Social Enterprise Development Initiative Grant - Australia

The Australian federal government recently announced the guidelines for the social enterprise development initiative, which aims to support the growth of social enterprises and to uplift vulnerable people in Australia.

In this article, we’ll share the eligibility, guidelines and outcomes sought.

We’ll also share the different phases of the business lifecycle and the purpose ceiling we see in the impact space.

We’ll also share how Purpose With Profit can help a select few ambitious social enterprises.

The Social Enterprise Development Initiative (SEDI) grant is part of a larger initiative by the Federal government to target entrenched disadvantaged people in Australia.

“The $199.8 million Targeting Entrenched Disadvantage package was announced in the 2024-23 Budget. This package includes two SII measures:

A new $100 million Outcomes Fund to:

• develop partnerships with the for-purpose organisations, state, territory and federal governments.
• deliver agreed measurable outcomes tailored to the needs of specific groups.

The Government will collaborate with the sector in 2023-24 to co-design Outcomes fund.

$11.6 million of funding for the Social Enterprise Development Initiative (SEDI) to provide:

• capability building grants to eligible social enterprises
• online education and mentoring to the broader SII ecosystem.

The SEDI aims to support social enterprises delivering services to disadvantaged Australians, to build capability, grow their business and support improved social outcomes.”

For the SEDI grant, the Department of Social Services is partnering with two organisations.

• Impact Investing Australia (IIA), which administers the SEDI Capability Building Grants
• Social Enterprise Australia (SEA), who will be the education and mentoring coordinator. They will draw on input from the sector on all activities aimed at improving discovery, connection and exchange.

At Purpose With Profit, we have applied to be on the SEDI Information and Education Advisory Group to help grow the sector by volume and scale, with founders rewarded fairly for their work.

By working with Social Enterprise Australia, we can help guide the sector in harnessing best practices and providing consistency for social enterprise frameworks delivered nationwide.
There are incredible incubators, accelerators and consultants ready to support the growth of social enterprises nationwide.

By now, you are wondering who is eligible for the grants.

“Eligible SEDI Grant applicants:

• Are a social enterprise (see definition below) or a trading Indigenous owned or controlled organisation with a defined social benefit
• Have an impact in one or more of the approved Department of Social Services outcome areas
• Currently provide benefit to those experiencing entrenched disadvantage in Australia
• Are an Australian organisation
• Have beneficiaries who primarily reside in Australia
• Have a turnover of at least $50,000 per year
• May be early stage but have progressed beyond the start-up phase
• Are seeking to scale impact (now or in the future) in one or more of the approved outcome areas to address entrenched disadvantage in Australia.

A social enterprise is a business that puts people and planet first. It trades like any other business, but exists specifically to make the world a better place. A social enterprise seeks to solve a social or environmental problem. It can be a for-profit or non-profit organisation, or a charity that trades.”

Here are the broad outcomes:

• Communities and Inclusion (Discrimination & Violence Against Women)
• Communities and Inclusion (Human Trafficking, Forces Labour, Slavery)
• Communities and Inclusion (Cultural & Racial Inclusion & Community Resilience)
• Communities and Inclusion (Newly Arrived Migrants)
• Employment, Training and Participation (Disadvantaged people 18-25, long-term unemployed over 55, Support for youth and adults leaving the justice system)
• Education & Child Development (Children & Young People)
• Education & Child Development (Parents & Guardian)
• Indigenous People (Projects directed at addressing specific needs to support better outcomes like Health, Housing, Empowerment, Cultural, and Education)
• Online Services (Better outcomes for vulnerable people)
• Microenterprise development (Supporting unemployed or unemployed)

For the full outcomes and activity, click here.

Many social enterprises cannot afford the expert services to help grow their social enterprise and impact.
 

The grant’s sole purpose is to provide eligible social enterprises with up to $120,000 of funds to be used for capacity-building support such as:

• Strategic Business Analysis/Planning
• Operational Advice
• Advice on IT/HR/Legal/Accounting
• Theory of Change & Impact Measurement Framework.
• Scaling Impact Investment Modelling
• Legal Support
• Marketing & Pitch development
• Access to impact capital
• Grant writing support

SEDI Grant recipients must show a Business Plan & Impact Measurement Framework.

We recommend you click here to see the application and assessment criteria.
 

The Application process is as follows:

1. Complete an Expression Of Interest
2. Phone Call
3. Grant application
4. Interview With Expert Panel
5. Grant Outcome

The Panel will consider a range of factors as part of the criteria including:

• “How will the social enterprise’s proposed Capability Plan enable it to scale its impact effectively?
• How does the social enterprise put people and planet first, to make the world a better place?
• How does the social enterprise (or its project) align with one or more of the DSS approved outcome areas? (see Outcome Areas above)
• How does the social enterprise measure its impact?
• Would the social enterprise be able to afford the provider’s fees without funding from a SEDI Grant? (Providers are the intermediaries that will provide capability building services to the social enterprise)
• Is the social enterprise led by a capable and experienced team?”

For the most up-to-date, frequently asked questions, go to Impact Investing Australia.

