The Social Enterprise Development Initiative (SEDI) is about to be turned from words into action.

This year the social enterprise sector saw itself named in the federal budget, with the $11.6 million SEDI. It has two parts:

• Capability-building grants

• Online education and mentoring.

SEDI is being designed to build the capability of the social enterprise ecosystem to grow social impact. This includes but is not limited to, improving social enterprises’ ability to unlock capital for impact and to participate in the social impact investment market.

Social Enterprise Australia was engaged by the Department of Social Services (the Department) to gather stakeholder views to inform the design of SEDI. Enormous thanks to all who generously shared their views, experiences and curiosity in others.

Stakeholder views were collected through two separate sets of workshops, one for capability-building grants (including 130 people) and one for online education and mentoring (76 people).

Follow-up surveys were designed to test the level of agreement on key themes that the Department heard in the workshops and wished to explore further. Surveys were received from 358 people for the grants and 211 for online education and mentoring.

Capability-building needs

Views were collected about the types of capability-building support social enterprises need to demonstrate and grow social impact. They show that a wide range of support is needed. A majority of survey respondents agreed that capability-building needs include:

• How to measure, track and evaluate social impact, including tools, frameworks, platforms, and reporting.

• Understanding different types of finance, what is required to access them, and terms and processes; and support to raise capital at the right time.

• Finding and securing business opportunities, including finding buyers, applying for grants, tendering, marketing and branding.

• Support to develop strategy, such as theories of change, value propositions, business models, and financial modelling.

• Support to develop operations, such as financial management, HR development, and other management practices needed to operationalise strategies.

• To strengthen governance to support decisions related to financial and impact sustainability and growth.

Views were also collected about the skills and knowledge needed by intermediaries and/or investors to demonstrate and grow social impact. The most common response was to better understand how social enterprises differ from traditional charities and businesses, including differences in approaches, traditions, models, and views of success. This was followed by knowledge of social enterprises’ different finance needs, different types of financial instruments and their returns, and different providers of finance.

Capability-building grants

Views were collected about how the SEDI grants should work. A majority of survey respondents agreed that:

• The grants should allow for a phased and flexible approach to capability-building support.

• Grants should allow social enterprises to seek support from different sources and in different forms. Different sources mean more than one provider of capability-building support. Examples of different forms are a social impact measurement tool and support with a capital raise.

• Many social enterprises need funding to access capability-building support as well as resources to be able to engage in capability-building.

• It would be useful if social enterprises could complete an online self-assessment of their capability and readiness for a SEDI grant prior to starting an application process.

• Selection decisions would be improved if there was a two-step process (e.g. expression of interest and shortlisted applicants are asked to submit a full application).

Stakeholders also called for clear and concise grant guidelines and evaluation criteria, support to identify the capability-building support needed to grow impact and support to apply. They also identified that while greater flexibility is allowed in using the grant as noted above this should not place an unreasonable impact on the providers of capability-building support.

Certification

The first survey asked two questions regarding certification with similar response to both questions:

• 71% agreed or strongly agreed that, to demonstrate and grow their social impact, social enterprises need support to become certified as a social enterprise. 17% neither agreed or disagreed and 12% disagreed or strongly disagreed.

• 69% agreed or strongly agreed that certification should be an eligibility requirement. 16% neither agreed or disagreed and 14% disagreed or strongly disagreed.

Those who agreed with the statements pointed to certification being the only tool that exists to verify social enterprises specifically - for government, philanthropy, investors, customers, and others, including to ensure that grants for social enterprise development went to verified social enterprises. Those making comments against certification pointed to it not being relevant or value for money for some social enterprises, and that some investment in impactful businesses will be discouraged if public benefit must outweigh private benefit as certification currently requires.

Online education and mentoring

A majority of survey respondents agreed the following are needed:

• Having best practice guides and templates and other learning material on key areas of capability-building topics available to all and in one location.

• Online introductory workshops on key capability-building topics are a valuable supplement to guides, templates and other learning materials.

• Connecting social enterprises that are working to build similar capabilities, for example, a community of practice for social enterprises that employ people with a disability and that want to better measure their social impact.

• Facilitated peer-to-peer mentoring in small groups to develop individuals and/or organisations.

