There are more than 20,000 social enterprises in Australia employing an estimated 300,000 people. But what exactly is a social enterprise? Unlike a charity which is regulated by the Australian Charities and Not-for-profits Commission (ACNC) there is no legal structure for a ‘social enterprise’.
So, can any organisation call itself a social enterprise and qualify for grants under this category? Well, there are some broad definitions that distinguish a social enterprise from other types of businesses.
Firstly, the fundamental purpose of a social enterprise is to provide a social benefit – which could be economic, cultural, social, educational or environmental. The Grameen Foundation is a good example. Their mission is to “empower the poor, especially women, to create a world without poverty and hunger”.
Secondly, the majority of the profits of a social enterprise will be reinvested to further their social mission, not paid to shareholders. Lastly, most of their income will be derived from trade, rather than donations or grants.
So, how do they make money? Like all businesses, social enterprises need a viable business model. Types of business models include: entrepreneur support, market Intermediary, employment, free-for-service, low-income clients, cooperative, market linkage, service subsidisation and organizational support.
Social Traders have a certification process which can verify the legitimacy of an organisation claiming to be an Australian social enterprise.
Support for social enterprises:
- Social change central
- Social start up studio
- Social Enterprise Network Victoria
- Social traders
- Collab4 good
Need help in to commercialise a new idea or start a social enterprise? Contact INNOVIC on (03) 8060 3504. We have worked with innovators for over 30 years. Confidential consultations available via zoom, telephone or in person.
