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When not-for-profits make a profit

Making a profit and doing good were once considered mutually exclusive, particularly by not-for-profits.

But things are changing as social enterprises, which aim to sustain their mission by trading for profit, continue to sprout across the globe.

Hayley Morris

At last count, there were about 20,000 in Australia - including one of the first, Our Community.

Some even primarily identify as not-for-profits, but derive a growing slice of income from trade.

But the definitions remain murky, which is why it's refreshing to see at least one government act to clear things up.

The Victorian Government's social enterprise strategy - released in February - has created fresh momentum for a national approach, to replace the piecemeal and patchy policy and support now.

Victoria will spend $5 million on its strategy: building a social enterprise network, an online market, and backing training and support for 100 enterprises to expand.

Social Traders managing director David Brookes tips Victoria's move is "a game changer" finally recognising social enterprises as a big part of the economy, and is "confident that this leadership will encourage other jurisdictions around Australia to follow".

Our Community recently spoke with a series of experts who say social enterprises have valuable lessons for not-for-profits that they can use now.

Our Community founder Denis Moriarty says the organisation's business imperative is good at focusing the mind on being good, efficiently.

"Social enterprises must be able to do good, while being realistic about returning on that investment," Denis says.

He points out many not-for-profits are already involved in social enterprise, such as schools and sports groups selling equipment and uniforms to earn cash.

"They're doing the things a social enterprise should do: earning income, and creating a revenue base to make themselves more sustainable."

Impact Sustainability founder Hayley Morris (pictured) stresses not-for-profits looking at social enterprise must remain flexible, patient, study their market, and ask the experts.

"If you're learning, adapting and changing, you're being successful," she says.

Moores legal expert Catherine Brooks suggests not-for-profits looking at the option should consider becoming a B Corporations, which commit to a positive social, environmental and financial impact.

This article was partly taken from Board Builder, the newsletter for the Institute of Community Directors Australia (ICDA)

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