This is our site for sharing information and findings as we carry out a three year project about young peoples participation in Arts Based Social Enterprises. This research is supported fully by the Australian Government through the Australian Research Council's Discovery Projects funding scheme (project DP170100547). The views expressed herein are those of the authors and are not necessarily those of the Australian Government or Australian Research Council. Follow us on Twitter @YouthSocialEnt
Are you a stakeholder/manager/coordinator/teacher in an Australian Social Enterprise? Do you run programs that have an arts (fashion, dance, visual arts, creative writing, crafts, drama) component? We invite you to participate in our research project funded by the Australian Research Council.
Participation will involve a one-on-one interview of approximately 1 hour (or less) in length with a member of the project team (listed in the above flyer).
The purpose of the research is to understand how social enterprises engaged in arts activities manage education, training and work transitions, and support the health and well-being of young people.
Please contact Perri Campbell for further information at Perri.Campbell@rmit.edu.au
Are led by an economic, social, cultural, or environmental mission consistent with a public or community benefit;
Trade to fulfil their mission;
Derive a substantial portion of their income from trade;
and Reinvest the majority of their profit/surplus in the fulfilment of their mission (Barraket et al, 2016a: 3).
In this post we have a look at the Social Traders and Swinburne University reports on the ‘Finding Australia’s Social Enterprise Sector’ (FASES) research project. As we mentioned in our previous post there are a number of factors that support and limit the growth of the social enterprise (SE) sector in Australia, and the development and impact of SEs. The following summary from the 2016 FASES report provides a good snapshot of what’s going on in the Australian SE sector:
In their 2010 FASES report Barraket et al (2010: 8) argued that little was known about Australia’s Social Enterprise Sector due in part to a lack of self-identifying among SEs; not all SEs operating as such labelled themselves as such. They said:
… it is clear that the language of social enterprise does not yet have distinct meaning for many civil society organisations and businesses in this country; more than 150 organisations commenced the survey and were filtered out on the basis that they were either not for profits that did not trade or profit maximising businesses that were not led by public or community benefit (Barraket et al, 2010: 36).
SEs also take many different forms and operate under different legal structures which means they are not always visible in the same ways as businesses in the private sector. Since 2010 the FASES project has identified a number of key facts and defining qualities illuminating the SE sector.
According to the 2010 and 2016 Full Reports (Barraket et al, 2010: 3 and Barraket et al, 2016a: 3) there are more than 20,000 SE operating in Australia with diverse missions and beneficiaries. The most popular mission identified in the report was:
… creating meaningful employment opportunities for people from a specific group, and developing new solutions to social, cultural, economic or environmental problems.
Interestingly, this is different from the 2010 report findings which identified ‘creating opportunities for people to participate in their community’ as the most popular mission (Barraket et al, 2016a: 5). The growing interest in employment is no surprise given the growing unemployment rate in Australia, which particularly affects young people. The Trading Economics website reports a decrease in the youth unemployment rate between May and April of 2017, however young people are enduring the unwanted effects and consequences of a lack of employment options and meaningful full time work.
Almost one-third of Australian young people are unemployed or underemployed, the highest level in 40 years, according to a report released on Monday.
The rate of underemployment – now at 18% – has become an entrenched feature of the youth labour market, according to the Generation Stalled report, commissioned by the Brotherhood of St Laurence (Davidson, 2017 March).
A lack of full-time job prospects and an increasingly tense world has left a generation of Australia’s young people feeling bleak about their future (Clarke, 2017 February).
SEs reflect social and economic concerns as they operate mostly in local and regional markets with the aim of fulfilling missions that resonate at local and regional levels. There are fewer SEs that operate in international markets or aim to address international issues (Barraket et al, 2016a: 4). This finding was reflected in our own modest search of Arts based social enterprises in Australia. We found that when SEs do focus their attention on international issues, they often adopt a ‘Fair Trade’ ethic and source or support the import of handcrafted goods to be sold in Australia. Rarely were there programs (i.e. Transitional Labour Market Programs) attached to these SEs.
