How many social enterprises are in the United States?

I started this year on a quest to answer the big question:

How many social enterprises are in the United States?

The United States hasn’t measured this before and I get this question all the time. We don’t have a common legal structure or even a common definition of what a social enterprise is, but, we can start somewhere. Other places around the world complete this type of census on a regular basis and have some pretty amazing numbers - 70,000 social enterprises in the UK and 20,000 social enterprises in Australia - just to name a few.

Despite promotion through social media channels and keeping this census open for 9 months, this census survey DID NOT have a statistically significant number of social enterprises respond. However, I wanted to share the results of the 32 responses anyway, as a starting place and to glean any trends we can from this small sample size. Please note that a larger sample size of social enterprises could skew these results significantly. Read the information below with a grain of salt and comment below with any questions you have, or send me a message privately.

How many social enterprises are in the United States?


QUICK SUMMARY

We have some things in common with each other…

Over 70% of responses are Social by Selling, aka organizations that make their impact through what they sell or to whom they sell it.

The future is female. Sixty-nine percent of responses have a female leader of their social enterprise!

Forty-seven percent of respondents said over 90% of their revenue is earned income! But only 22% were profitable based on earned income (not philanthropic donations).

…But we also have some differences.

Legal structures vary widely - with equal numbers of for-profit and nonprofit organizations. There’s not one “right way to do social enterprise” in the United States.

Social enterprises operate in many different types of industries, but popular industries in this census include: Information technology and software, Manufacturing, Consulting, Retail (thrift, resale), Financial services/credit union.

We have small but mighty teams!

One third of social enterprises have no paid staff, and nearly 80% have a team of five or fewer staff. Forty-four percent have an annual budget under $50K.

We’re working to solve some big issues, including these popular Sustainable Development Goals:

  • SDG8 Decent Work and Economic Growth

  • SDG10 Reduced Inequalities

  • SDG17 Partnership for the Goals

  • SDG1 No Poverty

  • SDG3 Good Health and Well-Being

And 50% of respondents measure their impact by using pre- and post- survey assessments with program participants.

We’re facing some big challenges.

The biggest challenge we are facing right now is access to funding (56%), followed by finding the right partnerships, marketing, and time management.

We also anticipate challenges in the next few years in those areas, as well as finding/attracting the right talent, and achieving the impact we want to see.

If we could improve one thing, it would be profitability (47%).



FULL SUMMARY

Demographics

What is your legal structure?

38% are structured as an LLC.

38% are 501c3 nonprofit

How is your social enterprise “social”?

Respondents could select which ways their entity qualified as a social enterprise, using the “social by” definitions.

A social enterprise can be social by:

Sharing: Organizations that exist to share some or all of their profits with charitable organizations or causes.

Selling: Organizations that make their impact through what they sell or to whom they sell it.

Sourcing: Organizations that develop their programs by how they make their products or services, typically using environmentally sustainable methods.

Staffing: Organizations that employ underserved communities, for example individuals with disabilities or individuals who are/were homeless.

Respondents could choose more than one way of being social, because most are!

Social enterprises are social by…

  • 41% are social by Sharing

  • 72% are social by Selling

  • 28% are social by Sourcing

  • 38% are social by Staffing

When did you start your social enterprise?

  • 78% of responses started their social enterprise between 2011 - 2018.

  • 50% of all responses started 2016 - 2018.


How many paid staff members?

We have small teams, sometimes not paid!

  • 31% have no paid staff members!

  • 78% of all responses had less than 5 paid staff

Who’s your leader?

  • 69% of social enterprise leaders are female!

Where are you based?

  • 91% are based in urban areas

  • 69% operate only in the United States

What industries do you operate in?

Popular industries for social enterprise:

  • Information technology and software

  • Manufacturing

  • Consulting

  • Retail - thrift, resale

  • Financial services, credit union

BUDGET AND PROFITABILITY

  • 44% have an annual budget under $50K

  • 47% said over 90% of their revenue is earned income!

  • 59% said less than 10% of their revenue is philanthropic income (donations).

Was your social enterprise profitable last year?

  • 22% were profitable based on earned income only

  • 28% were profitable when including philanthropic income

  • 50% were not profitable in 2017

MISSION AND IMPACT

Popular SDGs

Sustainable Development Goals 8
Sustainable Development Goals 10
Sustainable Development Goals 17
Sustainable Development Goals 1
Sustainable Development Goals 3

SDG8 Decent Work and Economic Growth

SDG10 Reduced Inequalities

SDG17 Partnership for the Goals

SDG1 No Poverty

SDG3 Good Health and Well-Being

How to you measure impact?

50% said pre- and post- surveys with participants


LOOKING AHEAD AND CHALLENGES

What challenges are you facing right now?

  • 56% said access to funding

  • 47% said finding the right partnerships

  • 44% said marketing, finding and communicating with customers

  • 38% said time management, and getting everything done!

What challenges do you anticipate in the next 5 years?

  • 44% said access to funding

  • 31% said they anticipate partnership challenges

  • 28% anticipate marketing challenges

  • 25% anticipate human resources challenges in finding and attracting the right talent

  • 25% anticipate challenges in achieving the impact they want to see

What would you like to improve?

  • 47% want to improve profitability

  • 16% want opportunities and access to funding

If you’re struggling with the challenges above, I can help!


ABOUT THE AUTHOR: BETH PALM, MBA

Hi there! I'm Beth. I'm here to equip social entrepreneurs and change makers like you with the tools to change the world. As a jack-of-all-trades nonprofiteer and recognized social enterprise expert, I've walked the talk in this emerging industry. With over a decade of experience launching and managing social enterprises, I want to share my best tools, resources and knowledge with you.

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