Social Enterprise in the United States and Europe: Understanding and Learning from the Differences
Janelle A. Kerlin
Published online: 28 September 2006 C International Society for Third-Sector Research and The Johns Hopkins University 2006
Abstract Since the 1980s both the United States and Europe have experienceda simultaneous expansion in social enterprise. However, little has been written comparing and contrasting American and European conceptions of social enterprise resulting in difﬁculty communicating on the topic and missed opportunities to learn and build on foreign experience. To address this need, this paper compares and contrasts American and European social enterprise through an extensivereview of literature from the two regions and discussions with social enterprise researchers on both sides of the Atlantic. It outlines the deﬁnitions of social enterprise used by American and European academics and practitioners, identiﬁes historical factors promoting and shaping different conceptions of social enterprise, and highlights the differing institutional and legal environments in which itoperates. It concludes by identifying what Americans and Europeans can learn from each others’ experience with social enterprise. Keywords Social enterprise . Third sector . United States . Europe
Introduction For over two decades, social enterprise movements in the United States and Europe have taken on growing importance. Broadly deﬁned as the use of nongovernmental, market-based approaches toaddress social issues, social enterprise has become an increasingly popular means of funding and supplying social initiatives in the two regions. Yet while the trend and its ultimate objectives are similar, distinct differences remain in the conceptualization
An earlier version of this paper appeared as part of the ARNOVA Occasional Paper Series as “Social Enterprise in the United States andAbroad: Learning from Our Differences,” in R. Mosher-Williams (ed.), Research on Social Entrepreneurship, ARNOVA Occasional Paper Series 1(3), 2006. J. A. Kerlin ( ) Department of Public Administration and Urban Studies, Andrew Young School of Policy Studies, Georgia State University, P.O. Box 3992, Atlanta, GA 30302-3992, USA e-mail: email@example.com Springer
Voluntas (2006) 17:247–263of social enterprise including emphases and discreet outcomes. These differences stem from contrasting forces shaping and reinforcing the movement in each region. Thus, not surprisingly, research has found that while deﬁnitions of social enterprise tend to vary within the regions themselves, even broader divisions exist between the two regions in terms of understanding, use, context, and policyfor social enterprise.
Contrasting deﬁnitions of social enterprise United States The concept of social enterprise in the United States is generally much broader and more focused on enterprise for the sake of revenue generation than deﬁnitions elsewhere. This remains true even when considering the deﬁnitional divide in the United States between academics and practitioners. In U.S. academiccircles, social enterprise is understood to include those organizations that fall along a continuum from proﬁt-oriented businesses engaged in socially beneﬁcial activities (corporate philanthropies or corporate social responsibility) to dual-purpose businesses that mediate proﬁt goals with social objectives (hybrids) to nonproﬁt organizations engaged in mission-supporting commercial activity (socialpurpose organizations). For social purpose organizations, mission-supporting commercial activity may include only revenue generation that supports other programming in the nonproﬁt or activities that simultaneously generate revenue and provide programming that meets mission goals such as sheltered workshops for the disabled (Young, 2001; 2003a). Social enterprise engaged in by nonproﬁts may take...