Social Enterprise : What’s Having an Impact?

Some new and converging trends in the social enterprise space have emerged from the recent selection process for The Crunch, writes Lisa Boothby, Head of Enterprise Investment Readiness at Social Traders.

More social enterprises than ever before are looking for help to get themselves off the ground.

This year, Social Traders’ social enterprise incubation program "The Crunch" received over eighty applications. Thanks to the support of many partners, Social Traders is able to offer sixteen places in the program this year, but for the first time, we have had to turn away social enterprises that are ready for The Crunch. So what’s changed?

We are seeing a convergence of factors that are leading to increasing interest in social enterprise and "The Crunch", and these can be distilled to a few key drivers; changing government policy settings, gaps in the training and employment services sector, concerns around environmental and food security issues, as well as economic pressures on the Not for Profit sector.

Imminent introduction of the NDIS

The biggest group of The Crunch applications this year were proposals to create employment opportunities for marginalised groups, of which disability employment was strongly represented.

The link between disability employment and social enterprise can be traced, at least in part, to the fast approaching National Disability Insurance Scheme (NDIS). Up till now, disability employment has been largely delivered through Australian Disability Enterprises (ADEs), which have been supported by the government to provide employment for people with disabilities.

Under the NDIS, control of funding will shift from ADEs to the people with disabilities themselves. Disability employers are seeing greater imperative to create attractive workplaces for their employees in enterprises that are financially sustainable in the open market.

Training and support are not enough

The increasing demand for social enterprises that provide employment for groups beyond disability cannot be as clearly attributed to a single policy shift.

What is clear though, is that existing forms of education, training and support for some of these groups is not enough to deliver employment, yet employment is widely recognised as key to changing lives.

Our applications reflected this concern particularly in the areas of; "youth at risk", indigenous groups, and migrants.

Agencies that have traditionally dealt just in support and training are now seeking to create genuine and sustainable employment options for youth at risk through social enterprise. In a different context, but for similar reasons, indigenous and migrant groups are looking to create enterprises that will generate ongoing and meaningful employment for their communities.

A link between recycling and employment

The Crunch applications relating to the environment were significant this year, with a number seeking to reduce the amount of waste that goes into landfill through recycling.

A neat fit exists between the type of work involved in recycling and local job creation, so we are seeing more proposals for recycling enterprises that serve this dual purpose.

Innovation in response to food security concerns

The issue of food security is complex and requires a range of responses. Our applications for The Crunch suggest that organisations are looking to social enterprise models to ensure people have ongoing access to affordable and healthy food. Food security is a long-term issue, which may explain why organisations are looking for sustainable, trade-based responses.

One of the first enterprises from our previous round of The Crunch to gain investment has been a food security enterprise, which suggests there is an appetite in the investment market for this kind of social enterprise.

Economic pressure on the NFP sector

Another group of this year’s The Crunch applications were from established Not for Profit organisations looking to replace declining programmatic funding, typically from government or philanthropy, with surpluses earned through trade.

It would appear that the demand for charitable services is continuing to climb as our rising population becomes more complex, and continues to be challenged by issues of inequality and exclusion.

At the same time, economic conditions are causing traditional sources of funds to stagnate or decline. Consequently, many NFPs want to create social enterprises to provide them with a stable source of untied revenue that they can use to achieve their charitable purpose.

Organisations and individuals are increasingly looking to social enterprise to solve community problems, as evidenced by the large number of applications received for The Crunch this year.

As the underlying factors driving this demand are likely to accelerate, we expect to see more demand for social enterprise support services.

A key consideration for the architects of Not for Profit reform is to support the scaling and growth of transformational programs like The Crunch.

About the author: Lisa Boothby is the Head of Enterprise Investment Readiness at Social Traders, where her focus is on building capacity of start-up social enterprises with the objective that they become investment ready and ultimately begin trading. She provides consulting and coaching support to enterprises participating in The Crunch and a range of other start-up enterprises.

Click here to read about Social Traders’ announcement of the social enterprises participating in The Crunch Round 4.