Social enterprise, for-profit or non-profit?

Should a social enterprise be for-profit, or non-profit? This is a debate that has been going on for a long time. What's the big idea? Perhaps a better understanding of a for-profit and a non-profit social enterprise will help us understand why is there such a big debate.

A for-profit social enterprise are more inclined and required to give high-quality products or services. The reason is really simple, Being a for-profit social enterprise means it is conducting business for almost the same reason as a conversational business. They are constantly competing for customers.
But more than just competing, the social enterprise can issue share and dividends to shareholders and owners. In Singapore context, for-profit social enterprises are not an uncommon sight. the owners get to take back profits earned.

As for non-profit social enterprises, they do not take back profits but rather, those money are used for the business's expenses and improvement of the social enterprise. They may even rely on donation from time to time.

So once again, why should it matter whether it's for-profit or not? Firstly, we should understand that in the UK, social enterprises are all non-profit. Yet they are still very successful. The owners aren't allow to draw our any profits. Many argue that Singapore should follow their model, claiming that a social enterprise that takes profits are not true social enterprise.

However, should it ever be mandatory for social enterprises in Singapore to be non-profit, it will definitely deter people from wanting to set up a social enterprise. Yet, it gives us a feeling that people are setting up social enterprises for the wrong reasons if such a thing deter them from setting up a social enterprise.

Alas, I feel that for-profit social enterprises can better allocate their resources so that they can benefit their beneficiaries better with the excess profit that they have. They can keep the profits but they should also be used for the advancement of the social enterprise, as well as taking care of their beneficiaries.

At the end of the day, it depends on us as an individual, whether we want to earn profit or help society more. No matter what we choose, as long as we are accountable for our actions and are helping society in a good way and not doing any harm, it should be good enough for a start. Whether we wish to convert to a non-profit at a later date is a different story all together.

Article: What is the For-Profit Social Enterprise? - Jonathan Carson & Scott Griffith http://insights.som.yale.edu/insights/what-profit-social-enterprise