Social enterprise:key concepts

Joanne McNeillCommunity Capacity Building Officer Social Enterprise

City of Sydney Council – Wednesday, 28 March 2012

. . . what is ?

social enterprises are businesses that trade for a social, environmental or cultural purpose . . .

• generate a substantial portion of their income through trading• reinvest the majority of their profit / surplus (non-distributing)• include an asset lock

Social enterprise is about practice

. . . the difference . . .

community enterprises . . .

. . . are usually place-based,identify strongly as the agent

of the people by whom and for whom

they have been establishedCommunity Enterprise Hub, Mt Druitt

PLACE – Partners in Learning & Community Enterprise, TAFE

. . . the difference . . .

. . between a social enterprise, a social entrepreneur and social innovation . . .

broad spectrum . . .

Diverse on three levels:• Form• Purpose• Markets

legal forms . . .

• Cooperatives, Associations and Mutuals• Fair Trade Organisations• Intermediate Labour Market Companies• Charitable Business Ventures • Social Firms• Community Enterprise• Community Development Finance Institutions• Australian Disability Enterprises• Hybrid

• Important consideration – any relationship with parent nonprofit?

purpose . . .

Common motivations

• employment - provide employment, training and support for marginalised groups; two types

• service delivery - create or retain services in response to social or economic needs

• income generation - generate profits to support other community or not for profit activities

. . . types . . .

• External social enterpriseBusiness activities are wholly distinct from organisation’s social aim or mission. Often established to fund social services, activities and operating costs. Business activities are external to operations, but support the social programs through supplementary funding.

• Integrated social enterpriseSocial aim or mission overlaps with business activities, and may include an overlap of costs and sharing of assets. Often established to create a funding mechanism in order to support the organisation’s operation and social mission. Enterprise often enhances organisation’s mission and enables it to achieve greater social impact.

• Embedded social enterpriseSocial aim or mission is wholly entrenched in business activities of venture – mission and enterprise activities are the same, business activities are embedded within organisation’s function and social program and is fundamentally central to mission.

Social enterprise typology, Virtue Ventures – www.virtueventures.com

. . . social impact . . .

• legitimacy

• greater scrutiny

• clear link between model & change want to see - Theory of Change

• evolving field

• no one approach

• what does success look like

markets . . .

Example

Salvo’s legal - http://salvos.org.au/salvoslegal/

• full-time, self-sustaining legal practice specialising in property and transactional commercial law 

• difference is that fees paid by clients fund the operation of another firm, Salvos Legal Humanitarian - which operates to provide free legal advice and assistance to those most in need without any fee

• first class commercial legal services are provided at a market competitive fee

• aims to use its compassionate dedication, creativity, ingenuity and skill to fight against social injustices

• means each procurement dollar delivers an additional benefit, beyond the service purchased

. . . not business as usual . . .

• blended inputs, blended returns

• different types of markets – eg. BoP, not end user

• different viability scenarios – balance of returns; reserves

• social vs business costs

a strategy – nexus point

not a program … what will you sell, who will pay for it?

not a business … who are the beneficiaries, how will you know?

. . . an AND approach… not about replacing

so ….

recent developments . . .

Federal activity:• Innovation Fund and Jobs Fund• Social Enterprise Development & Investment Fund (SEDIF)• Social Enterprise Finance Australia (SEFA) & Social Enterprise

Solutions

NSW State Government:• Community Builders Fund• Some social procurement interest

Councils in Sydney area:• Parramatta City Council program• Social Enterprises Sydney• Social Procurement Action Group

development support . . .

• Is critical, and difficult• Needs effective specialist approach• Not a funding stream or program, not an SME• Infrastructure tier limited in Australia

• Social Enterprises Sydney• Initial focus on Sydney West and Central Coast regions• Network model• Establishing membership base• www.socialenterprises.com.au

further info . . .

• http://www.parracity.nsw.gov.au/work/economic_development/social_enterprise:

– Churchill Fellowship report: How the public sector can support social enterprise development

– VIC DPCD: Social Procurement - A Guide for Victorian Local Government

• Social Enterprises Sydney– www.socialenterprises.com.au

• Social Traders and the FASES report – http://www.socialtraders.com.au/finding-australias-social-enterprise-sector-fases

• School for Social Entrepreneurs– www.sse.org.au

• Social Enterprise Finance Australia (SEFA)– www.sefa.org.au

• Social Enterprise Solutions– www.foresters.org.au/socialenterprisesolutions/