What is a Social Enterprise?

Last Updated on August 10, 2023

The idea that responsible travelers can and should support social enterprises on the road is a fundamental notion to this entire site, and to the book I published, The Volunteer Traveler’s Handbook.

But for those unfamiliar with the term social enterprise—especially how social enterprise and travel intersect—let’s examine what it means and how this type of travel often affects more change than traditional forms of service, like international volunteering.

social enterprises tackle pressing local social issues
The Maji Moto Cultural Camp is an incredible social enterprise operating in Kenya—it invites tourists to a cultural camp for days or weeks, and uses the funds to help advocate for an end to female genital mutilation, and also sends local girls and boys to school partially funded by tourism dollars.

What is a social enterprise in business?

what is social enterprise
A graph showing the blended value of social enterprises over pure profit driven businesses, graphic thanks to ENP

A social enterprise sells good or services and uses a portion of the profits to reinvest in the local community by addressing social issues, improving locals’ quality of life, conserving natural resources and the environment, preserving the community’s cultural integrity, and more.

A social enterprise is a business that holds its strong underlying mission above financial gain, investors, or traditional commercial business ideals. Instead, the common good is the primary focus and when a social enterprise succeeds, so to does the local society.

This’s my definition of a social enterprise in business, but there are many others that offer more nuance, while also highlighting different facets of the social enterprise concept (the Wikipedia page has a long look at all of those other circumstances).

What are the types of social enterprises?

A woman shows off her embroidery as part of a micro-loan program in Mexico’s Oaxaca Valley. Women in the region receive micro-loans and training for their businesses, and in return host one tour group a month to support En Via, the social enterprise running the micro-loan program. Tourists visit the remote villages where loan recipients live and learn more about each woman’s business, and how the loans have changed her life for the better.

There are various types of social enterprises, each with its own focus and approach to addressing social or environmental challenges. Here are some common types of social enterprises:

Nonprofit Social Enterprises

These organizations use commercial strategies to achieve their social or environmental missions. They often generate revenue through sales of products or services, but the profits are reinvested into furthering their social objectives.

Cooperatives

Cooperative social enterprises are owned and operated by a group of individuals who come together to address a specific need. They can take the form of worker cooperatives, where employees collectively own and manage the enterprise, or consumer cooperatives, where customers have a say in the business’s decisions.

Community Interest Companies (CICs)

CICs are a type of legal structure in some countries that are designed for social enterprises. They are required to use their assets and profits for the benefit of the community they serve.

B Corporations (B Corps)

B Corps are for-profit companies that meet specific social and environmental performance standards. They are legally required to consider the impact of their decisions on multiple stakeholders, including employees, customers, and the environment.

Social Cooperatives

These cooperatives focus on providing employment opportunities and support for marginalized or disadvantaged groups, such as people with disabilities, immigrants, or the long-term unemployed.

Fair Trade Enterprises

Fair trade social enterprises work to ensure that producers, often in developing countries, receive fair wages and good working conditions for their products, such as handicrafts, textiles, or agricultural goods.

Environmental Enterprises

These social enterprises prioritize addressing environmental challenges, such as waste reduction, renewable energy, sustainable agriculture, and conservation efforts.

Microfinance Institutions

Microfinance social enterprises provide financial services to individuals or communities with limited access to traditional banking, helping to alleviate poverty and promote economic development.

Socially Responsible Businesses

These are traditional for-profit businesses that integrate social and environmental considerations into their operations and decision-making processes.

Hybrid Models

Some social enterprises combine elements of multiple types, using a hybrid model to achieve their social and financial goals.

Social enterprises can take on a wide range of forms and structures, and their activities can vary greatly based on their specific goals and target beneficiaries. The primary distinction to keep in mind is that social enterprises prioritize positive social or environmental impact alongside financial sustainability.

How can social enterprise be a force for good in travel?

reaching out teahouse social enterprise in vietnam
The Reaching Out Teahouse in Hoi An, Vietnam not only creates a beautiful experience in its quiet spot in the heart of Old Town, but it employs deaf women from the community who communicate with the tourists with surprising ease.

My definition is simplest one to connect how social enterprise in business and travel can become a powerful joint tool for responsible travelers. And in relating this back to travel, since 2008, I have slowly traveled and volunteered all over the world.

On these travels, I came to understand that it is often the mere act of tourism and community-level support in developing nations that has the largest positive impact on the people in these places I visited—much more so than international volunteering.

Within the context of traveling to a developing country, spending your tourism dollars at social enterprises has a strong positive impact on that community because these are, by their very nature, community-driven initiatives that most often use local ideas and labor to solve a social problem.

As we travel, we spend money on everything from food to tours—with accommodation, souvenirs, and transportation in between.

What if each time we ventured out of the country we found a way leave our tourism dollars in the hands of local working hard to better their community and country?

What types of travel businesses are social enterprises?

food social enterprise b-corp
Some social enterprises operate training restaurants—in this case, STREETS International is a hospitality and culinary training program for disadvantaged young people in the community. The restaurant easily served up one of the best dishes I had during my entire three months backpacking Vietnam.

Examples of tourism businesses and services that may operate as a social enterprise in a place you are visiting include:

  • restaurants
  • retail shops and boutiques
  • craft centers
  • artisans
  • tour operators
  • guesthouses
  • transportation companies
  • tailors
  • massage parlors
  • cultural shows

This list is far from comprehensive, and it varies greatly depending on the city you’re visiting. If you want some pretty specific examples, read our curated guides to the best social enterprises in Thailand, Cambodia, Myanmar, and more.

The fact is, you have a choice when you travel of where you invest your money. Though it is unlikely you can only support social enterprises on your trip, you can prioritize these businesses when given the opportunity.

If you’re going to sleep somewhere, why not find the business best supporting your ideals of socially responsible travel?

If you have to eat three times a day, why not find a social enterprise or mom-and-pop eatery for at least one of those meals?

It’s on each traveler to take the time and make the effort to research local businesses finding creative ways to advance social, environmental, and human justice agendas.

How to find social enterprises around the world

social enterprise to help disabled people in the community.
Also located in Hoi An, Vietnam is a social enterprise boutique that sells incredible souvenirs made by disabled people in the community.

Here on Grassroots Volunteering, we offer the world’s largest database of social enterprises and local organizations. These local organizations are community-driven and truly using tourism as a force for good.

Other ways to travel responsibly and support social enterprises while on the road include:

  • Use a guidebook: All of the leading guidebooks (Lonely Planet, Frommer’s, Moon) include lists of tour companies, restaurants, etc, and as they describe these businesses, they often highlight which ones have underlying social missions.
  • Research on blogs: Head to the blogosphere and find travel bloggers who have visited where you plan to travel; travel bloggers and expat bloggers often dig deeply into the fabric of a city and will share their favorite initiatives in the places they live or visit.
  • Ask a local: Once you’re in a new place the people around you are your best source of information. Ask your hotel desk for restaurants and tour operators doing good in the community. Expat restaurant owners and language schools are also excellent sources for this type of information.

The bottom line is that you can spend your tourism dollars wisely and invest it in local communities rather than Western-run companies or large for-profit businesses run by the region’s wealthy elite. All it takes is a planning, research, and motivation.

And if you find a wonderful social enterprise on your travels, we would love to know about it so that we can add it to our database and send other travels to support its efforts!