New standards for social enterprise certification in Australia

Social enterprise advocates believe greater recognition of the sector’s diversity is needed to help more for-purpose businesses win corporate and government contracts.

Development organisation Social Traders has provided national certification for Australian social enterprises for more than a year, but is now updating the framework to make it easier for a more diverse range of social enterprises to qualify.

The idea is to even the playing field for all sorts of business types to gain social procurement opportunities with the corporate and government sectors.

Social Traders managing director David Brookes said the update was about improving the operation of the certification standards to meet the needs of a broader market.

“We know that impact can be delivered by all sorts of businesses in many different ways and we commend this,” Brookes said.

“While social enterprises are primarily driven by a social purpose, they also operate under many different models.

“It’s therefore critical to make Social Traders certification available to all business forms that are truly operating as social enterprises, given the market advantages certification is designed to deliver.”

There are currently 290 certified social enterprises, which have to provide legal and financial documents to prove they match the definition of a social enterprise and meet rigorous standards.

The new certification framework follows a comprehensive industry review and will include impact indicators.

It aims to broaden the range of social enterprises being certified, by accommodating most legal structures including not for profit, for-profit, and social enterprise units of NFP organisations.

Brookes told Pro Bono News the updated framework still centered on the importance of social purpose in an organisation.

He said certification also took into account an organisation’s stage of development, noting that social enterprises were required to provide different levels of evidence according to how advanced their business was.

“We want to provide more flexibility into the certification scheme while keeping a high level of integrity around a social enterprise’s mission,” he said.

“The criteria we have in place has not changed, we’ve just provided greater flexibility to cater for the diversity of social enterprises operating in different sectors.”

Brookes said social enterprises already operated in every industry and sector of the Australian economy, and used a variety of legal structures.

He said with awareness of social procurement increasing around Australia, recognition of the diversity of social enterprise was fundamental to opening new market opportunities for the sector.

“This new framework provides a greater level of flexibility for enterprises to be seeking that certification,” he said.

“I think we will see an increase in the number of organisations that seek to be certified, enabling them to take advantage of the increased procurement opportunities that we’re witnessing across the public and private sectors.”

Social Traders says for every $100,000 spent on social procurement, 1.5 jobs are created for disadvantaged Australians.

The organisation aims to create 1,500 jobs by facilitating $105 million in social procurement spend by 2021.