30.1 The Difference Between Social Entrepreneurs & Nonprofits

Social entrepreneurs and nonprofits both work to solve social problems, but they are not the same. Nonprofits rely mainly on donations, grants, and government funding to carry out their work, and any surplus revenue is reinvested in the mission rather than distributed as profit. Social entrepreneurs, by contrast, use business models to generate income, which makes them more self-sustaining and less dependent on outside funding.

The two approaches can overlap. A nonprofit may use social entrepreneurial strategies to strengthen its financial stability, while social entrepreneurs keep a distinct focus on financial viability alongside their social mission.