Monday, October 12, 2009

Opinion: Charities capitalise on business to fight poverty

With over 20,000 homeless people in Victoria, we need to rethink our strategies to combat the rise of poverty in our society.

Whether we like it or not, the gap between those who have and those who have not is growing.

Enter social enterprise – a proven method in the fight against injustice, inequity and disadvantage in communities around the world.

Many charities are using the power of social enterprise to harness commercial businesses as their modus operandi. These businesses are driven not by profit, but by opportunity – giving those without power and voice a chance to participate in on equal terms.

Last week, 600 devoted social innovators from across the globe came to Melbourne to discuss emerging trends, successful models and cutting edge techniques to decrease the rise of poverty throughout the world. These international experts were seeking an innovative marriage of business and charity – the merging of market with social purpose.

Social enterprises unite communities to get a fairer deal. When exploitative factory owners and shopkeepers charged exorbitant prices in England in the industrial revolution 150 years ago, a group of workers established their own shop to provide quality and affordable food to their community and the first social enterprise was born.

Through the support of governments, the last fifteen years has seen a resurgence in social enterprise. The value of social enterprise has been recognised as the combination of local agencies and passionate people understanding local needs. Coupled with an entrepreneurial and creative approach, bit-by-bit these businesses are effectively responding to the needs of disadvantaged communities.

By providing services where little or none existed, social enterprises can give communities the public services it needs. By creating jobs for unemployed people excluded from the labour market due to their low level of educational attainment and life skills, such as early school leavers, social enterprises provide real work experience, training and allow a sustainable pathway to employment.

The most successful economies from around the world have adopted the social enterprise ethos. From coffee to construction, from landscaping to logistics, from packaging to painting, from markets to manufacturing, from recycling to repairs, from nurseries to newspapers, from hotels to health, from gyms to geraniums, from insurance to funeral homes, there are over 55,000 social enterprises in the United Kingdom alone.

The largest credit union in Canada, Vancity Credit Union has 310,000 members and provides financial support to people who have been ignored or forgotten by the larger commercial banks as well as helping charities to build their own asset base.

The world’s largest social enterprise, the Mondragón Corporacion Cooperativa in Spain, comprises 120 companies, employs 42,000 worker-owners, runs 43 schools and one college, generates more than $4.8 billion annually in manufacturing, services, retail and wholesale distribution, and administers more than $5 billion in financial assets.

Over the last ten years in Australia, the South Australian and Victorian Governments have led the recognition and revival of social enterprises, ably assisted by groups that target and sponsor unique and viable social enterprise ideas, like Social Traders.

Initially through training programs, not-for-profit groups such as Mission Australia have set up social enterprises that provide opportunities for disadvantaged and jobless Australians to get a job.

Trainees are offered integrated personal skills development and accredited training that aims to enable the transition to sustainable mainstream employment.

Social enterprises such as the Urban Renewal, a landscaping and construction business, provides an entry to the job market for young people that have limited employment prospects due to poor life and relationship skills, low educational attainment, mental health, drug and alcohol issues.

The life and job skills developed in social enterprises enable the job-seeker to find rewarding and sustainable employment in the long term.

Thanks to dedicated and skilled managers and team leaders, in running businesses such as Urban Renewal and the Charcoal Lane Aboriginal restaurant in Fitzroy, Mission Australia offers quality and value for money services to government and the public. We do not want pity. We want the opportunity to showcase the skills of people who don’t get that opportunity to demonstrate what they’re capable of.

As we reflect on the ways we can seek to draw members of our society out of poverty, Australia must share the faith of this unique marriage of business and charity. But even with the welcome support of the Commonwealth Government through the Jobs Fund initiative, the number of social enterprises in Australia remains relatively small.

In order for Australia to harness the power of social enterprise to provide jobs in our high unemployment and disadvantaged communities and get people off the streets of our cities, regional and rural areas, we need the investment and recurrent assistance from Australian governments and social investors.

Social Enterprise can help create a fairer Australia.

Paul Bird is the Victorian State Director of Mission Australia

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