In this post, we’re diving into a fascinating and often asked question: What is a social enterprise, and how does it differ from a regular business or a charity? You might be curious about this, especially when you hear about Phare, The Cambodian Circus, and its unique position in the world of social enterprises.
Social Enterprise vs. ‘Regular’ Business
At first glance, social businesses and ‘regular’ businesses seem quite similar. They both aim to make a profit by selling products, services, or entertainment. However, the key distinction lies in how they utilize those profits.
In a ‘regular’ business, the profits typically go straight to the owners, who can use them as they see fit. On the flip side, in a social business, those profits are channeled towards a specific cause that the business identifies, essentially putting their earnings to work for a greater good.
But wait, you might be thinking: doesn’t that sound a lot like a charity? Well, it’s true that both social businesses and charities aim to benefit society. The difference? Social businesses operate with a sustainable, revenue-generating model, while charities often rely heavily on donations.
Social Enterprise vs. Charity/NGO
Charities and NGOs primarily rely on donations to sustain their operations. People donate to support their good work, not necessarily in exchange for products or services. While some non-profits might also sell items or services, donations are their lifeblood.
On the other hand, social businesses focus on generating revenue through sales. Yes, they might receive donations from time to time, but their primary source of sustenance is the income they generate through their offerings.
Where Does Phare Circus Fit In?
Enter Phare, The Cambodian Circus, a prime example of a social enterprise. This remarkable venture, part of Phare Performing Social Enterprise along with Phare Creative Studio, thrives by selling tickets, merchandise, refreshments, and hosting private events. The goal? To not just cover expenses but also generate profits.
The majority shareholder in this social enterprise is the non-profit school, Phare Ponleu Selpak. Consequently, most of the profits earned by Phare Circus are funneled back into supporting the school’s free education and social support programs for over 1200 students daily. Meanwhile, minority shareholders are contractually obligated to allocate their dividends to a social cause, be it Phare Ponleu Selpak or any other meaningful initiative.
Phare Circus’s Commitment to Social Responsibility
But it doesn’t stop there. Phare Circus goes above and beyond to benefit society in various ways. They showcase and sell products in Phare Boutique, supporting local artisans and craftsmen. Even before calculating profits, royalties from each show go directly to the school. The business invests heavily in the personal and professional development and welfare of its artists and staff. Plus, they actively engage with the community, sharing art with Cambodian people who might not have had the opportunity otherwise.
The Impact on Phare Ponleu Selpak
Phare Ponleu Selpak, as a non-profit charity, primarily relies on donations to operate. However, by creating Phare Performing Social Enterprise as a separate, profit-driven business, they aim to reduce their dependence on donations and achieve a more sustainable future.
So there you have it, a clear insight into what makes a social enterprise stand out from the crowd, and how Phare, The Cambodian Circus, is making a positive impact on society while captivating audiences with its mesmerizing performances. To delve deeper into their social mission and their relationship with Phare Ponleu Selpak NGO School, read on!
What is a social enterprise according to the man who invented them?
Muhammad Yunus, Nobel Peace Prize Laureate and founder of the first micro-finance organization Grameen Bank, defines social enterprises as:
A social business is a non-dividend business whose aim is to solve a social problem through business methods. It is different from both a traditional personal profit-making business and a not-for-profit organization.
All profits from operation of the business must go toward achieving one or more social objectives in addition to covering costs of the company. No personal gain is desired by its investors. A social business can address problems such as providing healthcare, housing, and financial services for the poor, nutrition for malnourished children, providing safe drinking water, introducing renewable energy and much more in a business way.
A social enterprise is a kind of business:
- Whose primary aim is to address a social problem;
- Which is financially self-sufficient;
- Which does not pay dividends to its owners.
Hopefully, this post helped clarify the difference between a ‘regular’ business, a social business and a charity / NGO. Please WRITE US if we can provide any additional information.