Similarly to 2010, and mirroring the mainstream economy, the sector includes small, medium and large enterprises, with the majority in our sample being small. The 2016 study again finds social enterprises are involved in all forms of economic production, including retail, wholesale, and manufacturing. However, they operate primarily within the service economy, with 68% of the sample providing services for a fee (Barraket et al, 2016a: 4).
In 2010 organisations participating in the FASES research project were asked to report on their income and expenditure (for the 2007-2008 financial year). The reported annual turnover ranged from zero to $68 million (with a total reported turnover within the sample of 168 organisations of $477 193 850). In 2016 that annual turnover ranged from zero to $199 million (from a sample of 189 enterprises) (Barraket et ala, 2016: 22).
In terms of growth and development opportunities, the FASES 2016 data shows a growth in ‘new entrants to the field, with 33.8% of the study’s sample being between two and five years old’. While development opportunities lie in: ‘social procurement; quasi-market development; and opportunities to grow impacts through supply chain development’ (Barraket et al, 2016a: 3). These modes of development are supported by the Victorian Social Enterprise Strategy which gives particular attention to social procurement and the ways in which SEs can contribute to and fit into the market economy. We discussed our concerns with this trend in earlier posts…
Finally, they identified a number external and internal factors constraining the growth of social business and impact in Australia. Limiting external factors include:
a patchy ecosystem for social enterprise start-up and growth, including limited geographic spread of intermediaries and insufficient opportunities for peer to peer learning and development;
the continuing piecemeal awareness of and support for social enterprise development by Australian governments;
and, limited public awareness of social enterprises and their work.
the lack of suitable funding for SEs at different stages of development (Barraket et al, 2016a: 5).
In terms of internal constraints the 2016 report identified:
organisational governance as both a key enabler and a key inhibitor
of social enterprise performance.
Accessing suitably skilled staff and adapting workforce profiles as
organisations grew and changed was also identified as a problem (Barraket et al, 2016a: 4).
These barriers have consequences for the Impact social enterprises make, that is the effectiveness of their work and how they are able to carry out their mission.
Supporting the Potential of Social Enterprises
The 2016 report analysis suggests a number of ways in which the SES can be supported in pursuit of their missions and social impact. These following recommendations are informed by workshops with SEs:
1. Policy development
When asked about how the SE sector in Australia could be supported and the role of the government, more than 80% of respondents thought that government policy support would create new opportunities and generate growth. Activating SE though ‘traditional procurement laws of government’ was suggested (Barraket et al, 2016b: 15).
2. Building a more cohesive ecosystem
Better support during the start up phase was called for which would include: greater availability of intermediaries; more opportunities for peer-to-peer learning; cohesive and continuing support from the Australian Government; greater public awareness of social enterprises and their work (Barraket et al, 2016b: 16).
3. Developing appropriate and accessible forms of finance
Many respondents called for better, more suitable financial support at different stages of development. Because of their location some SEs are not able to access funding, particularly those outside metropolitan areas.
The right financial support at the right time can make a big difference (Barraket et al, 2016b: 17).
… philanthropy appears to be playing a proportionately more significant – albeit still relatively small – role in financially supporting social enterprises, particularly those in start-up development since 2010. This may suggest a growing awareness of social enterprise by philanthropy, and the extension of some partnerships between philanthropy and not for profit organisations that are now exploring social enterprise as an option for increasing their impacts or improving their financial viability (Barraket et al, 2016a: 32).
4. Impact measurement tools
While impact measurement is largely regarded as a contested and complex issues for SEs, Barraket et al (2016: 18) suggest that more accessible, comparable and affordable impact measurement tools are needed to help articulate the social impact of SEs (Barraket et al, 2016b: 18).
Additional survey research suggests the costs of undertaking impact measurement are prohibitive for many social enterprises (Barraket et al, 2016a: 31).
Continuing lack of convention around measuring social impacts, and lack of availability of affordable options to do this work, was a frequently cited constraint on social enterprises both understanding and extending their positive impacts; practice in this regard appears to have remained stable over the last two waves of FASES.
