What is a Social Enterprise?

Social enterprises are organisations that are:

  • led by an economic, social, cultural, or environmental mission consistent with a public or community benefit; and
  • derive a substantial portion of their income from trade; and
  • reinvest the majority of their profit/surplus in the fulfilment of their mission.

This definition was developed in 2009 by Professor Jo Barraket, as part of the initial FASES research, in collaboration with social enterprises, the community sector, government and intermediary organisations.  It has since been broadly adopted by practitioners and policy-makers.

Not everyone applies (or operationalises) the above definition in the same way.  The meaning of ‘public or community benefit’, ‘substantial portion’ of income and ‘majority of profit’ is often debated. Further, information about how social enterprises generate income and what they do with profit/surplus is rarely publically available. Nevertheless, the definition is generally consistent, if a little less prescriptive than definitions used elsewhere, for example in the UK, Scotland, Canada.

Map for Impact adopted a broad approach to identify social enterprises, with the purpose of:

  • Reflecting the approach that the Victorian Government uses in its Social Enterprise Strategy (2017);
  • Enabling an inclusive assessment of the scope and impact of social enterprise in Victoria (i.e. that includes organisations that do not necessarily identify as social enterprises, but that fit broadly with the definition); and
  • Allowing data to be narrowed, if preferred.

Guided by a broad approach, Map for Impact includes organisations such as community sporting organisations, industry co-operatives, universities, independent schools, Australian Disability Enterprises, as well as not-for-profit providers of childcare, health insurance and superannuation.

For a fuller discussion about identifying social enterprises, please refer to FASES 2010 (pp. 47-55).

For a fuller discussion about the research design of Map for Impact, please refer to the full report.