To define social enterprise, you have to understand the difference between a for-profit business looking to do good and a social enterprise. A for-profit business looking to make a community impact is often still vested in serving their own corporate needs over those of their community. While still wanting to make a positive impact, their main priority often lies with their investors and board. By definition, a social enterprise, even a for-profit social enterprise, is an organization that applies commercial strategies to maximize improvements in human well-being instead of maximizing profits for external shareholders. Social enterprises do not aim to offer any benefit to their investors that will harm the community they are a part of.

Based on the definition of social enterprises, these businesses are designed to tackle current, ongoing social problems and improve communities, individual life chances, and the environment. They earn money and function like any business, but work to make a bigger impact, often reinvesting their profits to make bigger changes.