Resilient but stretched: New research tracks the state of Australia’s social economy

For-purpose organisations across Australia are under increasing strain in the face of mounting economic and workforce pressures, according to the latest results of the Centre for Social Impact's landmark social economy study released today.

Drawing on responses from 219 social economy organisations – a 56% increase in participation on last year's inaugural survey – the study provides the most detailed picture yet of Australia’s social economy, encompassing charities, other not-for-profits, social enterprises, cooperatives, mutuals and philanthropic organisations, all driven by a social or environmental mission rather than a profit motive.

Collectively, these organisations make a significant contribution to Australia’s economy and communities. Charities employ 1.6 million people – more people than the manufacturing, construction and retail trade sectors.[i] Co-operatives and mutuals contribute approximately $90 billion towards Australian income levels, while social enterprises employ around one in 60 Australians.

Against this backdrop, the Centre for Social Impact’s findings provide a timely snapshot of the challenges, opportunities and emerging priorities shaping the nation’s social economy. Key insights include:

• Cyber security has surged as a major concern. Widespread cybercrime surged into the top five external risks facing the sector, alongside growing societal polarisation.
• Workforce challenges are intensifying. Recruiting and retaining staff or volunteers has become one of the sector's top three priorities, while building staff capability has risen significantly from tenth to sixth.
•  Funding remains the sector's biggest challenge. Against a backdrop of economic uncertainty and increasing demand, maintaining funding and diversifying income sources, remain the sector's two biggest priorities. Yet the survey reveals a financial paradox: despite the push to diversify, most organisations still rely on traditional income sources such as government funding, fundraising, contracts, and the sale of goods and services.
• Organisations are being asked to prove impact without adequate resources. Despite growing expectations to demonstrate impact, almost half say they lack the dedicated funding needed to measure it properly.
  
  

Centre for Social Impact Acting CEO, Rosemary Conn, said the findings highlight the scale of the sector's contribution and the cost of taking it for granted.

“Australia's social economy continues to deliver significant social benefit at a time of heightened geopolitical instability, threats to social cohesion and climate-related disasters,” Ms Conn said.

“This report shows a sector that keeps showing up for its communities, often under considerable pressure. If we want that to continue, we need consistent investment in the sector and the people who make it possible – the staff and volunteers who go above and beyond because they care about the people they serve.”

Lead author Associate Professor Melissa Edwards, from CSI UNSW, said the results point to a sector focused on stabilisation rather than growth in a difficult environment.

“This research reveals a sector facing a huge range of challenges and under increasing strain,” she said. “While maintaining funding and revenue and diversifying income sources remain the top priorities for social economy organisations, we're seeing a marked rise in workforce concerns – particularly recruiting and retaining staff and volunteers and building staff capabilities.

“As one organisation told us, they are lean, efficient, agile and outcomes-driven, but they struggle to remain sustainable. This tension between innovation and survival is a common thread through this year's results.

“This year's survey expanded on our first study to provide a much richer picture of Australia's social economy. As we build this evidence over three years, we're beginning to see not only where the sector is under pressure, but how its priorities, capabilities and challenges are evolving over time,” A/Prof Edwards said.

The final wave of the Centre for Social Impact's three-year Social Economy Survey will open in late August. People working across Australia's social economy are encouraged to participate and help build the most comprehensive picture yet of the sector's contribution, challenges and future. Read the full insights report here.

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