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SOCIAL INNOVATION POLICY TOUR 2009 NINO ANTADZE / RICHARD BLICKSTEAD / TIM BRODHEAD / LEE DAVIS / TIM DRAMIN / PATRICIA ELSE / AL ETMANSKI / DON FAIRBAIRN / LOIS FINE / GORDON FLOYD / ALLYSON HEWITT / DR. CARIN HOLROYD / JAQUELINE KOERNER / BAYLA KOLK / SEAN MOORE / JOANNA REYNOLDS / JUDY ROGERS / DONNA THOMSON / DR. FRANCES WESTLEY / ANDREW WHARTON / FAYE WIGHTMAN / Key insights from the UK on enabling Social Innovation with Social Finance and Social Entrepreneurship MARCH 29 TH TO APRIL 1 ST
Transcript
Page 1: Social innovation policy in UK

SOCIAL INNOVATION POLICY TOUR 2009

NINO ANTADZE / RICHARD BLICKSTEAD / TIM BRODHEAD /

LEE DAVIS / TIM DRAMIN / PATRICIA ELSE / AL ETMANSKI /

DON FAIRBAIRN / LOIS FINE / GORDON FLOYD / ALLYSON

HEWITT / DR. CARIN HOLROYD / JAQUELINE KOERNER /

BAYLA KOLK / SEAN MOORE / JOANNA REYNOLDS / JUDY

ROGERS / DONNA THOMSON / DR. FRANCES WESTLEY /

ANDREW WHARTON / FAYE WIGHTMAN /

Key insights from the UK on

enabling Social Innovation

with Social Finance and

Social Entrepreneurship

MARCH 29TH TO APRIL 1ST

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PAGE 2 Social Innovation Policy Tour 2009

CONTENTS 03 PURPOSE OF THE TOUR 04 KEY DEFINITIONS 05 SETTING THE CONTEXT: SOCIAL INNOVATION IN CANADA05 Comparing Canada and the UK

05 The Opportunity

05 The Challenge

05 Early Questions from the Canadian Delegation

06 Profiles of Social Enterprises in Canada

06 Profiles of Social Finance in Canada

09 IN PURSUIT OF ‘AH-HA’ MOMENTS: KEY INSIGHTS FROM THE TOUR

08 Social Finance

08 Public Policy

09 Creating an Enabling Environment

10 SOCIAL FINANCE10 UK Strategies

11 Lessons for Canada

12 High Level Recommendations

13 PUBLIC POLICY RELATED TO SOCIAL INNOVATION13 UK Strategies

14 Lessons for Canada

15 High Level Recommendations

16 CREATING A CULTURE AND ENABLING ENVIRONMENT FOR SOCIAL INNOVATION16 UK Strategies

17 Lessons for Canada

19 High Level Recommendations

20 ACTION PLAN 21 CONCLUDING REMARKS

22 APPENDIX A: Delegate Bios

23 APPENDIX B: Itinerary 25 APPENDIX C: Tour Organizers

26 APPENDIX D: Key Insights from Speakers

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Social Innovation Policy Tour 2009 PAGE 3

PURPOSE OF THE TOURThe UK is known around the world as a country that has energetically embraced the social innovation movement. It contains wide and deep networks of social entrepreneurs, new models of social finance, innovative social enterprises, committed central government support and successful programming which contributes to the creation of a culture and environment where social innovation flourishes.

In January 2009, Social Innovation Generation (SiG) National and Causeway set in motion a movement to bring best practices related to social innovation from the UK to Canada by exposing senior Canadian policy-makers, grant-makers and practitioners to their counterparts operating on the other side of the Atlantic.

The appetite to learn from the UK is not new. In fact, many conversations and events in Canada over the years have included guests representing UK-based organisations, including Michele Giddens from Bridges Ventures, Arthur Wood from Ashoka, Nick Temple from The School for Social Entrepreneurs, and Rod Schwartz from Catalyst. However never had a group been formally mobilized to visit these friends, as well as meet some new ones. SiG and Causeway sought to change this by coordinating the first Canadian social innovation policy tour to London.

