SOCIAL ENTERPRISE IN THE UNITED STATES: FITTING A SQUARE PEG INTO A ROUND HOLE

The social enterprise movement did not start in a vacuum, but is the latest iteration of business trying to benefit society. In a historical context, it follows in the footsteps of corporate philanthropy and corporate social responsibility. But unlike those movements, social enterprise goes farther by attempting to blend and give equal weight to both philanthropy and profit. This dual mission is contrary to the traditional corporate notion of shareholder wealth maximization, and is an obstacle to the future viability and success of social enterprise. As a result, new corporate entity forms have been developed to help social entrepreneurs achieve their dual purpose goals of philanthropy and profit. The purpose of this article is track the development of social enterprise, to understand why the preexisting legal entity forms are outdated, and to explore the different entity options that social enterprises have to choose from. In doing this, the goal is to provide the reader with a better contextual understanding of the social enterprise movement, its limitations, and how the legal community and government legislatures are trying to help out.