This blog series examines the potential of social procurement and social purchasing as a source of funding for social enterprises. The first post explained the concept and introduced two potential ways to encourage it.

While socially conscious consumption has been steadily growing in popularity over the past few years, social procurement offers a new set of opportunities - especially when the public sector gets involved. All government contracts, grants and contributions come with conditions to which the providers of goods and services must adhere.  The public dollars basically require a certain set of behaviours. By virtue of the fact that the enterprise or voluntary organization that won the bid will be receiving taxpayer dollars, there is an expectation of reciprocity.

This exchange is at the heart of social procurement. The successful bidder not only must deliver high-quality products or services. It is also expected to return something to the community that has enriched the bidder’s bottom line. While governments have long recognized the power of embedded terms and conditions, the expectations associated with contractual arrangements typically take the form of legal, ethical and efficiency considerations.

However, there is a new dimension that has become increasingly recognized in recent years: community benefits. In addition to delivering goods and services, prospective contractors should be required to ‘give something back’ to the community - hence the term “community benefits”. These refer to the notion that the benefits of a given contract should be felt more broadly than by just the firm or organization that derives monetary gains in the form of cash payments.  

In terms of employment, community benefits can mean that the successful bidder offers job opportunities to designated groups – such as persons with disabilities, Aboriginal youth, new Canadians and young offenders.  The company promises to hire, in fulfillment of the contract, a certain number or percentage of individuals who are typically underrepresented in the labour market. (A variation on the employment theme involves encouraging social enterprises to actually bid for the available contracts.)

Community benefits can also involve training prospective employees.  This form of skills development helps raise awareness among employers and community members, more generally, about the value of people who often get overlooked as potential workers. Training may not result in immediate employment because participants may have to complete an apprenticeship or require additional skills.  But the very act of being engaged as trainees may afford them the confidence to pursue a skilled trade or return to school. The experience may also provide trainees with contacts and letters of referral that they otherwise would not have had.

Finally, community benefits can involve support for designated voluntary organizations.  While this approach is the least direct form of community benefit, it nonetheless can raise awareness about certain social issues.  It can also help direct resources to organizations struggling with scarce supports.

Of course, social procurement can never replace direct public investment.  The fact that successful contractors would be expected to make available training or employment to individuals typically underrepresented in the labour market can never supplant a publicly-supported, widely available program to develop skills, retrain workers or assist them in linking to the job market.

At best, the community benefits derived through social procurement can be understood as a complement and supplement to solid public investment in employment and social well-being. At the end of the day, more support for social enterprise is what counts.

Photo credit: http://www.flickr.com/photos/andreajoseph/412916674/in/set-72157604591663616

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