What is Social Enterprise?

Social Enterprise

Social entrepreneurship, social enterprise and social innovation are concepts that continue to create debate and definitional controversy. In recent years, these debates have been discussed in various monographs (e.g. Mair et al. 2006; Nyssens 2006; Nicholls 2008; Robinson et al. 2009; Ziegler 2009), and in journals such as the Social Entrepreneurship Journal (e.g. Thompson 2006; Peattie & Morley 2008) and Stanford Social Innovation Review (e.g. Martin & Osberg 2007). In spite of this continuing debate, no one set of definitions suffice to describe the multitude of processes and structural forms that characterise social entrepreneurial activity (Paulsen and McDonald, 2010: 109).

Social enterprises are hybrid organisations that sit between the public and private sector. They integrate business principles with social justice objectives and purposes to produce a community benefit (Campbell et al, 2011). Social enterprises develop a social ‘mission’ which often includes a focus on community and belonging and, as such, have been identified as a way of engaging marginalised young people and supporting their transition into the workforce through ethical, socially aware frameworks (Humphery, 2010; Kelly et al, 2015).

Defourny (2009: 8) argue that social enterprises emerged in Europe in the 1990s. During this time one major type of social enterprise was dominant across Europe: ‘work integration social enterprises’ (WISEs). The objective of WISEs is to ‘help low qualified unemployed people, who are at risk of permanent exclusion from the labour market’ by integrating these people into ‘work and society through a productive activity’. This trend towards work integration has been strengthened by the many social enterprises involved in employment creation initiatives.

Defourny and Nyssens (2006: 4) argue that understandings of social enterprise in the United States are broad and occasionally vague: ‘referring primarily to market oriented economic activities serving a social goal’. Loose definitions of social enterprise can be helpful because they account for the various forms these hybrid organisations take. However, definitions are necessary, particularly for funding bodies looking to invest in organisations with a social impact. As such, ‘it is their reasons for existence and the way profits are distributed that is of importance in defining them as social enterprises’ (DPCD, 2011: 13).

In Australia, social enterprises are commonly understood as hybrid organisations which embrace ‘values of entrepreneurship over specific trading functions (Barraket, 2006: 3). As Jo Barraket (2010: 7) – Associate Professor of Social Enterprise at the Queensland University of Technology – argues, social enterprises are:

organisations that exist for a public or community benefit and trade to fulfill their mission…Although social enterprises are diverse in their structure, purpose and business activities, they are variously engaged in: creating or replacing needed services in response to government and market failures; creating opportunities for people in their communities; modeling alternative business structures through democratic ownership; and generating new approaches in areas of contemporary need, such as alternative energy production and waste minimalisation (Barraket, 2010: 7).

Social enterprise operates on a spectrum, from those that are highly commercialised through to very grassroots initiatives that seek to model different approaches (Barraket, 2010: 9).

Agostinelli (2010: 19) offers a similar definition with examples of social enterprises in Australia:

A Social Enterprise is an enterprise or business that brings about social change through market-focussed business activities. Profit is understood to be a means to an end and is put back into the business, community or charitable organisation. Some local social enterprises include Lentil as Anything, The Big Issue, and the Hunter-Gatherer retail chain. Social enterprise is not a new phenomenon and can be traced back to worker and consumer cooperatives such as Friendly Societies and Credit Unions.

Social enterprise is perceived as an innovative response to funding challenges that non-profit organisations increasingly face as they attempt to solicit private donations, and government and foundation grants. The concept is used to emphasise the innovative dimensions of projects and the risks that they are taking. A wide variety of organisations are engaged in social enterprise activities: ‘from for-profit businesses engaged in socially beneficial activities (corporate philanthropy) to non-profit organisations engaged in mission-supporting commercial activity’ (Defourny and Nyssens, 2006: 4).


