social delta

Consulting and support for social enterprise in Canada

Tag: social enterprise (page 1 of 3)

Being a social entrepreneur is like owning a sailboat

If you are a sailor, you invest time, money, and passion in your boat. You may even build a community around this recreational hobby. You do not expect repayment. At the end of each day, however, you get paid with that which is immeasurable and intangible. You are paid in the beauty of the open water, the glory of nature, perhaps the company of friends, and the wind in the sails.

Similarly, social enterprise is not about making money, or making a name for yourself, or building an empire. It is about creating a better, more peaceful, more sustainable, more just world. The investment pays dividends that have no financial currency, but are of tremendous value.

I’ve heard that sailboats are frequently described by owners as “a hole in the water into which you throw money.” Sadly, a social entrepreneur will likely lose more money than they will make as they conceive, design, launch and build their business. Most effective social enterprises are never sold for a profit, nor are they franchised into a stream of future income. In fact, the majority of social enterprises do not make a profit year over year, and when they do, their very existence compels them to reinvest in maximizing their social mission.

However, social entrepreneurs—I argue—should not be motivated by money; they have to be motivated by the social change that they deem is necessary.

I was once approached by a social enterprise leader, asking if I’d like to invest in their fair trade business. He flat out told me, “This is a terrible financial investment.” However, he said that it is an investment in the right way to do business, where co-operative farmers (who I will never meet) will be able to live a sustainable, healthy life, a life where their children will get an education and opportunity. The investment has indeed been a financial loss, but an exceptionally lucrative social decision. The social enterprise has continued to operate (in part) because of my capital, and they continue to help individuals in a sustainable, meaningful way. I put money into justice, and my recompense is enormous.

I meet a lot of people who believe that social enterprise is cool. Some even call it innovative and new. However, social enterprise is actually an old concept with a new name. Early business was never about profit. It existed to allow entrepreneurs to make a living, providing goods and services that are needed for a community: food, haircuts, building materials, and the like. Business can be designed to cover costs, including salaries, and provide value without maximizing profit.

As we work to build purposeful and meaningful businesses, we ought to banish the thought that social enterprise is going to be a way to retire wealthy. As with the investment in a sailboat, we might enjoy retirement happy, satisfied, and full of calm knowing that our sacrifices are worth every penny we put into it.

The long-term payment for the social entrepreneur is a social wealth that is far beyond riches.

Free Training for Mental Health Social Enterprises

The Mental Health Commission of Canada (MHCC) is offering free online course coupons to social enterprises through the Social Enterprise Institute (SEI)

If you are a social enterprise that hires individuals with mental illness, take advantage of this coupon offer by completing the online request form. This coupon offer is available to social enterprises in Canada that employ people living with mental illness.  There is no deadline to complete the online request form but there are a limited number of coupons available in each category.  Coupons will be distributed on a first come first serve basis to eligible applicants.

The Social Enterprise Institute (SEI) was created to help anyone, regardless of location or economic ability, to set-up a social enterprise to address issues and causes they care about.  SEI was also created to make learning easier to implement; to take the hassle out of learning new skills by delivering seamless, short, on-demand eLearning produced by industry professionals. Learn more about SEI at www.socialenterpriseinstitute.ca.

COMPLETE THE COUPON REQUEST FORM

SEI  is one of the partners in the Social Enterprise Ecosystem project (S4ES).  The S4ES project connects training, marketing, and impact measurement resources for social enterprises anywhere in Canada.  The project is funded by the Mental Health Commission of Canada, the Government of Canada’s Social Development Partnerships Program, and the J.W. McConnell Family Foundation. Learn more about S4ES at www.s4es.ca.

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A case against defining social enterprise.

What’s in a name? That which we call a rose, by any other name would smell as sweet. William Shakespeare

As if to refute Shakespeare’s famous line, we all like to define things that are new to us.  Scientists will define new stars, species or diseases. Social workers and teachers will define new approaches to learning and social improvement. Business people will define their brand, or a new trend in consumer behavior. Academics spend their entire careers reading about previously defined concepts and trying to invent new ideas and label them.

