Something challenging
Social procurement is where business and government buy goods and services from social suppliers, with the intention of making a positive social impact. It is rapidly gaining momentum as both sectors recognise the power of their sizeable spends; not only to provide jobs for Australians experiencing disadvantage, but also to generate real business value.
Unprecedented potential demand for social procurement is primarily being driven by hard targets incorporated into government policy, and voluntary social procurement activity from a growing number of corporates.
In Victoria alone, the opportunity for social enterprises and indigenous businesses is potentially worth hundreds of millions of dollars of potential contract revenue annually — driven by hard and soft targets on major infrastructure projects and the Victorian Government’s social procurement framework. This equates to potentially thousands of jobs for the most disadvantaged Australians.
Yet we estimate that there are only about 25 social suppliers that have the scale and capacity to take on these contracts.
SVA is in our second year of a pilot, funded by Equity Trustees, which focuses on intensive capacity building for social enterprises. Its purpose is to get them ‘contract ready’ — so that when large government and business contracts arise, social enterprises have the experience, scale, and operational sophistication that enables them to successfully bid for the contracts, and then hit the ground running.
Our objectives for the first three years of the pilot are:
To help three social enterprises win and deliver new multiyear, multi-million dollar social procurement contracts;
Create 60 new jobs for disadvantaged Victorians; and
Help position Victoria as a national and international leader in social procurement and social enterprise.
We’re making great progress, but it’s taken longer than we anticipated. Here’s why:
- The swift evolution in the social procurement market over the past two years required us to refine our proposition and market-test it to ensure it was still responding to the needs of therapidly changing landscape
- The contract opportunities are big and complex. Though they represent potential to generate significant job numbers and positive impact, they’re time demanding and require collaboration across multiple service providers (including lawyers, accountants and other professional services) and multiple funders.
- The range of solutions to some of the challenges (in particular, building the social enterprisesupplier base) is becoming more creative. We are seeing the emergence of really interestingstrategies being adopted by corporates and social enterprises that our work needs to incorporate.
We’re currently working on three projects at present which we’re confident will act as beacons for the sector:
Jigsaw — replicating its successful document digitisation social enterprise in Melbourne to create jobs and training for people with a disability
Vanguard — replicating its commercial laundry social enterprise, creating life-changing opportunities for people that have experienced mental health issues
Leading disability employer — helping them to explore large-scale acquisition targets
We’re confident of hitting both our jobs and transaction targets by the end of year 3 and applying learnings to our growing pipeline of work.
We have a selection of funders that have expressed interest in following the development of this project. If you’d like to join them, please contact Katie McLeish.
