Resourcing social enterprises: approaches and challenges

6 Aug 2015

This is the second publication from the Bankwest Foundation Social Impact Series and includes preliminary findings from the Supporting Development and Growth in the Community Sector in Western Australia research program. This report is the first output of the Social Enterprise Financial Resilience project, which forms part of the program.

Despite increasing interest in social enterprise, there is limited understanding about the factors that support the capacity for social enterprise to deliver social objectives. In particular, we know little about how social enterprises access and use financial and other resources to sustain their businesses and how this can influence their organisational resilience. There are suggestions that social enterprise and small private for-profit businesses face similar barriers to accessing commercial finance (Burkett, 2010; Mavra, 2011). However, there are also factors specific to social enterprise – related to their organisational structures, their business purposes, and their operating environments - that influence how social enterprises attract, use and choose financial and other resources. With regard to financial resources, there is growing interest in and popular discussion about social finance in general and impact investing in particular. Yet, the financial needs, barriers and effects of certain forms of finance on social enterprise resilience and impact remains unclear.

The purpose of this report is to review the existing evidence about the resource needs and behaviours of social enterprises, and their barriers and opportunities to accessing financial and other resources. We augment this review with comments from workshops and interviews undertaken with 15 Western Australian social entrepreneurs, and seven social financiers and policy professionals in May-June 2015.

Unpacking the financial needs and behaviours of social enterprises provides a platform for better understanding of the factors that affect financial resilience of social enterprises in Western Australia and beyond, and the tools we need to support such resilience. Of course, organisational sustainability requires access to resources beyond finance; we consider in this report wider resourcing needs and their implications for financial resilience. 

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