Social enterprises punch above their weight: report

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Posted on 21 Nov 2024

By Greg Thom, journalist, Institute of Community Directors Australia

A new report highlighting the economic and societal value of social enterprises has called for more federal government support for the sector.

The inaugural Report on Identified Social Enterprises (RISE) is described as the largest and most comprehensive analysis of social enterprises in Australia.

The study, released by social enterprise industry body Social Traders to coincide with World Social Enterprise Day revealed:

certified social enterprises invest 27% of their total revenue in delivering impact
68% of social enterprises reported a net profit in the past financial year
Social enterprises spend $5.7 billion a year on delivering impact
Social enterprises created more than 89,000 jobs for people facing barriers to work
23% of social enterprises are entirely self-funded, with all revenue generated from trade
44% identify their primary beneficiaries as people with disabilities, providing much-needed support for a community facing systemic barriers to securing and retaining open employment

There are an estimated 12,000 social enterprises in Australia.

Analysis of half of these contained in the RISE report found they contribute $16 billion to the Australian economy, indicates the sector’s overall economic contribution may be greater than the $21.27 billion predicted in previous estimates.

A social enterprise:

has a defined primary social, cultural, or environmental purpose consistent with a public or community benefit
derives a substantial portion of its income from trade
invests efforts and resources into its purpose such that public/community benefit outweighs private benefit.

Source: Report on Identified Social Enterprises (RISE) report.

Social Traders RISE report graphic 2 — The three impact models of social enterprise.

“Let’s make social enterprise business as usual, for a more inclusive, sustainable and equitable Australia.”

Social Traders CEO Tara Anderson.

In the forward to the report, Social Traders CEO Tara Anderson said that social enterprises combine the head of business with the heart of charity and deliver the impact of both.

“They prove that doing good and doing business are not mutually exclusive.”

Anderson said the report for the first time combines Social Traders own data on 636 social enterprises with data from the Australian Charities and Not-for-profits Commission (ACNC) and Map for Impact.

This brought the total number of social enterprises analysed in the report to almost 6,000 – the largest dataset on social enterprises to be analysed in Australia.

“As we combine datasets for the first time, our hope is that this report will empower policymakers, researchers, investors, philanthropists, intermediaries and the public to better understand and support the vital contributions of social enterprises,” said Anderson.

implementation of a Federal Government-backed social enterprise strategy
drafting of a Commonwealth Social Procurement Policy that explicitly supports social enterprise
Federal Government backed incentives designed to help social enterprises grow such as workers’ compensation concessions, tax relief, access to deductible gift recipient (DGR) tax concessions and research and development tax considerations
Government and philanthropic funding to offset the impact costs incurred by employment generating social enterprises
support to recognise (and capture data on) all social enterprises through Social Traders certification
support to expand Social Traders data collection capability and data analysis

Anderson said countries with national social enterprise strategies have seen a 16% increase in social enterprises start-ups.

If replicated in Australia, this could result in an additional 1,900 social enterprises spending $900 million per year to deliver social and environmental impact.

“Imagine what would be possible if social enterprises played a bigger role in the economy,” said Anderson.

“Let’s make social enterprise business as usual, for a more inclusive, sustainable and equitable Australia.”