31 Oct 2017 / by David Lepage / in Blog
How the social procurement movement enhances nonprofit sector revenue and impact
Thank you to Imagine Canada for permission to repost this article.
We definitely know the tide is turning when industry leaders like Mitchell Cohen, the President of the Daniels Corporation, encourages the private sector to “climb aboard the social procurement train”. (Globe & Mail, June 14, 2017)
As with any business, increasing sales opportunities is a critical factor for success. But for social enterprises (1), additional sales translate into more than just increased revenue or profits; more revenue creates the opportunity for even greater social impact!
Social procurement (often referred to as social purchasing) is essentially buying contracts for goods and services from social enterprises, with the intention of making a positive social impact, be it job creation for a historically disadvantaged community, or reducing carbon emissions. It means leveraging money that will already be spent on contracts by governments, private companies or nonprofits to also further a social good. This practice is extremely important for opening up social enterprise market opportunities (2).
Social purchasing is emerging as a means for government, private sector, institutions and nonprofits to leverage their existing purchasing into an added value outcome. They are moving their purchasing from being a simple business transaction to get the lowest priced option to using purchasing to achieve a social value, too.
With the intentional use of existing purchasing we are able to address issues such as poverty, housing, targeted employment and social isolation. The direct result of social procurement initiatives means many more people who experience barriers to employment are getting work with social enterprises such as EMBERS in Vancouver or Build in Winnipeg, across the portfolio of the Toronto Enterprise Fund or DASC in Halifax.
Social purchasing doesn’t negate the need for competitive pricing, quality of service and goods, and environmental issues; it merely adds another lens into the purchasing consideration. Nor is social purchasing a silver bullet, able to solve all of our social issues and economic challenges. But it is one more tool in our collective efforts to build healthy communities.
Policy is being developed nationally to further the social value marketplace
The current policy arena at the municipal level, provincial strategies, and federal mandates and legislation is rife with government initiatives. We are seeing multiple drivers influencing this shift to social procurement. Federally, the mandate letter to the Minister of Public Service and Procurement Canada (PSPC) includes social value within its purchasing modernization goals. House of Commons bill C-344, which will allow the Minister of PSPC to add a social value unto federal infrastructure investments, is making its way towards passing, potentially this fall.
Provincially, British Columbia has published Social Purchasing Guidelines. Ontario, Manitoba, Quebec and Nova Scotia have criteria for social purchasing within their social enterprise and social economy strategies. In terms of municipalities, Victoria, Cumberland, Vancouver, Fort McMurray, Toronto, Montreal and other municipalities have social procurement policies in place. Vancouver and Toronto have used community benefit agreements to insure a community value from major developments and infrastructure.
The rapid social procurement evolution across government is in turn influencing and impacting the decisions along their entire private sector supply chain. Major institutions, especially universities and colleges including the University of Winnipeg, Concordia, UBC, and others, are realizing their purchasing should, and can, align with their community development and sustainability goals.
The sector is energized and moving on social procurement
Operationally, Buy Social Canada is the only national third-party certification body for social enterprises and social enterprise purchasers. On our website, we’re building a resource library of public policy examples and related cross-sector tools to enable the growth of procurement activity and experience within the nonprofit sector.
Toward this end, we are also building a network of partnerships and collaborations across the country. We’re currently working with the partners of S4ES to map out a supportive ecosystem, as well as the Social Value Marketplace Community of Practice and the upcoming Social Procurement Summit in Gatineau, November 27 & 28.
A community of practice on social enterprise
The Social Value Marketplace Community of Practice emerged ais a result of several random conversations about “what’s going on in your community or region” on issues related to social procurement. Coordinated by Buy Social Canada, it is open to anyone interested in learning more and sharing updates on the range of social procurement policies and practice across the country. The group already boasts membership from all levels of government, private sector purchasers, social enterprise suppliers, and consultants in the field sharing their experience and learning from one another. (Contact us to get involved!)
A summit on social purchasing
The Buy Social Canada Summit will be an assembly of 250 purchasers from government, business and social enterprise suppliers engaging in a full day of discovering their common goals, identifying barriers and seeking solutions that will contribute to the future of social procurement.
The summit program is focused on creating an environment for cross-sector understanding of the spectrum of policy options and sharing the experiences of actual practice. The format will include: a series of case studies on the role and relationships of government, private sector and social enterprise; facilitated learning exchanges sessions, and working group explorations of barriers and opportunities for purchasers and suppliers. Many of the Community of Practice members will meet in person at the Buy Social Canada Summit, where they will serve as the lunchtime learning dialogue facilitators.
Buy Social Canada is very excited about the emerging social procurement movement because every application of social procurement is a means to improve the opportunities for social enterprises, and every social enterprise success leads to creating healthy communities. (3)
1. A social enterprise seeks to achieve social, cultural or environmental aims through the sale of goods and services. The social enterprise can be for-profit or not-for-profit but the majority of net profits must be directed to a social objective with limited distribution to shareholders and owners. http://www.ic.gc.ca/eic/site/ccc_bt-rec_ec.nsf/eng/h_00016.html
2. Author’s Note: Let’s be clear, more social purchasing and increased social enterprise success isn’t a silver bullet for the social sector organizations or the communities that we serve. Nor is social enterprise a replacement for government support or charitable giving – but it is another tool available for income generation and delivering social impact.
3. Buy Social Canada (BSC) was established in 2014 and funded in part through the Canadian Social Enterprise Ecosystem Project, S4ES, is affiliated with the international Buy Social collaboration that was founded by the Social Enterprise UK in 2010.
David is the co-founder and Managing Partner of Buy Social Canada and a co-founder of the Social Enterprise Institute. He is the Chair of the Social Enterprise Council of Canada and Chair of the Social Enterprise World Forum Board. He is a Program Adjunct for the Sandermoen School of Business, facilitator for the Groundswell Social Venture Program and sits on several other boards and advisory groups, including the Vancouver Farmers Market, Ethelo Decisions, Ethelo Democracy, and Imagine Canada's Sector Pulse. He is principal with Accelerating Social Impact CCC, where he provides social enterprise and social value based business advice and consulting and promotes a supportive public policy environment.