Leveraging the procurement power of public sector and anchor institutions for community benefits
What is social procurement?
Every year, the broader public sector and anchor institutions (such as hospitals, universities and libraries) spend billions of dollars purchasing goods and services. To maximize the impact of public procurement, and deliver the best overall value for taxpayers, this purchasing power of public sector and anchor institutions can be leveraged to generate positive social and environmental impacts for communities, in addition to the goods and services being procured. This is known as social procurement.
With social procurement, goods and services are still purchased through a competitive and transparent bidding process, but new assessments of additional social value will be added. This could include purchasing from diverse-owned suppliers, social enterprise and co-operatives, and/or setting second-tier targets, requiring (or promoting through procurement point systems) suppliers to increase their own social purchasing.
Social procurement can help organizations put their purchasing dollars to work not just once, but twice by supporting social enterprises and other community benefits, at no extra cost.
Nonprofits social enterprises and co-operatives
Similar to small businesses, many nonprofits, including nonprofit social enterprises and co-operatives, provide goods and services, however with additional public benefits.
They do this by:
- Offering meaningful jobs and training opportunities to people with multiple barriers to finding/maintaining employment, such as people with disabilities and people experiencing homelessness, to build economic self-sufficiency and reduce reliance on social programs;
- Hiring and spending locally to ensure dollars are circulating within the local economy, particularly in rural and remote regions;
- Leading clean energy initiatives and ensuring enterprise activities are low carbon, and environmentally sustainable;
- Providing high quality goods and services that are affordable, accessible, and culturally appropriate; and
- Reinvesting surpluses back into their community-based missions.
Current issues within the social procurement ecosystem
Despite the fact that nonprofits are innovative, and provide a wide range of services and goods, they face barriers accessing procurement opportunities as regular procurement only considers lowest price rather than best overall value. This narrow focus on price often leads to social enterprises and co-operatives being overlooked during the procurement process, either because their prices are slightly higher or that the additional social and environmental benefits they deliver are not valued or considered at all.
At the same time, dedicated resources and support are needed to support the creation and growth of social enterprises and co-operatives, so that they can improve their capacity and become more competitive in the procurement process.
What is ONN advocating for?
We are advocating for enabling policies to build both the demand and supply side of the social procurement ecosystem:
- Provincial and federal social enterprise strategy to sustainably scale up efforts, so nonprofit social enterprises and cooperatives can develop and grow.
- A province-wide social procurement policy that commits to purchasing from nonprofit social enterprises and co-operatives.
Government can take immediate next steps by:
- Including representatives from the nonprofit sector on Supply Ontario’s Stakeholder Advisory Council.
- Consulting with the nonprofit sector while developing the Ontario Public Sector Supply Chain Strategy.
How are we advocating for social procurement?
- Ongoing government relations with Treasury Board Secretariat and Supply Ontario.
- Convening nonprofit social enterprises to identify key barriers and issues they face.
Ways nonprofits can get involved
- Explore developing an organizational social procurement policy for your nonprofit – did you know that ONN has an organizational social procurement policy? You can use our policy as a template to develop your own social procurement policy.
- Use our briefing note to talk to your municipality about social procurement.
- If you have any questions about social procurement or are seeking resources, please contact candice@theonn.ca.
Relevant resources
Check out ONN’s resource center, Community Wealth Building section for a list of resources related to social procurement and social enterprises.
Examples of nonprofit social enterprises:
- Building Up
- Community Builders
- Food Reach
- Fresh Roots Café & Catering
- Matthew House Furniture Bank Ottawa
- Operation Grow
- Heartwood House
- Wabano Facility Rentals
Ontario social enterprise directories:
- Buy Social Canada certified social enterprise directory
- Centre for Social Enterprise Development (CSED) directory
- York University social procurement vendor directory
Examples of existing social procurement policies taking steps in the right direction
- City of Peterborough Social procurement
- City of Toronto Social Procurement Program
- City of Brampton Sustainable Procurement Strategy
- City of Calgary Social Procurement Implementation Journey
- City of Winnipeg Social Procurement Framework
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