Imagine a world where all charitable organisations are self-funded and do not rely on donations to operate.
You might be surprised to learn that the shift towards self-funded ‘not for profit’ businesses actually started with Oxfam in 1948, through the opening of its first charity shop. Proceeds from the shop were used to support Oxfam’s efforts around the globe to find lasting solutions to poverty and related injustice.
The movement towards ‘profit for purpose’ businesses by start-ups, small and medium size companies is gaining momentum in Australia.
In fact, a 2010 FASES research report identified up to 20,000 social enterprises in Australia, which have operated for at least five years, and represent a wide range of industry sectors. Despite the growth of the ‘profit for purpose’ movement in Australia, there is still a lack of understanding and definition of this movement.
What is profit for purpose?
The business landscape in Australia has been rapidly evolving over the past decade. Companies that traditionally operate in the ‘for profit’ environment are moving towards being more charitable. Similarly, organisations that traditionally operate in the ‘not-for-profit’ environment are developing business models to be profitable. The movement of companies from both ends is blurring the lines between traditional ‘not for profit’ and ‘for profit’ business models.
The middle ground between the two opposing business models is commonly known as a ‘profit for purpose’ or ‘social enterprise’. Social enterprise businesses are led by a mission to achieve social, community and environmental benefit through trading and by channelling a portion of their profits toward their mission.
Who’s doing it?
An excellent local example of profit for purpose is Streat, a foodservice social enterprise that is dedicated in providing a supportive pathway toward long term employment of youths who have been living, or are at risk of having to live, on the street. Streat provides youths with social support through industry training and employment opportunities in their profitable street cafes around Melbourne. Streat has cafes in the CBD and Flemington.
Another example of a local social enterprise is Hepburn Wind, the owner and operator of Australia’s first community wind farm located in Leonards Hill, Central Victoria. Profits generated from the sale of energy are reinvested into local community projects such as an indigenous garden, irrigation for local kindergarten and renewable energy educational program.
Who’s with me?
Sounds like good karma and good opportunity all rolled into one, huh? It doesn’t get better than that. What do you think? I’d love to read your comments in the space below, so let’s start a dialogue around this!
Brian Chua is the founder of an environmentally focused social enterprise, Treepads. He started a movement towards sustainable ‘living’ property development by 2022 and works with businesses in bringing that future closer.