What Is A Social Enterprise?

If you're here, you're probably wondering what is a social enterprise and they differ from a non-governmental organization (NGOs)? Well, you've come to the right place!

In this post, we'll be exploring the definition of social enterprises, some examples, and the key differences between them and NGOs.


Whether you're an aspiring social entrepreneur, a curious student, or just someone interested in the world of social impact, this is the perfect read for you.

So, let's dive in and learn more about the exciting world of social enterprises!

Social Enterprise

Social enterprise meaning: a type of organization that aims to achieve social or environmental objectives while also generating revenue.

  • is a business entity that operates to further a social cause (e.g. the development of women by assisting B40 women and homemakers generate income);
  • primarily generates income by the enterprise’s activities (e.g. selling corporate gifts and crafts made by the B40 women and homemakers);
  • reinvests its profits into the organization in furtherance of its mission (e.g. upskilling and nurturing the talents of B40 women and homemakers).

A social enterprise operates similarly to any other for-profit businesses with a key difference of focusing on social goals.

Non-Governmental Organization (NGO)

NGO meaning: a not-for-profit organization that operates independently from any government.

  • are generally non-profit organizations (e.g. the World Wide Fund for Nature (formerly the World Wildlife Fund)
  • any surplus of funds made would be channeled towards the recipient within their social issue of focus. For example, an NGO focusing on conservation of animals would channel any money earned or received back to the welfare of the animals;
  • are usually funded by donations, grants, or membership dues, and often rely on volunteers to carry out their work.

Why Are Social Enterprises Important?

Social enterprises are important because they have the power to create positive social and environmental change through their business model. Unlike NGOs, social enterprises generate revenue through the sale of goods or services, which they then reinvest into their social mission. This allows them to create a sustainable impact and reduce their reliance on donations.

Social enterprises are great as they can create positive social and environmental change through their business model. Unlike NGOs, social enterprises generate revenue from selling goods or services, which they reinvest into their social mission. This helps them to create a long-lasting impact and reduce their dependence on donations.

Furthermore, social enterprises often operate in a market-driven environment, which fosters innovation and adaptability. This allows them to respond to social and environmental issues with creative solutions that can be scaled for greater impact.

Social enterprises are important because they combine the power of business with a social mission to create sustainable change

Note: The work of social enterprises goes beyond NGOs by creating innovative solutions to social and environmental issues that can be scaled for greater impact.

Types of Social Enterprise

Social enterprises come in different types, each with a unique focus and approach.

Despite their different goals, social enterprises are devoted to making a positive social and environmental impact while remaining financially sustainable.

Dr. Joe Johnson, the founder of Welfront Group LLC has categorized the most common types of social enterprises into the following four:


  • creates ventures with the intention to provide for the social needs of community within a particular geographical area;
  • relies on the active participation of people within that area.

The Non-Profit Social Entrepreneur

  • profits earned are channeled back into the business to further expand the services offered;
  • usually easier to meet goals of the enterprise as funding is more readily available.

The Transformational Social Entrepreneur

  • focuses on meeting social needs that are not being met by the government or traditional businesses;
  • usually recruits and foster talent in-house.

The Global Social Entrepreneur

  • works towards complete transformation of a social system;
  • advantages are felt internationally.

Social Enterprise Development in Malaysia

The Malaysian Global Innovation & Creativity Centre (MaGIC) has played a key part in the development of the social enterprise landscape in Malaysia.

They have previously run various programs for budding social entrepreneurs whether you are just starting out or are a veteran looking to grow your social enterprise and increase your social impact.

However, as of 9-11-2021, MaGIC merged with Technology Park Malaysia to form a new entity called the Malaysian Research Accelerator for Technology and Innovation (Mranti)

Presently, the Ministry of Entrepreneur Development and Cooperatives (Kementerian Pembangunan Usahawan Dan Koperasi (KUSKOP)) is the ministry leading the way forward for social entrepreneurship in Malaysia.

According to the Malaysia Social Entrepreneurship Blueprint 2030 prepared by KUSKOP, they are 414 registered social enterprises in Malaysia as of December 2021.

KUSKOP also runs several programs together with other agencies to promote the development of social enterprises in Malaysia.

The Rise of Social Enterprises

There are many social enterprises in Malaysia and the world that are making a positive impact in their respective communities.

They are making a difference by addressing various social and environmental issues, such as poverty, unemployment, and environmental degradation. They are also creating innovative solutions to these issues, such as sustainable products and services, job opportunities, and waste reduction.

Moreover, social enterprises in Malaysia are receiving more attention and support from both the government and private sector. The Malaysian government has launched several initiatives to support social enterprises, such as the Social Enterprise Blueprint 2015-2018 and the Social Impact Matching (SIM) Grant.

Private sector companies are also investing in social enterprises through corporate social responsibility (CSR) initiatives and impact investing. Even more so now, with ESG being the buzzword in 2023 and beyond. 

Overall, social enterprises in Malaysia are playing a vital role in creating positive social and environmental change while also being financially sustainable. They are proving that business can be a force for good and that profitability and social impact can go hand in hand.

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