Social Enterprise In Australia ‘Disappointing’ and ‘Self-Obsessed’

The social enterprise movement in Australia has become “self-obsessed” and “internally focused”, a Melbourne forum with the controversial title of Why We’re Breaking up with Social Enterprise has heard.

Bessi Graham, the CEO and founder of social enterprise consultancy, The Difference Incubator (TDi), which hosted the forum, said they were “breaking up with social enterprise” because they were disappointed.

“To be perfectly honest we feel a bit heartbroken because the potential and what we had put our hopes into, has not played out,” Graham said.

TDi creates programs to assist entrepreneurs and mission-driven organisations grow investment-ready enterprises for social or environmental impact.

The TDi panel included social finance partner at EY, Christopher Thorn, general manager of mission development at Baptcare, Olivia Maclean and Eyal Halamish, the co-founder of digital democracy platform OurSay.

Graham said in her introduction to the forum that they did not feel like social enterprise had “lived up to its side of the bargain”.

“Some of the disappointment and the things that are frustrating for us exist around the fact that social enterprise seems to have become more and more self-obsessed and internally focused,” Graham said.

“It is this combination of a real obsession [for some people] with the idea of entrepreneurship –  a real desire to be a social entrepreneur… and it has lost some of the real reason or motivation that we were attracted to in the first place and it has become more about being that ‘thing’ and having that label for yourself and what that might mean for you as an individual.”

Panel member Halamish, who described himself as a social entrepreneur, told the audience he had already controversially described social enterprise as a “failed business”.

“The reason I said that is because I know a lot of people who work and come up to you with big ideas and will talk about being a social enterprise and I would try to go one layer deeper to the business model and normally it didn’t exist,” Halamish said.

He said in the early days of his enterprise he was guilty of looking at the “big picture without really having a good business model”.

“We have clawed back into this… space trying to find a real business model that actually creates some social impact as a result,” he said.

Graham said social enterprises were also obsessing over definitions.

“In my opinion and TDi’s opinion it is unhelpful and drives really limited thinking for people around what kind of business can do good in the world,” she said.

Graham said there was also an unhelpful obsession with a social enterprises legal structure.

“The form that a social enterprise takes is one of the things that often flows out of a misnaming of what a social enterprise is,” she said.

“The other really strong obsession is the incredible focus on profit and what is done with profit. If you limit the good you can do in the world to what you do with your profit or even worse what you do with a percentage of your profit you have completely missed the point.

“There is an underlying laziness in finding a nice flashy term that you can call yourself rather than do the work to figure out how your business is actually doing good in the world.”

Graham said the relationship failure with social enterprise was more about a mismatch with the name.

“The idea of breaking up with social enterprise is in no way a breaking up with those people who call themselves a social enterprise. But social enterprise as an idea has come to a place where our relationship doesn’t work any more,” she said.

“We have tracked social enterprise to the very problem it was trying to escape – that scarcity mindset that sits in a charitable not-for-profit space. We already have enough organisations that are very competitively fighting over shrinking pools of capital in a philanthropic and government space. We don’t actually need to create more grant organisations… there is enough of those.

“We thought the promise of social enterprise was that it could open up new pools of capital but…  Why create a label and call yourself something if it actually doesn’t change the game of where you play and how you play?

“Moving forward TDi is passionately committed to the idea of our job being to awaken the possibilities of doing good and making money and bringing together a business that can do both of those things in the same business model.”

Graham said TDi wasn’t about to stop working with social enterprises.

“We will continue to work with groups whatever they call themselves… what we care about is what you are actually trying to do in the world and how we can help you do that in a sustainable way,” she said.

Maclean told the forum that people in her not-for-profit organisation who had a lot of entrepreneurial skills and were “savvy” had taken them to a very profitable space by running their business expertise through the charity using the “best of the for-purpose world” skills.

“Whether it is social enterprise or another term, at the heart of it for me is that holistic invitation and the profound belief that… when you are purpose driven you will be profitable and you will get there,” Maclean said.

“I think [social enterprise] is a stretch and still a challenge but a huge amount of upside for us still.”  

Thorn told the forum he was not disappointed with the social enterprise space itself but with the use of the term.

“I am actually very excited with where we are,” he said.

“What these terms have been helpful in doing is to reframe the conversation and get people thinking differently outside their normal silos of activities. And I think that is all that is happening here.

“[But] I think the social enterprise term has passed its use-by date.”

  Watch the TDI breakfast forum here: