29/07/2021 - 08:00

Room to grow for social enterprises

29/07/2021 - 08:00

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Some of WA’s social enterprise leaders consider the societal upheaval due to the COVID-19 pandemic has presented an opportunity to change the way business is done.

Kathleen Burton is co-chair of WASEC. Photo: David Henry

Some of Western Australia’s social enterprise leaders consider the societal upheaval due to the COVID-19 pandemic has presented an opportunity to change the way business is done.

Social enterprises, which are organisations focused equally on profits and social and environmental benefits, trade as businesses or not for profits for the good of society.

Perth City Farm chief executive and WA Social Enterprise Council co-chair Kathleen Burton said now was a good time to reconsider how the economy worked.

“We talk about all the problems we have with our current economic system and the things that aren’t working, and social enterprise is such a great model to address many of those things,” Ms Burton told Business News.

“Basically, as a social enterprise, we are saying profits aren’t the most important and shareholders aren’t the most important; they are less or equally as important as our employees, the community and the environment.

“That’s totally a great way to address all the inequity in the world.”

Ms Burton said the sector could provide opportunities for the state to diversify.

“We have a way of diversifying the economy of the state, which is going to make the state a lot more equitable, nicer, cleaner place to live,” she said.

A group of people who work, own, or operate social enterprises, including Ms Burton, founded the WA Social Enterprise Council in April 2021 with the goal of developing the sector in the state.

WA’s social enterprise scene is a lot smaller and less developed than those in other states.

While there are about 20,000 social enterprises in Australia, estimates suggest only about 1 per cent of those are in WA.

A research paper completed by Impact Seed in 2019, the WA Social Enterprise Mapping Project Preliminary Summary Report, found that the sector was relatively new in the state, with about 36 per cent of social enterprises starting in 2017 or later.

The report also found that the largest proportion (36 per cent) were very small or in the early stages of operation and had revenue between $10,000 and $99,000.

However, some were also large and well established, with four social enterprises in WA with revenue exceeding $10 million.

Wide Open Agriculture, with revenue of $2 million in 2020, is a social enterprise also listed on the ASX.

The report found social enterprises in the state were focused on dedicated causes such as community inclusion and belonging (24 per cent), and the environment (27 per cent) including waste, carbon and sustainable energy and food, fibre, and regenerative systems.

Other causes include bettering the lives of indigenous people, providing services for people experiencing disadvantage, and consulting services.

Mechanical maintenance business Warrikal founder and Wonnarua woman, Amanda Healy, created social enterprise Kirrikin in 2014.

Kirrikin prints Aboriginal artworks onto luxurious fabrics and turns them into clothes, bathers, and accessories and shares the profits from the sale of the items with the artists.

Ms Healy was inspired to start the business after recognising Aboriginal artists needed to receive more compensation for their work.

“Even if I can get a little bit back to each of those artists to help them through, so at Christmas they can buy presents for their kids or grandkids, that to me is really important,” Ms Healy told Business News.

Ms Healy decided Kirrikin should be a social enterprise instead of a not-for-profit operation because she wanted to run the organisation with the flexibility of a business.

There were a lot of rules and regulations governing not for profits that could be difficult to comply with, she said.

“Basically, we are just a standard business with a purpose,” Ms Healy said.

The Underground Collaborative is both a not for profit and a social enterprise.

It aims to create employment opportunities for women and young people experiencing or at risk of homelessness in WA at its cafe, Ground+Co, and educate the broader public about homelessness.

In November 2019, Ground+Co launched a coffee cart in Perth CBD outside the EY building but had to close in March 2020 due to COVID-19.

Earlier this year, Ground+Co reopened a cafe in the State Library of Western Australia.

Despite The Underground Collaborative’s not-for-profit status, chief executive and founder Katie Liew said funding had been a challenge.

According to its annual report, The Underground Collaborative had revenue of $88,000 in 2020.

Just over half of the organisation’s revenue was from sales at the cafe, a quarter was from government grants, and a further 20 per cent was from donations.

Ms Liew said the organisation was often acting as a job provider and employer but received little to no funding support.

“Additionally, grants weren’t really an option for TUC either as they didn’t understand social enterprise, so we’ve survived largely through philanthropic donations and pro bono support, but also on a very shoestring budget, even until now,” Ms Liew told Business News.

Katie Liew started The Underground Collaborative in 2017. Photo: David Henry

City Farm’s Ms Burton said the first job of the WA Social Enterprise Council was to increase awareness of social enterprises and show why government and the public should support it.

“We just need a way of having a clear definition of what a social enterprise is so people, when they are choosing to support social enterprise, have confidence that it’s legitimately a social enterprise,” Ms Burton said.

A social enterprise certification was a possible solution to help consumers distinguish between social enterprises and other businesses, she said.

In addition, Ms Burton said the council hoped government would lead the way in terms of prioritising social enterprise organisations when it came to the procurement of products and services.

“A key part of that is really evolving the procurement systems in WA so that local government and state government have procurement policies that are acknowledging the role of social enterprise driving their purchasing decisions,” Ms Burton said.

“That helps with awareness and support for the enterprises.”

She said Queensland and Victoria were the gold standard in cultivating the right environment for social enterprises.

A social procurement framework released by the Victorian government in 2018 laid out its intentions to support Aboriginal businesses and social enterprises.

In June, the Queensland government released a social enterprise strategy and committed $8 million over two years for the Social Enterprise Jobs Fund to support social enterprises to scale-up activities and create training and employment opportunities.

Ms Burton said the council was campaigning for similar funding.

She said organisations needed to be either a charity or a not for profit to receive most government funding under the current system.

“Most of it specifically says, ‘No social enterprise support’,” Ms Burton said.

While WA does have a $20 million WA Impact Fund, established by Aware Super and managed by Impact Investment Group, Ms Burton said it tended to fund projects that were already financially sustainable instead of those in the startup phase.

Another challenge had been a lack of knowledge for people working in the sector.

“It’s very much you learn it as you do it and there isn’t any really good specific knowledge sharing mechanism or courses people can do in WA,” she said.

“So that’s a big role that we want to have as the council: facilitating that sharing of knowledge and stories and upskilling people.

“It’s in between business and non-profit and has the same challenges as both, but the challenges combine to be permutations on challenges.

“There is a very particular knowledge that people need.”

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