The concept of social entrepreneurship has recently attracted considerable attention from numerous scientists and policymakers. The basic assumption of this model is that entrepreneurial activities, whether at the level of individuals or groups, should serve the greater good of society, and not focus exclusively on maximizing profits, as is the case with traditional entrepreneurship. It is this assumption, despite the lack of appropriate definitions and theories, that brought the concept of social entrepreneurship global attention. The paper defines and interprets concepts within the framework of social entrepreneurship, such as social enterprise and social entrepreneur, as well as the concept itself and its impact on the community. The paper offers a summary of the evolution of social entrepreneurship in Croatia, an analysis of its current state and highlighting its advantages and disadvantages, i.e. the challenges it faces. Additionally, given that Croatia is a member of the European Union, the paper examines the impact of the European Union on social entrepreneurship and the position of Croatia in relation to other member states. Croatia can boast of a rich history of social entrepreneurship, which is largely due to the efforts of civil society groups in nurturing this sector. The Government of the Republic of Croatia, along with its accession to the EU, created the National Strategy for the Development of Social Entrepreneurship in the Republic of Croatia from 2015 to 2020 as a priority. The goals of this strategy were to establish an institutional, legal and financial framework, to build a register of entrepreneurs and to provide support and education. However, despite these goals, very little progress has been made in their realization.