It was very interesting to notice the distinction between Social Business and Social Enterprise made by ClearlySo, an online social marketplace which helps social businesses and social enterprises raise investments, get access to service providers and recruit people. ClearlySo says that social businesses are organizations who have dual motives – commercial (profit-making) and social (which they define as SEE = Social, Environmental and Ethical) whereas social enterprises are organizations which, though are sustainable through a revenue generating model, are primarily focussed on creating social impact and hence channelize most of their profits towards that.
With the world of social entrepreneurship becoming more wide-spread, such differentiations will be become crucial with time and are of paramount importance to social investors, foundations and funds. ClearlySo doesn’t talk about the legal structure of these organizations at any point which is another important aspect of how organizations are looked at by investors. In India, a new breed of hybrid entities are sprouting up which are registered as both for-profit and non-profits legally. Such entities are being called social enterprises and can channel donations as well as invite investments, which helps them rise on a double bottom line growth curve.
The definition of social business on ClearlySo in itself is very thought-provoking. What’s interesting to note is that according to ClearlySo, Renewable Energy companies are social businesses by virtue of their very nature whereas pharmaceutical companies are not considered as social businesses due to innumerous controversies around the pharma giants being majorly focussed on making profits and not caring about serving low income communities. Though this kind-of makes sense to some extent, I think the more we try to make this definition objective, the more confusing it becomes. But again, it is important to do that so that people and organizations don’t end up spending most of their time in debating on semantics.
Acara Institute 
Interesting post. There as many definitions of social business as there are social businesses. From our view at Acara, we don’t really care much about the definition, I think it will sort itself out. As long as the business/enterprise is financially sustainable in some way, it’s ok. That can be done in a lot of ways. I know some investors who say a social business is like a “regular” business, just a smaller return. I’m not sure I’d agree with that, that seems fairly simplistic. I think the social return can be pretty complicated, and selling to the BOP isn’t enough, for example, to make it a social business. I suppose it’s a little like the the old definition for obscenity, you can’t define it, but you know it when you see it.
Very well put. Definitions do not matter as long as the motive comes out distinctly.