What social enterprise wants: To be more widely embraced

aSocial enterprise has been missing in action from the 2019 federal election, writes Young Change Agents co-founder and CEO Margaret O’Brien, as part of a series of articles looking at what the social sector wants from the incoming government.

As we head into another election, I reflect on how strange it is that social enterprise isn’t more widely embraced by our politicians in Australia. After all, it ticks so many boxes across the political spectrum. Social enterprise uses the power of the market to solve social problems that cost taxpayers a stack of money, plus, it helps the most vulnerable and our environment. All big vote winners, surely?

There are strategies out there to foster social enterprise – in pockets or “sprinkles”. Certainly, some states do it better than others. However, this is not nearly good enough when we have both a strong economic imperative (changing nature of work) and a social and environmental imperative (ageing population, growing inequality and climate change).

Our youth are starting to study social entrepreneurship as part of mainstream school and higher education. Isn’t it time we get serious at a national level about using social enterprise as a lever for social change?

More than 20,000 of us, as social enterprises, have real solutions to the wicked problems out there. It’s like having Panadol in the cupboard and continuing to suffer through a bad headache!

For this article, I asked a bunch of social enterprise contacts from across enterprise, council and intermediaries the question, “What do you like, dislike and wish for when it comes to social enterprise in Australia?”, with the aim of demonstrating that the sector knows the achievements (that’s right, we already have a track record), challenges and opportunities that exist to make good policy and impact.

Here’s a mind map of the responses:

As you can see, the results stimulate interesting questions. I’m a big believer that if you can better understand the problem you can reach better solutions.

Here are some of those problem questions and a few early ideas, from both my peers and I, which are ripe for enhancement.

1. Strategy

How might we align local, state-based and national advocacy groups with government to create a national social enterprise strategy?

Some early ideas:

• A minister for social enterprise.
• The development of a national social enterprise strategy (linked to state strategies like Victoria’s Social Enterprise Strategy and following the likes of Scotland, Canada and South Korea).
• A cross-department initiative which works to introduce social enterprise to all federal departments (similar to the new Customer Service agency within NSW government).
• A collaboration with state governments to support the development of a coordinated and well-supported social enterprise ecosystem, including capacity building for social enterprises, building on Social Traders certification for social enterprises, appropriate finance and the role of intermediaries (QSEC, Social Traders etc).

2. Procurement

How might we make social procurement a priority for every size of company and government organisation?

Some early ideas:

• The extension of the Social Traders Connect program into all Councils and SMEs (digital platform).
• A reverse ideation forum where buyers set the challenge for social entrepreneurs to meet purchasing demand.
• Extending the federal government’s support for Indigenous business via Indigenous Procurement Policy (IPP) to social enterprise and other for-benefit suppliers through a Social Procurement Policy.
• Better access to mainstream trade finance, which will enable social enterprises to step up to larger procurement contracts over time.

3. Innovation

How might “sandpit learning” be used to stimulate innovation across the social enterprise sector?

Some early ideas:

• An extension of the federal government’s Try, Test and Learn fund to focus specifically on social enterprise development in areas including employment, health, education and environment.

How might we encourage more collaboration and partnerships to increase impact?

Some early ideas:

• “Merge-for-good grants” to help mission-aligned organisations come together to create a larger impact and/or secure larger tenders/contracts.
• “Borrow a social enterprise” or social franchising from successful overseas organisations (study tours, seed-funding, visa program etc).

4. Finance

How might we make the tax-system better suit social enterprise innovation and growth?

Some early ideas:

• A formal legal structure for social enterprises that recognises the unique nature of a for-purpose business eg Social Benefit company approach.
• Reduce the complexities and inefficiencies of navigating between the for-profit and not-for-profit sectors, for example DGR1 reform.
• Widen the applicability scope of charitable donations from DGR1 entities to charities, not for profits and profit-for-purpose, qualifying under the early stage innovation investment guidelines.
• Consider incentive mechanisms similar to the social investment tax relief scheme from the UK to unlock additional risk capital for the sector.

How might we stimulate more impact investment for our biggest social and environmental challenges?

Some early ideas:

• Ensuring social enterprise and social procurement are part of government’s impact investment initiatives, ie beyond SIB’s and adopting outcomes-based funding for government services.
• A national campaign of social enterprise awareness (linked to a coordinated national strategy and sector body).
• Impact investment readiness focused programs for mid-stage social enterprises, rather than more start-up incubators.
• Celebrating successful social impact investment and sharing learning.
• Braver philanthropy ie investing in long shots and de-risking for future donors and commercial investors.
• Enable everyone to become an impact investor through distributed risk models like LendforGood (from the team at StartSomeGood).

5. Eco-system

How might the social enterprise sector be more like the start-up sector?

Some early ideas:  

• Appointment of a “social entrepreneur in residence”.
• More focused social enterprise accelerator programs like Remarkable (disability tech) and Unboxd (Health and wellbeing) that have direct links to the beneficiaries/customers.
• Shark Tank for social entrepreneurs.
• R&D grants.
• More networking opportunities.

How might government (and philanthropy) better support social enterprise capability?

Some early ideas:

• Capability and sustainability grant funding that is specifically tagged for this tough work (rather than business-as-usual).

Contributors to this conversation:

• Jay Boolkin, Social Change Central
• Lucy Brotherton, City of Parramatta
• David Brookes, Social Traders
• Rob Caslick, Two Good Co
• Hanna Ebeling, Social Enterprise Finance Australia
• Amy Orange, Fourth Sector Solutions
• Laura Reed, Seventh Street Ventures

About the Author: Margaret O’Brien is the co-founder and CEO of Young Change Agents, social enterprise lead at Seventh Street Ventures, activator at SheEO, and co-coordinator of the Sydney Social Enterprise Exchange. She has a unique perspective on the sector built from her hands-on experience working with social enterprises at every stage of development. Along with Jay Boolkin, Hanna Ebeling and Hannah Miller from Social Enterprise Finance Australia (SEFA), O’Brien also helps bring together the Sydney social enterprise community through the Facebook and networking group Social Enterprise Exchange Sydney. She was previously social enterprise advisor at Social Traders.

See also:

What charities want: A little more respect, a little more certainty

What community services want: An end to the cuts

What volunteering wants: For the voluntary workforce to be valued and invested in

What philanthropy wants: A more giving Australia

What impact investing wants: For the incoming government to up the ante