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What is a social enterprise?

Social Enterprise Definition

Social enterprises are businesses that trade to intentionally tackle social problems, improve communities, provide people access to employment and training, or help the environment.

Find out more about certification

Social Enterprise Definition

Using the power of the marketplace to solve the most pressing societal problems, social enterprises are commercially viable businesses existing to benefit the public and the community, rather than shareholders and owners.

Social enterprise is a descriptive term for a range of businesses prioritising social goals, rather than a legal form in itself. In the Australian context, social enterprises take on a range of organisational legal structures, making it difficult to distinguish them from other organisations. Social Traders has developed a rigorous and flexible process whereby we certify social enterprises that meet the social enterprise definition. This definition is based on Australia’s landmark research Finding Australia’s Social Enterprise Sector (FASES) conducted in 2010 and 2016 and benchmarked against international standards.

The enterprise has a defined primary social purpose, environmental or other public benefit

The enterprise derives a substantial portion of its income from trade

The enterprise reinvests 50% or more of annual profits towards achieving the social purpose

*Social Traders operationalises this as the costs to the organisation of delivering on its primary purpose in relation to prior year net profits

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