The role that social enterprises can play in facilitating social inclusion and stimulating social innovation is receiving growing interest from government, philanthropy and the sector itself.

Despite this, little is known about the scope, dimension and impact of Australian social enterprise.

In order to learn more, the Australian Centre for Philanthropy and Nonprofit Studies (ACPNS) joined with Social Traders to undertake Australia’s first attempt to comprehensively identify and understand Australian social enterprise.

As a social enterprise development company, Social Traders will use aspects of the research to create an online tool that will support the social enterprise sector into the future.

Social enterprise

Social enterprises are organisations that exist for a public or community benefit. They conduct their trade practices in order to fulfil their social mission, and they reinvest a substantial proportion of their surplus (or profit) in order to achieve this.

Social enterprises can take diverse forms, and include the commercial trading arms of charities, community or member-owned businesses, and business established by community services agencies to create pathways to employment for people disadvantaged in the labour market.

Recently, new models of social business have emerged, which seek to align every aspect of their economic production with their mission in areas such as waste minimisation, food security and environmental innovation.

The aim

The Finding Australia’s Social Enterprise Sector (FASES) report sought to define social enterprise in the Australian context and examine the social and business activities of organisations within the field.

The purpose of the research was to illuminate the nature and activities of the social enterprise sector, in order to enable the sector, policy makers and the wider public to better understand its scope, diversity and roles.

The method

The project included a series of workshops, interviews and online consultations with 38 key informants, the identification of around 4,000 possible social enterprises via a web and media search, and an online survey involving
365 social enterprises.

The results

Size

The FASES survey results indicate that social enterprises include small, medium and large businesses. The annual turnover in the sample ranged from $0 for start-ups to $48 million, although publicly available information about other known social enterprises suggests that the turnover range is much greater.

Mission

The missions and targeted beneficiaries of social enterprise are extremely diverse, suggesting that these businesses are widely dispersed throughout civil society.

The main purposes of social enterprises are to provide opportunities for people to participate in their communities, and to provide new solutions to social, cultural, environmental and economic challenges.

Types

Types of social enterprises operate within every industry in the Australian economy. They span from commercially-oriented businesses that seek to generate profits to support their mission, through to enterprises that are direct responses to market and/or government failure.

Income

Australian social enterprises are ‘mixed-resource’ organisations, relying on a combination of paid staff and volunteer inputs, and earning income through trading as well as government and philanthropic grants.

Amongst respondents to the survey, 85 per cent reported that trade was by far the dominant source of income. This included 30 per cent of income earned through competitive contracts with government, as distinct from grants. Younger social enterprises were more reliant on contributions from individual members and philanthropic grants than other enterprises.

Age

Contrary to some popular commentary about social enterprises being a new phenomenon, the FASES report suggests that Australia has a mature and sustainable sector, with 62 per cent of its respondents reporting being more than ten years old.

Like all fields of entrepreneurial activity, however, not all models of social enterprise are necessarily sustainable, and individual failures, as well as successes, are likely to occur.

The impact

The FASES project sheds light on an important, yet largely invisible, part of Australia’s social economy.

While this research is an important first step in describing what social enterprises do, more research needs to be done to tell us about how they do what they do and what their societal impacts are.

The leads and contacts developed for the survey research are being used to build an online Australian Social Enterprise Finder with Social Traders, and this will be operational by the end of 2010.

Details of FASES research project can be found at www.socialtraders.com.au/about-fases