Beyond the bottom line: assessing the social return on investment of a disability-inclusive social enterprise

In Australia, only 48% of working-age people with disabilities (15-64 years old) are employed, compared to 80% of those without disabilities.

Traditionally, people with disabilities have been employed in Australian Disability Enterprises (ADEs), also known as sheltered workshops, but this model has faced substantial criticism. Common issues include:

  1. Repetitive and menial with little skills development of social integration
  2. Wages designed to top-up rather than replace disability support pensions, maintaining the reliance of people with disabilities on welfare

In response to these challenges, Australia’s disability employment policy has increasingly shifted towards promoting open employment, a move reinforced by the 2023 Royal Commission.

Open Employment: A more inclusive approach

Open employment offers a more inclusive environment, where people with and without disabilities work side by side and are paid at similar rates.

Positive outcomes from open employment include:

  • Better financial outcomes
  • Greater social inclusion and community engagement
  • Enhanced independence
  • Better physical and mental health

However, significant barriers remain for people with disabilities in moving into open employment. These are:

  • Low expectations from families, disability services and employers
  • Limited access to appropriate vocational support and training
  • Inadequate transportation to access employment opportunities
  • Discrimination

The promise of social enterprise

The social enterprise sector offers a promising solution for expanding open employment opportunities for people with disabilities. Not only is the sector growing in Australia, but research suggests they are more than twice as likely to employ people with disabilities compared to other businesses.

While there is a wealth of research highlighting the social benefits of employment within social enterprises, what’s missing is robust quantitative data on the economic impact of these initiatives. Such data is vital to attract public and private investment, scale these efforts, and provide a viable alternative to ADEs post-Royal Commission.

Using a SROI approach to examine the social impact of disability inclusive social enterprise

This study adopts a Social Return on Investment (SROI) approach to quantify the economic impact of disability-inclusive social enterprises—a methodology not previously applied in this context. Using a social enterprise start-up as a case study, the authors unpack the various stages of the SROI process and discuss the implications of the findings.

Specifically for Australian Disability Enterprises, the research explores:

  1. How they can use the information to seek funding
  2. How the model can be adjusted to increase the SROI and
  3. Whether these adjustments align with the mission of the ADE

Additionally, it delves into:

  1. The broader implications for ADEs, the disability employment sector and policy makers
  2. A critique of the SROI methodology
  3. Contributions to the existing literature on disability employment

View the paper

More information: Social Return on Investment (SROI) Methodology

SROI is an adaptive form of cost-benefit analysis that allows for the inclusion of outcomes not typically accounted for in traditional economic evaluations. This stakeholder-driven process generates a ratio of costs to financial value of benefits, combining direct financial outcomes with social and environmental benefits. For outcomes with no direct market value, financial proxies are used to estimate their impact.