Depending on three factors: motivation, use of income and responsibility, four types of organizations in the field of social entrepreneurship can be identified. The four types of organizations fall between two extremes: 1. traditional non-profit organizations and 2. traditional for-profit organizations, ordinary businesses.
Therefore, according to traditional non-profit organizations, the first in the field of social entrepreneurship are:
- Non-profit organizations- with income-generating activities – these types of organizations incorporate, in addition to their main activities, also business activities that generate additional income. All revenues are reinvested in the activity of the organization.
One such example comes from the Washington DC Zoo, which sells elephant dung as a natural fertilizer. Although there is profit, it is insignificant.
- Social enterprises- are organizations with specific social objectives that are the organisation’s main purpose. They aim to maximize both the profit and, in particular, the benefits to society or the environment. The difference between the non-profit organizations mentioned above and social enterprises is that the latter is operated as a business.
If, in the previous example, the manure was sold as fertilizer at a zoo, it is transformed into a premium, high-quality paper that is sold in whole chains of stores. There are also employees for the entire process of paper production.
- Socially responsible businesses- These are traditional for-profit businesses that are aware of the social element and integrate sustainability into business activities. Lego, for example, has been focusing on climate change and waste reduction for several years. In 2015, they invested $ 150 million in these issues and switched to renewable energy by 2020.
- Corporations that practise social responsibility– These are also traditional for-profit businesses that practice social responsibility. Unlike socially responsible businesses, corporations that practice social responsibility even integrate this element into their activities.