Why Every Business Should Be a Social Enterprise

Have you ever made a business decision that left money on the table because it was the right thing to do for your employees or community? Kept prices stable when you could have raised them, or chosen local suppliers over cheaper alternatives? 

Maybe you’ve never thought of your business this way, but if you answered yes, you’re running what could potentially be considered a social enterprise. (And we love to see it!)

At Insights4Equity, we believe that social enterprise isn’t a special category of business, but rather how every business should operate. 

The Evolution of a Term

Freer Spreckley was among the first to write about the concept of a social enterprise in the 1970s and early 1980s. Bill Drayton popularized the term through his work founding Ashoka in 1981—having been inspired by the Land Gift Movement Vinoba Bhave started in India in 1951. But the underlying philosophy has even deeper roots and stretches back centuries. From cooperative movements in the 1800s to modern B Corporations, the idea of using business as a force for good has continuously evolved to meet society’s changing needs.

What makes the term particularly relevant today is how it challenges the assumption that a business’s sole purpose is to maximize profit. Traditional definitions often limit social enterprises to specific organizational forms or focus on nonprofits generating earned revenue. But we want to make sure we’re looking at the bigger picture.

Are You Already Running a Social Enterprise?

Here’s our definition: A social enterprise is any organization that prioritizes community needs alongside—or even ahead of—pure profit maximization. If you’re asking “how does this decision affect our employees, customers, community, and the planet” before “how much profit will this generate,” then you’re thinking like a social entrepreneur.

This means:

• Nonprofits are social enterprises (with rare exceptions where the “enterprise” element of fee-for-service is absent)
• For-profit businesses with explicit social missions are social enterprises
• Cooperatives, public benefit corporations, and other alternative structures can be social enterprises
• Creative businesses that focus on art, music, handmade goods, etc., can also be social enterprises

The common thread? These organizations make business decisions with all stakeholders in mind, not just shareholders. 

The Real Cost of Profit-First Thinking

The choices businesses make ripple far beyond their balance sheets, ultimately coming back to affect their own sustainability. During the pandemic, food prices surged dramatically, affected by supply chain disruptions, labor shortages, and increased costs. But some research shows that corporations with market power used these genuine challenges as cover to raise prices beyond what their cost increases justified, significantly expanding their profit margins while consumers struggled. In a world that centers community, companies operating as social enterprises would recognize that exploiting crises for profit maximization undermines the very communities they depend on for long-term success.

What Sustainable Success Actually Looks Like

Insights4Equity founder Kiyomi Beach is a runner, and she thinks about business sustainability this way: “I can run an eight-minute mile, but only for one mile. To run a marathon, I need to pace myself at 12 minutes per mile.” We can acknowledge that both are accomplishments, and both are challenging. But only one is sustainable over the long haul.

That’s what we’re doing when we prioritize profit maximization above all else—we’re sprinting when we should be pacing for a marathon. We’re extracting value at a rate that cannot be sustained. Social enterprises recognize that building strong communities, treating employees well, and considering environmental impact is not just ethically right, but essential for long-term viability.

A Return to What Works

When humans first began to specialize in their work, it was to make life better for themselves and their communities. We created economic systems to serve human needs. Somewhere along the way, especially in our current capitalist system, we’ve become so specialized that we’re optimizing for quarterly earnings rather than our collective wellbeing. We’re creating products and services that make our overworked lives more palatable rather than addressing the root causes of why we’re overworked in the first place.

The social enterprise framework—the way we define it at I4EQ—is about returning to those fundamentals. Indigenous communities have long practiced relational economics that center care and good relationships over profit extraction. Economist Ronald L. Trosper documents how Indigenous economic models create sustainability by recognizing that relationships among humans and the natural world are fundamental—not optional add-ons to business decisions. Similarly, African American communities have a rich history of cooperative economics. Jessica Gordon Nembhard’s research reveals how Black Americans have used cooperative ownership and mutual aid to build wealth and address community needs in the face of systemic exclusion, demonstrating that collective action and community-centered business models are powerful tools for both economic survival and social change.

These traditions teach us that building businesses that serve people—not the other way around—is practical wisdom, not utopian fantasy. Your business depends on the support of your community. If you don’t serve their needs, and they become unable to support you, your business will ultimately fail. Even Walmart, living high now, will crumble if our society falls apart.

Why This Matters for Your Business

We know our broad use of “social enterprise” can cause confusion. But we’ve learned that thinking about profit and community impact together leads to better, more sustainable business decisions. That’s not to say you accept lower margins forever—just that the highest short-term margins can often cost you long-term sustainability, employee retention, customer loyalty, and community trust.

For nonprofits, this connects directly to our two-sided business model framework. Nonprofits are already businesses making strategic decisions, and framing them as social enterprises emphasizes this reality while highlighting their mission-driven approach.

Most importantly, we want to work with organizations that share our values, and we use this term to signal that. When we help clients make better business decisions, we’re thinking about frontline stakeholders and the broader community alongside financial outcomes. That’s the bridge between business and mission that defines our work.

Ready to Run the Marathon?

If you’re thinking about how your business decisions affect all stakeholders—your employees, customers, community, and planet—you’re already running a social enterprise. The challenge is systematically building these considerations into your strategy and operations, so they’re not at risk of becoming afterthoughts.

At Insights4Equity, we help businesses and nonprofits bridge the gap between mission and sustainable business practices. Whether you need fractional leadership to guide strategic decisions through a social enterprise lens, or coaching to help your team develop this dual-focus approach, we bring both business acumen and deep commitment to community impact.

Ready to explore how social enterprise thinking could strengthen your organization? Let’s talk about how our fractional teams and coaching services can help you build a business that serves both your bottom line and your community. It’s not idealism to acknowledge that your long-term success depends on the health of the communities you serve—just good business sense.