Putting the ‘Social’ in Infrastructure Funding
This blog was first published on December 31st, 2008 on the PLAN Institute for Caring Citizenship website. Al Etmanski, co-founder of PLAN, has been described as the Jimmy Pattison of the social sector. He is one of the first two Canadians elected to the prestigious Ashoka global fellowship of social entrepreneurs.
New infrastructure spending in response to our economic crisis is expected to produce multiple wins – jumpstarting the economy, providing employment, repairing our aging sewers, roads and bridges and expanding transit services.
Another potential big win is possible – ending the scourges of poverty, homelessness, child hunger, loneliness and exclusion.
The voluntary sector in Canada is a key part of Canada’s economic engine. It employs 12% of our active workforce, as many full time workers as all branches of the manufacturing sector combined and has an annual payroll of $22 billion. Its $120 billion in annual expenditures is more than Canada’s retail, mining, oil and gas sectors combined. Studies suggest a high correlation between stimulating spending in the voluntary sector and new jobs.
But it is caught in a double bind. It faces the same challenges as other sectors of our economy - lack of investment in infrastructure and access to capital - while demand for taking care of society’s most vulnerable increases.
Because PLAN, the organization my wife Vickie Cammack and I co-founded, has been successful at changing the disability funding infrastructure in Canada through the world’s first Registered Disability Savings Plan, we were asked by Montreal’s JW McConnell Family Foundation to make recommendations on how to bring a fresh innovative mindset to other seemingly intractable social problems. After four years of field study, we are convinced Canada has enough pieces of the puzzle to consign many of our social problems to museums -- if we put the right infrastructure in place.
Like most industries the voluntary sector needs to attract new sources of capital to invest in good people, good ideas and good solutions. One way is by levering Government funds to attract private investment to achieve social goals. For example, my organization, PLAN, estimates federal matching grants for the new RDSP will lever $80 billion directly into the bank accounts of people with disabilities who are poor. President-elect Obama intends to leverage federal funds to attract private investors and improve local social innovation.
On the human resources front, this includes replacing an ageing workforce and making it an attractive career for younger workers. Technology is also critical: no business or government department would make do with the basic computer hardware and software the voluntary sector uses. Equally important is innovation. A new breed of creative social entrepreneurs has emerged in Canada who is changing the way we tackle our toughest social problems. They lack the resources to scale up their innovative solutions for widespread benefit.
As our political leaders and Finance Minister Flaherty’s Economic Advisory Council prepare for next year’s budget, I have two ideas for consideration:
1. Create legislation that allows non profit voluntary sector organizations to take on shareholders who are prepared to invest cash in their social solutions. This will provide access to new sources of capital. These new hybrid social/business organizations already exist in the UK and the US and are a critical part of the economic recovery plans in both countries.
2. Establish social objectives for all infrastructure funding. Creating incentives for projects to meet social objectives would harness the brightest and most creative social entrepreneurs in the voluntary sector. It would stimulate 21st century solutions to our toughest social problems, cultivate higher levels of competition, innovation and accountability in the voluntary sector and rebuild our ageing social infrastructure.
Imagine, for example, using infrastructure investments to create accessible tourist outlets and businesses. Capturing just 1% of the market for US travelers with a mobility impairment, (seniors and disabled), would increase our tourism revenues by $2 billion. Aside from helping our struggling tourist industry, this business opportunity would also help the 30% of Canadians with mobility impairments who would in turn patronize accessible businesses.
Or what if infrastructure dollars went into constructing new affordable housing stock? Social housing innovators like the new Street to Home Society in Vancouver have proposals which would lever additional investors, thereby multiplying government commitment while creating jobs for the recession-prone construction sector, stabilizing local economies and most importantly, addressing homelessness.
During our tough economic times, the voluntary sector is a pivotal player. Let’s remove the constraints to its creativity and enable it to demonstrate its full potential as a powerful economic catalyst and our best hope to address human needs. In the process, we'll be able to show the world how Canadians take care of each other.
