Australian Stories of Social Enterprise Cheryl Kernot and Joanne McNeill First Edition © Copyright The University of New South Wales 2011 All rights reserved. No part of this book may be reproduced without permission from the publishers or their agents. Published by The University of New South Wales Sydney, NSW, 2052 Design, layout and printing by Breakout Design Print Web National Library of Australia Cataloguing-in-Publication entry Authors: Cheryl Kernot and Joanne McNeill Title: Australian Social Enterprises: Stories of Challenge ISBN: 978-0-9808764-1-3 Subjects: Social business enterprise, Social firm, Impact maximization, Social entrepreneurship, Social business, Social responsibility, Public/social/ private partnership, Grameen family of organizations, Social venture capital, Corporate social responsibility, Corporate Social Entrepreneurship, Citizen enterprise Acknowledgements The authors would like to acknowledge the participation of all the interviewees. We understand that every time we ask these busy people to participate in sector development activities we take them away from running their enterprises. Their efforts are central to growing this emerging sector and we honour those efforts as they undertake the challenges of their respective social enterprises. We would also like to acknowledge the support of our respective employers. This includes the patience our colleagues and team mates have afforded us while we have juggled our responsibilities. This project is an extension of our core roles and we greatly appreciate the time that has been extended to us to make it happen. A special acknowledgement goes to Ananya Nandakumar at CSI who has been an invaluable support in transcribing, researching, writing, proofing and overseeing contract details. Methodology The project has sought to provide a vehicle for Australian social enterprise practitioners to tell their stories. We felt that there was a need for the learning and insights of these experienced and emerging leaders to be shared. As such, the stories presented provide a snapshot of the interviewees’ perspectives on their own and their organisations’ experiences. The project is not academic and does not seek to provide a representative sample, or to evaluate the social enterprises themselves or the model more generally. It does seek to open up discussion in the Australian context, through showcasing a wide variety of social enterprises. A diversity of legal structures, trading sectors, social/ environmental/ cultural missions, sizes, stages of development and locations were sought. Thirty-five face-to-face interviews with thirty-three organisations were conducted between September 2009 and February 2010, mostly at the social enterprise location. The interviews ranged from one to three hours in length, were audio recorded and in several cases more than one interviewee participated. A semi-structured interview format and conversational style were used, with interviews structured around a core set of themes: ◗◗ What was the original vision for the social enterprise? ◗◗ What is the vision now – how has this changed, what influenced this? ◗◗ What role have partnerships played? ◗◗ What has been your experience around funding and investment, during start up and/or growth phases? ii ◗◗ How do you approach staffing? ◗◗ How have governance arrangements influenced direction and development? ◗◗ Does your founder continue to be involved? ◗◗ Have you handled succession issues to date, or are you thinking about this? ◗◗ How does your mission affect how you manage the organisation – do the external values translate to your internal practices in any way? ◗◗ Has/will any of your work contribute to ‘growing the commons’ – assist others working to achieve similar goals? ◗◗ Have you/do you plan to use any social impact assessment processes – what has been your experience of this to date? ◗◗ What have been/will be the critical success factors for your social enterprise? ◗◗ If you started again, what would you differently? ◗◗ What has kept you going – who or what has been helpful to you? Interviewees were provided the opportunity to review the draft stories and their comments have been incorporated into the final versions. The stories are presented thematically to seek to illuminate shared learning pertinent to a sector. iii Contents INTRODUCTION 1 FOOD: Charcoal Lane VIC 7 Food Connect Qld/National 13 Mars Hill Cafe NSW 19 Mu’ooz Eritrean Restaurant & Catering Qld 25 Sorghum Sisters VIC 29 STREAT VIC 37 ARTS, MEDIA AND DESIGN: Abbotsford Convent VIC 47 Biddy Bags Qld 59 The Big Issue in Australia VIC/National 63 Gideon Shoes NSW/National 69 Goolarri Media Enterprises WA/NT 75 Human Ventures (formerly Speak Out) Qld 81 VibeWire Youth Inc. NSW 87 AdvOcacy: Break Out