Four goals were developed in designing the itinerary for the policy tour;

1. Understand how public policy can be used to stimulate social capital markets

2. Understand how government can create an enabling environment for social enterprise

3. Create a cross-sectoral cohort of people interested in exploring ways to develop an enabling environment for social innovation in Canada.

Provide first-hand exposure to some of the UK’s innovative policy, finance and programming initiatives which contribute to its reputation as a global leader in social innovation development.

In addition to these goals, three issue areas were identified as being critical pillars to social innovation generation and became the framework for the series of events and presentations in London.

Public Policy

Social Finance

Culture and Enabling Environment

With these ambitious goals set, twenty-two delegates from across Canada signed up for the London tour. This visit took place over four days and included a total of twenty-five speakers, three ‘field trips’ and exposure to nearly a dozen innovative entrepreneurs.

One of the most important takeaways from this tour was not particular nuggets of information from one speaker or another, but rather a sense of inspiration. The people and organisations who participated in this tour, both form the UK and Canada, represent a global community of caring people who share a commitment to make the world a better and more equitable place. The challenge now is to find ways of unleashing the creative potential of this community to achieve social and environmental objectives.

The following report summarizes the key insights from this tour and proposes an initial roadmap with sug-gestions on how Canada might adopt and adapt some of the best practices uncovered in the UK, and apply them to a national social innovation generation strategy.

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KEY DEFINITIONSSOCIAL INNOVATIONSocial Innovation assumes a world where ultimate good in society can be not only imagined, but also cre-ated. It is an initiative, product or process that profoundly changes beliefs, basic routines, resource and authority flows of any social system in the direction of greater resilience. Successful social innovations have durability, impact and scale.

SOCIAL FINANCESocial Finance is sustainable finance with a social or environmental goal. It is the flow of financial capital to human need uses:

› Affordable Housing

› Social Enterprise

› Support for working families

› Health & Home Care

› Community Development

› Social Economy

› Clean Technology

› Microfinance

› Fair Trade

› Green Building

› Education

› Bottom of the Pyramid

~ Adapted from www.xigi.net

SOCIAL VENTURE CAPITALSocial Venture Capital is a form of venture capital investing that provides capital to businesses deemed socially and environmentally responsible. MaRS Whitepaper Series ‘Social Venture Finance: Enabling Solutions to Complex Social Problems

SOCIAL ENTREPRENEURSAn entrepreneur who engages in business seeking both financial and social return. PFC (Philanthropic Foundations Canada)

SOCIAL ENTERPRISE An organization or venture within an or-ganization that advances a social mission through entrepreneurial, earned income strategies. Social Enterprise Alliance

Social Finance aims to leverage existing capital

to attract new investment for public benefit.

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Social Innovation Policy Tour 2009 PAGE 5

COMPARING CANADA AND THE UK

SETTING THE CONTEXT: SOCIAL INNOVATION IN CANADA

Canada UK

2009 Population 31,612,897 61,126,832

2009 Unemployment Rate 8% (April) 7.1% (March)

Weekly Earning $820 $858 (2008)

THE OPPORTUNITYCanada has the 2nd largest Nonprofit (behind Netherlands) sector with 8.4% of the active population em-ployed by this sector and 2.7% of the population actively volunteering. When looking at core Nonprofits (excluding hospitals, universities and colleges) the statistic remains impressive with 5.5% of the active population being employed by this sector 1.

Main sources of income for this sector come from governments, 49% and earned revenue, 35%. Core Nonprofits reflect a similar spectrum with 36% of income coming from government (24% provincial and 9% federal) 43% from earned revenue and 17% from donations and grants, 4% from other sources2

THE CHALLENGEFoundations across Canada are cutting back, suspending disbursements or programs.

