Social entrepreneurship is a type of activity that combines the combination of business and charity and makes a profit by solving or mitigating pressing social problems. Revenues from such activities are not shared among the participants in the companies, but are invested in areas such as environmental protection, reducing unemployment, protecting the rights of citizens, etc.
The Law on Social Entrepreneurship is currently on the verge of adoption.
Social Profitability
In the field of social entrepreneurship, activities are carried out without the presence of external financing, and the work is carried out according to well-studied business schemes. Here, new scientific approaches are also applied to the solution of a wide variety of social problems in various fields of public life. As part of their core business, they are implementing community-oriented programs. These areas can be agriculture, and medicine, and education, and much more.
Profit and benefit
To date, there is no one specific definition describing the specific essence of social entrepreneurship, since this activity covers many areas of human life and has a large number of directions. This type of entrepreneurship acts in such a way as to promote sustainable changes for the better in any particular social process through its actions, but at the same time make a profit that any other entrepreneurial activity would bring.
Social entrepreneurship as a social phenomenon appeared and began to function in Russia relatively recently, while in foreign countries it has been operating for a very long time.
Specificity
Problems of high social significance take place in any society and in any country, and they are caused by the usual impossibility to satisfy all the needs of members of society. This area of activity is becoming more and more popular every year around the world, and in Russia, over several decades of its existence, it has accumulated rich experience in the development of social ideas. Having received public support, the non-profit sector can rightfully be considered a separate branch of the country's economy, and charity has become a phenomenon that draws attention to each individual. Business in Russia, having taken upon itself part of the responsibility for the well-being of society, is implementing a great many socially significant programs today, and society now needs this help more and more. As for procurement, small businesses and socially oriented organizations have slightly different rights.
Everything has its time
However, at the current moment of development, social entrepreneurship, as a form of social work, does not yet have a sufficiently developed methodology. And the reason for this is the lack of knowledge of this social phenomenon. So far, there is no single correct understanding of its essence and types of social orientation. There is currently no separate federal law on social entrepreneurship.
The main areas of activity
These include:
1. Production of various types of goods:
- general goods (clothing, food, furniture, etc.);
- goods with a certain social significance (playgrounds, medical equipment for the rehabilitation of patients, etc.).
2. The provision of services and works of social importance:
- counseling (legal, psychological, pedagogical, etc.);
- education or advanced training (conducting various seminars and trainings, development of creativity);
- medical and social assistance (public services, home-based services, etc.);
- domestic services (hairdressers, shoe repair, etc.);
- development of ecological tourism;
- activities to reduce unemployment.
A report on social entrepreneurship should be compiled regularly.
Who is the user of socially significant services?
The main consumers of all these services can be both private and legal entities. Individuals include people who find themselves in a difficult life situation; groups of citizens who need rehabilitation after illness or injury; youth, elderly, unemployed. Legal entities include commercial organizations that may be interested in purchasing goods, finding employees, etc. non-profit organizations, as well as the state.
Between Commerce and Government Services
Social entrepreneurship is necessary, and not only to those to whom it is directed, but also to the state itself. However, this phenomenon cannot be attributed either to that entrepreneurial activity, which relates specifically to enterprises engaged in the provision of services, or to one whose driving force is social activism. The activity of social entrepreneurship is, as it were, the third subspecies of social enterprises, the scope of which is very diverse.
Field of work
The scope of social entrepreneurship includes:
- the creation of any home business for those categories of citizens who do not have the opportunity to work - single mothers, mothers with many children, or on maternity leave;
- the creation of travel companies that make a lot of efforts for the smooth movement of wheelchairs;
- - Organization of educational processes, work in kindergartens and schools, the development of entertainment centers for children and creative studios;
- organization of entrepreneurial assistance - for those who plan to create their own entrepreneurship, basic training, assistance in creating business plans, material assistance to beginners;
- infrastructure development - for example, economy-class hairdressing salons, landscaping, garbage processing - creating all this and much more in areas where it is needed.
VOI enterprises (All-Russian Society of Persons with Disabilities) is such a system of organizations that is one of the elements of the state for employing citizens with disabilities. This enterprise is one of the elements of social entrepreneurship.
Forms
Forms of social entrepreneurship are commercial, nonprofit, and hybrid organizations.
Nonprofits can profit from all activities, however, they should not distribute it between their investors and owners, but must direct it to the development of their goals. Moreover, the amount of such profit should not exceed certain limits. Article 30 of the Federal Law “On the Contractual System in the Sphere of Procurement of Goods, Work, and Services to Ensure State and Municipal Needs” regulates the participation of small businesses and socially oriented non-profit organizations in procurement.
In the commercial form of social entrepreneurship, organizations engaged in such activities practically do not differ from commercial ones. A significant difference from them is only that they have a declared social mission.Accordingly, they exist in the form of individual entrepreneurs engaged in private activities, commercial partnerships, joint-stock companies and limited liability companies. The law defines privileged conditions for small businesses and socially oriented non-profit organizations in the participation of purchases for state needs.
These organizations differ from non-profit organizations in that they have a narrower range of sources of income - loans, owners ’funds, so-called bridge loans, venture capital, etc. Owners of commercial organizations have the right to keep profit for themselves, but at the same time they have limited financial assistance from outside, therefore, to date, many commercial entrepreneurs are unable to combine in their activities areas for profit and fulfillment of social missions.
Which type of institution is most suitable?
Hybrid type enterprises are the most flexible element of social and economic systems, as they are able to provide a wide variety of opportunities for their development. They can receive part of the profit and at the same time, satisfy the social goals of their activities. Such enterprises include:
- commercial organizations with non-profit divisions;
- non-profit organizations with commercial units;
- non-profit structures, which include non-profit enterprises;
- consortia;
- partnerships between businesses and nonprofits.
Legislation
To date, there is no single law controlling the activities of subjects of social entrepreneurship in Russia. However, for a very short history of the existence of the concept itself, many amendments to other laws that are indirectly related to this field of activity have been adopted.
Normative acts that are guided today in the implementation of activities based on the principles of social entrepreneurship:
- Law on Protection of Competition;
- the law "On the development of small and medium-sized enterprises in the Russian Federation";
- the law “On Amending Certain Legislative Acts of the Russian Federation”;
- Order of the Ministry of Economic Development of the Russian Federation “On the organization of competitive selection of constituent entities of the Russian Federation, whose budgets in 2013 are provided with subsidies from the federal budget for state support of small and medium-sized enterprises by constituent entities of the Russian Federation”.
What is envisaged in this area abroad?
In many Western countries, where the sphere of socio-economic entrepreneurship is more developed than in Russia, and has been successfully operating for more than a decade, there is a huge regulatory framework governing this activity. In Russia, the law is necessary, as social entrepreneurs become more and more every year, and the scope of their activities is gradually expanding. However, Russian parliamentarians are already actively working on this problem.