Our purchasing decisions influence the way that supply chains develop. Seeking the lowest price at all costs can result in supply chains with layers of hidden costs through damage to the environment and to the communities involved in that supply chain. However, there are great examples where buyers have changed supply chains in order to deliver positive social outcomes. One example of this has been in coffee. When enough consumers chose to buy Fair Trade coffee, roasters altered their supply chain to accommodate demand and in so doing raised the wage levels and working conditions of coffee farmers and the communities that they live in. As demand for Fair Trade coffee increased, production became more efficient and price declined. Fair Trade coffee now provides good coffee at competitive market prices while generating positive social outcomes. Whether you buy for government, business or simply yourself as an individual consumer you have the power to change supply chains to generate social impact.
Of late there has been a lot of enthusiasm for the development of an impact investment market in Australia. Social Traders is keen to highlight that impact investment – that generates social impact and financial return – is not synonymous with social enterprise. Nor is developing an impact investment market the answer for the provision of capital for all social enterprises in Australia. Our experience, over the last five years, in social enterprise development and investment, coupled with examination of the more developed market in the UK, sounds a warning to those who believe that impact investment capital alone is the answer for supporting social enterprises in Australia. Australia’s nascent social enterprise market requires a carefully blended mix of capital and support if we are to see a full spectrum of social enterprises realising their potential in this country. You can conceptualise the capital available for Australian social enterprises as a continuum: At one end we have donation/grant capital, mainly provided by philanthropy and government, and to a smaller degree crowd-funding, and at the other end, we have impact investment - money to deliver social good with the expectation of a financial return - and, a little further along the continuum, commercial finance.
The Social Enterprise Builder is Social Traders' online tool to assist those starting a social enterprise. This is an online step-by-step guide includes templates, worksheets and activities for the various stages of social enterprise development.