What is a social enterprise?

The term 'social enterprise' (SE) has quickly become a bit of a buzz word, and has picked up momentum as a way of describing certain types of businesses. But what is a social enterprise exactly?

There is no formal or legal definition of a social enterprise.

However, the majority of businesses or organisations who operate as an SE or serve to support SEs describe them as a business that trades, a business that operates commercially and a business that has points of difference that particularly serve the community.

Some key features of a social enterprise can be:

• Their primary purpose is the common good 
• They may generate a proportion of their income from running a commercial operation
• They have social, cultural, environmental and economic outcomes to the business, and to their core. 
• They are a cause-driven business whose primary reason for being is to improve social objectives

Ultimately, what’s important is that a social enterprise identifies its social, cultural environmental or economic practices that are serving the community and that it trades commercially.

Additionally, it's important that the social enterprise is transparent about what investment is going toward that purpose and how the business is going about achieving that.

Why do social enterprises exist & what do they do?

The number of businesses that are operating as social enterprises is growing rapidly, each of them are making an important contribution to creating a more diverse and inclusive economy.

Social enterprises exist for a number of reasons but in the most simplistic terms, these businesses provide economic, social and/or environmental benefits to local communities. 

What this might look like in practice is:

• Providing much-needed jobs in local communities
• Contributing to the local economy
• Offering a range of community services
• Providing social development opportunities
• Generating a positive change in the community in which they operate

Put it this way, a social enterprise exists to achieve a social mission.

This might include, providing a healthcare service, or a service to disadvantaged community groups, introducing or supporting renewable energy, creating jobs or providing education initiatives.

What is the difference between a charity, a social enterprise & an ethical business?

Social enterprises can be easily confused with traditional charities. Charities also have a social mission at their core.

However, a charity relies on outside funding (sponsorships, grants etc.) to support its social mission but social enterprises trade commercially and generate profits. And it’s this financially sustainable revenue stream objective that makes a social enterprise different from a charity. 

Nor should a social enterprise be confused with an ethical business. There are a lot of ethical businesses around that aren’t necessarily social enterprises. 

A social enterprise will have a social mission at its core, and will use commercial trading as tool to support this mission and maximise their social impact.

An ethical business will focus on creating profit for its shareholders, but takes an ethics-based approach to issues like the environment, trade practices, and community development.

This is not to say that profits aren’t important to a social enterprise – they are, and actually they are an important aspect of these businesses being successful, it’s just that unlike ethical businesses, profits are not the primary motivation behind a social enterprise. 

Social enterprises can still be highly profitable, but it’s what they do with this profit that stands them apart as a social enterprise.

Their priority is usually to reinvest this profit to support their objectives, and the outcome of their social mission, rather than paying shareholders. 

A successful social enterprise is one that balances the tension between upholding the social mission of their organisation and maximising the productivity of their business venture to ensure sustainability.

What types of Social Enterprise are there?

Social enterprises come in many forms, but there are four key social enterprise models of business that exist. Some social enterprises use one, some or all of these models to drive toward their core goal.

• Innovation – a social enterprise that addresses a social need through innovative products, services, or business models.
• Employment – a social enterprise that addresses unemployment or employment of disadvantaged community groups with fair wages
• Give back – a social enterprise that realises it’s mission by giving a certain amount of proceeds or profits towards their associated social beneficiary for every purchase made 
• Education – a social enterprise that addresses a social need through specialised skills training and development

What are the advantages and challenges of being a Social Enterprise?

Being a social enterprise and staying true to the social cause at the core is no small feat. It takes a lot of hard work, and there are always challenges (although not necessarily ones that can’t be overcome).

So what are the advantages and the challenges that are commonly presented to a social enterprise?

ADVANTAGES

Staff satisfaction

• Social enterprises have the benefit of the community as their focus, and the centre of any community is the people.
• People get a lot of satisfaction out of working for a positive cause or outcome. Ultimately social enterprises are there to tackle problems so there is often a ‘feel good’ factor for staff in these jobs.
• But more importantly, social enterprises open up local work opportunities which benefits the individuals and the local economy.

Customer satisfaction

• Customers who feel strongly about the core social mission of the social enterprise feel a lot more satisfied with their spend when they know they are working with a business that has a common set of values. And they are more likely to advocate for the business with their peers. 

Strong relationships with community:

• Working so closely with local consumers, local business groups, local business networks, and local staff ultimately means that as a social enterprise you are building a strong sense of community.
• The community gets behind a social enterprise which ultimately strengthens the social enterprise’s overall offer, the sustainability of their business and their success.

Strong points of difference:

• Social enterprises have unique and stronger points of difference, which benefits their ability to stand apart from their competitors (some of whom may not be operating as a social enterprise) and market themselves in a different way.
• The more personalised approach and already strengthened relationships with the community enhances their marketability and appeal.

Funding and partnership opportunities:

• If it’s a strong cause that benefits the community it’s easier for other businesses to get behind it and support through partnerships, or to receive funding from grants, or sponsorship to help achieve the mission.

