1. Social enterprise:
key concepts
Joanne McNeill
Community Capacity Building Officer Social Enterprise
City of Sydney Council – Wednesday, 28 March 2012

2. . . . what is ?
social enterprises are businesses that trade for a
social, environmental or cultural purpose . . .
• generate a substantial portion of their income through trading
• reinvest the majority of their profit / surplus (non-distributing)
• include an asset lock
Social enterprise is about practice

3. . . . the difference . . .
community enterprises . . .
. . . are usually place-based, PLACE – Partners in Learning &
Community Enterprise, TAFE
identify strongly as the agent
of the people
by whom and for whom
they have been established Community Enterprise Hub, Mt Druitt

4. . . . the difference . . .
. . between a social enterprise, a social
entrepreneur and social innovation . . .

5. broad spectrum . . .
Diverse on three levels:
• Form
• Purpose
• Markets

6. legal forms . . .
• Cooperatives, Associations and Mutuals
• Fair Trade Organisations
• Intermediate Labour Market Companies
• Charitable Business Ventures
• Social Firms
• Community Enterprise
• Community Development Finance Institutions
• Australian Disability Enterprises
• Hybrid
• Important consideration – any relationship with parent nonprofit?

7. purpose . . .
Common motivations
• employment - provide employment, training and
support for marginalised groups; two types
• service delivery - create or retain services in
response to social or economic needs
• income generation - generate profits to support
other community or not for profit activities

8. . . . types . . .
• External social enterprise
Business activities are wholly distinct from organisation’s social aim or
mission. Often established to fund social services, activities and operating
costs. Business activities are external to operations, but support the social
programs through supplementary funding.
• Integrated social enterprise
Social aim or mission overlaps with business activities, and may include an
overlap of costs and sharing of assets. Often established to create a funding
mechanism in order to support the organisation’s operation and social
mission. Enterprise often enhances organisation’s mission and enables it to
achieve greater social impact.
• Embedded social enterprise
Social aim or mission is wholly entrenched in business activities of venture –
mission and enterprise activities are the same, business activities are
embedded within organisation’s function and social program and is
fundamentally central to mission.
Social enterprise typology, Virtue Ventures – www.virtueventures.com

9. . . . social impact . . .
• legitimacy
• greater scrutiny
• clear link between model & change want
to see - Theory of Change
• evolving field
• no one approach
• what does success look like

10. markets . . .
Example
Salvo’s legal - http://salvos.org.au/salvoslegal/
• full-time, self-sustaining legal practice specialising in property and
transactional commercial law
• difference is that fees paid by clients fund the operation of another
firm, Salvos Legal Humanitarian - which operates to provide free
legal advice and assistance to those most in need without any fee
• first class commercial legal services are provided at a market
competitive fee
• aims to use its compassionate dedication, creativity, ingenuity and
skill to fight against social injustices
• means each procurement dollar delivers an additional benefit,
beyond the service purchased

11. . . . not business as usual . . .
• blended inputs, blended returns
• different types of markets – eg. BoP, not
end user
• different viability scenarios – balance of
returns; reserves
• social vs business costs

12. so ….
a strategy – nexus point
not a program … what will you sell, who
will pay for it?
not a business … who are the
beneficiaries, how will you know?
. . . an AND approach… not about replacing

13. recent developments . . .
Federal activity:
• Innovation Fund and Jobs Fund
• Social Enterprise Development & Investment Fund (SEDIF)
• Social Enterprise Finance Australia (SEFA) & Social Enterprise
Solutions
NSW State Government:
• Community Builders Fund
• Some social procurement interest
Councils in Sydney area:
• Parramatta City Council program
• Social Enterprises Sydney
• Social Procurement Action Group

14. development support . . .
• Is critical, and difficult
• Needs effective specialist approach
• Not a funding stream or program, not an SME
• Infrastructure tier limited in Australia
• Social Enterprises Sydney
• Initial focus on Sydney West and Central Coast regions
• Network model
• Establishing membership base
• www.socialenterprises.com.au

15. further info . . .
• http://www.parracity.nsw.gov.au/work/economic_development/social_enterprise:
– Churchill Fellowship report: How the public sector can support social enterprise
development
– VIC DPCD: Social Procurement - A Guide for Victorian Local Government
• Social Enterprises Sydney
– www.socialenterprises.com.au
• Social Traders and the FASES report
– http://www.socialtraders.com.au/finding-australias-social-enterprise-sector-fases
• School for Social Entrepreneurs
– www.sse.org.au
• Social Enterprise Finance Australia (SEFA)
– www.sefa.org.au
• Social Enterprise Solutions
– www.foresters.org.au/socialenterprisesolutions/