What is a Social Enterprise?

What is a Social Enterprise?
Written by
Matias Salinas

The business world is commonly paired with the notion of greed and self-promotion. In recent years, however, there has been a shift in the business world towards organisations that are focused on doing good. These businesses, known as social enterprises, are businesses that have a social or environmental purpose at their core.

This article will explain them in detail, as well as provide some examples of prominent organisations that fall into this category.

What Is a Social Enterprise, and Why Do They Exist?

Social enterprises are a type of business designed with the purpose of addressing societal issues through entrepreneurial profit. Rather than giving bonuses to owners or shareholders, they choose to contribute their excess funds to special causes and public service. While appearing very much like a conventional business at the surface level, these companies are mainly driven by altruistic goals.

Social enterprises have emerged as a popular sector in recent years as public attention quickly builds on issues of environmental, cultural and economic sustainability. Consumers see more value in doing good, as do entrepreneurs who are looking for ways to make a difference in the world.

There are many reasons why social enterprises exist, but ultimately they all come down to one core motive: to effect positive change on a societal issue.

Some social enterprises exist to tackle environmental issues, such as climate change or resource depletion. Others focus on social issues such as poverty, homelessness or unequal access to education. And still, others focus on cultural issues such as racial discrimination or gender inequality.

How Do Social Enterprises Work?

Social enterprises can seek to achieve their goals in many ways, but all of them operate within the basic framework of a for-profit business. This means that they generate revenue through the sale of goods or services, and they use this revenue to reinvest in their business or social cause. In general, this looks like one or more of the following three funding models.

Employment-generating: Employment-generating social enterprises focus on creating jobs and economic opportunities in disadvantaged communities. They do this by providing training and support to help people find employment, as well as offering fair wages and working conditions.

Service-providing: Service-providing social enterprises provide goods or services that address a specific social need. This could be anything from healthcare to food security, and the aim is to make these services accessible to as many people as possible.

Profit-redistributing: Profit-redistributing social enterprises reinvest at least 50% of their profits into the social or environmental cause they are supporting. This could be done through direct donations, grants, or investments.

The Impact of Social Enterprises

The impact of social enterprises can be both local and global, depending on the scale and reach of the enterprise.

At a local level, social enterprises can have a big impact on the communities they operate in. This is because they often focus on addressing specific social needs within these communities, such as providing access to healthcare or employment opportunities.

At a global level, social enterprises can have a big impact on the way we do business. Through their commitment to sustainability and social responsibility, they are helping to change the way businesses operate and are paving the way for a more sustainable future.

Examples of Australian Social Enterprises

Australia is home to a sea of social enterprises, each of which work to do good in different ways.

Here's a list of some of the most impactful in the country and around the globe:

Social Enterprising In Action: Orange Sky

A great example of social entrepreneurship in action, Orange Sky is a registered Australian charity focused on stimulating remote communities through better access to laundry facilities. Their for-purpose organisation works hand-in-hand with local leaders and donors to collect funds and resources that can be used to build and operate fully-equipped mobile laundry vans. These vans are then sent out into communities in need, providing a free, vital service to those who often go without.

Not only do members of Australia's rural regions benefit from the essential services offered by Orange Sky, but also the opportunity for connection it provides. As the vans travel from town to town, they create a safe and social space for people to connect and build relationships - something that is often lacking in rural and remote areas.

Social enterprises are a promising aspect of today's business world - one that is focused on doing good, rather than simply making a profit. With their ability to address social and environmental issues at both a local and global level, these organisations are making a big impact in the world and paving the way for a more sustainable future.

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