The Regulation of Social Enterprise
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Description
At one time it was convenient to divide society into three sectors: public, private, and “non-profit.” In recent years, however, the distinctions between the sectors have become blurred, mainly because phenomena previously regarded as unique to the private sector have begun to emerge in the other two sectors. The public sector has introduced practices such as competition and reliance on financial incentives, and the non-profit sector, which includes the charitable sector, has experienced increased “commercialization,” often in response to cuts in government grants to charities. The term “commercialization” has a number of meanings, but in the charitable sector frequently refers to charitable entities’ engaging in commercial activities—i.e., providing goods or services in exchange for valuable consideration. This phenomenon is sometimes called “social enterprise” and encompasses a wide variety of activities. Familiar forms of social enterprise include small-scale bake sales and car washes, the sale of Girl Guide cookies, the operation of gift shops and food stands by hospitals or museums, and the rental of unused real property by charities of all kinds. More innovative forms include charging user fees for social services, using a charity’s staff to provide services to corporate clients at market prices, selling membership lists, and licensing trademarks to for-profit corporations. This chapter focuses on the legal regulation of social enterprise. The first section outlines the current legal regime. The remainder of the chapter examines the benefits and the dangers associated with permitting charities to engage in social enterprise and the advantages and disadvantages of various methods of taxing the income that it generates. I conclude by outlining a proposal for reform of the current regime.
Source Publication
Between State and Market: Essays on Charities Law and Policy in Canada
Source Editors/Authors
Jim Phillips, Bruce Chapman, David Stevens
Publication Date
2001
Recommended Citation
Davis, Kevin E., "The Regulation of Social Enterprise" (2001). Faculty Chapters. 294.
https://gretchen.law.nyu.edu/fac-chapt/294
