[special_heading title=”Social Enterprise” subtitle=”” font=”secondary” margin_bottom=”20″]
Social enterprises create social or environmental outcomes while generating most or all of their revenue from trading or a business model. This allows for greater financial and strategic independence than traditional charitable grants. The number of social enterprises in Australia has increased significantly in recent years and many of these are now ‘investment ready’ and have been accessing debt and/or equity investments to grow and scale.
In Australia, we talk about three types of social enterprises. Many enterprises utilise two or all of these models:
- those who achieve social impact by training and employing people who have experienced disadvantage
- those who provide a service or product to groups or communities who are otherwise excluded or underserved from mainstream business
- those who run an ethical business for profit, and the majority or all of the profits are invested into social causes
Australian Case Study – Vanguard Laundry Services
Vanguard Laundry Services (VLS) is a social enterprise commercial laundry service based in the regional Queensland Australia. St Vincent’s Hospital is VLS’s major customer and outsource all their laundry cleaning to VLS along with 100 other hospitality and health customers. Further contracts have been secured over the past two years and national and international opportunities for expansion are now under negotiation.
Vanguard is a social enterprise model that creates employment for 52 people and includes an in built career and training centre that supports the local community and long term unemployed. All profits are reinvested into supporting the long term unemployed return to work.
Learn more about Vanguard Laundry Services in the video below:
Australian Case Study – Streat
One of Australia’s most influential and well-known social enterprises is Streat, who has documented the various lessons they faced as the grew and took on investment. They are have secured a $6.5 million debt/equity deal which will facilitate their financial sustainability, and almost triple their social impact. An overview of their operations is available here.
Learn more about Streat in the video below:
Support for Social Enterprise Development and Impact Investing
In addition to our work at Social Outcomes, a number of other intermediaries also support social enterprise capacity development, including developing robust business models, growing markets and access to procurement contracts, financial management, investment readiness, and securing impact investment. These include:
Foundations that provide seed grants for social enterprise include:
Internationally, the possibility of scaling the impact of social enterprises through impact investment is nicely explained through the story of Oomph Wellness in the UK:
Visit our dedicated toolkit page for more information on impact investing in Australia.
Maintaining Social Purpose
Many social enterprises are concerned that their social mission might be lost in the business model over time, especially if they receive investment. That is, how do you ensure the social enterprise does not evolve into just a mainstream business? One of the working groups of the Global Steering Group has focused on mission alignment, called Profit with Purpose Businesses, ensuring that enterprises receiving investment are able to maintain their focus on social outcomes while continuing to generate financial returns for investors.
Yackandandah is an inspiring story of a community taking control of their future and ensuring that the local economy and social infrastructure remained strong in this regional Australian town. The video below overviews their work: