Service area

Social enterprise

Overview

A social enterprise is a business that applies commercial strategies to maximise improvements in human and environmental wellbeing, rather than maximising profits for external shareholders. They may use a commercial model which pursues social responsibility directly, or aim to raise funds for charitable purposes through their business activities.

Four women standing together laughing in greenhouse

In recent years there has been a rise in the number and diversity of social enterprises in Australia and globally.

What is a social enterprise?

Social enterprise has no settled definition but the term refers to a business for a social purpose: using a business strategy to achieve a social, cultural or environmental goal or another kind of community benefit, rather than for the economic benefit of shareholders or owners. As a business they operate in commercial markets seeking to generate a profit from trade.

Social enterprises may be not-for-profit, returning all profits to the enterprise itself, or they may be for profit, returning profits to their cooperative owners, the community, or someone else. However, they differ from a for-profit business which has adopted a triple bottom line. The social goal is paramount for a social enterprise, with profit or not-for-profit status being a secondary choice; profit status is paramount for a traditional business, with a corporate responsibility stance being a secondary choice.

Visit the Social Traders website to find out more about social enterprise research, history, motivations and case studies.

Why set up a social enterprise?

Reasons for setting up a social enterprise include:

  • Meeting a community need: finance, housing, fuel, education, economic opportunity for marginalised groups
  • Reducing reliance on grants and donations
  • Creating a business model to be both the ends and means for your social goal e.g. an employment program
  • ‘Being the change’ by demonstrating better way of doing business – democratic, environmentally sustainable, socially responsible
  • Generating income for another charitable/community purpose

You can watch a short video on starting a social enterprise by Social Traders.

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