• An explainer of organisation types, variations within organisational types, and their function/s in the social enterprise ecosystem.

• An explainer of key terms relevant to funding and investment.

• A tool that lets people search by field, to find participants in the ecosystem, and to share information about themselves.

Comments about learning material included that duplication of existing resources should be avoided, showed strong support for a small number of quality-assured resources being in one location, and noted that these should be in a practical format. Some also spoke to these being most useful when open-source, collectively developed, vetted and continuously improved. Calls for locating things in one place and the collective development of resources were echoed beyond learning materials, to include workshops and ways to find and connect with others in the ecosystem.

More detail on some of the above online education and mentoring opportunities were also gathered. These included more detail on the following topics.

Way-finding

When asked more about way-finding in the ecosystem, responses largely focused on the need to be able to find:

• Funding, including philanthropy, investment, government, finding investees and unspecified funding.

• Collaboration opportunities, including partners, collaborators, and other investors.

• Buyers from social enterprises and intermediaries.

• Learning and development opportunities, including mentors, mentees, intermediary support, and others to learn from.

Many commented that they would use the tool to find people, organisations and collaborations they can not otherwise find, that who they search for will change over time with their needs, and that search capabilities need to support finding people or organisations on a highly specific basis.

Online communities of practice

Comments about online communities of practice also provided insights into effective design. Respondents want communities of practice to:

• Have a clear and shared purpose

• Capture and share learnings

• Be action and member-driven

• Be well facilitated

• Measure their impact

Comments also noted the need for both commonality, such as similar organisational maturity or a focus on the same challenge, and for sufficient demographic diversity or diversity of roles in the ecosystem.

Online mentoring

When asked specifically what is needed to create an effective online mentoring experience, stakeholders most often focused on mentor models, with strong support for clear structure and mutually beneficial arrangements. This was followed by well-matched mentors, then trust, mentor capabilities, and clear and well-defined goals.

Shared language

Comments identified shared language as a gap that must be bridged. There is strong support for explainers to help address this. Further, many respondents noted that in addition to these explainers, effort and funds must be invested in their use. Further comments about explainers included that they should be nuanced and reflect regional and other contexts, acknowledge and draw on multiple perspectives, build on what exists, be maintained, and be located and shared to maximise uptake.

Impact measurement

Finally, respondents called for the development of an impact measurement tool or tools that can be accessed and used by all to help organisations know what data to collect and measure their impact. Some also called for this tool to enable the ecosystem’s size, characteristics and contribution to be tracked over time.

What’s next?

The Department is considering all of the feedback provided through the engagement process and will look to incorporate the ideas where practical and feasible.

SEDI capability-building grants

The SEDI capability-building grants will support the capability of social enterprises specifically to demonstrate and grow social impact. Eligible social enterprises will be able to apply for grants of up to $120,000 (GST exclusive) with a total of $6 million available.

The grants can only be provided to social enterprises already delivering goods and services to people experiencing disadvantage, and in relation to:

• Communities and inclusion

  • Discrimination and violence against women

  • Human trafficking, slavery and forced labour

  • Cultural and racial inclusion and community resilience

  • Newly arrived migrants

• Employment, training and participation

• Disability

• Early childhood development

• Aboriginal and Torres Strait Islander peoples

The grants can be used to improve sustainability, as a necessary foundation for future growth.

To be eligible for the capability-building grants, applicants need to be a social enterprise and demonstrate consistent trading activity.

The Department will engage a SEDI Grants Administrator to manage the SEDI capability-building grant rounds and are now inviting applications for this role through an open grant process. Applications close on December 6, 2023.

Applications for the SEDI capability-building grants are planned to open in the second half of 2024, once an Administrator is onboard.

SEDI online education and mentoring

The SEDI online education and mentoring will target building capability for all actors in the social enterprise ecosystem to grow social impact.

Following the consultations and listening to the feedback, the Department has indicated its intention to use the education and mentoring component of SEDI to deliver:

• a centralised repository of online information, tools and educational materials, including a way-finder tool/solution;

• communities of practice and other collaboration opportunities, and

• materials, tools or training materials where there are identified gaps.

Preference is to bring these elements together in an online “Hub”; which would support social enterprises, and the intermediaries and investors working with them.

Further details on this part of SEDI will be announced in 2024.