It comes as no surprise that many people who first hear the term social enterprise want a definition. This is why you’ll see a “definition” of social enterprise in the margin to the right of this post. For most, to understand the meaning  of a term is the first step to embracing the idea. The words are familiar but are not fully understood as a pair. Is social enterprise a chatty workplace? Is it a new media term? Is it a collection of similar businesses?  Amalgamating the known definitions of the two terms leads to many interpretations.

Social Enterprise, in essence, basically refers to a commercial activity with a primary goal of creating some sort of social benefit.  However, this is not the only definition. There are many nuances and variations, including legal structures, ownership, profitability goals, success measurements, hiring practices, asset locks, target beneficiaries and a host of subjective qualifications depending on the personal perspective of the entrepreneur.

It is significant to note that even people who work as social entrepreneurs or as supports to social enterprise can’t agree on a definition. This is confusing for the newly initiated and leads to a great many people dismissing social enterprise as a fad, a new label on an old idea, or even an insidious effort to undermine the market economy, or the charitable sector. Without a definition, social enterprise runs the risk of being marginalized–possibly even shunned–by the establishment.

However, it is my belief that the fluidity of the definition, the nuances, and the many interpretations is actually what makes social enterprise so powerful as a tool for social change. In our modern world the silos of social structures—non profits, coops, government, business, clubs—have led us to myopic perspectives on how to provide value to society. In order to really start to address the social problems that are a result of the current structures, we need to look for more malleable, more dynamic, more intangible, and less defined tools. Social innovation requires new thinking to old problems and new hybrid approaches to put that new thinking into action.

It is no longer sufficient to simply “partner” with another sector actor to seek effective change. Partnership and collaboration are strong tools to bring different perspectives to a problem, but they are just the beginning. Social enterprise, in all of its many forms and definitions, is a structure that allows for many approaches and many perspectives to be used simultaneously. Social entrepreneurs can glean from the best practices of a diverse group: non profits, private businesses, public sector institutions, co-ops, voluntary associations, charities, community associations, etc.

As if to punctuate the value of a vague definition of social enterprise, the Harvard Business School’s Social Enterprise Initiative’s mission, “applies innovative business practices and managerial disciplines to drive sustained, high-impact social change…[while we] engage with the nonprofit, for-profit, and public sectors to generate and share resources, tools, and knowledge.”

The challenge of no clear definition is that our laws, our financial services and our social support networks remain somewhat confused by social enterprise. Interpretation of the term’s meaning leaves us wondering: does a social enterprise run on grants or through investment?  Does it require volunteers or paid staff? Are they taxed or not? Must they incorporate or be informal? Are they out to make financial gains or generate social value? The answer is that social enterprise can do all of these things…sometimes all at the same time.

Confusing? At first yes, perhaps. However, if we embrace the concept of social enterprise rather than a strict definition, then we may indeed see innovative solutions that will improve our society for generations to come.

Community Impact Bond: invest in social innovation through HUB Ottawa

Impact Hub Ottawa has been in existence for more than five years providing space, resources, information and a network to many of Ottawa’s most progressive citizens and organizations. They have recently moved to a new location as they continue to grow.

The staff and board of HUB Ottawa are hosting a mix and mingle event in which they will share their growth plans, launch their new Community Impact Bond opportunity and answer any questions you may have about this new investment vehicle.  If you are interested in investing in the changemakers, innovators, and social entrepreneurs making our city a better place to live, you’ll want to attend their information session.

Monday May 8th, 5:30-7pm at 123 Slater, 6th floor

This community bond offers a fixed rate of return based upon either a 2 or 5 year term. You can download a more complete prospectus at the HUB Community Bond Offer.  For more information, you may always connect with Katie Miller, HUB Ottawa’s Managing Director to discuss the opportunity further. Her full contact details are in the prospectus. I also recommend that you visit the HUB website to learn more about the programs and services offered by HUB Ottawa.

