Sunday, October 4, 2009

Can Social Enterprises Fight Competition From Private Sectors?

Have you ever wondered why social enterprises are limited in number? Majority of companies are working with profit making as the sole objective. There are very few enterprises that take up social and environmental causes, re-invest for community development and provide training and employment opportunities.

Experts believe that if a social enterprise is not able to handle strict competition from private firms, social clauses might prove harmful for its existence. But at the same time, fierce competition can also act as a blessing in disguise for several non-profit organizations that are trying to be successful in the tendering process. Recently, a social enterprise in UK won a contract worth 500,000 pounds with the Liverpool City Council for the second year in a row. The contract had a social clause according to which the successful bidder from the private or social enterprise sector will have to deliver social benefits.

Many social entrepreneurs are of view that adoption of social clauses does not place social firms in the safety zone, far from fierce competition posed by the private sector. It is interesting to know that fulfillment of social causes which used to be the unique selling point for social enterprises is now becoming an essential condition for bidders from private sectors. This is the time for non-profit organization to fight competition from the private sectors, reduce costs and create better training and job opportunities for the community.

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