Major opportunities identified for increasing social (or environmental) impacts of social enterprises included ethical supply chain development – including between social enterprises – and replication or, less frequently cited, scaling up of social enterprises (Barraket et al, 2016a: 32).
The social enterprise sector in Scotland delivers £1.68 billion to their economy each year, employs 100,000 people and there are plans to increase this number even further. The ‘Scottish Social Enterprise Strategy’ (what we will refer to as ‘SSES, 2016’) provides a long term 10 year plan to develop the sector via 3 year ‘Action Plans’.
The strategy begins by positioning SE as intrinsic to Scottish culture and the economy.
Social enterprise is also an important part of our national identity and international reputation (SSES, 2016: 16).
They say for instance, that more than 5000 SEs are currently operating in the country, three in five of these generate an annual turnover of less than £100,000, and two thirds of all SEs in Scotland sell directly to the public (SSES, 2016: 9).
The strategy is framed by the idea of an uncertain and ambiguous economic future in which, it is thought, SEs can provide sustainable, entrepreneurial solutions. Also on the social enterprise agenda is: fair work, place and regional cohesion, tackling inequality and human rights as defined in the Fairer Scotland Action Plan(SSES, 2016: 15).
The world is increasingly volatile, complex and ambiguous. In response, the delivery of this long-term strategy must remain agile (SSES, 2016: 10).
Through this logic SEs are seen as agile, flexible and able to adapt to volatile markets which render traditional business models clunky and old fashioned. SEs are packaged as new, caring businesses that are able to address public needs and concerns. You can see below where social enterprise is positioned within Scotlands Economic Strategy as a mode of ‘inclusive growth’, alongside goals like ‘investment’, ‘innovation’ and ‘internationalism’.
The strategy is forward looking in that it identifies a range of political, social, economic and technological futuretrends which it is thought will influence social enterprise operations and opportunities:
The influences and trends presented have been identified as both relevant and plausible. They have informed our thinking on how best to help the sector adapt to the dynamic and challenging period ahead (SSES, 2016: 10).
Let’s look at these future trends and what they mean for social enterprises …
Technological trends: The SSES claims that as technology enables public scrutiny of SE activities, SEs will be encouraged to collect robust data, show good governance and social impact (pictured left). And as socially responsible products and practices increasingly become more familiar to the public, more hybrid businesses are likely to emerge in the sector. Here, SEs are presented as the ‘business of the people’ – trustworthy, grassroots, accountable, hi-tech, responsible and capable of social and economic impact (SSES, 2016: 12).
These ‘trends’ identified by the strategy can be thought of as framing mechanisms or ways of attributing particular meaning to SEs. SEs are identified as vehicles that can be mobilised to addresss a range of economic and social problems, from local community concerns to uncertain economic markets.
People might be able to imagine themselves as responsible for local community issues which SEs address, but these issues are often tied to broader, even global issues which exist outside the reach of many individuals as they go about their daily lives. This is an idea which we will pick up on in our discussions about ‘moral economies’ and social enterprises in later posts.
Politicalchanges: First, ‘Enabling legislation’ is identified as something that will open up financial and funding possibilities for SEs, particularly in the areas of early learning and childcare, health and social care, land ownership, broadband and transport. SEs are encourged to capitalise on the opportunities that arise in these spaces.
Second, it is predicted that increasingly localised public services will need a personalised response. And this is where it is claimed that SEs can step in to offer these kinds of unique, customised services.
Finally, it is thought that change will come about from high levels of democratic participation:
High levels of democratic participation is likely over time to lead to power being devolved downwards. Locality planning, participatory budgeting, and community empowerment are symbolic of the shifts underway. Further work will be required to ensure services are locally organised, people powered, and enterprising (SSES, 2016: 11).
While Social trends (pictured below left) include: demographic change, persistent inequalities, the influence of young people, and ethical consumption. The responsibility of caring for an aging population and providing innovative solutuons for aging populations is attributed to SEs, as well as the responsibility of fighting entrenched social inequality.
