RETHINK NEEDED: The foundations of a charity are fundamentally different to business but there has to be a middle ground where both can thrive. I’m having lots of conversations lately about the social enterprise model.I’m slightly frustrated by the lack of support for it in our community and believe a core shift in thinking needs to be tackled before the social enterprise model issuccessfully adopted.
What is a social enterprise exactly?Social Traders define it as: “Social enterprises are businesses that trade to intentionally tackle social problems,improve communities, provide people access to employment and training, or helpthe environment”.
It’s a business with a social conscious that uses at least 50 per cent of its profits towards asocial mission. There’s no real legal entity in set up for a social enterprisethat gives you any benefit like tax deductions, so you have to trade as a company.
But there seems to be growing pains with the idea of social enterprise and people andcorporates wanting to support them.A friend of mine established a social enterprise in Sydney with a focus on the indigenouscommunity. In line with the model, they started a consulting company to fund their socialenterprise to ensure its sustainability. They’ve had to stop thissustainable income stream because larger organisations wouldn’t fund them knowing they hada business arm within the organisation.
Society has been asking charities to be more transparent andmore ‘like a business’. It’sabsolutely necessary to be transparent, however, the foundations of a charity are fundamentallydifferent to business.
The foundations of a charity are care, compassion and nurture. Thefoundations of business are systems, structure, process. They’re like chalk and cheese.
With this in mind, we have to work out not only how they work together, but how we shift ourthinking to better support the new model – that is somewhat being expected of charities.
Social enterprise now is the middle ground – the balance between the two. They start with thewhy in mind (care, compassion and nurture), but do it in a business manner (with structure,systems and processes).
A few local examples are: The Place – Charlestown: have multiple services they runfrom their hub in Charlestown Square, they rent their rooms to corporates for conferencesand workshops so they can provide affordable and free services to those who are vulnerable.
Other examples areARTea’s Gallery and Garden in Swansea and The Canopy in Cameron Park.
I wish there were more examples like these – where charitable organisationswere more reliant on making their own money.
Victoria is great at supporting the social enterprise model. Businesses, foundations andphilanthropists are really behind the social enterprise movement and it is growingexponentially and thriving.
Charities have their why, they just don’t know how to do business.
Businesses know how to dobusiness, but they’re desperately looking for their why.
If we could help each other and meetin the middle we would have the best model for social impact that wouldchange no only each other but future generations.
Grace McLean is the founder ofNFP Connect