It is exciting to see Ottawa  offer social investors an opportunity to participate in creating a more vibrant, just, and healthy city;  I encourage you to find out more.

2016 Gift Guide featuring social enterprises and progressive businesses

Social Delta is pleased to recommend the holiday gift guide that has been produced by Social Enterprise Ontario. Please consider supporting these businesses, as you share holiday cheer with friends, family and colleagues.

Each gift you buy this holiday season can have significant impact on your community. Thanks to the newly launched Social Enterprise Gift Guide, extending the impact of your gift giving is now easier than ever. The Guide features a wide variety of products created by Canada’s diverse social enterprise sector, representing for-profit and non-profit organizations, cooperatives and B Corps.

The Social Enterprise Gift Guide includes a broad range of products and is fully searchable by product type, price range, region and other categories. For example, you’ll be able to purchase calendars or greeting cards from Options Mississauga Print and Office Services, beer from Beau’s All Natural Brewing Company, meals cooked by Syrian refugees from Newcomer Kitchen, Inc. and order a gift basket of local preserves made by Youth Opportunities Unlimited in London.

In addition to the main online guide there is a printable Feature Product Gift Guide (PDF) with selected products from different social enterprises from across the province

The Guide is available in English and French (ESontario.org).

This project was made possible thanks to a collaboration of various community organizations and the financial support of the Government of Ontario.

You can find the full catalogue of 100+ products and services online at http://seontario.org/social-enterprise-gift-guide-2016.

If you’re a social enterprise and you’d like to showcase your products & services please fill out this form. (Deadline: December 9)

Funding–yes grant money–to reduce homelessness

Employment And Social Development of the Government of Canada recently launched two calls for proposals for innovative projects that aim to prevent and reduce homelessness. This is an excellent opportunity for social entrepreneurs with a social mission related to homelessness.

Below is a message they have sent out to be shared:

The call for proposals for microgrants has been extended and will end on November 14, 2016.

  • The call for proposals for microgrants – Apply for funding up to $25,000 for small-scale projects. Projects must focus on exploring effective and innovative practices, tools or initiatives that prevent or reduce homelessness in Canada.

Note that there is also a more comprehensive funding program for larger scale initiatives, also with a deadline of November 14, 2016. For more information, please visit the Innovative Solutions to Homelessness funding page.

Why invest in a social enterprise that doesn’t break even?

The goal of a social enterprise is to create positive social change.

To sustain its social impact it has to make enough money to pay all its expenses… in order to remain financially viable, correct?

Would you believe that a $50K investment in a financially unsustainable social enterprise (generating revenue that never exceeds 80% of its costs) can still create more than four times the social impact than making the same donation to charity, while at the same time creating more than $360K in retained earnings, keeping the business in operation over 22 years without any further investment?

There is a strong case to make a social investment in a business that doesn’t break even. If your investment goals are to create social change, then better to invest in a business that can use your money to multiply the social benefit.

Read my guest blog post at SEEChange Magazine for the full story and calculations.

Market share equals what to social enterprise?

One key measurement of success in a for-profit business is market share. Does this also apply to a non-profit housing cooperative?  An employment-based catering company?  An up-cycling storefront?

The goal of a social enterprise is to maximize the positive impact on those who benefit from their business: affordable housing to all, new job opportunities for the disenfranchised, tons of diverted waste from landfills.  In many cases, mission maximization can only be achieved by increasing the scale of their business; therefore,  unless the market expands, scaling up means someone else must scale down or be joined.

However, it is almost “un-social enterprise” to be creating a vision in which market share is a goal, or evemarket-share-graphicn plausible. Most social enterprises operate locally, and all work with a social mission that drives them. The thought of putting a for-profit out of business—or even acquiring that company—is likely not in their initial thinking, nor explicitly in their business plan.

