A landmark study has found that social enterprise success depends on a layered system of interconnected enablers spanning policy, markets, finance, support, people and culture.

Social Traders and RMIT University have released What Works: The Global Evidence on Social Enterprise Success Factors, drawing on a systematic review of 137 peer-reviewed academic studies to answer a question that has long challenged the sector: what enables social enterprises to be not just impactful, but resilient and scalable?

The answer is clear, and it has significant implications for governments, investors and social enterprises themselves.

Beyond trade: A more complete picture

The research builds on Social Traders 2025 report “Social Enterprise: Powered by Trade and Driven by Purpose”, which established a compelling link between trade revenue and social impact. But trade, is only part of the story. It flourishes only when the right conditions surround it.

"Success in social enterprise reflects a layered architecture of enablers," says Tara Anderson, CEO of Social Traders. "Trade is a significant factor, but it only works when supported by adaptive policy, informed markets, mission-aligned capital, capable intermediaries and a culture of trust."

The study identifies six interrelated dimensions that collectively shape whether social enterprises thrive or struggle.

The six dimensions

Policy and strategy sets the foundational conditions. Social enterprises perform better where governments recognise hybrid business models and avoid rigid for-profit or not-for-profit distinctions. Predictable regulation, fit-for-purpose standards and social procurement frameworks reduce costs, build legitimacy and open access to markets and capital. At the organisational level, mission clarity and strong governance prevent the "mission drift" that can erode social purpose over time.

Markets determine whether social enterprises can convert purpose into sustained trade. The research is unambiguous: markets do not automatically recognise social value. Without deliberate demand-side interventions - social procurement frameworks, buyer education, credible certification and active brokerage - even high-performing social enterprises struggle to compete. Market infrastructure is not a nice-to-have; it is essential.

Finance and resources shape long-term resilience. The evidence strongly favours patient, flexible, mission-compatible capital over short-term, output-driven grants. Blended finance, philanthropic support and impact investment are most effective when they complement trade revenue rather than substitute for it. It can build enterprise systems, leadership capability and market readiness. At the organisational level, revenue diversification and strong financial management protect against shocks.

Support through intermediaries, research and development, technology and enabling policy - is the connective tissue of a healthy social enterprise ecosystem. Intermediaries in particular play a critical coordinating role: connecting actors, translating policy into practice and reducing friction across the system. The research finds support is most effective when it prioritises long-term capability building, not short-term compliance outputs.

Human capital is a decisive driver of impact and resilience. Practical training in hybrid leadership, governance and financial literacy is far more predictive of success than formal qualifications alone. Organisations that invest in workforce diversity, succession planning and learning systems are more likely to operate as resilient institutions rather than founder-dependent ventures. At the individual level, entrepreneurial orientation, grit and values-led leadership matter enormously.

Culture and values underpin everything else. Trust, transparency and positive societal perceptions build legitimacy with governments, investors and markets. Organisations that embed values into governance and operations are better able to balance social and commercial objectives and scale without losing their purpose. Values-driven leadership shapes culture from the top down and sustains stakeholder confidence under pressure.

What needs to happen now

The report translates its findings into a clear agenda for action, directed at the four key actors who shape the social enterprise ecosystem.

Governments must formally recognise social enterprise as a distinct part of the economy, designing regulatory, taxation and procurement settings that reward social and environmental outcomes delivered through trade. Social procurement frameworks and buyer education are essential levers for activating demand.

Funders and investors need to shift capital away from short-term grants and toward patient, capability-building finance - prioritising long-term resilience over immediate outputs and ensuring investor expectations are aligned with social enterprise purpose.

Intermediaries, organisations like Social Traders that connect, certify and support the sector, must be treated and funded as critical system infrastructure. Their role in reducing transaction costs and opening market pathways delivers returns across the entire ecosystem.

Social enterprises themselves must invest in governance, financial management, market capability and people systems, reducing over-reliance on individual founders and building organisations that can sustain performance through change.

"No single lever is sufficient," the report concludes. "Impact at scale depends on alignment across government, funders, intermediaries and social enterprises, with each actor playing its complementary role."

As Australia's social enterprise sector continues to grow, this research offers a roadmap. Trade can power social impact at scale, but only when the foundations around it are intentionally designed, resourced and aligned.

Our recommendations to fuel social enterprise impact, resilience and scale

• Recommendations to fuel social enterprise impact, resilience and scale
• Recognise social enterprise as a distinct part of the economy and reward public benefit delivered through trade
• Activate demand through procurement, buyer education and credible standards
• Shift capital from short-term grants to capability-building, mission-aligned finance
• Invest in intermediaries as critical system infrastructure
• Strengthen execution and leadership capability
• Align action across policy, capital, markets and social enterprises to unlock scale

This research was supported by the Global Business Innovation Enabling Impact Platform at RMIT University, with additional funding from the 2025 Strategic Impact Fund.

Wang, L. Biru, A., Onwuka, E., Argus, K., Earles, A. (2026). What Works: The global evidence on social enterprise success factors. Social Traders: Melbourne