Social Traders, a social enterprise development organisation, defines social enterprises as “businesses that trade to intentionally tackle social problems, improve communities, provide people access to employment and training, or help the environment.” Social enterprises aim to address social issues using business strategies. Rather than gaining profit for business owners and shareholders, social enterprises benefit people and the communities around them.
There’s no formal legal structure for social enterprises in Australia, but there are three defining characteristics that differentiate them from charities, conventional businesses, and non-profit organisations:
- Steered by a cultural, economic, environmental, or social cause
- Generate income from trade, not donations or grants
- Reinvest a large part of their profits in their cause.