Nothing less than social transformation is the expected impact of social entrepreneurialism and enterprise. The spirit of entrepreneurialism is tied to the ‘younger generation’ who are relied upon for ‘progressive values’ and ‘new expectations anout society, business and life’ (SSES, 2016: 11). And this point is expanded on in relation to schooling a little later in the strategy, where there are plans to develop an education system with entrepreneurship at the core to capitalise on the potential of Scotlands young workforce (SSES, 2016: 16).
Finally, it is thought that our own motivation as consumers to buy ethically produced and responsible products and services, is cited as a driver for social change. Social Enterprises are encouraged to leverage these political and social trends to grow the sector, unite communities and fight against socio-economic injustice (our team member Kim Humphrey is an expert in the dynamics of ‘ethical consumption’).
A desire to live better, more sustainable lives means consumers will increasingly make ethical choices. This may fuel growth of the sector, but only if social enterprises are more visible and able to supply consumer requirements (SSES, 2016: 11).
The Economic trends identified by the SSES provide the final piece of the puzzle (SSES, 2016: 12). Here, entrepreneurialism is something that can balance and revitalise the economy by creating a more diverse business base. And, in the economic trends section we see a reflection of the social trends mentioned above. The idea of ‘business with a purpose’, social impact and ‘collaboration’/partnership taps into social trends of moral or ethical consumption (see Kim Humphrey’s Excess: Anti-Consumerism in the West).
We will pick up on this discussion of business with a purpose in our next post on social enterprises as the ‘good global citizen’, intrapreneurship and mobilising the consumer for market opportunity. In that post we reflect on what these ideas mean if we examine them through the lens of the ‘moral economies of social enterprise’.
In our last post we discussed the Victorian Social Enterprise Strategy (SES) and its focus on social finance options, specialist intermediaries and social procurement. In this second post we take a look at how international social enterprise strategies have inspired Victoria’s SES and what the strategies ‘next steps’ involve.
But before we delve into these issues it might be useful to remind you what the Victorian SES is all about. The strategy frames social enterprises (SEs) as a way of promoting innovation, entrepreneurialism and productivity:
‘The growth of the social enterprise sector improves productivity through innovation, by adapting old business models to meet the needs of Victoria’s changing economy. Social enterprise helps maximise the productive use of our human capital through increased workforce participation’ (SES, 2017: 2).
Between 2011 and 2016 the Federal Government allocated $20 million in Social Enterprise Development and Investment Funds (SEDIF). Recently, this initiative was evaluated and it was recommended that social finance options (grant finance, patient capital and early-stage risk capital) were provided to SEs along with business capability development for social enterprises. The evaluation also recommended supporting ‘specialist intermediaries’ and ‘social procurement’. While this kind of support has a role to play in developing Australia’s social enterprise sector, in our last post we discussed how supporting intermediaries rather than SEs runs the risk of undercutting funding to SEs.
In the SES there was also a recommendation that the impact of social enterprises be measured. We questioned how the impact of SEs would be measured, because impact in the social context is not always quantifiable or easy to measure. Funding and impact were listed as key elements of growing the social enterprise ecosystem in Victoria (SES, 2017: 9).
Now lets turn our attention to the international policies and strategies influencing Victoria’s SES.
Drawing inspiration from international social enterprise strategy
Victoria’s Social Enterprise Strategy takes direction from Canada, the UK and the Scottish Government’s recently released (2016) social enterprise strategy. The Victorian SES states that:
‘The Scottish Government has been a leader for many years in establishing a supportive environment and eco-system for social enterprises. They have made small, targeted investments for huge dividends and are currently in the consultation phase of developing a new 10-year social enterprise strategy for Scotland to build on their successes. With a comparable population Scotland’s social enterprise sector employs over 112,000 people, compared to Victoria’s estimated 75,000’ (SES, 2017: 11).
The Victorian strategy presents Scotland as a leader in creating the right conditions for social enterprises to emerge and thrive through small targeted investments. They draw comparisons between the populations of Scotland and Australia as well as how many people the social enterprise sectors employ. For instance, in terms of gender balance in the social enterprise workforce Scotland is said to lead the way. It is interesting that compared with the corporate sector, social enterprise sectors in Scotland and in Victoria show a more equitable pay scale and involvement of both men and women in different leadership roles.
