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Article: How social enterprises are building a more inclusive Australian economy

By Erin Castellas and Jo Barraket

Social enterprises employ twice the rates of Australians with disability and female managers as mainstream small businesses. Our study of Victorian social enterprises also found 12% of jobs are held by previously long-term unemployed people (those who have been out of work for more than 12 consecutive months), and 2% by Indigenous Australians.

This shows that social enterprises are an important vehicle for the development of an inclusive economy – one that broadens economic participation, is more equitable, stable, and sustainable.

Social enterprises are organisations that aim to address social issues, such as homelessness or social exclusion, using strategies from business. For example, by running cafes to train and employ homeless or disadvantaged youth, social enterprises can harness business for social outcomes.

Around one third of board positions at social enterprises are held by women, compared to less than one quarter in mainstream businesses.

Social enterprises also attract significant amounts of volunteer support – around 251 hours per enterprise per year. This creates further opportunities for those marginalised from the mainstream workforce, fostering training opportunities and a sense of community.

These statistics are likely conservative, as many social enterprises do not yet track employment, diversity and trainee statistics.

 

And this is only one part of the story of social enterprises – until recently there was little hard data or research on the sector or its impact.

Not all social enterprises are focused on job creation, many tackle other social and environmental challenges such as reducing environmental impact through recycling, providing services for small communities (such as petrol), and creating responsibly sourced and produced products and services.

But our research shows social enterprises face a lack of resources for marketing, skills development for employees, and accessing finance. Many social enterprises are young non-profit organisations and struggle to fund their own growth.

Challenges faced by social entrepreneurs

The majority of social enterprises have between one and 200 employees, and are structured as not-for-profits. This is part of the reason why the barriers faced by social enterprises are often financial – many lack the necessary operating structures or skills to attract the right kind of partners or financing.

For example, CERES Community Environment Park, an environmental education and technology demonstration park, was completely reliant on grants when it was founded. However, facing the loss of government funding, it was forced to adopt other revenue streams, such as a farm-to-table veggie box delivery service.

The costs for social enterprises to access finance are generally high, as they must first develop scalable businesses and apply for investment. The loans and investments in social enterprises are often small, even though investors and lenders have to do the same risk analysis and due diligence as they would with any other business. This pushes up the cost (interest rates, for example) of accessing finance.

There is some movement to make it easier to support and invest in social enterprises. New organisations are providing programs for social entrepreneurs to build the skills required to grow their businesses and attract investment.

The impact investment sector (made up of investors that focus on social and environmental alongside financial returns) is also growing. And there are now grants available to help social entrepreneurs build capacity and secure investment capital.

 

There are 20,000 social enterprises in Australia, and this number is growing. This growth is in part driven by local and state governments, as well as some large corporations, deciding to source goods from companies that meet social and sustainability criteria.

Social enterprises are poised to grow, as they appeal to entrepreneurs, policymakers and investors who are interested in creating more sustainable, dynamic and inclusive economies.

One barrier to growth remains under-capitalisation – a lack of financial resources. A more inclusive economy, built on social enterprises, requires more investment in business skills (such as marketing and winning new contracts), and better measurement and communication of the social impacts being achieved.

 

This article originally appeared in The Conversation.


Article: Victorian Social Enterprises Boosting Economy with Inclusive Workforce

ProBono Australia feature the Map for Impact project in an article entitled Victorian Social Enterprises Boosting Economy with Inclusive Workforce.


Media Release: Victoria is Australia’s Social Enterprise Champion

A new report detailing the impact of the growing Social Enterprise sector has found that Victoria’s 3,500 social enterprises contribute more than $5.2 billion to the Victorian economy.

Minister for Industry and Employment Ben Carroll visited the offices of The Big Issue – one of Australia’s largest social enterprises – to learn more about their busy Christmas period and to release the Map for Impact: Victorian Social Enterprise Mapping report and website. (See www.mapforimpact.com.au/ )

Developed by the Centre for Social Impact at Swinburne University of Technology, the report and website are key outcomes from the Victorian Government’s Social Enterprise Strategy. The report identifies Victoria as the Australian centre of social enterprise, with more than a quarter of Australia’s social enterprises based in the state.

The Map for Impact report shows that the sector generates around 60,000 jobs, with more than 25 per cent of these jobs addressing the needs of disadvantaged people with barriers to employment.

With more than 50 per cent of social enterprises run by women, the report also found the sector provides jobs for more than 12,000 disabled Victorians, 4000 jobs for long term unemployed people and 985 jobs for indigenous Australians.

Minister Carroll also welcomed a great example of social procurement by Australia Post, which will see the Big Issue’s Women’s Subscription Enterprise process thousands of children’s letters addressed to Santa Claus this Christmas.

