learn about social enterprise

FAQ


What is a social enterprise?

Social enterprises are businesses that trade for community benefit. They sell products and services for the sole purpose of delivering social or environmental benefits to communities. Social enterprises have an explicit social, cultural, environmental mission, and they achieve this mission through the sale of goods and services. Profits generated are used to fulfil this mission. Social enterprises may create employment and training for disadvantaged job seekers, provide services to meet community needs, or generate income for charities for not-for-profit groups. Read our definition of social enterprise.

Who is Social Traders?

Social Traders is a social enterprise development organisation that was launched in June 2009. Based in Victoria, it came about in response to the need for systemic change required to support the development of social enterprise in Australia. Whilst much of Social Traders’ direct work with social enterprises occurs in Victoria, we work nationally in the areas of research, advocacy, opening markets and resource development. Read about Who We Are & What We Do.

What are some examples of social enterprises?

The social enterprises that are most visible in Australia are the opportunity shops that are located in every suburb and town. Some of the more well known social enterprises include the Bendigo Bank Community Branches and The Big Issue. Behind these well known identities are thousands of other social enterprises that operate in most communities across the country. Read case studies.

Are all social enterprises nonprofits?

The term social enterprise includes both nonprofits that use business models to pursue their mission and for-profits whose primary purposes are social. Social mission is primary and fundamental; the organisational form depends on what will best advance the social mission.

What industries do social enterprises operate in?

Whilst there are industries where social enterprises are more likely to be found, social enterprises can operate in any field. Some of the industries which social enterprises are often associated with include recycling (both household and commercial), catering and hospitality, landscape and maintenance services, banking, community radio, furniture building, mail services, packaging and IT.  For further information refer to the FASES research.

Why do people develop social enterprises?

There are 3 principle motivations for developing a social enterprise:

  1. Income generation - Many nonprofit organizations see social enterprise as a way to reduce their dependence on charitable donations and grants through commercial activity.
  2. Employment – Many people see employment or engagement of marginalised groups as the principle motivation for social enterprise.
  3. Service delivery – Social enterprise has the capacity to create or retain services needed in communities.

Read about social enterprise motivations and types.

Where do "social entrepreneurs" fit in?

Social entrepreneurs are individuals who pursue opportunities to create pattern-breaking change in inequitable systems, whether through social enterprises or other means.

What data is available on the size and scope of the social enterprise sector?

The forms social enterprises can take and the industries they operate in are so many and various that it has always been a challenge to define, find and count social enterprises. In 2009 Social Traders partnered with the Australian Centre for Philanthropy and Nonprofit Studies (ACPNS) at Queensland University of Technology to define social enterprise and, for the first time in Australia, to identify and map the social enterprise sector: its scope, its variety of forms, its reasons for trading, its financial dimensions, and the individuals and communities social enterprises aim to benefit.

This FASES project (Finding Australia’s Social Enterprise Sector) produced its final report in June 2010. The project was led by Associate Professor Jo Barraket, Australia’s leading social enterprise academic. Download the summary and full report of the FASES research.

Should social enterprises make a profit?

If a social enterprise does not make a profit, it depends on philanthropic or government support to stay afloat. Some social enterprises exist knowing that they need to raise funds every year to continue operating. These social enterprises which are reliant on non-commercial sources of support believe their social returns merit the grants they seek and secure. Most social enterprises seek to generate a profit from trading activity because they are ineligible for grants or because they choose to operate this way.

What is social procurement?

Social procurement involves organisations and individuals choosing to purchase a social outcome when they buy a good or service. For further information about social procurement, click here.

Where can I get advice on starting up a social enterprise?

Like any other business, setting up a social enterprise requires substantial advice, investment, and support. Much of the support available to mainstream business may be relevant to social enterprises starting up, as they often face many of the same barriers. The Social Traders website provides links to a range of tools and resources that will help people to develop a social enterprise.  View resources and tools for start-up social enterprises.

If you are starting up a enterprise it is always good to learn from others’ mistakes and successes. Our info briefs and case studies on social enterprises illustrate some of these stories from across Australia. You can also attend one of our social enterprise study tours.

How can I learn more / get involved?

The Social Traders website is a great way to get involved. Our website provides access to a range of information on activities, news and events. Register on our homepage to receive our tri-weekly e-bulletin, which provides the latest news about the sector and Social Traders. Ask us a question on Facebook or Twitter, or simply contact us directly to let us know what you are doing.