Social Enterprise: Lessons from Down Under

While the concept of using business models to achieve social or environmental impact is universal, the definitions of “social enterprise” are not. And the infrastructure supporting them can look vastly different from place to place.

Recently, I spoke with Richard Warner, a leader in the Australian social economy, following his visits to social enterprises in Santa Fe, NM. Warner is CEO of Nundah Community Enterprises Cooperative (NCEC), a worker cooperative that focuses on generating sustainable employment and training opportunities for people with developmental disabilities through high-quality, long-term jobs. The cooperative’s award-winning social enterprise businesses include cafes, catering, and landscaping services that have had lasting social impact in their community.

Over his three-day visit with Santa Fe–based social enterprises, we discussed the differences between the United States and Australia when it comes to social enterprises and their ecosystems of support.

The comparison reveals not just differences in funding and structure, but a fundamental distinction in political recognition and collective identity.

Defining Social Enterprise: Two Perspectives

Australia…defines social enterprise as: “a business that puts people and planet first…that [exists] specifically to make the world a better place.”

In the United States, social enterprise is not easy to define. Generally, I define social enterprise as the intersection of business and social change. It is the impact that a business owner wants to have not only on their bottom line but also in their community or on some social issue. It’s also a nonprofit with a revenue stream (usually profitable) that provides services aligned with its mission.

We have hundreds of examples of these nonprofits in the United States. Many of them don’t self-identify as social enterprises. Others do—and grow their revenue and their impact through businesses and services. In all my years of researching models and consulting with social enterprises, however, I have yet to come across a definitive definition of social enterprise in the United States, and there is no legislated definition.

In Australia, the boundaries are more precise: Social Enterprise Australia, the country’s nationwide peak sectoral organization, defines a social enterprise as “a business that puts people and planet first. They trade like any other business but exist specifically to make the world a better place.”

As Warner explained to NPQ, social enterprises in Australia, while they work across industries and have different legal structures, share common features. In particular, they all:

• Exist to solve a social or environmental problem
• Put people, planet, and purpose over profit in operational decisions
• Have a self-sustaining revenue model
• Reinvest most of any surplus toward their purpose
• Choose legal structures and financing that protect and lock in purpose long-term

“That’s a general definition around which the Australian movement has agreed. It allows for participation of a significant variety of models from within the social economy, whilst maintaining a level of rigor, ensuring they run businesses and that mission and impact is at the heart of what they do,” Warner explained.

Australia does not have a federally legislated definition of social enterprise. Instead, it relies on national support organizations like Social Traders, which provides “certified social enterprise” status, ensuring buyers and supporters have confidence in the enterprise’s commitment to its mission. People and Planet First, a global verification for social and environmental impact, is widely recognized and accepted by social enterprises in both the United States and Australia.

Ecosystem Structures

Although Australia’s movement is relatively new (approximately 15 years in the making) it has become a strong network and advocacy system. The US system of support is more localized, often led by community-based, volunteer-run groups, and/or university and educational institutions connected to incubators.

Australia has an active national network including Social Enterprise Australia and state-level bodies that advocate for public policy on behalf of their members and the movement. Australian social enterprises also rely on incubators and intermediaries providing technical assistance; and social procurement, which embeds purchasing from social enterprises into government and corporate supply chains, providing a crucial mechanism for scaling and market entry.

In the United States, the Social Enterprise Alliance is the lead national membership organization. It offers many workshops, programs, and consulting resources to its 500-plus members. The group does important and necessary work to keep the sector cohesive, but its work is primarily rooted in localized networks in cities across the United States that host meetups and learning sessions, and provide technical assistance through partnerships with other business-serving organizations.

Many universities across the United States offer social enterprise courses within their business schools or have sustainable business-focused courses. In some cities, there are social enterprise incubator programs (some partnered with universities or community colleges) focused on supporting the social entrepreneurs through peer-to-peer cohorts.

While social enterprises in the United States benefit from local programs, the lack of a widely accepted general definition of social enterprise has impeded the development of public policy that might provide broad overall support for the sector.

Funding Blends and Philanthropic Allies

Australian social enterprises typically operate on a blended-income model. Direct business income is central to their revenue, but this can be augmented by government funding (especially for those delivering government-funded services) and philanthropic donations (if they are also registered charities).

“Philanthropy has been catalytic and a great ally of social enterprise,” Warner observed. While the philanthropic sector in Australia is small, Australian philanthropy is active and increasingly strategic, aiming to assist enterprises in delivering deep impact while also supporting wider advocacy efforts to grow the social economy.

By contrast, in the United States, philanthropy is massive—an estimated $1.757 trillion as of September 30, 2025. To offer just one contrast with Australia, a list published this year found that the largest Australian foundation paid out AU$214 million (at current exchange rates, one Australian dollar equals about 65 US cents). By contrast, the Gates Foundation paid out a little over US$8 billion last year.

One reason the US social enterprise sector is not as cohesive as in Australia may be that many nonprofits are not keen on transitioning to a revenue-generating social impact business model when foundation funding is more readily available.

The Power of Political Recognition

Perhaps the most glaring difference between the two countries lies in the level of governmental engagement.

“The big difference [compared to the United States] in Australia is the sense of there being a movement and the existence of a support system around that.”

Federal recognition and support for the social enterprise sector in the United States are generally minimal. In contrast, Australia’s political climate has rapidly enhanced its support of social enterprise after years of advocacy by the sector. Warner points to the fact that the sector now boasts over 12,000 social enterprises contributing $23 billion to the economy, giving social enterprises critical economic and political mass. The United States tracks small businesses and nonprofits, but lacks official data for social enterprises.

With substantial commitments from state and federal governments in Australia, social enterprises are demonstrating their ability to address complex social problems. According to Jess Moore, CEO of Social Enterprise Australia, key recent federal commitments include:

• $24.6 million for the Economic Pathways to Refugee Integration (EPRI) program
• $11.6 million for the Social Enterprise Development Initiative program to build capability across the sector
• A $104.7 million Outcomes Fund to make payments based on measured service results

During his US tour, Warner visited several Santa Fe–based nonprofits that he said were impressive for their viability, community embeddedness, and ability to balance business and social agendas.

Yet, he observed a critical distinction: “The big difference in Australia is the sense of there being a movement and the existence of a support system around that. I’m not sure they [US nonprofits] identified particularly as social enterprises—they were just doing it!”

Challenges and Opportunities Ahead

Despite the momentum, Australian social enterprises face challenges, primarily the high cost of tackling deep inequality while remaining competitive in the market. The main opportunity lies in leveraging this very challenge: building strong multisector partnerships—between social enterprises, NGOs, businesses, and governments—to drive significant, systemic change and influence government policy direction.

What could be useful in the United States to drive the sector further? A federally funded program dedicated to the education, incubation, and support of social enterprises as the sector grows and continues to address the social issues head-on. A fund within the Small Business Administration—and allocated to each state for these purposes could be a huge boost to the sector.

Warner suggests that building a stronger sense of shared identity among US organizations and more collaboration among B Corps, people-and-planet-first verified groups, and others could be fertile ground for future movement building. After nearly 20 years in this sector, I agree with this assessment.

Social enterprises offer great promise, as they combine the valuable energies of a social and ecological mindset with entrepreneurial drive and action. The biggest opportunities lie in building multisector partnerships between social enterprises, nonprofits, businesses, and governments to tackle major social problems.