’60 per cent of chief executive roles in Scottish social enterprises are occupied by women compared to just 17 per cent of women in chief executive roles in Australian companies’ (SES, 2017: 11).
Scotland’s targeted investments have been paired with a 10-year investment plan which includes:
The Social Entrepreneurs Fund – From Ideas to Action. £1 million – to provide capital and business support for new social enterprise ideas
Just Enterprise program – £3 million for business support and £4 million enterprise investment fund – both managed by consortia of Scottish intermediaries
2015 First census of Scotland’s social enterprises
Support for Social Enterprise Networks – there are now 20 across Scotland (SES, 2017: 11)
Scotland’s social enterprise policy can be found here. We’ll take a closer look at this in upcoming posts…
The Victorian Government also looks to Canada and the UK to support their investment in the business capabilities of social enterprises. However, it is a little concerning that this type of investment emphasises profit and gears funding towards organisations that work with social enterprises, and not primarily the social enterprises themselves.
In Canada, state jurisdictions look to foster the business capabilities of social enterprise through better access to training for proponents, business support and services, facilitation of access to government services, awareness building of the sector and improving access to finance to enable businesses to both start-up and grow.
Victorian Social Enterprise Strategy Key Action Areas
As we’ve said, the Victorian SES seems to be pushing for the development of social enterprise business practice and broader policy frameworks with economic profit and growth in mind. Alongside this, the Government is keen to formalise partnerships between the sector and the State.
In order to achieve these goals the strategy outlines three key action areas:
Key area 1: ‘Increasing impact and innovation’
This involves: supporting innovation, promoting and connecting social enterprises and raising awareness, and growing the social enterprise eco-system. The idea here is to make government programs more readily available and relevant to social enterprises. This approach is to be supported by a research program aimed at understanding how social impact is valued. The SES states that:
‘This will include an indepth study and mapping of Victorian social enterprises to better understand their demographics and impact, including representation of women in the workplace and in management roles, and exploration of appropriate economic modelling’ (SES, 2017: 15).
A study of how social impact can be valued could be useful, especially one which considers the meaning of social impact and how ‘value’ is attached to things, events, people and programs would be best. This would be a critical engagement with social impact. It is unclear at this stage precisely what form the program of research will take. The strategy indicates that it will be formative and look to influence future policy and economic models which social enterprises may then be encouraged to adopt.
Key area 2: ‘Building business capacity and skills’
This key area focuses on encouraging self-sufficiency, strengthening intermediary services, building the skills and capacities of social enterprises, and enhancing the enabling role of the government. The SES states that:
‘The government will facilitate the creation of a skills development program for social enterprise SME founders and managers – supporting the viability, sustainability and growth of the SME’ (SES, 2017: 16).
The concern here for us, is that many social enterprises are over-workshopped and over-trained and need actual funding rather than these types of programs. Again, funding goes to the intermediaries, as the strategy says:
‘The government will provide pilot funding to test new initiatives supporting the development of the intermediary sector to provide specialist business support, advice, mentoring and signposting to social enterprise networks, investors and buyers’ (SES, 2017: 16).
Key area 3: ‘Improving market access’
This means that attempts will be made by the State to decrease the financing barriers social enterprises in Victoria face by boosting investment opportunities and creating opportunities for competitive social enterprises to deliver goods and services. The word competitive indicates that SEs will be encouraged to compete with fellow SE organisations. This may have its benefits, however it may also go against the grain of basic social enterprise ideas and philosophy to work with and not against others orgs in creating social value and impact.
This third key area involves a number of steps, like developing a Social Procurement Framework:
‘The government will develop a whole of government social procurement framework to leverage public investment in supporting social outcomes. The project aims to provide whole of government purchasing guidance to departments and agencies regarding opening more accessible tender and procurement opportunities to social enterprise SMEs. It will also work on the creation of a broader framework for considering the economic and social value from working with social enterprises’ (SES, 2017: 16).
