‘Disturbing’ Findings of Aus Social Enterprise Research

Australian social enterprise is being hurt by a lack of coordinated advocacy on policy and the “disturbing” failure of impact investors to understand the demands of social enterprise, according to the interim findings of a major research project on Australia’s social enterprise sector.

Released at the Social Enterprise Masters Conference in Melbourne, early results of Finding Australia’s Social Enterprise Sector (FASES) 2015 revealed that social enterprises were telling stories of the “broken promises” of funders.

“The resource paucity of the [social finance] field came through very strongly. [Organisations are] operating on the smell of an oily rag,” research leader Professor Jo Barraket said.

“We heard a disturbing story – well, maybe not a disturbing story, but a reality story – about an impact investing field that is immature, that does not understand the needs of social enterprise…and a story of a sense of broken promises.

“I have to say, we had the demand side of the field in the room most of the time. If we opened that conversation up, had a balanced representation of social financiers in the room, we might get a different story, but that is the perception coming from social enterprise. That a promise has been developed, and sometimes perpetuated by social enterprise intermediaries, that is not being fulfilled at the other end.”

The national research is being conducted by the Centre for Social Impact (CSI) at Swinburne University in partnership with Social Traders.

As part of the first stage of the study, a series of 13 workshops were conducted across six states during September 2014 and April 2015, to discuss the challenges, opportunities and needs of Australian social enterprises with those managing them, intermediaries and people in policy and development roles.

“What was discussed was a lack of coordinated policy advocacy for social enterprise in Australia…It was talked about in relation to, do we need an industry body, do we need a peak?

“There was a strong discussion that there has been a lack of coordinated advocacy for social enterprise development in this country and that therefore leads to a lack of an explicit public policy framework for supporting social enterprise development.

“If you want that to happen, you need to create it…the only way a representative body is going to be created, is if people in the room who represent social enterprise create a representative body. In a sense that vacuum is waiting to be filled but you collectively need to ask yourselves if you want to fill it.

“Social procurement, hands down, came up as the one significant opportunity social enterprises could see to deepen their impact by developing their markets.

“A big theme identified by our participants was the need to develop markets for social enterprise through increasing public awareness of their presence and growing public sector and corporate purchasing from these types of organisations.”

Governance and staffing were also identified as major ongoing issues.

“As social enterprises grow and change, they experience challenges in navigating organisational identity, staffing and governance cultures that adapt with them,” Barraket said.

In particular, the complexities of staffing social enterprises with a double – and sometimes triple – bottom line, was noted.

Barraket said that many people participating in the research workshops were moving into the social enterprise space as they sought to align their work with their values, including “corporate refugees”.

“They weren’t all millennials by any means. There were people across every generation moving into the social enterprise space, coming from a range of career trajectories, so I think it’s important that we don’t suggest or assume that the only people with this values-based transfer are coming from this particular generation.”

“In the governance context, we heard a lot of stories about the mismatch between board decision-making that’s related to Not for Profit purpose and charitable activity… and social entrepreneurial thinking… finding the mechanisms by which we [can] navigate the flexibility and agility of a small business that's effectively operating within a large bureaucracy came up over and over again.”

“The point that comes out for me is that there’s clearly some competency development that’s needed…someone needs to talk to the [Australian] Institute of Company Directors about training board members to be effective at governing social enterprises.”

The next stage of the FASES project will include a national online survey to collect further information about the current locations, practices and activities of social enterprises in Australia. Drawing on the workshops, the survey will aim to distinguish differences in organisational practice based on industry, enterprise origins, enterprise model, stage of development and geography.

The initial FASES project was conducted in 2009 by Professor Barraket and consisted of a national mapping study which became the first national research project on the Australian social enterprise sector.

Members of the sector are encouraged to participate in the research. Visit tinyurl.com/fases2015 to participate in the survey.