Thought Leadership

Is social enterprise the right move for your organisation?

Brayden Smith Brayden Smith

To social enterprise, or not to social enterprise: that is the question.

It’s a hot topic around the globe as the gap between ‘funding needs’ and ‘funding reality’ continues to grow wider.

Done well, social enterprise can deliver opportunities to generate revenue while delivering on your organisation’s mission and purpose. They allow not-for-profit entities to gain greater financial independence, expand their activities and scope of services, and to build better connections with the community.

However, there are risks, especially if your organisation has limited commercial and governance capabilities. When executed poorly, social enterprise can burn through your ‘social capital’ at an alarming rate and jeopardise not only the social enterprise, but the organisation it supports.

So how do you know if setting up a trading operation is the right move for your organisation?

Focus on the golden rules of social enterprise. The services or products it offers should be innovative, unique, people oriented and environmentally friendly. It should also operate with a purpose of creating value for the community it serves. So start by establishing two key fundamentals: identify the issues your social enterprise seeks to resolve and clarify how it will help tell your organisation’s story.

You then need to dig a little deeper. To ensure a social enterprise is a step in the right direction for your organisation, ask yourself four key questions:

  1. What is the social enterprise’s business model?
  2. What corporate form should it take?
  3. What is your plan for capital and growth?
  4. How will you measure your impact? 

If you don’t know the answers, it’s critical to seek the right advice before investing your organisation’s valuable resources into a venture that could rapidly turn into a serious misadventure.