We verify your social enterprise status

ST Certification Standards

Our certification standards have been developed:

• Based on extensive sector research
• With independent financial and legal experts
• With input from Australian social enterprises
• With reference against progressive social enterprise sectors in Europe and North America
• By leveraging 10 years of work with Australian social enterprises
• Social Traders consults the ST certification Advisory Group for more complex applications of the certification standards

Covid-19 may impact the ability of some social enterprises to meet certification criteria. Talk to us about your specific circumstances. For a full copy of our guidance notes contact us.

STANDARD DOCUMENTS
Social Traders collects legal and financial documents based on the age of the social enterprise
0 - < 2 years	2 - 5 years
Signed legally binding governing documents* Complete financials (to date) Business plan 12-month cash flow forecast	Signed legally binding governing documents* 2 most recent years of financial statements at the enterprise level Most recent year of financial statements for the parent organisation (if applicable)
*In Yr 1, enterprises without complete governing documents can submit the Social Traders verification certificate, with associated changes to be implemented by Yr 2

STANDARD ASSESSMENT ITEMS
There are some quick items that are assessed across all enterprises
Initial meeting to understand the social purpose and business model ABN/ACNC check Understanding of the relationship between related entities (if applicable)* Quick solvency assessment *Social Traders may not be able to certify some organisations with complex group structures
FULL CRITERIA The criteria are based on the FASES definition of a social enterprise. Certification takes into account the age and impact model of the social enterprise
1. The enterprise has a defined primary social, cultural or environmental purpose consistent with a public or community benefit Clear primary social purpose, consistency in its articulation, and alignment with the business model Terms consistent with operating as a social enterprise embedded in governing documents OR verification certificate indicating commitment (Yr1 only) Public facing documents (e.g. website, annual report) referencing the stated purpose
2. The enterprise derives a substantial portion of its income from trade 50% or more for ventures that are more than 5 years from start-up 25% or more for ventures that are 2 – 5 years from start-up Demonstrable intention to trade for ventures that are less than 2 years from start-up Enterprises with major shifts in strategy may be treated as early stage Historical financial statements and/or planning documents may be requested to demonstrate intention to grow trading revenue for marginal cases
3. The enterprise invests efforts and resources into its purpose such that public/community benefit outweighs private benefit Key test is that public/community benefit outweighs private benefit Direct costs to the social purpose as outlined below, related to the stated social purpose category, as a % of prior year net profit after tax* (these are and/or options):
Employment and/or training for disadvantaged people Total expenditure on wages for beneficiary employees and any direct support costs Product or service of need to the community that is unmet by the mainstream market SEs direct expenditure on providing a product or service of need to a community. Donating profits for a specified charitable purpose Dollar value donated or invested towards a charitable purpose including direct expenditure on managing recipient relationships.
*Social Traders uses prior year net profit after tax (as the denominator). Where there is no profit, Social Traders will conduct a more detailed financial assessment.