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Social. Enterprise. If these two words conjure images of Tupperware parties or private social clubs where everyone sits around gabbing while one happy entrepreneur makes a buck, well, you’re wrong. But don’t feel bad. It seems very few would know a social enterprise if they were sitting in one.
They’re hidden in print shops, cafés, bakeries, courier services, even consulting firms. Whatever their cover, they’re quiet revolutionaries in the business of changing social constructs, putting community (and often the environment) before profits.
The initiators of such ventures have a sharp eye for spotting gaps in a system that leaves many out in the cold, and a strong drive for jumping in with creative schemes to fill them. You’d think they’d have all the government support in the world. So why has Ottawa been stifling these daisies, hindering any promise they show of growing into self-sufficient social dynamos? ***
Still confused about just what these mystery entrepreneurs do? Even those at the first Canadian Conference on Social Enterprise held November 15 to 17 in Toronto couldn’t agree on a definition. What is clear is that everything from worker co-ops to for-profit businesses, as well as daycares and unions in some provinces, rally under the social enterprise banner. Add charities with offshoot enterprises that employ immigrant women, at-risk youth or other disadvantaged populations while recycling profits back to the cause and you see the full diversity the term embraces.
No matter how you define it, David Wheeler, York U’s business and sustainability program director, says, “social enterprise emerged as a response to the fact that the sands are shifting in terms of institutional responsibility these days.” He adds, “Because governments are cutting back and extricating themselves from a whole range of activities, a vacuum is created that both the private sector and the not-for-profit sector have to help fill.”
While many social enterprises are fully self-sufficient businesses turning a handsome profit or – like TurnAround Couriers, a for-profit biz employing homeless youth – just starting to break even, the majority still get funding from the very institution that created the vacuum in the first place: government. And it’s choking them.
Across the country, social entrepreneurs complain that government departments aren’t prioritizing their sector, that staff assigned to overseeing contracts with their businesses know little of the concept, and that contract details are undermining the nature of their ventures. Not to mention the general lack of financing available to them apart from spotty grants.
Yes, Paul Martin announced $134 million in financing, research and capacity-building for the sector in last month’s Throne Speech, but after divvying that up among the provinces, a mere $7 million a year for five years will go to Ontario groups that have long been struggling to stay afloat.
Considering the kinds of solution-oriented, market-driven services offered by this sector, it’s appalling how obstructive the government has been.
A common complaint is that the feds – for all their support for private business – have often discouraged the profit motive in the social enterprise sector. Take Youth Opportunities Unlimited, in London, as an example. The non-profit charity runs several social enterprises, including Reuse It, in which at-risk youth get on-the-job training and promote eco-friendly practices. About 20 kids run a recycling biz servicing city bins and about 90 local business. Any valuable scraps are either sold off or given new life as Muskoka chairs and tables made from old telephone poles.
Reuse It has been up and running since 96, supporting about 20 per cent of the program itself, and for the past couple of years Human Resources and Skills Development Canada (HRSDC) funded the rest of it. Easy enough, until partway through the process the rules changed.
Steve Cordes, director of Y.O.U., was told that because the program is largely funded by the feds, the feds now own any revenue the kids bring in. HRSDC took over 100 per cent of funding, and any revenue raised by selling handmade Muskoka chairs is deducted from that 100 per cent.
Cordes says that under the new arrangement there’s absolutely no incentive to become more self-sufficient. “It wouldn’t matter if we sold (a chair) or not under this contract.”
And he adds, “Their policy that they own the revenue really flies in the face of being able to support a social enterprise. We’re trying to substantially increase the revenue so we’re less dependent on government funds, but we’re getting no support for allowing the program to grow.” The contract, says Cordes, is a nightmare.
Joe Valvasori, program manager of Toronto’s Learning Enrichment Centre, a community economic development org that funds three social enterprises including a new-immigrant-run I.T. help centre called Leftek, has similar stories to tell. Short contracts undermine long-term community development visions narrow criteria for who gets into programs mean that those most in need often don’t make the cut and again, any funds raised by projects are clawed back dollar for dollar from HRSDC funding.
As Valvasori explains, they also get slapped down when they exceed goals. “If we have a contract to place 300 people in jobs, and through innovative ways we managed to place another 100, instead of (HRSDC) telling us that’s great, they tell us, ‘You’re obviously overstaffed we’re paying you too much. ‘”
Adds Valvasori, “Aside from being silly and surreal, it kills any kind of capacity of our organization to serve the broader community.”
