Social Enterprise

Canada’s First Magazine on Social Enterprise and Entrepreneurship Launches

It’s true what they say; new projects are daunting, anxiety-provoking and pull-your-hair-out-exhausting. But here’s another truism: they’re as thrilling as it comes. Each new initiative involves the setting of fresh expectations, self-prescribed milestones and goals. And let’s not forget those dreams. Launching an enterprise is any dreamcatcher’s inspirational fodder.

As founders of Canada’s first publication for and about social enterprise and entrepreneurship, we’re not unlike any other social entrepreneur in that we’re dreaming big. And we hope you are too.

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Social Entrepreneurship: Can “Lawyers Without Borders” help with funding?

About 18 months ago after winding up activities with a technology venture capital fund, I had that “AH-HA!” moment that so many of my friends and colleagues have described, but I had yet to experience. What was it?

I met the SiG@MaRS team and a number of the passionate and talented social entrepreneurs they support. I learned about the challenges entrepreneurs in this field face and was intrigued by fact that while most social ventures require less capital than technology businesses and generally have a lower risk profile, capital is in very short supply. This is particularly true in Canada where most of us, including me before I was enlightened, assume that the government or charitable donors provide adequate funding for this sector.

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Meeting the Access to Capital Challenge for Canadian Social Enterprise

The financing problems of social enterprise in Canada are well-known. Banks have difficulty extending commercial loans to social enterprises because they lack the security of hard assets, and private investors can't take ownership positions in businesses that -- as non-profits -- have no owners.

Yet there are fledgling models in Canada that have overcome these barriers. The Candian Alternative Investment Cooperative (CAIC), Access Toronto, Jubilee Fund in Winnipeg, and community loan funds in Montreal and Ottawa are some of the innovations that have successfully brought together socially responsible investors with local volunteers and publicly-funded agencies. The result is jobs and economic opportunity for low-income people in these communities.

The challenge now is to scale up. Is there a way to create an investment product that would attract not just thousands of dollars, but tens of millions of dollars to the social enterprise sector? As communities across Canada struggle with the effects of the current recession compounded by years of economic and social neglect, the need for such an investment vehicle has never been greater.

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Field Notes from a Social Entrepreneur

Where should non-profits and social enterprises begin when considering their financial options?

First stop is right at home: Is this the right time in the organization’s evolution to be making these considerations at all? It’s worth setting a filter to screen timing on making these considerations at all, and avoid wasting valuable time/energy/resources spinning wheels down the road.

Here are a few suggestions for filter questions: Who is making these considerations? Are they the right person/group to champion this assessment, and do they have the resources to do it properly? Do they have a keen understanding of the organization’s mission, direction & ground level operations? What is the organization’s fitness level in terms of taking on a big new challenge that will affect mission, direction & operations in often unforeseen ways?

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Before Exploring Social Finance… Know Thyself

At the BC Centre for Social Enterprise, we interface with many community-based organizations seeking to start social enterprises. At our organization’s infancy in 2004, social enterprise was the ‘hammer’ for every ‘nail’ connected to social and environmental inequity. We were so in love with the potential of the social enterprise approach, that we failed to understand its limits. We also failed to recognize that many non-profits and charities are simply not cut out for social enterprise.

One red flag that signals to me that social enterprise is perhaps not the best fit for clients, is when they expect that the enterprise is entitled to be supported entirely by non-repayable grants. My colleague Stacey Crawford undertook some graduate level research that fully shone a spotlight on the tendency for many in the third sector to expect free money for their ventures. In my days as a business counselor for traditional enterprise, this expectation on the part of traditional self-employed folks usually prompted me to suggest that perhaps business wasn’t the best path for them.

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