Dr Ruth Knight, 2 April, 2019
Nonprofit organisations, companies and governments are increasingly recognising that commerce and entrepreneurship can be powerfully combined.
This fusion supports community wellbeing, economic return on investment, as well as social return on investment. With businesses valuing social enterprise, they are now enabling their supply chains, people and networks that create a social impact. Governments see that their commissioning and procurement power can have an enormous social impact on the community. Soon it will be imperative, not optional, for companies to embed social impact into their business, supply chains and brand strategies.
Despite the growing number of employers, customers and investors who care deeply about using their influence to create social change, Dr Craig Furneaux from QUT’s Australian Centre for Philanthropy and Nonprofit Studies explains that more research and education is needed to improve business planning and models. This would enable more collaborative, hybrid business practices, which philanthropists and social investors can support.
His research suggests that social entrepreneurs who want to start a social enterprise must consider which the business structure is best suited for the social outcome they are aiming for, and moreover what they can do with revenue once they are profitable. He provides some tips on setting up a social enterprise which you can use to develop your business.
Outland Denim - A fashion social enterprise case study
Social enterprise Outland Denim began as a nonprofit but soon realised that this wasn’t the best model to achieve the investment and growth required to be a sustainable business. Founder James Bartle realised they needed a business model - not a charity model - if they were going to have a significant social impact, as well as financial stability and sustainability. Sally Townsend from Outland Denim illustrates that their jean product is made with the purpose of alleviating modern-day slavery in Thailand.
Sally explains that the women making their Outland Denim jeans are often “go from no skill, to managing a team, to being able to buy their own home and rice field and being able to purchase a sister out of slavery.”
Outland Denim believes their social enterprise business model is minimising the effects of modern-day slavery and human trafficking. They’re making a statement about slave labour to the fashion industry, which is particularly fraught with these issues.
Outland Denim is impacting lives for the better in many ways, and consumers who love good quality jeans can support this social impact simply by buying the Outland Denim brand.
Outland Denim’s business has grown largely due to a great product, a powerful mission, and now the support of high profile advocates such as Megan Markle, the Duchess of Sussex, who wore the jeans on her Australian Tour in 2018. The company, which started with five seamstresses, now employs over 45, a number that is growing due the enormous demand for the jeans around the world.
Outland Denim illustrates to the fashion industry that social enterprise and success are not mutually exclusive. They’ve also demonstrated that social enterprises can help realise significant change for good and that consumers want to buy from businesses with a social impact.
Watch our interview with Sally Townsend
Develop your own social enterprise
Interested in understanding how to start a social enterprise? QUT’s Australian Centre for Philanthropy and Nonprofit Studies offer courses to assist you in developing your business, including Introduction to Social Enterprise and Human-centred design for social innovation.
Author
Dr Ruth Knight is an academic with the Australian Centre for Philanthropy and Nonprofit Studies with a special interest in workplace culture, leadership and social impact.