And other services and structures will be developed to help identify SEs, such as a ‘recognition scheme’ and an ‘online matching service’:
‘Social Enterprise Recognition: The government will support the development of a recognition scheme to help identify social enterprises and build the confidence of buyers, creating a directory-like information source identifying Victorian social enterprises’.
‘Marketplace Partnering – On-line Matching Platform and On-ground Events Calendar. The government will facilitate the development of an on-line partnering platform to link government and corporate buyers with social enterprise and support a calendar of metropolitan and regional market place events to link buyers with social enterprise’ (SES, 2017: 17).
While these will be useful in providing SEs with potential financial partners, backers or donations this does risk commercialising the sector, especially if SEs are increasingly pushed to compete, to turn a profit and develop business models hatched in the corporate world.
It may also be the case, as in any market, that some social enterprises will benefit from being supported and included in a ‘network’, while others who do not meet the requirements may be excluded. Some social enterprise missions will be valued over others. Different forms of social value may not be recognised through the research evaluation program, particularly if value is tied intrinsically to profit.
Concerns and Questions
The Victorian Strategy states that social enterprises support workforce participation of marginalised groups and improve social cohesion. In many ways social enterprises do address these issues, however the strategy indicates a shift towards the formalisation of the responsibility for these issues resting with SEs. The concern here is that:
such a strategic move displaces Victorian State government responsibility to address these issues onto the community and the individuals involved in running social enterprises. The strategy mobilises a neo-liberal political approach to significant social and economic problems by responsibilising individuals and the community.
While the State looks to take on a measure of responsibility itself, the way in which is does so in concerning: it indicates a shift toward profit-driven welfare, which can actually entrench poverty and exacerbate inequalities between those who manage and run social enterprises and those who are supposed to benefit.
Government support for the sector may have its benefits and its downfalls. Particular ways of doing social enterprise will be encouraged, this includes being a competitive social enterprise. The risk is that increased competition in the social enterprise sector, like any other business sector, may affect performance and quality, and may impact on the experience of participants involved in the programs that social enterprises support.
How can social enterprises be best supported to fulfill their social mission?
Is the value and social good of social enterprise something that should be tied to economic profit? If so, then how?
This post is part one of a two part post about the recently released Victorian Social Enterprise Strategy, 2017.
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).
Social enterprises ‘main purpose is not the maximisaton of profit but the attainment of certain economic and social goals’ (Muñoz and Tinsley, 2008: 44).
In Australia in recent years, social enterprises have been positioned in many goverrnement, community and business discussions as significant sites for youth engagement, training, and social inclusion. In 2017 the Labour State Government of Victoria released their Social Enterprise Strategy. The policy, in part, states that rates of employment and community engagement among marginalised groups of young people in Australia will be a key indicator used to evaluate social enterprise benefit/outcomes.
The Victorian Government Social Enterprise Strategy (SES) is framed by a concern for the employment opportunities provided to young people entering the workforce. The Minister for Industry and Employment Wade Noonan notes that ‘jobseekers’ are ‘at risk of being left behind’ with young people facing declining opportunities for meaningful participation in the workforce. Noonan suggests that the that the Victorian social enterprise sector has a substantial role to play as government alone can not solve:
Our most pressing social challenges – including unemployment, homelessness and disadvantage …
Many of our brightest and most innovative people are working tirelessly every day to find new ways to solve these problems. Through the extraordinary efforts of Victoria’s thriving social enterprise sector, we are drawing maximum dividend from our economy and applying business skills to a social mission (SES, 2017: 1).
The new Strategy understands social enterprise aims and goals as mostly financial:
While social entrepreneurs often require financial support or assistance to get their business off the ground, the goal of social enterprises is to become commercially self-sustaining. Sustainable operations are vital to the social enterprise model and international experience demonstrates the ongoing dividend, which is gained from well-targeted policy to assist sustainability (SES, 2017: 2).
The State Government supports social enterprise activity by: supporting social enterprise intermediaries, through social procurement initiatives, and through investment in social enterprises.
Social enterprise intermediaries
The Victorian Government states that social enterprise intermediaries provide support and guidance to social enterprises in identifying and adopting:
workable business models and legal structures, accessing appropriately experienced mentors, and successfully demonstrating economic and social impact (SES, 2017: 7).
