Non-Profit Vs Non Profit

To understand what exactly a social business is, it is important to understand the differences between them and non-profits and for-profit businesses. As stated earlier, a social business is a cause-driven business in which no personal gain is desired by the investors. Non-profits, on the other hand, have some differences. What makes an organization a non-profit has to do with purpose, ownership, and public support. Charitable non-profits typically have a mission that focuses on activities that benefit society, public ownership where no person owns shares of the corporations or interests in its property, and income must never be distributed to any owners but recycled back into the organization (THE BALANCE SMB). Social businesses are similar to non-profits in that they typically have a mission or goal focused on improving society and for the most part profit generated is funneled back into the organization, not distributed to those in leadership roles.

As stated, non-profits are typically publicly owned; this is not the case for social businesses. Social businesses are still private businesses with private ownership. For profit organizations exist primarily to generate a profit; to take in more money than it spends. The owners can decide to keep all the profit themselves, or they can spend some or all of it on the business itself. Or, they may decide to share some of it with employees through the use of various types of compensation plans (MANAGEMENT HELP). Social businesses are similar to for-profit organizations in that money is generated as a result of their actions. However, in social businesses, that money is funneled first towards advancing a social cause, then back into sustaining the business itself. They key difference between social businesses and for-profits is the way they use their money and their reason for generating money (making a profit vs. tackling a social