Social Enterprises must do three things:

  1. Have a defined primary social, cultural or environmental purpose consistent with a public or community benefit, and
  2. Derive a substantial portion of their income from trade, and
  3. Invest efforts and resources into their purpose such that public/community benefit outweighs private benefit.

They operate in all industry sectors of the economy, from facilities management, to catering and hospitality, to business administration to design.

There are three Social Enterprise impact models:

  1. Employment-generating – creates employment and training opportunities for marginalised people.
  2. Community need – delivers accessible products and services to meet community needs that are not met by the market.
  3. Profit redistribution – donates at least 50% of profits or revenue to charity.

Purpose is at the heart of a social enterprise.

What is Social Enterprise Procurement?

Social Enterprise Procurement is when a business or government chooses to buy goods and services from a Social Enterprise. Switching to Social Enterprise Procurement delivers the same quality while helping create a fairer and more sustainable world.

Social Procurement is a way for businesses to meet sustainability and ESG goals simply by switching suppliers. That could include local suppliers, indigenous suppliers, Social Enterprises and others. Social Enterprise Procurement is a specific type of Social Procurement that creates some of the most impactful procurement outcomes, that complements sustainable and inclusive procurement.

When you buy from a Social Enterprise, you are purchasing quality goods and services that your business needs, while buying community impact in the same transaction. The best part is this is spend already allocated for essential op-ex – money that would have been spent anyway. It’s not money budgeted separately for CSR, yet it achieves the same CSR or sustainability goals.

Some of Australia’s leading brands across all industries are already buying from Social Enterprises. John Holland, The Victorian Government, Microsoft, Lendlease, Westpac, Coca Cola Amatil, Mirvac, SAP and Transurban are just some of the well-known brands leading the way.

Social Traders enables business and government to create positive impact by deeply integrating Social Enterprises into their supply chains. We support businesses to build the systems, structures and internal culture to prepare them to buy from Social Enterprise. We also certify Social Enterprises and support them to strengthen their business model. A full list of current Certified Social Enterprises can be found on the Social Traders Social Enterprise Finder.

The business case for Social Enterprise Procurement

By allocating a small portion of procurement spend to Social Enterprises, business and government have changed the lives of some of the most vulnerable people in the country. But buying from Social Enterprise also makes good business sense:

  • Community-focused supply chains are more robust. Many businesses have found themselves vulnerable when offshore supply chains collapsed. The crisis underlined the limitations and fragility of global supply chains. Building a diverse and local supply chain will de-risk your business.
  • Future employees are increasingly expecting their employer to have a purpose beyond profit. Making a positive contribution to communities boosts staff engagement and attracts the best talent.
  • Good businesses build customer demand and brand loyalty. The current crisis has brought into stark relief the importance of businesses facing the reality of the situation with authenticity and compassion. The businesses that invest now in growing and showcasing their purpose will create stronger brand equity.
  • Governments will be looking for the private sector to partner with them in delivering positive social outcomes. Delivering social impact is becoming an increasingly important factor in winning contracts with Government.

Stakeholders, customers, and employees will increasingly expect employers to make a contribution to the community. The good news is this is possible, by simply buying goods and services you would have done anyway, without compromising on cost or quality.

Incorporating Social Enterprises into existing supply chains is a very real and immediate means of delivering the corporate social responsibility stakeholders expect – while boosting business at the same time.

Let’s make sure the money Australians spend today is helping build a stronger economy for decades to come.