Every social organization exists to fill in a gap and solve a problem. In the social sector, the goal is more of making positive impact than making profits. In this social space, there exist two kinds of organizations that are usually interchanged. They are the “nongovernmental organization, NGO” and the “social enterprise”.
Even though NGOs and social enterprise both function to identify a problem, provide solution to that problem and make positive impact, their structure and mode of operation differs. A striking difference between these two is that while a social enterprise uses a business model to solve a problem, NGOs have no business model. Instead, they operate by funds generated from donations, grants or sponsors.
Through the business model, social enterprise makes profit that is invested back into the enterprise for social work. On the other hand, NGOs cannot make profits. Essentially, a social enterprise may be seen as a business but as one that exist to solve a social problem.
Define your organization today and get ready the necessary registration for that organization.
26 thoughts on “UNDERSTANDING THE SOCIAL SECTOR”
You are correct. Although NGOs does not use business models, however, they do not implement any project without carrying the beneficiaries along. All the same, both parties solves socio-economic issues and bring development to the country.
As actors in a global civil society, NGOs can help to recreate a countervailing force to the process that can excluded people by re-distributing assets and opportunities, injecting social values into market processes, and holding economic institutions to account for their actions. This represents the cutting edge and implementations of innovation of much NGO work today and also for the future.
Very well said.
Wow! The Economist has SPOKEN.
Yes ! Economist have spoken
Very true. Great input!
I would like to know in specifics, what type of social work do social enterprises do.
My thought exactly.
Now, you can identify a problem as an NGO. That problem might be no electricity in the community and so, students are unable to read and write at nights. You organize a campaign and generate funds to provide lanterns and rechargeable lanterns to help with this problem. Yes, you have helped solve this problem.
Now, the social enterprise approach is different. Just recently, a Nigerian lady just developed a ball that when played for about 30 minutes, it generates led light for 3 hours. If I should align this to a social enterprise, the approach would be this. A social enterprise will produce these led-light balls and sold to this community in need of light for night reading and writing. This way, the social enterprise makes impact and profit at thesame time. This profit still goes into the social enterprise.
This is why organizations will readily have grants given to social enterprises than NGOs because they have a sustainability model.
I hope this answer helps.
Thanks for this explanation.
Kudos! You have said it all.
Thanks for being more elaborate
You are right with this illustration
A social enterprise is a business and the goal of any business is to make profit. But a social enterprise also has its focus on solving social problems. It is driven by empathy, and so craves to provide a solution to a problem faced by the masses. From its profits, it runs itself to regenerate more outcomes. The NGO on the other hand seeks to reach out and bring solution to community problems, but solicits for grants as it is non-profit and cannot on its own generate funds to address these problems. So both social enterprise and NGO seek to bring development, transformation and solutions to the masses, but they operate differently.
Nice write up
Much importance should be given however to every NGO convener as the sincere definition of the purpose of creation of an NGO. It’s really becoming abused.
Yes, people set up NGO’s with the intention of getting grants for their personal gains. Proper scrutiny should be done by CAC during registration processes