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When business equals community benefit

Emily Hollosy April 22, 2010

3 min read

Australia has the third most enterprising not-for-profit sector in the world, where around 40 per cent of income is derived from trading activity, excluding trade with governments.

Yet Social Traders Managing Director David Brookes says that many of these organisations do not identify themselves as belonging to a ‘sector’ as such, far less consider themselves as social enterprises.

“Social enterprise is not a new concept,” Brookes explains, A basic definition of a social enterprise is a business created specifically to deliver a social outcome or community benefit.”

“Based on the broad definition of businesses that trade with a social purpose and deliver social dividends, there are many examples of social enterprises that have been around for decades.

“It may be that we are in fact towards the front of the pack in terms of social enterprise activity and we’ve yet to mobilise the force of this growing and exciting movement.”

Why is social enterprise more popular now?

Over the past few years the Victorian Government has been working with both private and community sector organisations as part of its broader social policy agenda.

Brookes explains that social enterprise has the potential to be used as a different and innovative platform that contributes to businesses’ financial and non-financial resources.

He sees this as one of the reasons behind the recent interest these enterprises have been attracting from philanthropic foundations, trusts, and the private business sector.

In Brookes’ opinion, the rise in popularity of social enterprise is also due to the changing landscape brought about by the global financial crisis, which contributed to general awareness that social enterprises have an increasingly important role in addressing economic and social challenges.

What is Social Traders?

Social Traders was established in 2008 to build on the commitment to and growing interest in social enterprise by both government and community sectors.

The organisation aims to build a robust and cohesive sector through encouraging and supporting the development of a commercially viable social enterprise in Australia. It does this by:

Raising the profile and highlight the benefits of social enterprise
Opening up market opportunities and access to finance for social enterprises
Increasing the trading capacityof enterprises
Establishing a co-ordinated approach to social enterprise development in Australia.

Brookes says another issue raised by the social enterprise agenda is the question of what kind of organisations are involved with or interested in contributing to this social environment.

Some of the diverse organisations that Social Traders engage with include established and emerging social enterprise leaders and practitioners, local, state and federal governments, the private business sector, community sector organisations, the philanthropic sector, academic and research organisations and other intermediary support organisations.

Challenges for social enterprise across the sector

Brookes is confident that the organisation has a strong base from which to build a stronger social enterprise sector in the years to come.

However, he does recognise the challenge involved in building awareness and understanding of the benefits social enterprise can bring across government, business, philanthropic and community sectors.

He is also mindful of the challenge to ensure that the impact and benefits of social enterprise are better measured and understood.

For Brookes, the importance of overcoming these challenges will ensure that:

The right sort of support infrastructure and investment is provided for enterprises to grow.
Financial models are developed to respond to the needs of the sector.
Social enterprise is not seen as a panacea to society’s challenges, but recognised for its potential as a different way of doing business and playing a significant role in responding to community needs.
Duplication of effort and resources is avoided by ensuring co-operation and co-ordination of social enterprise research, policy development and advocacy.

A bright future for social enterprise in Australia

Commenting on the bright future ahead for social enterprise, Brookes says: “We are witnessing growth in social enterprise as a platform for achieving social inclusion objectives, be that through employment or service delivery.

“There is commitment to building knowledge and increasing recognition of the need to provide a supportive environment for enterprises to grow in terms of access to finance, market opportunities and building their trading capacity.

“For our part, Social Traders is committed to becoming a force for social enterprise through a co-operative and collaborative network across the government, business, philanthropic and community sectors.”

Resources and support provided by Social Traders include:

Conferences, workshops, forums and study tours
A new social enterprise development fund, established in 2010, to provide finance, training and skills development
A business guide and directory that is under development
Information for studies conducted by government and research bodies.

Emily Hollosy

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When business equals community benefit

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