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What is a Social Enterprise?

The world is changing rapidly around us, and with it comes a big change in the funding of community and Not For Profit (NFP) activities. As the neoliberal order sadly flourishes, government assistance is drying up for most social causes, making grants and direct aid increasingly scarce. As everyday donors want something more than a plastic poppy for their charity buck, it is no longer enough to simply appeal to emotion and hope that an advert showing starving children will get you thousands in return. The average donor has become smarter and a little more conscious that donations to large multinational charities often go into administration fees, rather than to the actual cause.

However, don’t pack your bags and give up on humanity just yet. For in every crisis lies opportunity, and for the NFP world the pull back of government assistance has ignited a well-received revolution called ‘Social Enterprise’. Many conscious consumers are becoming disenfranchised from consumerism. They realise their dollars end up with silent, well-off investors and shrewd marketing executives, while workers in developing countries are paid next to nothing. Social enterprise is a perfectly placed solution for changing this, redirecting the value of our purchases to the people and community that have put in the work. Consumer trends are showing a rise in responsible consumption, where shoppers prefer ethical goods and services; even paying a little extra for more environmentally and socially-conscious retail goods.

The social enterprise concept has a well-ingrained place in Australian society and we have over 20,000 independently-operating social enterprises supporting environmental or social causes. What started off as bake sales and garage sales are now thriving national businesses that collect donated used goods and, with the help of volunteer labour, retail across our sunburnt land. Yes - you too have contributed greatly to the returns of social enterprises when visiting the Salvos, Vinnies, Red Cross and a multitude of other op shops supporting various causes. And what a wonderful idea; not only are we helping community groups raise money to help those in need, but we are also recycling goods that would otherwise adorn our landfills and dumps. All this, while remaining fashionable and reaffirming that capitalism and consuming unethically mass-produced threads is far from the only road to being stylish... We’re born that way baby!

While second-hand retail is a positively perfect recipe for social enterprise, it is not the only way by far. Most business ideas can run on a social enterprise business model and it doesn’t even mean that they must be run completely by volunteers. Social enterprises can and should employ people and run like your usual fiscal business. There’s just one main difference: profits or a percentage of the revenue are earmarked for the benefit of the community, rather than for shareholders. This ‘profit’ can be used to grow your social enterprise into other communities which will in turn employ more people (god knows regional and rural areas could do with more jobs), or put toward a community centre or project.

There are some very successful social enterprises that are already healthy and thriving within our communities. Parent and Citizens Associations in schools run the tuck shop/uniform shop as a social enterprise; RSLs, Surf Life Saving and Bowls Clubs run their bars and restaurants as a social enterprise. Other examples include events centres, cafes, mobile laundry services, cooperative vegetable shops, publishing companies and many more.

Accountability and transparency is the key to running a successful social enterprise. Just like any business, a social enterprise needs to run in line with the established legislation. While currently Queensland legislation has not yet caught up to defining a social enterprise concept, there are legal parameters within existing NFP frameworks that accommodate it. Whether it is an Incorporated Association or an Incorporated Company by Limited Guarantee that you choose for your Social Enterprise, it will allow you to trade, employ people, pay GST and grow in an ethical, socially-minded way.

At #MakingItHappen we can help you set up, fund and market your Social Enterprise. We will help you maximize your impact potential, whether it is intended to create employment, support marginalized people, provide access to more services or generate an income stream for your NFP.

Get in touch today!