What is Social Enterprise?
“So, what exactly is social enterprise?” This is one of the most common questions asked of our Young Change Agents team when we talk with educators, collaborators, and students about what we do and who we are.
The Social Enterprise Model Explained…
Simply put, a social enterprise is a business entity that aims to address social or environmental problems while generating profit. The primary purpose of a social enterprise is to achieve a positive social impact, rather than maximizing profits for owners or shareholders.
However, a social enterprise model is far from simple!
Social enterprises can take many different forms, ranging from nonprofits whose primary goal is not to make a profit, but rather to serve their specific purpose and benefit society to for-profit companies that prioritise social or environmental benefits alongside financial returns.
For example, Young Change Agents is a nonprofit social enterprise leading the way in youth entrepreneurship in Australia.
In fact, Young Change Agents recently received certification from Social Traders, Australia’s only social enterprise certification. The certification gives stakeholders assurance that businesses certified are creating genuine purpose and impact through trade and we are so proud to be included amongst Australia’s best social enterprises.
However, it doesn’t stop there. In every single Young Change Agents program and our full pathway approach, the focus and our philosophy are about creating a movement of social entrepreneurs nationally. Inspiring our young people to make a change, be the change, and sustain the change through a social enterprise model.
In this blog, we’ll share more about the social enterprise model and discuss why it is becoming a more well-known term globally and the continued rise of social enterprises. We will also touch on the importance of creating a generation of social entrepreneurs and how Young Change Agents can support and inspire that journey for our young people to become social entrepreneurs.
What Social Enterprises Might I Know?
You may have heard of the Australian-based social enterprise, Who Gives A Crap, which is thriving (especially during COVID19) with its profit model of “generating a financial return from the sales of ethically produced toilet paper, tissues, and kitchen towels. Half of its profits are donated, and to date, the other half have been reinvested into the business to help fund its growth.”
Good Cycles social enterprise based in Victoria has successfully maintained a “80/20 revenue model, with more than 80% of annual revenue derived from its commercial operations, less than 20% from funding/grants, reinvesting 100% of profits back into its mission: providing young Victorians at risk of disengagement with employment opportunities that improve their futures.
For more advice, information, and examples of social enterprise, how to set up a business as a social enterprise, or to understand suppliers and their social enterprise status, see Social Enterprise Australia or Social Traders.
The Rise of Social Enterprises
Characteristics common to all social enterprises is their focus on sustainability, both in terms of their business practices and their social and environmental impacts. They reinvest a significant portion of their profits back into their operations and communities, rather than distributing profits to shareholders or owners. We really like the Social Traders definition of social enterprises as “an innovative breed of businesses that exist to create a fairer and more sustainable world, and that purpose is at the heart of social enterprise.”
Social enterprises are stepping up to make a difference in the achievement of the UN Sustainable Development Goals (SDGs) the “17 Global Goals that form a blueprint for peace and prosperity for people and the planet, now and into the future.” We have some epic problems to solve which present epic opportunities, and social entrepreneurs and social enterprises are a perfect way to create and scale sustainable businesses and change focussed on achieving these SDGs.
According to Social Traders, Australia has over 12,000 social enterprises. Social enterprises contribute $21.3 billion to the Australian economy and account for 1% of GDP. Over 206,000 people are employed in Australian social enterprises. Creating purpose-driven work that aligns with personal values is one reason people are seeking employment in social enterprises. Many social enterprises offer competitive compensation and benefits too as they understand they need to attract and retain talented individuals, and they often offer competitive compensation and benefits packages.
Social Enterprise for Young People
Young people have lived experiences, they can identify problems they see and feel around them, in their communities, nations, and globally. They have greater exposure to the ‘real world’ than any teenage generation before them thanks to social media, technology, and now of course AI.
At Young Change Agents, we believe in the power of social entrepreneurship to help young people change the world. This is through seeing problems as opportunities and having the mindset, skillset, and toolset to take action and activate to make change. Young people will be expected to recognise opportunity, take initiative and innovate in the face of challenges. A great way for them to do that is by thinking of their ideas as social enterprises, not just a project or creation, but how can that idea be delivered and scaled to create more long-lasting change.
Youth Social Enterprises - where to start?
If you want to feel joy and hope, look at our Young Change Agents Youth Project page and our YouTube channel, this is just a very small snippet of the social enterprise ideas that are created every time we and our educators work together to deliver and embed our programs in schools and community groups.
We even offer a Social Enterprise in a Box program that launches a social enterprise within a school, providing a real-world experience of working in a venture for students. Students are empowered to design, launch and manage the social enterprise. We facilitate workshops with students to develop the brand and logo of the shop and decide what they will stock. We also codesign the shop logistics and experience with students. This program also allows students to experience budgeting and managing funds without using real money through our platform that tracks their income and spending.
Depending on the curriculum or unit, we have programs specially designed for young people to identify opportunities and create social enterprises which can focus on:
- PlanetASchools: supporting youth to create environmental and sustainability-focused consultancies within their school.
- Digital Boss: helping youth to create digital products and services.
- Youth Design Challenges: creating solutions to a specific challenge theme (currently Future of Finance)
- Lighting the Spark: a culturally proud, community-led program that enables local leaders to share entrepreneurial education with Indigenous youth in their communities, with the guidance of local mentors and businesses.
- Discovery or Explorer: help youth to creating social enterprise solutions to local community problems.
Working closely with Australian educators, we can build a new generation of social entrepreneurs, solving our biggest challenges through social enterprises!