There is anecdotal evidence that major gifts are in decline. US foundations have experienced a drop in $150 billion in assets - which equates to nearly as much as they have given out over the last 4 years.3

EARLY QUESTIONS FROM THE CANADIAN DELEGATIONThe organisers set the tone for the tour on the first day by asking each delegate to introduce themselves and explain what they hoped to achieve over the following four days. This was followed by a very high level overview of the landscape of social innovation in Canada, including recent trends in financing, policy models, and examples of effective programs and emerging research on the field of social innovation. By the conclusion of this first day, a few guiding themes emerged through questions posed by delegates:

1 © Imagine Canada Source: Johns Hopkins Comparative Nonprofit Sector Project, 2000 National Survey of Giving, Volunteering and Participating, National Survey of Nonprofit and Voluntary Organizations2 © Imagine Canada Source: 2003 National Survey of Nonprofit and Voluntary Organizations. http://www.imaginecanada.ca/files/en/nsnvo/sector_in_canada_factsheet.pdf3 Strom, Stephanie. New York Times, ‘Foundations Giving in ’08 Defied Huge Asset Decline’, March 30th, 2009.

Canada’s Charity and Nonprofits Sector

161,000 registered Charities & Nonprofits 1

12 million volunteers 2

2 billion hours of volunteer time 3

2 million FTE workers 4

11% of the economically active population 5

8.5% of Canada’s GDP 6

1 Imagine Canada February 20092 Hall, M, et al. (2005). Highlights of the National Survey

of Nonprofit and Voluntary Organizations. Ottawa:

Statistics Canada. 3 Hall, M., et al. (2006). Caring Canadians, Involved

Canadians: Highlights from the Canada Survey of Giving, Volunteering and Participating. Ottawa: Statistics Canada.

4 Imagine Canada: February 20095 Ibid6 Ibid

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PAGE 6 Social Innovation Policy Tour 2009

› What are the limitations of the charity model? What are the new models that are emerging in response to these limitations?

› What factors (social, economic, political) that contributed to the creation of so many UK models of social finance? What makes social finance a principal issue for the government? How do different organisations work together?

› How can Canadians scale-up the impact of social enterprises?

› What are the key programs that have helped, and continue to contribute, to the vibrant culture of social innovation in the UK?

› Who does and does not qualify for ‘social enterprise’ development programs (funding, government supports etc.)?

The purpose of this report is to provoke thinking about what Canada might learn from experiments and the success stories found in the UK. We believe that useful new ideas and models will emerge through the process of convening working groups co-evolving a strategy with the support of SiG, Causeway, tour delegates and other stakeholders in the community.

PROFILES OF SOCIAL ENTERPRISES IN CANADA

Phoenix Print Shop Widely recognized for its success through its printing business providing vocational training to street involved youth. Contracts include Toronto Hydro, PriceWaterhouseCoopers, TD Bank, & Toronto Training Board.

BurtonHicks Enterprises Helps families buy affordable homes and establish a financial foundation, providing financing for the purchase and then transitions buyers to a regular bank mortgage within five years.

Haween Enterprises Inc Employing new Canadians to create custom manufacturing for retail apparel, promotions and industrial customers.

ReStore Habitat for Humanity Retail outlets where quality used and surplus building materials are sold, proceeds support construction of Habitat Homes.

PROFILES OF SOCIAL FINANCE IN CANADARenaissance Quebec

Renaissance is a charitable organization aimed at the professional and social reintegration of people ex-cluded from the labour market. It accomplishes its mission, in part, by operating a Montreal-based chain of second hand stores called Fripe-Prix. The stores provide affordable clothing and household items to the community while creating employment opportunities for individuals with significant employment barriers. Renaissance is affiliated with Goodwill International.

The goods sold at Fripe-Prix are recovered through a home pick-up system. Donations from individuals and businesses consist mainly of clothing, but the organization also receives furniture, books, toys, small electrical appliances, electronic components, and computers. Renaissance recovers six million pounds of used goods per year.

