Social Enterprise 101
What is social enterprise, who’s
talking about it and how can it be
used as a tool for CED?
Definitions
•
“Social enterprises are businesses owned by nonprofit organizations, that are directly involved in
the production and/or selling of goods and services for the blended purpose of generating
income and achieving social, cultural, and/or environmental aims. Social enterprises are one
more tool for non-profits to use to meet their mission to contribute to healthy communities.” Social Enterprise Council of Canada
•
“Social enterprises are businesses whose primary purpose is the common good. They use the
methods and disciplines of business and the power of the marketplace to advance their social,
environmental and human justice agendas.” -Social Enterprise Alliance, USA
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“A social enterprise is a business that trades for a social and/or environmental purpose. It will
have a clear sense of its ‘social mission’: which means it will know what difference it is trying to
make, who it aims to help, and how it plans to do it. It will bring in most or all of its income
through selling goods or services. And it will also have clear rules about what it does with its
profits, reinvesting these to further the ‘social mission.’” -Social Enterprise, UK
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“A social enterprise is an organization that applies commercial strategies to maximize
improvements in human and environmental well-being, rather than maximizing profits for
external shareholders. Social enterprises can be structured as a for-profit or non-profit, and may
take the form of a co-operative, mutual organization, a social business, or a charity organization.”
- Wikipedia
A nonprofit operating a business/a business
operating like a nonprofit
Carries the dual
purpose of
• generating
income from
sales and
• achieving social,
cultural or
environmental
aims
Multiple Bottom Lines
Profit
People
Planet
Business Orientation
in a Nonprofit World
Nonprofit Approach
For-Profit Approach
• Primary goal is to fulfill social
mission
• Culture of slow decision- making
with multiple layers, including
board
• Expected to apply bulk of
financial resources to direct
services to mission
• Must achieve social and
financials goals concurrently
• Focus on what clients and
funders want
• Primary goal is to make a
profit
• Need for quick decisionmaking
• Expected to invest in
infrastructure such as
technology & business
management
• Must achieve financial goals
• Focus on what customers and
investors want
Business Model Continuum
Not-for-Profit Ownership
For Profit / Private Ownership
(including NFP Co-operatives)
(including FP Co-operatives)
Donations
Fee for
Services
Social
Enterprise
For-Profit
Social
Enterprise
Blended
Return on
Investment
Corporate
Social
Responsibility
Strictly
Seeks
Profit
Social Economy
John Pearce, Social Enterprise in Anytown
(2003, Calouste Gulbenkian Foundation)
Why Start a Social Enterprise?
• To meet a need in the community or the
local market not met through traditional
business models
• Advance or achieve a specific social
mission
• Contribute to the financial sustainability
of a non-profit organization
Reasons for Interest
in Social Enterprise
• Dissatisfaction with the old ways of doing
things
• Opportunity to creatively address mission
• Shifting and unpredictable funding context
– need for unrestricted revenue
• Gradual increase of business-based
thinking in the social development sector
• Increasing interest of entrepreneurs in
social returns and impact
“Social entrepreneurs identify resources
where people only see problems….They begin
with the assumption of competence and unleash
resources in the communities they serve.”
David Bornstein, How to Change the World: Social Entrepreneurs and
the Power of New Ideas
In-House Social Enterprise
•
Cost centre within an organization
•
Single purpose SE: SE is the organization
Separate Identity
•
For-profit Subsidiary (wholly or partially
controlled) or Separate Nonprofit
•
Joint Venture/Partnership or Co-operative
Pillars of Support
for Social Enterprise
• Provide support for all stages of development
from concept, feasibility, business planning,
business launch and growth
• Build the Business Skills in the Nonprofit Sector
• Access to Appropriate Investment and Financing
• Provide Market Opportunities
• Research & Demonstrate Value
Financing Social Enterprise
Types of Capital
• Donations
• Grants
• Sponsorships
• Equity/Shares
• Community Bonds
• Debt Financing
• Patient Capital
• SALES!
Sources
• Government
programs
• Foundations / United
Way
• Corporations
• Credit Unions/Banks
• Community Futures
• Philanthropists
• Investors
Challenges
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Procurement policies favour larger businesses
Balancing low cost services with sustainable living wages
Access to business financing
Nonprofit program vs. independent business
Nonprofit boards concerned about business risk
Nonprofit organizations not understanding social enterprise
Some traditional funders still don’t recognize social enterprise
Competitive nature of business has potential to damage
community and partner relations and the ability to learn from
other social enterprises
• From a product perspective, it can create anything from planter boxes,
fertilizer or patio furniture to packing cartons, meat pies, and cookies.
• From a service standpoint, a social enterprise can deliver anything from
consulting services, recycling, or building management to courier and
voice mailbox services, lawn maintenance, cafes and restaurants.
• From a fiscal perspective, non-profit enterprises can generate anywhere
from 5% to 100% of a program's or organization's costs. Income sources
can range from high-end businesses with private clientele or discounted
services paid for by low-income clientele, to government contracts or
government-funded services.
• From an outcomes perspective, non-profit enterprises can provide preemployment services for Aboriginal youth, supply food or dental services
for low-income children, improve watershed management and increase
fish stocks, or support the employment of mental health consumers or
people with developmental disabilities.
Danica Straith
Amanda Fisher
Tania Lerat
Who’s Talking
About Social Enterprise
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Nonprofit organizations
Various levels of government
Academics, researchers, students
Funders, venture capitalists
Networks and associations
Independent entrepreneurs
Small and large business
Some of the Big Champions
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Social Enterprise Council of Canada (www.secouncil.ca)
Enterprising Non-Profits (www.enterprisingnonprofits.ca)
Canadian Centre for Community Renewal (www.communityrenewal.ca)
BC Centre for Social Enterprise (www.centreforsocialenterprise.com)
Canadian Social Entrepreneurship Foundation (http://www.csef.ca)
ClearlySo Canada (www.clearlyso.ca)
Social Innovation Generation @ MaRS
(www.marsdd.com/aboutmars/partners/sig)
TransFair Canada (http://fairtrade.ca/en/about-fairtrade/what-fair-trade)
Canadian Co-operative Association (www.coopscanada.coop)
Le Chantier de l’économie sociale (http://www.chantier.qc.ca)
Conseil canadien de la coopération et de la mutualité (www.cccm.coop)
Recent Research
on Social Enterprise
• BC-Alberta:
www.mtroyal.ca/wcm/groups/public/documents/pdf/socialenterprise2.pd
f
• Manitoba: www.mtroyal.ca/wcm/groups/public/documents/pdf/insmbsurvey.pdf
• New Brunswick: www.sess.ca/english/wp-content/uploads/2013/02/NBSE-Survey-Report1.pdf
• Nova Scotia: http://www.sess.ca/english/wpcontent/uploads/2012/12/NS-SocialEnterpriseResearch-ATGK.pdf
Education in Social Enterprise
• The Université de Sherbrooke - Master's Program in co-op and collective
enterprise
• Université du Québec à Montréal – MBA Program in social enterprise
• Université du Québec à Rimouski - one course on alternative businesses
• Concordia University - Graduate Diploma in CED
• York University - Schulich School of Business
• University of Alberta - Canadian Centre for Social Entrepreneurship
• Simon Fraser University - Centre for Sustainable Community
Development
• Cape Breton University - MBA in Community Economic Development
• University of Winnipeg - Department of Business Administration (courses
include: Management of Co-operatives, Social Enterprise Management,
and Non Profit Management)
Professional Development Topics
You’d Like to See Covered
on Future Calls
Thank You!