Arts Based Social Enterprise

(Above: The Social Studio, socks from the recent ‘Soxhibition’: a collaboration between the Scoial Studio a Melbourne based social enterprise and Melbourne artists)

The majority of Social Enterprises target marginalised young people and operate in the education and training and art and recreation industries (Barraket 2010). Arts Based Social Enterprises (ASEs) are considered to be highly effective at engaging marginalised young people for a number of reasons, including accessibility with a relatively low entry skill level, the youth appeal of the creative industries and the range of personal rewards that come from developing, creating and exhibiting creative works (McQuilten, 2015). ASE models encompass a range of art media from visual art, textiles and performance to media production and graphic design.

ASEs are further associated with diminishing government arts funding, prompting calls to consider Social Enterprise models as alternative sources for funding and organisational practice (ENCATC 2013; McRobbie 2012). ASEs offer complex settings for considering the way competing economic and social goals may be managed because they combine additional objectives of generating creative outputs from participants.

Artistic creation can transform the lives of individuals and communities, and is a powerful form of communication that bridges geographic, cultural and language barriers while sustaining the most enriching aspects of community and culture (Van der Pol, 2007; Papastergiadis, 2012). ASE’s are particularly effective at targeting marginalised young people as they can accommodate widely divergent levels of technical ability, prior experience, literacy, numeracy and computer skills. At the same time, creative practice is highly engaging, personally rewarding and can develop a range of work and life skills that support transitions into further education and research (McQuilten 2015).

For more on arts based social enterprises see: Impact and sustainability in art based social enterprises by Grace McQuilten and Antony White


Agostinelli, J. (2010) ‘The Proof is in the Pudding – Social Enterprise in Australia’, Fine Print, Vol. 32, No. 2, pp. 19-23.

Barraket, J. (2006) ‘Community and Social Enterprise: What Role for Government?’, Department for Victorian Communities, Department of Planning and Community Development.

Barraket, J. (2010) Time for Informed Debate on Pros and Cons of Social Enterprise [online]. Impact, Spring 2010, pp. 7-9. Availability: http://search.informit.com.au/documentSummary;dn=632068632634681;r
es=IELHSS [cited 02 Jun 11].

Campbell, P., Kelly, P. and Harrison, L. (2011) Social enterprise: challenges and opportunities, Alfred Deakin Research Institute, Geelong, Vic.

Defourny, J. (2009) Foreword, in J. A. Kerlin, Social Enterprise: A Global Comparison, University Press of New England, London, pp. xi-xix.

Defourny, J. & Nyssens, M. (2006) ‘Defining Social Enterprise’, in M. Nyssens, S. Adam, & T. Johnson (eds.) Social Enterprise: At the crossroads of market, public policy and civil society, Routledge, London, pp. 1-26.

Department of Education, Employment and Workplace Relations (2011) ‘Social Enterprise Development and Investment Funds Grant Program Guidelines’, Published by the Department of Education, Employment and Workplace Relations, Victoria.

Humphery, K. (2010) Excess: Anti-consumerism in the West, Cambridge: Polity, 264pp. (Softback, ISBN: 978-0-7456-4541-4 & Hardback, ISBN: 978-0-7456-450-7).

McQuilten, G [in press, accepted 01/10/2015] ‘Art as Enterprise’ in E.M.
Grierson (ed), Transformations: Art and the City, Intellect Publishers, Bristol, UK.

Kelly, P., Harrison, L. &Campbell, P. (2015). ‘”Don’t be a smart arse”: Social Enterprise Based Transitional Labour Market Programs as Neo-liberal Technologies of the Self’. British Journal of Sociology of Education, 36(4), 558-576.

McRobbie, A., ‘Re-thinking Creative Economy as Radical Social Enterprise’, Variant, Issue 4 (Spring 2011) p. 33 Mission Australia (2016) Social Enterprise, https://www.missionaustralia.com.au/what-we-do/employment-skills-training/socialenterprise#sthash.KkN20IbX.dpuf

Papastergiadis, N. Cosmopolitanism and Culture (Cambridge, UK; Malden, USA: Polity Press, 2012)

Paulsen, Neil & McDonald, Alex (2010) ‘Doing social enterprise: a reflection and view from the field’, Paper in special issue: Social Enterprise and Social Innovation.

Van der Pol, H., ‘Key role of cultural and creative industries in the economy,’ (Canada: UNESCO Institute for Statistics, 2007)


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