Brisbane recently played host to the Social Enterprise World Forum 2022. Over 2700 people from 93 countries attended either in person or virtually to talk about all things related to social enterprise.
We were blown away by the collective work being done in this sector to promote and drive business for good. This included hearing the story of several First Nations organisations and social enterprises working within their own communities to create sustainable for-purpose businesses, which directly impact their local communities, providing training, jobs and income as well as funds back into local community initiatives.
If you are new to the Social Enterprise space or growing an existing Social Enterprise, this is a rapidly growing and evolving sector.
Common themes from the Philanthropy Australia conference were carried through to this event, including the importance of co-design with the people who will actually be delivering the product or service that the enterprise delivers, and collaboration to achieve mission. Strong relationships and trust of course — between all stakeholders — was also a key focus, including both procurement partners and grantors.
According to Social Change Central and Impact Investing Australia, there are over 20,000 Social Enterprises operating within Australia. However, Griffith University suggests that this figure could be much higher. Social Enterprise Australia is the national peak body and there are at least seven state or regionally-based peak bodies supporting this emerging industry. There is still some debate and confusion around terminology and definitions, which is what Social Enterprise Australia is trying to resolve, along with the researchers at Griffith University.
Simply put, a Social Enterprise exists to make the world a better place. The commonly accepted formal definition speaks to organisations that are led by an economic, social, cultural, or environmental purpose consistent with public or community benefit. They trade to fulfil their mission and derive a substantial portion of their income from trade while much of the profit/surplus is reinvested in the fulfilment of their mission. That is, they exist for purpose, profit and reinvestment.
A common question asked by for-purpose organisations moving into the Social Enterprise area is “How do I find funding?” As with any funding partnership, there must be a values and purpose alignment between the funder and the beneficiary, whether it be through a procurement process or a grant of any type. If involved in a procurement process, ensure you ask the question as to whether social suppliers are being considered. There is no point in proceeding if 100% of funding is set to go to corporations.
If the Social Enterprise is set up as a not-for-profit and can be registered on the Australian Charities Not for profits Commission (ACNC), there are additional opportunities for funding available including from Trusts and Foundations (most of whom will also require DGR 1 status), corporate social investment and service clubs. Again, the importance of demonstrating collaboration with other providers is critical.
As the sector advances, there is growing conversation about other ways to fund for-purpose organisations that are not ACNC registered and trade as businesses, including Impact and Angel Investing. Angel Investors are private investors—generally high-net-worth individuals—who provide backing for startups or entrepreneurs, typically in exchange for ownership equity. Impact Investors are like Angel Investors but focus on funding organisations or projects that generate measurable, positive outcomes, in addition to financial returns for the investor.
There are also “accelerator” and “incubator” programs designed to help you find funding plus support the business side of operating a Social Enterprise. State and local governments have also been assisting with startup and general operating costs. For example, the Queensland Government has funded $8M for programs in 2022 and 2023 while Parramatta City Council issue regular grants to support their local Social Enterprises. State governments are also proactive in providing investment information and training for startups and social enterprises such as the Sydney Startup Hub through Investment NSW and launchvic in Victoria.
With all for-purpose organisations, best practice is critical to growth and maintaining sustainability. This should be established early on before trading commences. Ensure you have the right Board, mentors and business practices in place to run the business and regularly visit your strategy and impact measurement processes. Ask yourself, what can you measure and report? What can’t you? And importantly you must be measuring social, economic and financial benefits.
To identify funding opportunities for your social enterprise, Strategic Grants’ GEM Portal contains grants and funding. The Strategic Grants team also works in program design and tender writing. Get in touch to find out more.
And if you are a Social Enterprise leader or manager based in Brisbane, be sure to register for Queensland University of Technology’s short course Developing Your Enterprising Leadership and Partnerships — we will be there presenting on best practices for winning tenders and grants!