1. Social and Commercial Benefits – The Double Bottom-Line – Organisational Considerations before embarking on setting up a Social Enterprise

Social enterprises can be regarded as businesses that invest their profits into social aims and objectives, i.e. the “core” work of the organisation that established the business. For example, the community development association that establishes a crèche uses the profits generated by the crèche to fund its community development work, perhaps by contributing to premises rental, development worker salaries and initiatives in the community.

It can be seen then that a Social enterprise has two sets of objectives – business related objectives in relation to profits, costs and budgets and social objectives relating to the specific aims and objectives of the parent organisation. These two sets of objectives are often referred to as “The Double Bottom Line” because at the end of any trading year, a social enterprise will not only be concerned with the profits they have made, but will also be concerned with the impacts and outputs achieved in the local community, in relation to the organisation’s main aims, with those profits.

Module 7 - The Social Auditing process takes into consideration the social aspects or “bottom line” whereas the legally required financial accounting and reporting systems concentrate on the business bottom line. To be successful, the social enterprise must strike the appropriate balance between both these objectives, which can sometimes compete with each other.

 

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