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The unique power of social enterprises to create social value

From geopolitical tensions to climate change and global pandemics, our world is facing challenges.

26 April 2022

Australia

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In Australia, the landscape is also being shaped by significant policy changes. This includes our transition towards renewable energy, and a huge pipeline of once-in-a-generation infrastructure projects transforming our cities and regions.

Changes like these can be challenging. But with them come opportunities to address social issues that compound disadvantage and uphold systemic injustice.

Social value through social enterprise

To address disadvantage, we need to build the capacity of individuals and communities to grow, feel empowered and included. The power of social enterprises to do this is unique, yet largely still untapped.

Social Traders is Australia’s social enterprise certifier and intermediary dedicated to connecting businesses and governments with social enterprises. It defines social enterprises as:

‘An innovative breed of businesses that exist to create a fairer and more sustainable world.’

According to Social Traders’ own definition a social enterprise must:

  • ‘Have a primary social, cultural, or environmental purpose with a public or community benefit

  • Derive a substantial portion of their income from trade (generally >50%)

  • Invest efforts and resources into their purpose such that public benefit outweighs private benefit.’

And it groups social enterprise benefits under three main categories:

  • ‘Employment-generating: creating employment and training opportunities for marginalised people – also known as Work Integrated Social Enterprises (WISE)

  • Community need: delivering accessible products and services to meet community needs that are not met by the market.

  • Profit redistribution: donating at least 50% of profits or revenue to charity.’

Young man with Downs Syndrome working in a cafe. Wearing a red apron and handing a packaged bag of food towards the camera. Slight friendly smile

Creating inclusion through Work Integrated Social Enterprises

Barriers to employment can take different forms. Language and culture for recent migrant and refugees, mental health challenges, intellectual or physical disabilities, multigenerational disadvantage, lack of education and skills, trauma like that experienced by survivors of domestic and family violence, or those suffering from post-traumatic stress disorder (PTSD).

Providing employment opportunities to marginalised people can be challenging for a “normal” business. Thanks to their mission-driven business model, ability to attract philanthropic support, and capacity to leverage access to other government programs, Work Integrated Social Enterprises (WISE) are perfectly placed to provide employment for people who need some extra support. They prepare individuals for open employment, offering them the skills and confidence to seek and secure employment in a “normal” business.

While the end game must be to enable and empower all businesses to have inclusive and supportive employment practices, WISE offer employment and training opportunities in a supportive environment.

They cater for the additional barriers and needs of more marginalised community members. Employment opportunities provided by these social enterprises can be a powerful first step towards inclusion and mainstream employment.

In some cases, transition to open employment is not possible, but social enterprises can continue to offer meaningful, inclusive and fulfilling employment to people who would otherwise remain marginalised and isolated.

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Growing a strong social enterprise sector

Growing a strong social enterprise sector

Establishing a successful social enterprise can be challenging. Just like “normal” businesses, many social enterprises fail. Collaboration and partnerships can help these businesses to flourish, and transition from small, vulnerable enterprises to organisations that can be scaled-up to compete on large procurement contracts.

Collaboration among governments, social enterprises, businesses, philanthropic organisations and communities is often the best way to amplify collective impact.

Great examples of these kinds of partnerships include:

  • The Bread and Butter Project: with the support of philanthropy and the purchasing power of supermarket giants like Woolworths and Harris Farm, it is able to employ refugees and asylum seekers, boosting their prospects of successful resettlement and employment and developing a strong sense of belonging.

  • White Box Enterprises: works with other social enterprises, government, investors and philanthropists to build, replicate and support large-scale social enterprises, employing overlooked and underserved people. It is currently incubating innovative social enterprises like Australian Spatial AnalyticsHotel Housekeeping and Sheetly among others.

  • Kick Start: supported by the PAYCE Foundation, the philanthropic arm of property developer and investment company PAYCE. Kick Start is a WISE that partners with the construction industry and TAFE, offering worksite mobile canteens that employ and train young people facing barriers to employment.

  • Clean Force: provides quality commercial cleaning services in Melbourne, Bendigo and Sydney for offices, apartment complexes, entertainment venues and vacated residences, as well as roads and grounds maintenance.

Collaborations can be complex, but the potential that comes from successful partnerships and the results that can be achieved through them, make them a compelling proposition. And a necessary one.

It’s time to get serious about social procurement

With growing community, government, and market expectations for businesses to be socially responsible and comply with the UN Sustainable Development Goals, now is the time for government agencies and businesses to pursue social procurement in earnest.

By making this a standard procurement practice, and forming strong connections between government, not-for-profits, businesses, and the philanthropic sector, risks can be shared while the power of collaboration is harnessed.

An increasing number of WISE organisations produce goods and offer services that can compete with for-profit businesses in the open market. This offers government and business buyers an opportunity to procure high-quality goods and services that are competitively priced, while creating jobs and opportunities for some of the most disadvantaged members of our community.

Access to peak bodies and intermediaries like Social Traders (or Supply Nation when it comes to First Nations businesses) is a smart way to become part of a marketplace where commercial transactions become a win-win proposition.

If we embrace a philosophy where the value of purchase is not just in the economic benefits it provides for the buyer and seller, but in the social value that is created through businesses that employ, build capacity, and create opportunities for those facing disadvantage, we will be well on our way to addressing Australia’s underlying societal and economic problems, and bridging the divide between the “haves” and the “have nots”.