Here are some of the most common FAQs:

• When are the applications due? These grants will run through June 2026. It’s not based on the first submission. The team will assess each application.
• It is recommended to partner with an intermediary/provider to use the grant. You can utilise up to 3 providers.
• Up to 20% of the grant can be used for internal costs.
• If successful, 80% of the grant will be provided upfront, with the balance 20% on the program's acquittal.
• A capability plan needs to be submitted with the application with the help of a provider.

After working with and seeing hundreds of impact founders, we noticed a purpose-ceiling for impact businesses.

This is rarely discussed publicly in the impact roundtables or forums.

Many founders start with ‘sacrifice’ to get their idea off the ground.

Some continue working with a ‘sacrifice’ mindset for many years, even a decade!

Even though they have all the support and experts around them.

While others grow to a ‘livelihood’ stage, where they have a small team and are rewarded fairly.

This is where the purpose-ceiling kicks in!

For some social enterprises, the demand now exists not just in the locality or city but every state. If the purpose ceiling holds back these founders, others will fill the need.

All businesses go through a business lifecycle.

It’s easier to see the contrast of the purpose-ceiling when we discuss the business lifecycle stages.

The phases are:

• Start-up – Pre-revenue. You are investing time & money.
• Proof of concept – Product market validations.
• Growth – This is when you start seeing the results.
• Shake-out – Others are entering the market.
• Maturity – there’s a tipping point
• Decline – Sales start to slow down
• Life Cycle Extension – New Products/Refresh of the offering

We share this in this short video. (Excuse the background noise. We'll aim to have this sorted asap)

There are many reasons founders may face a purpose ceiling.

Some of these include:

1. Feeling like growth may lead to burnout
2. Not wanting to lose control of their business
3. Not having commercial expertise to grow
4. Lacking capital
5. Feeling like the brand could lose its values or ‘sell-out’
6. Preferring to do it yourself - not listening to advice.
7. Or it could be to appeal to philanthropy funding.

The last point needs a little further explanation.

Social enterprises that rely on philanthropic funding can be guided by the funding instead of the longer-term commercial model & impact.

We see this a lot in the not-for-profit space.

Ambitious social enterprises must weigh up their goals and aspirations with those of the

funders.

Does this resonate with you?

Before sharing how we can help, we would like to share a story.

Have you heard the story of the six blind men describing an elephant?
 

The Indian parable goes like this:
 

Six honest blind men come across an elephant and start to describe it.

One touches the ear and says it’s like a leaf.

One touches the leg and says it's like a tree.

One touches the tail and says it’s like a rope.

One felt the tusk and said it was like a spear.

Another felt the body and said it was like a wall.

Another touches the nose and says it’s like a snake.

They argued why they were right!

Many experts are good in their field. Yet they see it from their perspective.

Who sits with the founder to dive deep into the business and look at the whole?

At Purpose With Profit, we have indicators to monitor your ‘Purpose’ as well as your ‘Profit’ by measuring your Purpose, People and Planet strategies as well as Profit.

We also have a hidden pillar called Precision. The video showcases the ripple effect of aligning these strategies.

We are your trusted entrepreneurs in residence, by your side, to grow your social enterprise.

Many experts pitch to founders with quality services.

Some experts provide services with a light touch.

We work with founders to unpack your vision AND then the business vision.

We provide insights and strategies from the impact and mainstream business world.

Our superpower is empathy and applying scalable business models where you don’t sacrifice.

We sit with ambitious founders to understand their goals and growth challenges.

Then, we can determine the experts you need to grow your business.

We can apply a Business Model Canvas to help you determine ideal models.

You may need a Theory of Change & impact measurement for funding– see ours here.

Being senior financial & business practitioners, we can find operational efficiencies.

And share new funding models like Lend for Good.
 

Many founders start with a Purpose and Performance goal but are unsure how to get there without a Plan.
 

For others, they have a Purpose, and some have a detailed Plan, but they don’t monitor this with a Performance metric, leading to uncertainty.
 

With all the current business environment changes, who can stick with a plan, right?

In a normal business environment, you’ll have a salesperson who has a Performance and a Plan but lacks Purpose and feels unfulfilled.
 

We bring all three components => Purpose + Plan + Performance together. Our ‘plan’ is simplified to a page.

If this interests you, reach out to us.
 

We would love to serve ambitious social enterprises that are ready for the next growth stage.

We are happy to share that the Federal government is committed to helping social enterprises that are uplifting vulnerable communities grow.
 

The Social Enterprises Development Initiative is a grant offering up to $120,000 for quality social enterprises helping vulnerable communities.
 

Social Enterprise Australia Advisory Group and Impact Investing Australia have been set up to implement the program.
 

The SEDI grant is funded through the Department of Social Service, and strict eligibility, guidelines, and social services outcomes must be met.
 

At Purpose With Profit, we are seeing a purpose ceiling that’s holding many quality social enterprises back for various reasons.
 

Social enterprises rarely have a business partner who works deeply with the business from end to end. The grant provides this opportunity.
 

With the right support, social enterprises can break through their ‘purpose ceiling’ to grow significantly.
 

To scale, social enterprises will need values-aligned experts, a network, and access to various forms of financial capital.
 

If you are an ambitious founder or CEO looking to grow your impact business, do get in touch.

We’ll do our best to help you. And if we don’t have the capacity, we’ll connect you with other quality intermediaries.
 

Many quality intermediaries, incubators and experts around the country are ready to help.

Let’s do this Australia!
 

Book a call with us here.