The majority of Australian social enterprise intermediaries are located in Victoria, and include: Social Ventures Australia (SVA) (which supports SecondBite, Ganbina and STREAT); the Difference Incubator; the Social Enterprise Academy (SEA); and the Australian Centre for Rural Entrepreneurship (ACRE).
Social Traders: Established in 2008, jointly funded by the Dara Foundation and the Victorian State Government, Social Traders has established itself as the leading organisation supporting social enterprise in Australia, providing a diverse range of services to develop and grow the sector.
LaunchVic: A Victorian Government initiative, LaunchVic supports Victoria’s globally recognised, thriving start-up culture, and supports entrepreneurs to develop and grow businesses, including social enterprises.
Problems arise as social intermediaries are now the recipients of more funding than social enterprises themselves and are over-represented in the sector. Most intermediaries don’t provide pro bono support here – but charge social enterprises for this kind of consultancy. As a result they receive funding at both ends, from government and from social enterprises.
The Victorian Government social procurement initiative aims to leverage the purchasing power of the state government. It claims that the initiative
adds value by intentionally generating a social outcome when goods or services are purchased, and ensures that wider government goals can be aligned with procurement’ (SES, 2017: 7).
The social procurement approach has been used by the Victorian Government’s Level Crossing Removal Authority to create New Employment and Exchange Training Centre (NEXT). The Strategy cklaims that NEXT operates as:
a hub for a range of social procurement services, including career and transition advice services. The project is estimated to create 2000 new jobs, with at least 200 being apprentices or graduate engineers. The NEXT centre will provide opportunities to re-skill people from transitioning industries, such as automotive workers, and students from diverse and disadvantaged backgrounds, including indigenous Victorians and migrants (SES, 2017: 7).
Major Victorian government infrastructure delivery agencies, such as the Level Crossing Removal Authority and the Western Distributor Project require a Social Procurement Plan from project delivery partners.
Social Impact Investment for Sustainability
Launched in 2016, this Sustainability Victoria initiative provides a combination of grants and low interest loans to investment-ready social enterprises working in the environment space. Investments are designed to create new jobs and training opportunities, respond to climate change, avoid and recover waste and improve resource efficiency in Victorian communities (SES, 2017: 6).
Increasingly government funding is shifting toward this kind of investment, or debt finance, rather than actual funding, which can put further financial stress on nonprofits. This type of investment is paired here with a Sustainability focus which may exclude a range of social enterprises from applying for funding.
The limitations of the Social Enterprise Strategy
In terms of the track record that we bring to this project (see for example, Working in Jamie’s Kitchen: Salvation, Passion and Young Workers), and the significant research undertaken on/with social enterprises (see for example, Art as Enterprise: Social and Economic Engagement in Contemporary Art), we want to suggest that the framing of social enterprise in this Strategy should raise a number of concerns. In the first instance, the Strategy takes a profit-focused approach to social enterprise and does not fully account for hybrid models of social enterprise. This approach runs counter to the reality of the social enterprise sector worldwide, as only 30% of all social enterprises run at a profit. This has the effect of diminishing the value of non-profit yielding social enterprises and increasing the pressure on all social enterprises to turn a profit. The downstream effects of this pressure will be felt by the very participants social enterprises aim to support. Ironically, the strategy begins with a concern for the employment prospects of young people, but in reality may undermine the chances of young people, the quality of social enterprise programs and the functionality of the social enterprise sector. There are further negative implications for those social enterprises working with greater levels of marginalisation and disadvantage who bring together funding as well as self-generated revenues.
Finally, and perhaps most worryingly, the strategy places significant emphasis on supporting intermediaries and business development training (often run through intermediaries) with almost no government funding for social enterprises themselves. The small amount of funding being provided seems to be geared toward debt finance or ‘investment’ rather than actual funding. This continues a pattern of policy-making and funding decisions in the sector that has led to an explosion of intermediaries while social enterprises themselves struggle.
We will take up these and other issues in subsequent posts.