Key concepts

What is a social enterprise?

A social enterprise is a business that puts people and planet first. They trade like any other business but exist specifically to make the world a better place.

Their purpose is to solve a social and/or environmental problem and they prioritise purpose, people, and planet over profit in operational and strategic decisions. They have a self-sustaining revenue model and reinvest the majority of any surplus towards their purpose. Finally, they choose legal and financing structures that lock in the purpose long term.

Social enterprises are entities and organizations that are led by an economic, social, cultural or environmental mission consistent with a public or community benefit, that trade to fulfill their mission, derive a substantial portion of their income from trade, and reinvest the majority of their profit/surplus if any, in the fulfillment of their mission.

Social enterprise is about commercially viable businesses generating income and creating jobs to respond to entrenched social or environmental issues. They think, act and operate like a business whilst driving impact.

Today many social enterprises are intentionally designed to respond to the wicked problems and inequities that are a consequence of ‘business as usual’.

Image credited to CityMag 2021

This visualisation adds to and simplifies elements of a model published in 2015 by J Kingston Venturesome, CAF Venturesome and European Venture Philanthropy Association 2015.

Social enterprise can be any type of legal structure - there is no legal structure just for social enterprise and social enterprises will choose the structure that will best enable their business model and social purpose.

Social enterprise is a business model which overlays a commercial business model to drive sustainability with an impact model to drive impact towards their chosen purpose. 

This report presents the findings of the Finding Australia’s Social Enterprise Sector (FASES) 2016 project. The second in a series of efforts undertaken by Social Traders and the lead author to document the activities and needs of Australian social enterprises, FASES 2016 focuses on examining in-depth the opportunities and challenges faced by social enterprises and updating data from FASES 2010.

Size and economic contribution of social enterprise

Public and policy interest in social enterprise and its impacts are growing. But what social enterprise brings to Australia has not been well understood. In 2022, Social Enterprise Australia commissioned research to better understand the size and economic contribution of social enterprise in Australia, which was published in the Business for Good Report. The research revealed that there are an estimated 12,033 social enterprises in Australia, making an estimated contribution of $21.27 billion per year to the Australian economy, employing an estimated 206,278 people in Australia. Proxy data was used to break these estimates down by State and Territory. Read the full report here.

Image credited to Social Enterprise Australia

In 2023, Social Traders also published Profile of Australia’s Certified Social Enterprises (Pace23) as the richest and deepest data set on Australian social enterprises to demonstrate the size, scope, models and contributions of Social Traders certified social enterprises and shows it’s on a growth path. PACE23 showcases the power of social enterprise to create public benefit over private gain.

Impact enterprises

Impact enterprise is a term that can be used interchangeably with social enterprises to describe organisations that prioritise social and environmental impact; however, impact enterprise encompasses a broader range of impact-driven organisations than just social enterprise.

This Guide to ‘Impact Enterprise' developed by the Griffith University Centre for Systems Innovation (formerly known as the Yunus Centre) explores the motivations, characteristics and approaches of organizations that use business to create positive impact. Impact enterprise can be initiated by individuals, groups and organisations with myriad interests, world views, motivations, and missions. These drivers create different identities and form a range of descriptors, types and movements under the broad umbrella of impact enterprise.

The critical function of impact enterprise is being able to create impact while also generating revenue. While these objectives are often seen as trade-offs, there are a number of ways they can work together – creating ‘blended value’. Some organisations combine multiple blended business models within their operations to increase their overall impact (e.g. using a combination of inclusive employment and a circular economy model.

Impact enterprises can be set up using different forms of incorporation and legal structure – you don’t have to be a company to do business, and you don’t have to be a charity to create impact.

Impact enterprises are active in nearly every sector of the economy. While the sector of business activity will always have implications for how impact can be created, it doesn’t necessarily determine the nature of the impact – e.g. an impact enterprise operating in the food industry may be focused on creating social outcomes by providing training and employment opportunities to young people at risk of homelessness.

There are many areas where a positive impact can be made and is needed. The Sustainable Development Goals (SDGs) articulate a cohesive, high-level framework of all things we need to get right if humanity is to thrive. Impact enterprises often concentrate on tackling specific issues / areas of impact, although some are able to create benefits in multiple areas. All should aim to mitigate any negative externalities in areas outside their primary focus – e.g. an enterprise focused on education can also be carbon neutral.

Image credited to Griffith University

What is a circular economy?

A linear economy operates on a take-make-dispose approach, draining natural resources and producing waste.
A circular economy values resources and product design that promote longevity, repairability, and recyclability, aiming for the sustainable use of materials and products through reuse, recycling, repurposing, and remanufacturing (CSIRO).

By shifting to a circular economy, we can conserve natural resources, reduce waste generation, and minimize environmental degradation. By promoting continual use, recycling, and regeneration of materials, it fosters sustainability, enhances resource efficiency, and mitigates the harmful impacts of traditional linear economic models on the planet.

Here is a simple guide for caters to transition to a circular economy model.

Image credited to CSIRO

What are the Sustainable Development Goals?

The United Nations 17 Sustainable Development Goals (SDGs) are a call to action to countries, governments, organizations and individuals to develop plans that aim towards meeting these goals by 2030. The 17 SDGs are interconnected that are based on the foundation of people, planet, peace and partnerships. These goals are even more pressing today due the recent pandemic and the uncertainty it is causing on people, planet and prosperity (United Nations).