Regulation and Incentives for “Social Enterprise” in the United States
But First Greater and More Substantive Differentiation
Bibliographic Data
| ID | 13038452 |
|---|---|
| Authors | John E Tyler (Ewing Marion Kauffman Foundation, corresponding author) |
| Year | 2025 |
| Volume | 17 |
| Issue | 1-2 |
| Pages | 267-296 |
| Publication date | 2025-08-20 |
| Peer Reviewed | Yes |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | Nonprofit Policy Forum (JOURNAL) |
| Journal identifiers | ISSN: 2154-3348 • E-ISSN: 2194-6035 |
| Publisher | De Gruyter (PUBLISHER • DE) |
| DOI | 10.1515/npf-2024-0026 |
| OpenAlex | W4413335887 |
| Language | EN |
| Citations received | 1 |
| References cited | 29 |
Nomenclature around social enterprise, social entrepreneurship, the social economy, social business, or social purpose business means different things to different people under different circumstances. Sometimes, it means different things to the same people in the same circumstances – sometimes even in the same conversation. Clarity can be especially relevant for nonprofits – particularly charitable, tax-exempt nonprofits – for at least three reasons. First, they undertake their own strategic efforts to engage the marketplace to generate revenue and/or advance/scale their programmatic objectives. Second, they are often approached by enterprises purporting to be – even fully believing they are – social. Finally, charities increasingly compete with “social enterprises” for financial support, employees, customers, policymaker attention, etc. Given legal compliance mandates, charities must clearly understand who they are engaging with, how, and the extent of alignment or lack thereof. It can be reasonable to want government regulatory and policy interventions to help force much-needed clarity, which would also benefit the social enterprise movement and its enterprises. Regulatory and policy interventions could reduce green/purpose washing, ambiguity, and confusion and promote aligned engagement, but only if that “middle” space is sufficiently differentiated from traditional approaches and/or flexibility. Neither interest is served by vague invocations of nebulous degrees of attention to owner financial interests, market participation, and social good.Differentiation is important – if not essential. Differentiation must allow for reliably, consistently, and uniformly ascertaining over time what counts as a social enterprise and what does not. If “virtually any organization can call itself a social enterprise,” it will lead to “blurriness as to which business is actually a ‘social’ one,” which arguably describes the current state in the U.S. Whether through legal structure or modalities, social enterprises should exhibit the following: (1) heightened commitment to social good, (2) greater intentionality about predictably and reliably connecting their behaviors to socially good outcomes, and (3) consistency through time and persistence through circumstance. This essay submits that the U.S. lacks coherence, predictability, differentiation, critical mass, and a general will to enforce a reliable ordering of priorities that persists over time and can weather changes in ownership priorities and personnel. Even so, there are organizations whose operations are sufficiently different. There are also those that only purport to be different enough. Until there is differentiation at scale, this essay suggests that government regulation in the present will need to be through means applicable to for-profit businesses and, in the process, help identify green/purpose washing, promote clearer communication of purposes and priorities, and facilitate alignment. This essay first evaluates words commonly used in reference to social enterprise – impact, intentions, and outcomes – but finds them deficient. The essay next considers means for differentiation per the three characteristics listed above. Finally, the essay compares how other countries have invoked those concepts through legal structures or modalities, ultimately concluding that the legal structures and modalities in the U.S. do not support finding a cohesive “middle” space, yet
Economics · Incentive · Market economy · Political science · Community Development and Social Impact · Social Sciences and Governance · Taxation and Compliance Studies
| Unique citing works | 1 |
|---|---|
| Citations per year | 1 |
| Citation span | 2026 - 2026 (1) |
| Citation velocity | current |
| Highly cited | No |
| Citation types | Neutral: 1 |