Finding Australia's social enterprise sector 2016: final report

Social enterprises are organisations that: 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. This document reports on the research findings of the Finding Australia’s Social Enterprise Sector (FASES) 2016 project. FASES 2016 builds on the original FASES 2010 project, to document characteristics of Australian social enterprises, and explore the opportunities and challenges they face. FASES 2016 focused on understanding challenges and opportunities experienced by social enterprises in their current operating environments.  The research adopted a mixed methods approach. This included: a review of existing literature and methods of social enterprise mapping; 13 focus groups with a purposive sample of 75 social entrepreneurs, social enterprise managers, social enterprise intermediaries and policy makers; development and administration of an online survey; secondary analysis of data held by Social Traders; comparative analysis – where appropriate – between original FASES and FASES 2016 results; and geospatial analysis of existing national data sets and FASES 2016 data. Based on pre-existing research data and information from our survey, we estimate there are at least 20 000 Australian social enterprises. This estimate takes into account some not for profit organisations have multiple business ventures, and not all social enterprises are incorporated as not for profits. As the population of social enterprises remains largely unknown, measuring growth of the sector is challenging. The FASES 2016 data suggest that, while the social enterprise sector includes many mature organisations, we are seeing growth in new entrants to the field, with 33.8% of the study’s sample being between two and five years old. Major opportunities for social enterprise development identified by research participants included social procurement; quasi-market development; and opportunities to grow impacts through supply chain development. Major constraints on the development of the field identified by participants included a relatively limited ecosystem for social enterprise development and piecemeal public policy support. Organisational governance was also identified as a factor that both significantly enables or constrains social enterprise development. The major external constraints on social enterprises growing both their businesses and impacts identified in the research included: 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 continuing lack of suitability of external finance available to social enterprises at different stages of development was also a concern to some who participated in the research. In terms of internal constraints on development, participants in FASES 2016 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. Australian social enterprises seek to fulfil a diversity of missions and serve a wide variety of beneficiaries. The most cited missions of the 2016 sample were creating meaningful employment opportunities for people from a specific group, and developing new solutions to social, cultural, economic or environmental problems. This differed from the 2010 findings, where creating opportunities for people to participate in their community was the most frequently cited response. FASES 2016 finds that, similar to FASES 2010, Australian social enterprises operate in every industry of our economy. They trade predominantly in local and regional markets and focus on fulfilling their missions at local and regional goals. However, some social enterprises operate in international markets and seek to respond to missions of international scope. 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. FASES 2016 seeks to extend our collective understanding of the scope and activities of an important and largely invisible part of our social economy. It also explores the challenges and opportunities facing Australian social enterprises. Our research finds Australian social enterprises continue to give expression to a wide diversity of human aspirations.  The generalisability of some of the findings in this report is constrained by the data collection methods. Despite substantial effort to encourage participation in the online survey by the research team and Social Traders, it had a poor response rate. We augmented these data with organisational data held by Social Traders. If understanding the contributions and practices of the social enterprise sector is of concern to social enterprise intermediaries and policy makers, a coordinated data plan – making use of existing data collected by intermediaries – would be beneficial. Routine data collection by regulatory bodies would also assist build a comprehensive longitudinal understanding of social enterprise development in Australia