Despite several days of calling, HRSDC could not locate a spokesperson by press time who know the issue.
Of course, the government isn’t the only funding source whose dollars come with strings attached. Says Catherine Ludgate, director of Vancouver- based non-profit IMPACS Communication Centre, “Every funder, whether it’s a traditional family foundation or a social venture partner (venture capitalists who finance the social enterprise sector), is giving according to its own passions and visions, and organizations seeking charitable dollars have to line up their programming with those visions.”
In fact, says Ludgate, such visions forced many charities into the marketplace. “Well-meaningly, (social venture philanthropists, generally folks who made their millions in the dot-com boom or high-tech industries) often tied gifts of money (to traditional charities) to gifts of business assistance.” That business assistance in turn encouraged such charities to go down the social enterprise road. And as Ludgate explains, “Not all groups have gone willingly.”
Still, many would say they’d rather get a grant or loan from a venture philanthropist than from government. At least the former understands the social economy sector well, unlike most federal departments.
The problem is even worse in Ontario. “In other provinces, they have a Ministry of Community Development (that oversees) things like community economic development (which includes social enterprise),” says Nancy Sendell of Canadian Social Entrepreneurs Network. “In Ontario we have a Ministry of Economic Development and a Ministry of Community and Social Services, but never the twain shall meet.” The result: no one has the file, and when the feds were looking for agencies through which to deliver the $7 million a year to Ontario, southern Ontario was the only region without any such agency.
At least at the federal level there are signs the tide seems to be turning. MP Eleni Bakopanos was named parliamentary secretary specializing in social economy (as social enterprise is known in Quebec). She’s overseeing the money for social economy financing announced in the Throne Speech (an announcement that shocked many in the sector, who were surprised the PM even knew the term). Bakopanos knows the file well and has spent time listening to the many complaints social entrepreneurs have about her government as well as general woes about accessing financing.
“We’re taking care of some of the problems,” promises Bakopanos. “Hopefully by next year we will have removed most barriers.”
It’s a big wish, considering the deep roots of some of those barriers, but the MP says she’s well aware of the hurdles ahead. “We’re trying to fight a culture in government, a culture that works in silos.” Still, she says she’s gotten all eight ministers on board, including Joe Volpe, Minister of HRSDC.
But Valvasori isn’t convinced. “The politicians are very well versed in the buzz words, but (problems will arise) where the rubber meets the road.”
Angels in business clothing
Social enterprise, social economy – call it what you will, but businesses that put their communities first have been around for a while in T.O. Think the Good Food Box, the Y, even Girl Guide cookies. But there are plenty more creative social enterprises doing good in all corners of the city.
RAGING SPOON CAFE 761 Queen West
This long-time fixture on trendy Queen West is a catering operation and 125-seat café run and operated by psychiatric consumer/survivors.
ST. JOHN’S BAKERY St. John the Compassionate Mission, 155 Broadview
Not only does this bakery make some of the best darn bread in town, but it also employs everyone from refugees to psychiatric consumers/survivors. Bread only available through retailers.
HAWEEN ENTERPRISES 70 Belfield
Named for the Somali word for women, this biz employing new Canadians provides custom contract apparel manufacturing.
EVA’S PHOENIX PRINT SHOP 11 Ordnance
Eva’s Phoenix is a transitional housing and training facility run by graphic designers for homeless and at-risk youth, which might explain the pro print shop on the premises where teens get on-the-job training. ALL THROUGH THE HOUSE St. Christopher House, 248 Ossington
Get your condo cleaned by pros for $20 an hour and feel good knowing all the profits go back into helping St. Christopher House’s charitable activities.
LEFTEK TECH SOLUTIONS 116 Industry
This computer help desk solves your tech woes and helps I.T. entrepreneurs grow their business while aiding its 100-member staff of recent immigrants with previous experience in the I.T. sector.
FURNITURE BANK 200 Madison
Used furniture and household items are given to refugees, abused women and any at risk individual. Cash from a furniture refinishing shop and delivery service goes back into programs.
COMMON GROUND CO-OP 4 Overlea
This group oversees different businesses it forms in partnership with the developmentally delayed, including coffee shops and kiosks and the Lemon and Allspice Cookery, a catering service. The money made goes back to creating employment for the co-op’s workers.
TURNAROUND COURIERS 252A Carlton
All the couriers and office staff come from shelters or youth agencies, and 50 per cent of profits go back to the community. Plus, it’s the only for-profit social enterprise in T.O. we know of.
Compiled by Jenny Yuen
