Social enterprise is also really a package of buzz - social innovation, social finance, social entrepreneur and social capital. Now the important thing to understand about this Social Capital is it is NOT the social capital that Robert Putnam and others write about. It is the emerging, catch-all term for "private financial resources available to fund public good." It has kin in social finance, patient capital and philanthropic capital.*
Some of what we call social capital comes from philanthropic sources, some comes in the form of investment dollars. It can be packaged as grants, program or mission related investments, low-income loans, convertible loans, and a variety of other forms of debt and equity. It is discussed by folks at Investors Circle, RSF, GoodCapital, Uhuru Capital, and elsewhere. It is the basis of discussion of social investing, social capital markets, social capital indices and social stock exchanges. It was celebrated in its first conference this year.
Some social capital demands social return in exchange for financial returns, more and more we are hearing from investors who demand market rate financial returns PLUS social returns. It is a dense, dispersed, dynamic, and diverse term - and it is all the buzz. Look for much much more discussion of it in 2009.
Why did social enterprise (and its related terms) crack the buzz list this year? Social enterprise is now standard fare at business schools everywhere - and, given the collapse of investment banking - those business schools are going to be overrun in 2009, positioning the concept just on the threshold of universal business jargon. Social enterprise and its related package of terms are real now - there are strong examples in every part of the world, marketing efforts such as those funded by the Skoll and Omidyar Foundations have reached critical mass, TV shows are dedicated to social enterprise, and President-Elect Obama is promising new government agencies and financial support for social enterprise and innovation. Kiva enables almost anyone to become a social investor in a social enterprise.
I have to say, I feel a bit like David Pogue in calling Social Enterprise a buzzword. How so? read this article by David about what happens when you criticize a product that has a loyal fan base. So before all you social entrepreneurs attack me for demeaning your term, please let me clarify - being a buzzword is not inherently a good or bad thing. It has to do with how recognizable the phrase or actions or concepts are. Here's what it means to be a buzzword.
*I used the term philanthropic capital in my 2004 book precisely to avoid confusion with the social capital that is discussed, measured, written about and lies at the heart of community connectedness studies and experts such as Putnam. I seem to have lost the jargon battle here, though I still think these two distinct but related meanings for social capital cause confusion.