What is Social Enterprise
Social enterprises are businesses that trade to intentionally tackle social problems, improve communities, provide people access to employment and training, or help the environment.
Social enterprise can be challenging to define because the concept has been evolving rapidly in recent years and increasingly blurs the lines of the traditional business, government and non-profit sectors.
The definition of social enterprise differs globally.
The ‘social’ in social enterprise is inclusive. It describes an enterprise that exists to benefit society, be it the people or the planet.
In Australia, the definition adopted by our national certifying body, Social Traders, and adopted by many including SENVIC has three criteria – A social enterprise:
- has a defined primary social purpose, environmental or other public benefit
- derives a substantial portion of its income from trade and
- reinvests 50% or more of annual profits towards achieving the social purpose.
In 2017, there were 3,500 social enterprises in Victoria, employing 1.8 per cent of the workforce and contributing over $5.2 billion to the economy. See the Map for Impact by Swinburne’s Centre for Social Impact.
Social enterprises span the spectrum of nonprofit to for-profit entities. There are three general social enterprise models:
Organisations that employ people who have significant barriers to mainstream employment.
- Fruit2Work (Logistics company employing people with criminal records)
- Outlook (Waste management employing a range of marginalised workers)
- STREAT (café and catering employing young people at risk)
- Charcoal Lane (restaurant training young First Nations people)
- Asylum Seeker Resource Centre
- YMCA Rebuild
- Green Collect
- Good Cycles
- The Community Grocer
Transformative Products or Services
Organisations that create social or environmental impact through innovative products and services.
- GAME (community-oriented inclusive employer providing a range of services and reinvesting profits to deliver support programs for young people at risk)
- CERES and its collective of enterprises: CERES Fair Food, CERES Nursery, CERES Bakery, CERES Fair Wood, CERES Education
- Green Collect
- Good Cycles
Organizations that contribute a portion of their profits to nonprofits that address basic unmet needs.
- Who Gives a Crap
- Thank You
- Many organisations that also meet the B Corp criteria
Staff at CERES Fair Food
Social enterprise is not a silver bullet, but it is a promising approach to fulfilling unmet needs and fostering genuinely “triple-bottom-line” organisations – those simultaneously seeking profits, social impact, and environmental sustainability.
It’s certainly not the only solution, but it is most definitely a solution.
- For traditional non-profits, social enterprise can be a powerful complement to other activities when it advances the social mission and the financial sustainability of the organisation.
- For new start-ups – non-profits and for-profits – social enterprise gives entrepreneurs the ability to bake social impact and financial sustainability into the organization’s DNA from its outset.
- For traditional businesses, social enterprise initiatives enable a company to integrate social impact into business operations and prioritise social goals alongside financial returns.