The legitimacy of social enterprise

Abstract Social enterprise has emerged as a businesslike contrast to the traditional nonprofit organization. This article develops an explanatory direction for social enterprise based on institutional perspectives rather than more traditional rational economic concepts. Through Suchman's typology of legitimacy (1995), the article argues that the origin and evolution of social enterprise is put into dramatically different focus, particularly through the concept of moral legitimacy. Moral legitimacy not only connects the overall emergence of social enterprise with neoconservative, pro‐business, and promarket political and ideological values that have become central in many nations in the Organization for Economic Cooperation and Development but also explains the observation that social enterprise is being more frequently understood and practiced in more narrow commercial and revenue‐generation terms.