By Craig Dodge – An interesting question came up recently: What’s the difference between a social business (social enterprise) and a ‘regular’ business? Which often leads to the question about what’s the difference between a social business and an NGO (Non-Governmental Organization or charity).
This post will attempt to give a brief answer to those questions, and explain where Phare, The Cambodian Circus fits.
Social Business vs. ‘Regular’ Business
A social business and a ‘regular’ business are similar in that they both survive by making a profit selling something; product, service, entertainment, etc. The difference is how they use the profit. Profits in a ‘regular’ business go to the owner or owners to do with as they wish. Profits in a social business go to benefit society, usually to a specific cause that the social business identifies.
You might be thinking a social business sounds a bit like a charity, right? Charities work to benefit society. Social businesses work to benefit society. So what’s the difference?
Social Business vs Charity / NGO
A charity, or NGO, gets money to operate from donations by individuals and institutions, and even sometimes support from the government. The donors are not buying a product or service, but giving money to the charity to do it’s good work. Some NGOs may have a product or service they sell, but they survive mainly on donations. Some social businesses may receive donations, but they survive mainly on revenue from sales.
Where does Phare, The Cambodian Circus fit in?
Phare, The Cambodian Circus is a social business. It is one of the business units of Phare Performing Social Enterprise, along with Phare Creative Studio. Other business units will come soon. The circus survives through sales of tickets, merchandise, refreshments and private events. Ideally, the business will do better than just pay bills, but also make a profit from these activities. The majority shareholder is Phare Ponleu Selpak NGO School. Therefore, the majority of the profits go to support the school’s free education and social support programs to 1200 students daily.
Phare, The Cambodian Circus a responsible, social business in many other ways. Always keeping an eye on making a profit to send to the school, other efforts are made to benefit society when possible. Items sold in Phare Boutique support local artisans and craftspeople. Royalties for each show performed that was created at the school, are paid to the school, even before profit is calculated. The business invests a great deal in the personal and professional development and the welfare of the artists and staff. The business participates in many community activities, sharing art with Cambodian people who otherwise might not be able to experience it.
Phare Ponleu Selpak is an NGO / charity. The school survives mainly on donations. It also earns some revenue through sales of show tickets, merchandise and refreshments, but it depends mainly on donations. Creating Phare Performing Social Enterprise as a separate, profit-seeking business, will hopefully make the school less dependent on donations.
Read more about Phare, The Cambodian Circus’ social mission, and the relationship with Phare Ponleu Selpak NGO School HERE
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.