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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 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.