Finding Australia's Social Enterprise Sector (FASES) - Final Report
Executive Summary
Social enterprises are organisations that:
- Are led by an economic, social, cultural, or environmental mission consistent with a public or community benefit;
- Trade to fulfil their mission;
- Derive a substantial portion of their income from trade; and
- Reinvest the majority of their profit/surplus in the fulfilment of their mission.
This document reports on the research findings of the Finding Australia’s Social Enterprise Sector (FASES) project. FASES is a joint initiative of Social Traders and the Australian Centre for Philanthropy and Nonprofit Studies, Queensland University of Technology. It is a first attempt to identify the range and scope of social enterprises in Australia.
The methodology utilised in this research included: a review of existing literature and methods of social enterprise mapping; establishment of a project website and preliminary discussion paper to stimulate public engagement with defining and identifying Australian social enterprises, which resulted in four online responses to the discussion paper and 157 nominations of social enterprises to be included in the research; a series of workshops and interviews with 34 key informants to assist in defining social enterprise for the purposes of the research; identification of the social enterprise population through a combination of web and media review, review of existing databases and feedback through the project website; development and administration of an online survey; and
collation and analysis of secondary data. Five hundred and thirty-nine organisations commenced the online survey, of which 365 were valid social enterprises according to our definition.
Based on pre-existing research data and information from our survey, we estimate that there are up to 20 000 Australian social enterprises. This estimate takes into account that some not for profit organisations have multiple business ventures, and that not all social enterprises are incorporated as not for profits.
Our survey results suggest that the Australian social enterprise sector is mature, sustainable and internally diverse with regard to mission and organisational structure. Amongst the 365 survey respondents, 73% had been operational for at least five years, and 62% were at least 10 years old.
Australian social enterprises seek to fulfil a diversity of missions and serve a wide variety of beneficiaries. As a whole, the dominant foci of our survey respondents were on creating opportunities for people to participate in their community, and on finding new solutions to social, environmental, cultural and economic problems.
Australian social enterprises operate in every industry of our economy. Our survey data suggest that they trade predominantly in local and regional markets and focus on fulfilling their missions at local and regional goals. However, some social enterprises operate in international markets and seek to respond to missions of international scope.
The sector includes small, medium and large enterprises, with the majority in our sample being small. Social enterprises are involved in all forms of economic production, including retail, wholesale, and manufacturing. Although present in all aspects of the economy, they appear to operate primarily within the service economy, with 58% of our responding organisations providing services for a fee.
Collectively, Australian social enterprises are multi-resource organisations, relying on a combination of paid and unpaid workers, in-kind contributions, and earned income and other income streams to fulfil their missions. Amongst the organisations that participated in our survey, volunteer numbers ranged from zero to 56 000, with a median number of 10 volunteers. Paid workers represented the majority of human resources; the mean number of full-time equivalent staff was 47, while the median was four and staff numbers ranged from zero to 4 500.
Based on financial accounts for the 2007-2008 financial year, earned income was the dominant source of income amongst responding social enterprises, comprising 85% of overall income. Earned income included contracts with government that were competitively secured. Younger organisations reported being somewhat more reliant on debt equity, contributions of individual members, and philanthropic grants than respondents overall.
Social enterprises engage in all common forms of business planning and development practices. As a group, our respondents tend to engage somewhat more frequently in operational business practices than they do in strategic business development. In comparison with mainstream businesses, social enterprises in our survey reported being relatively more active in both strategic and operational business planning, and relatively more likely to procure business services, such as accountancy and legal services.
The Finding Australia’s Social Enterprise Sector project is a first attempt to shed light on the scope and activities of an important and largely invisible part of our social economy. Our research finds that, contrary to popular commentary about social enterprise, it is not a new phenomenon and it is not organised around a narrow set of missions. Rather, social enterprise – like other aspects of civil society – gives expression to a range of human aspirations as diverse as society itself.
The generalisability of some of the research findings in this report is constrained by the sampling method used, which was chosen because there is no easily identifiable population of social enterprises in Australia. If understanding the contributions and practices of the social enterprise sector is of concern to policy makers and social enterprise advocates, a coordinated approach to identifying the population would be desirable. Finally, while the research presented here tells us something about
what social enterprises do, more needs to be understood about how they do what they do, and the outcomes and impacts of their activities on their targeted beneficiaries and the wider community.
1.0 Introduction and background
There has been growing interest from governments, business, the not for profit sector and
philanthropy in social enterprise in Australia over the past decade. This reflects new demands for innovative responses to ‘wicked’ social and environmental problems, as well as growing requirements for not for profit organisations to diversify their income sources.
Recent changes to federal employment services have identified social enterprise development as one form of social innovation capable of generating jobs and employment pathways for those most disadvantaged in the labour market. This reflects policy interest in the success of some large welfare agencies in establishing intermediate labour market programs based on social enterprise models. In Victoria, the State Government has supported community enterprise development as part of its
community strengthening/development agenda for the last five years. At local government level, large councils such as Brisbane City Council and Parramatta City Council have introduced social enterprise support through purchasing arrangements and capacity building activities.
Beyond government initiatives, there has been growing interest in social enterprise by individuals and foundations interested in finding new approaches to philanthropy and social investment, and a growing number of practitioner forums and intermediary organisations involved in supporting social enterprise development. Social enterprise and social entrepreneurship are gradually capturing the attention of Australian universities, with a small but growing number of academic research centres
researching and teaching in these areas.
Despite this growth in interest, little is known about the dimensions or impacts of the existing social enterprise sector in Australia (Barraket 2004; Lyons & Passey 2006; Barraket 2008). This is in part due to the lack of a self-identifying social enterprise movement or coalition in this country. It also reflects the empirical challenges of identifying the sector; social enterprises operate under various legal structures and are thus not easily visible in the way that, for example, incorporated not for profits or private sector businesses are. A small, but growing number of ‘profit for purpose’ social businesses
are also blurring traditional boundaries between ‘not for profit’ and ‘for profit’ business activity.
As market activity led by a mission to achieve public or community benefit, social enterprise itself challenges presumed divisions between social and economic activity. Further, because of the relative newness of the language of social enterprise, not all organisations that operate as social enterprises identify with this terminology.
The Finding Australia’s Social Enterprise Project (FASES) is a first attempt to identify the range and scope of social enterprises in Australia. The aims of the project are to advance the social enterprise sector by:
- improving public and government awareness of the sector’s diverse forms, activities and contributions;
- identifying the social enterprise population for the purposes of further research of use to the sector; and
- facilitating opportunities for connection between individual social enterprises, potential beneficiaries and markets, and sources of developmental assistance.
The research reported on here responds to the first of these aims. The other outputs forthcoming from the project include a database and a national online directory of Australian social enterprises.
We have sought to be both rigorous in our research approach and transparent about our methods. Like all first attempts to identify the social enterprise sector, however, this one is likely to stimulate discussion and, possibly, dissent. We hope that the research presented here will be understood as a ‘conversation starter’ rather than an attempt to have the last word on the state of the Australian social enterprise sector. We welcome feedback on any aspect of the research.
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