The Women’s Subscription Enterprise employs 150 disadvantaged women in Melbourne, Sydney, Adelaide and Perth, providing a job and income as well as access to training, mentoring and support. The enterprise is responsible for packing magazines distributed to subscribers and also engages in external contracts with customers such as Australia Post.

Quotes attributable to Minister for Industry and Employment Ben Carroll

“Congratulations to the Centre for Social Impact at Swinburne University of Technology, for identifying and characterising Victoria’s huge network of diverse social enterprises. Many social enterprises are giving disadvantaged people the opportunity to share in Victoria’s impressive growth through the dignity of a job. These opportunities are critical to our fair and inclusive economy.”

“The Map for Impact report is a key outcome from the Victorian government’s Social Enterprise Strategy,  the first of its kind in Australia, which will maximise opportunities for social enterprises by improving access to markets, raising awareness and building skills across the sector.”

“The Andrews Labor Government strongly supports the social enterprise sector and congratulates The Big Issue on its commitment to employing disadvantaged Victorians.”

“The Big Issue is one of Australia’s longest-running and most significant social enterprises. At least 6500 Big Issue sellers have sold more than 11 million magazines since 1996, generating $26 million in income for the vendors.”

Weblink to Map for Impact website and Report: www.mapforimpact.com.au/


Map For Impact website launched

In July 2017, the Centre for Social Impact, Swinburne was commissioned by the Victorian Government—Department of Economic Development, Jobs, Transport and Resources to undertake a census and mapping exercise of Victorian social enterprises as part of its Social Enterprise Strategy.

Mapping Victoria’s social enterprises for the first time will create a baseline of evidence from which to begin understanding the characteristics of social enterprises across the state. This understanding will go some way in creating a foundation for informing government policy, identifying opportunities for collaboration across the social economy, and facilitating connections in a growing and dynamic sector that can harness business for social good.

Click here to put yourself on the map

What’s in it for social enterprises?

If you ask Sam Marwood, founder and CEO of Cultivate Farms, he’ll tell you, he intends to use the map to “crush the competition.” “Just kidding,” he says with a laugh. Cultivate Farms is a social enterprise focused on helping young people stay in rural communities by finding ways to help them buy and retain farms. “In all honesty, I will take a look to see who else is out there. How many agriculture enterprises are there? I don’t think there are any, but if I do have aligned enterprises, it would be useful to know.”

A map of social enterprises is a tool that can benefit social enterprises in a variety of ways. We’ve heard that for organisations in regional Victoria, the map may provide a great way to identify local collaborators, partners, even suppliers. Bessi Graham, CEO of The Difference Incubator suggests that there is a real opportunity for social enterprises to explore the ‘B2B’ (business to business or social enterprise to social enterprise) market for social procurement. “Social enterprises are often talking about social procurement from government and large corporates, but there is a big opportunity for social enterprises to procure from each other, much like the B corporation movement has done successfully in the United States,” says Bessi.

The opportunities for social enterprises to connect via the map extend beyond a rural and regional focus.

Some Melbourne-based social entrepreneurs have noted that they would really love the opportunity to network with and learn from other enterprises within their trade or industry to exchange best practice or find ways to work together on procurement initiatives. Bec Scott, CEO of STREAT social enterprise, has recently started a ‘foodie’ group of social enterprises for this very reason. A map provides a public resource for other enterprises, who to date may be less well networked, to identify their tribe and find ways to exchange best practice and collaborate for mutual benefit.

Beyond making networking connections, a map of social enterprises offers the opportunity for social enterprises to boost their visibility with potential buyers. Whether consumers, businesses or governments are looking to buy from values aligned companies, putting social enterprises on the map, creates opportunities for buyers to connect with sellers.

Who else benefits?

Aside from the networking, marketing and development benefits for social enterprises, a map of Victorian social enterprises can provide a public good for young job seekers, communities, and government.

The map of Victorian social enterprises provides evidence of the diversity of businesses that are able to work toward social good and make money. This can serve as a well of inspiration for young people or anyone looking to find that intersection between their values and their work. Not only can a map provide examples of the types of businesses that are out there, but it can also provide a sort of business directory for young people who either want to harness the social enterprise business model or look for a values aligned place to work or volunteer.

Creating a baseline of evidence by mapping social enterprises and their economic and social impacts can also inform governments about the importance of partnering with and supporting a burgeoning segment of the social economy. Social enterprises and governments are aligned in their desire to improve social outcomes for communities. Understanding where and how governments can work with these enterprises can lead to better social outcomes and more efficient pathways to get there.

How to get involved

To find out more and for social enterprises interested in putting themselves on the map, click hereCSI-Swinburne is working in collaboration with a number of partnering organisations, like Social Traders, to collate social enterprise directories. If you have a directory of social enterprises that you would like to share with this project, you can contact project manager, Erin Castellas at ecastellas@swin.edu.au.