But why not? Why shouldn’t a social enterprise seek to minimize competition and/or take customers from another local business? Why wouldn’t they attempt to buy that local business in order to increase their inventory, maximize their social mission, minimize competition, and benefit from economies of scale? There is no imperative to leave your competitors alone when you are a social enterprise.

Of course, it is possible that putting competitors out of business, or challenging their cost structure by using grants to get a competitive advantage, or taking them over in order to employ a disadvantaged segment rather than their existing employees, may have unintended social costs. No social enterprise ought to decrease the employment of others in favor of their “target” population, or diminish the value of for-profit colleagues in the marketplace. Healthy competition is good, arguably even necessary for innovation and improved social outcomes, and seeking market share without recognizing the social costs could potentially jeopardize the net social impact on the community.

Social enterprises are modest by nature, in my experience, and aggressive business practices are seen as unsavoury at best and downright nauseating at worst. However, if increased market share means increased (net) social benefit, then by all means a social enterprise ought to be unabashedly bold in their business aspirations to increase market share.

Charities are selling… more than ever!

As a follow up to an earlier post,  Social Delta is pleased to report that there has been an increase of $2 billion in annual revenue earned by charities in 2014. This represents a 12.4% increase from the 2012 returns. (which in turn was 3.8% higher than 2011)

Charities are expected to file T3010 forms at the end of each fiscal year. As part of this annual reporting, they submit financial statements in a specific format and these documents are then made public at the CRA Website.  Blumberg Segal LLP has painstakingly aggregated the data for the 2014 submissions to help define the scale and scope of the charitable sector in Canada.

Some key facts from the April 10th Blumbergs’ Snapshot of the Canadian Charity Sector 2014:

  • Total revenue from all sources in 2014: $246 billion
  • Total sales revenue (not including to government): $19.9 billion
  • Total  membership revenue: $1.6 billion
  • Total value of tax receipts issued: $15.7 billion

As was the case in the 2012 report, earned revenue by charities is greater that donated revenue for which tax receipts were issued.  Admittedly, not all of these revenue generating activities would be considered social enterprise, but the data underlines the growing importance of earned revenue in charitable activities in Canada.

For more details on the report, and the host of other resources available from Blumberg Segal LLP, visit their web page devoted to legal issues facing the charitable sector in Canada.

 

NEW: RECIPE FOR IMPACT

  • Is your social enterprise engine sputtering?
  • Are you and your team frustrated or overwhelmed?
  • Is revenue stagnant? Is financial sustainability in jeopardy?
  • Are you maximizing your social impact?
  • Is your founder looking for other work?

Social enterprises can have troublesome adolescent years as well, and Social Delta knows how to help  you overcome the challenge through a practical, effective one-day strategy session.

We offer a full day facilitated strategy workshop to help you and your social enterprise stakeholders identify strengths and challenges, and refine your objectives. This is a co-working session which draws upon Social Delta’s decade of experience working with and studying social enterprises, and your intimate knowledge of your own business.

This is not just any business strategy session. It is specifically designed for social enterprises, whether run as a co-operative, a non profit corporation, or a private company. We don’t just look at the numbers, we review the whole business proposition and identify how to maximize your social impact through improved business practices.

This unique service starts with an online survey completed by your team of stakeholders (clients, managers, employees, volunteers, board members and owners). This survey sets the foundation for an objective group evaluation of the financial and social health of your business in 12 different thematic areas.  The survey results form the foundation of a day of in-person discussions allowing your team to make concrete decisions about what areas need to have more focus, and what aspects of the business can be relaxed in the short term. The whole process is designed to “round the wheel” by reallocating scarce resources–time, physical assets, operating capital, and human resources–to create a stable, robust and effective social enterprise.

Together, we will write your business Recipe for Impact

In only one day:  Concrete, realistic, measurable  next steps to maximize the social impact and the financial health of your business.

Contact us for more information on pricing or to learn about this unique service for social enterprises.

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