Hey, as part of the assignments on what is social entrepreneurship, I needed to build my own concept of what is social entrepreneurship for me. So I started research to understand how are we doing things here in Ecuador as a country and what is the actual status of social enterprise.
What got my attention is to realize that in Ecuador at the governmental level, there is no definition of social enterprise, there is a definition of enterprise and its classifications and what is a foundation and its classifications.
This is due to the fact that in Ecuador the Social concept commonly refers to isolated or unrepresented communities in the national territory.
There is a government office called Popular and Solidarity Economy which is a superintendence that seeks to support precisely these communities and enterprises formed mostly by people with little or no professional preparation, supporting them with training, tax benefits, and non-returnable seed capital.
From the government, there are tax benefits applied to for-profit organizations that fulfill social responsibility roles from education and the environment, but the main business model of the organizations is not directly linked to the social impact they generate to obtain this tax benefit.
What does exist is an articulated effort from the private sector to build not only a concept but a cluster and directory of companies that are socially responsible, called B Corp. These companies to obtain a certification of System B, must comply with requirements called triple social impact which are:
In the environmental impact, it is necessary to certify that the acquisition of raw materials comes from renewable sources, the respect for biodiversity, and the minimization of environmental pollution.
The social impact refers to the human element within the organization where equity, diversity, and inclusion are guaranteed.
And from the economic side, it is necessary to generate revenue and have a legal constitution in front of the financial control agencies for at least 12 months. This added to requirements such as denouncing criminal acts, among others.
But again, the definition of social enterprise does not come from generating a product or service that solves a social problem, but that a company treats its human capital with dignity and is environmentally friendly, which is the minimum expected of a company in Europe, for example.
For me, a social enterprise is an organization that focuses on improving the living conditions of people in aspects that a government cannot supply by generating revenue as a result of solving that social problem through a product or service. Where the business model is focused exclusively on the consumer as a client.
I do not differentiate between foundations that are non-profit organizations and companies that are for-profit organizations, since both can generate the same impact and capacity to create products and services. It will depend a lot on the fiduciary responsibility of both organizations to their board and to the public offices.
But I believe that there is an important opportunity to develop the concept of social entrepreneurship and social enterprise in Ecuador through the mapping of the needs of both organizations, businesses, and foundations that leads to building a legal and financial framework that clearly delimits the word social and enterprise and how these can exist to generate sustainable solutions in the national territory. Btw, I created the image in Dall-E, hope you like this post and please leave a thumbs up and of course your comments, feedback, and thoughts. 🛫
I wanted to reach out and express my genuine appreciation for your publication. It resonates with me on multiple levels, allowing me to both agree with its content and learn from it. Your insights have been truly valuable to me, as I am also from Ecuador.
I also wanted to take this opportunity to share my thoughts on the potential for SE in Ecuador. I am incredibly passionate about this subject and have dedicated time to analyzing the current ecosystem for social enterprise development. While it may initially seem less favorable for social entrepreneurs, I firmly believe that this is primarily due to a lack of education on business aspects and a shortage of collaborative efforts. I am convinced that if we unite as a nation and work collectively towards promoting social impact through both for-profit and nonprofit organizations, we can create a more conducive environment for SE to flourish.
Thank you again for your post!
Juan Fernando Mora