Design Print Web NSW 93 Our Community VIC/National 99 INFORmatiON TECHNOLOGY: Infoxchange VIC/Timor Leste 107 Message Stick Group National 115 Work Ventures Ltd. ITeC Repair Centre (SIRC) NSW 121 cool nrg International 133 iv ENVIRONMENT: Eaglehawk Recycle Shop VIC 139 Outlook Environmental Services VIC 147 Penny Farthings Pushbike Parking Qld 155 Reverse Garbage Cooperative Qld 161 Soft Landing NSW 169 SERVICE/WORKS DELIVERY: Cleanable Property Services VIC 181 Dress for Success Sydney (formerly Suited for Work) NSW 185 MultiLink Interpreting Services Qld 191 Nundah Community Enterprise Cooperative Qld 199 Property Plus Group NSW 207 Spectrum Employment Services Cooperative NSW 215 Urban Renewal Landscape & Construction VIC 221 youthinc SA 231 Shared Learning and Authors’ Observations 239 Featured Social Enterprises’ Websites 255 Useful Links 258 Annex 1: The challenges and opportunities of different legal structures for social enterprises 262 Appendix A: About the sponsoring organisations and authors 264 v Introduction Once in a rare while the fundamental architecture of a significant part of society shifts. Over the last two and one-half decades the organisation of the social half of society, led by social entrepreneurs, has done so. — Bill Drayton, Ashoka, 2002 1 Why? Because a critical mass of people throughout the world has responded to the compelling evidence of the failure of traditional institutions and systems to respond to the ever- increasing inequity in the way the planet’s resources and opportunities are shared and to the rising environmental and health crises; and they have concluded that there can be a different way of doing business: different starting points, different core purposes, a different attitude to profits and ownership; a different way of harnessing capital market models, incorporating traditional business tools and strategies to achieve a social bottom line; adding social value alongside the traditional financial; adding “creative capitalism” to the suite of business options. While some definitional debate continues as the field matures, we have referred to definitions used by the Skoll Centre for Social Entrepreneurship at Oxford University and the Social Enterprise Coalition in the UK: Social entrepreneurship is the product of individuals, organizations, and networks that challenge conventional structures by addressing failures – and identifying new opportunities – in the institutional arrangements that currently cause the inadequate provision or unequal distribution of social and environmental goods. 2 1 Social Entrepreneurship has three key characteristics: sociality (in the public benefit), innovation, and market orientation. Social enterprises are businesses trading for social or environmental purposes. Many commercial businesses would consider themselves to have social objectives, but social enterprises are distinctive because their social or environmental purpose is central to what they do. Rather than maximising shareholder value their main aim is to generate profit to further their social and environmental goals. Social enterprise is a business model which contributes to a more sustainable society by offering the prospect of greater equity in economic participation3 We also acknowledge an Australian research-based definition of social enterprise from the Finding Australia’s Social Enterprise Sector (FASES) research project, developed after our project commenced: Social enterprises are organisations that: a. Are led by an economic, social, cultural, or environmental mission consistent with public or community benefit; b. Trade to fulfil their mission; c. Derive a substantial portion of their income from trade; and d. Reinvest the majority of their profit/surplus in the fulfilment of their mission.4 We have used the terms social enterprise and social business and have drawn on the typology developed, in an Australian context, by Burkett (2010).5 It makes the following general distinctions: Social Enterprises are often started with charitable intent by people who have an enterprising orientation working 2 from within the social sector; they often have small turnovers and often have blended funding – some grant, some earned; they tend to skew more towards social objectives if under pressure. Social Businesses are more often started with a business intent, by people working from within the private sector and who see an opportunity to create social impact; they usually have larger turnovers than social enterprises and rarely seek or attract grant funding, being more likley to concentrate on earned income and commercially oriented capital; they tend to skew more towards commercial objectives if under pressure. Yet already these distinctions are blurring with social enterprises moving