Reposted from the Cardus After Hours blog (RIP).

Given that it is Christmas, I was watching It’s a Wonderful Life and the social enterprise element really struck me. On the one hand you have George Bailey, who, through various circumstances, has to give up aspirations of university to run a building and loan company. The company makes it possible for people to own their own homes rather than rent from the slum lord businessman, Mr. Potter, who is the quintessential socially caustic capitalist. He never misses a chance to make a buck, no matter what the cost to the people around him. George Bailey, on the other hand, seeks to utilize his business to directly improve the lives of his fellow citizens every chance he gets.

The idea that business might elevate or degrade is hardly new. Frank Capra directed the film which came out in 1946. Other historic examples go back as far as enterprise itself. The writers, Frances Goodrich and Albert Hackett, where interested in the plight of people. Frances served for a time as a social worker. The film highlights the structural role that business plays in shaping a community.

When George is given a glimpse (via Clarence the angel) of what Bedford Falls would look like without him, it’s clear that various human vices have been exploited to the advantage of Mr. Potter and the significant disadvantage of the townspeople in re-named Pottersville.

Business plays a powerful determining role in the lives of people. The questions surrounding social enterprise involve learning more about how to create conditions that lead to increased common good without destroying the powerful force of commerce and the marketplace.

Plot aside, if you consider that both men were in business but with altogether different aims, it begins to sketch out what social enterprise is about—facilitating more George Bailey’s to offset the deep gaps that can and do arise in market-driven capitalism.

It can be confusing to explain what social enterprise is and we ought to be on guard against bafflegab wherever we might find it. However, just because something isn’t easy to explain doesn’t mean it isn’t important (try explaining how to knit over the phone). Social enterprise is an exploration involving a balance between not-for-profit social good and for-profit market drive. A not-for-profit can have a lot of money, it just belongs to the not-for-profit rather than an owner and has a social good mission of some sort. The earnings of a for-profit accrue to owners or shareholders and need have no social good mission outside of operating within the bounds of law.

The intriguing blur that current explorations of social enterprise creates arises, for examples, from the potential of a for-profit enterprise being driven by a social mission where significant portions of the profit are driven back into the services, employees and functions of the enterprise such that those resources lead to direct improvements in a community. The business is a typical company but has a very different motivation and orientation. What if a for-profit enterprise was better at employment services than a not-for-profit that was organized for that purpose? Can the strengths of the market be turned in such a way that the negative effects are minimized while the social good is maximized?

Within these crossing points we are intently exploring how legal, financial and other structural issues and challenges might be changed to foster increased common good returns on the for-profit side while also giving not-for-profit organizations greater access to the capital and resources they need to sustain their mission over the long haul.