Changing the Environment for Social Ventures for Them to Succeed

In the article “The Funding Gap,” we learned about the funding trouble social enterprises face. As the article mentions, social enterprises “combine the best of the nonprofit and for-profit worlds.” Social enterprises are for-profit companies with the mission to address social issues. Just like non-profit organizations, they aim to help others, but are not legally tied to laws that limit the reach of non-profits. Just like most businesses, social enterprises struggle to find capital and funding to grow their operations. Because they are profitable ventures, they can’t receive grants to expand their operations. At the same time, because they are a business they compete against other businesses in the free market.

Social entrepreneurship is shifting mindsets and the way we do business. Instead of solely aiming at making the highest profit possible, social ventures aim at addressing social needs while making a profit. This might be seen as a weakness by some investors with today’s environment. But social ventures can be very successful if people buy into their ideal and government changes laws to help them out.

Can government help with the obstacles social enterprises face when it comes to funding?

The biggest challenge I see for social enterprises is that they are competing with other businesses that might offer the same or similar product or service. Other businesses might already be well established. Investors are probably reluctant to invest in a business with high risks that might not necessarily offer high returns because they aim to help others.

But this is where government can lend a hand. The article “Coast Capital Provides $1 million for ‘social ventures’” by Scott Simpson gives a great idea for making social enterprises more competitive. Because many social enterprises might start with low revenues, the government can change the tax environment to benefit low-revenue businesses. If a business aims to address social issues, like the one mentioned in Simpson’s article, then the government should make or adapt laws to help those businesses. After all, these businesses will make the government’s job easier. In Simpson article, “Fusion Kitchen” is a social enterprise that hires immigrant women in Canada to leach local foodies how to cook authentic ethnic meals. They provide jobs to women who often have trouble finding a job because they are still adapting to their new environment. Social enterprises like Fusion Kitchen need to be supported by government laws and people in general. Social ventures like this one help improve our communities. The government should give more tax breaks to social enterprises to make them more competitive in the free market. And the government should create incentives such as tax breaks for those that fund these enterprises.

Is it reasonable to think that social enterprises can change the way we do business if they receive the support of consumers and the government?