CHALLENGES

Striking the balance:

• As we know, to be successful, social enterprises still need to operate commercially and turn a profit. It can be a challenge to strike the balance between competitive pricing, generating profits that can be used to support the cause, and managing stakeholders.

Monitoring the market:

• Communities and audiences are always changing, so another challenge can be keeping the finger on the pulse with changing technologies, consumer needs or desires, market movement and audience profiles.

Hold on to your vision:

• As the market shifts, so too do some of the goals. A social enterprise may start out with a vision to help a community in a certain way but other areas of need might arise – some may be relevant and easily absorbed in the mission while others may present a need to re-define the vision of the business.
• It’s important for a social enterprise to remember their WHY (what their ultimate vision is) and continue to develop and evolve their HOW (how they implement or achieve it).

Technical skills / finding the right people:

• Depending on the nature of the social enterprise, it’s important that the business gets the right people with the right skill sets to support them in their mission.
• Given that the ideal is to always recruit locally to support and benefit the local community this may mean that the social enterprise may need to invest in specialised or technical training and skills development rather than outsourcing. 

How can you best support a social enterprise? 

The more support a social enterprise has the more successful it will be. So, the best way you as a consumer can support a social enterprise is to be an advocate.

Here are some tips on how you can best support:

• Learn about the cause. Knowledge is power, so the more you know about the social mission of the enterprise the more you can talk confidently to your friends and family (ie other potential customers/supporters) about what the company is doing.
  
  
• Be encouraging and ask questions. If you see something that looks interesting or feel the social enterprise would benefit from, tell them about it. Ask them lots of questions about their initiatives so they have an opportunity to talk about them. Encourage them by collaborating, or providing feedback on, specific aspects of their work. 
  
  
• Support or donate to the organisation. Support as a customer, donate your time as a volunteer, or support individual projects, programs, or partnerships the organisation is a part of.
  
  
• Share their story. The best kind of advocacy is to spread the word and help ignite the passion and curiosity of others. This means commenting on or sharing their social posts, liking their pages, sharing positive experiences you’ve had with them and giving them your feedback.
  
  
• Drive policy. Often a social enterprise needs help getting funding, getting policies reviewed, or making significant changes to the market they are operating in and one of the best means of achieving this is through people power.
  This could mean that they need your support to advocate to local, state or federal councils, support in signing petitions or sending letters through to MPs or various other policy change initiatives.
  Put simply, if they ask for your support in pushing a specific message, help them. 

How is Enova Community Energy a social enterprise?

Enova sells electricity to householders and businesses (through its Enova Energy arm). But it is more than just a business.

Proudly operating in the social enterprise sector, Enova has a not-for-profit arm: Enova Community - a registered charity.

Its purpose is also to help everybody to participate in the shift to renewables. And we see the future as one where the consumer is also a producer - who shares in both producing the power and benefitting from it.

It's providing an alternative to the old energy model so that economic benefits don’t flow out of every region, but money stays and circulates locally, making for stronger communities and stronger regions.

How is Enova making a difference as a Social Enterprise?

There are a number of key ways that Enova is making a difference as a social enterprise.

1. Generating local jobs and boosting local economy

Enova Energy is 100% Australian owned and operated – meaning we generate local jobs and boost the local economy. And you can rest assured to know that if ever you call to speak to us you’ll get to speak to a real person in your time zone. 

We are proudly Australia’s first community-owned power company – a company that is about communities, customers and the welfare of our planet, not corporate profits.

Launched in 2016 in Byron Bay in New South Wales, today Enova is a thriving, fast-growing company that sells electricity to households and businesses all over New South Wales and South-East Queensland as of March 2021.

2. Reinvesting profits

As a social enterprise, Enova reinvests 50% of its profits back into community projects, energy efficiency and education.

The other 50% is shared amongst its 1600 individual community shareholders.

3. Supporting other community organisations

Enova supports or partners with other community energy organisations that have similar values at their core or whose missions align.

Organisations like Border Community Energy, Geni.Energy, Haystacks, Climate Council, Australian Ethical, HalfCut and NatureNSW to name a few (please check these are correct).

4. Supporting Community Energy Initiatives

Enova is really proud of being able to support in community energy initiatives which are driving and changing the shape of the way energy is generated, distributed and used in Australia.

Some of the projects we are particularly proud of are the Haystacks Solar Garden, The Beehive Project and Byron Bay’s Microgrid Project.

5. Support and drive for a community shift to renewables

Enova is proud to currently source up to 60% of our energy from our customers rooftop solar systems (the largest percentage of any retailer).

We purchase carbon offsets for any remaining amount of energy that we buy off the grid, so that we can proudly say we are 100% carbon neutral, while pushing toward our 100% renewable goals. 

6. Innovation

Enova invests in pilot initiatives alongside other partners, to trial and understand how community energy models can work to the greatest benefit of participants and shares its knowledge widely.

7. Energy Education

Enova’s not-for-profit arm Enova Community has a strong focus on reducing carbon emissions and providing education to people, businesses and communities around energy efficiency and sustainability.

You can read more about us, our story and how we came to exist by clicking here. 

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