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Social finance organization, Social Capital Partners (SCP), provided the grant and loan financing that allowed Renaissance to launch a new flagship Fripe-Prix store in Montreal. This store is being used to test innovative pricing, merchandising and marketing strategies to improve sales and profitability across the chain. SCP also arranged for Renaissance to receive strategic advice from its partner, The Monitor Group.

Edmonton Social Enterprise Fund

Launched in February 2008, the Edmonton Social Enterprise Fund (SEF) combines business expertise with flexible financing to help Edmonton nonprofit organizations and cooperatives create or expand strong, sustainable business ventures and affordable housing projects.

Loans for housing projects are short term, may range up to $500,000, are designed to bridge to conventional and other sources of financing, and may be used for construction, renovation or the purchase of property.

Loans for social enterprise are available for start-up or expansion of social enterprises. Loans for start-up may range up to $50,000 and for expansions up to $150,000. Loans are generally for terms of 5-8 years and may be used to finance operating and equipment needs, building purchases and even the purchase of a franchise. In certain limited circumstances, building purchase loans will be made for a term of up to 10 years.

All loans are near prime and repayable. The 5-year goal is to secure $11 million in capital and to invest this capital in loans to social enterprise and housing projects. Repayments will be reinvested in other loans significantly leveraging the lending power of the Fund.

Toronto Atmospheric Fund

Toronto City Council established the Toronto Atmospheric Fund (TAF) in 1991 to finance Toronto-based initiatives that combat global climate change and improve air quality. TAF provides grants and loans and undertakes special projects to advance its mandate. Working with all sectors of the community, and with city departments and with city departments and agencies, TAF leverages its resources to develop innovative local actions that lead to significant emission reduction results.

On an annual basis, TAF has approximately $1.2 million available for grants and special projects. Up to $8 million in financing is currently available for mandate-related loans.

RECEPTION: MEETING THE UK SOCIAL ENTREPRENEURS

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IN PURSUIT OF ‘AH-HA’ MOMENTS: KEY INSIGHTS FROM THE TOUR

SOCIAL FINANCEFor a successful social finance market to exist, a renewal of multi-sector partnerships (government, foundations, foundation endowment capital, private sector and the nonprofit sector) is needed.

› No one sector can do it all.

Government contributions and foundation grants are key stakeholders providing both capital and experience deploying capital.

› Relatively untapped stakeholders in Canada are institutional investors (pension plans & mutual funds with socially responsible investment strategies) and private sector partnerships.

There are tools and levers that can unleash capital for the social sector.

› Legal structure options for social enterprises (Community Interest Companies – CIC)

› Venture capital funds and seed capital with appetite and capacity to invest

› Intermediary fund managers (Venturesome)

› Risk mitigation tools (i.e. guarantees)

PUBLIC POLICYA catalyst is required to move the public policy agenda ahead.

› Debate around what format this catalyst should take (a government department or an endow-ment) and which level of government should control it (provincial or federal or both).

Government trends show there is increasing interest in exploring the role of the third sector in assisting with public service delivery.

› This is an area where the UK has been actively experimenting.

› There will be inevitable challenges in a process where investors, governments and the social sector will be required to work closely together.

› The result will be local economic development and job creation while simultaneously improv-ing the quality of life for its constituents and stakeholders. “60,000 British social enterpris-es turnover some £27bn” Cabinet Office Liam Byne, May 12th, 2009.

THE UK SOCIAL INVESTMENT TASKFORCE

In 2000, the Chancellor of the Exchequer announced

the creation of the social investment taskforce.

The chair of this taskforce, Sir Ronald Cohen,

presented their report in October 2000 which

contained 5 key recommendations:

› A Community Investment Tax Credit

› A Community Development Venture Fund (Bridges

Ventures)

› Bank disclosure on lending in under-invested areas

› Greater latitude for investment in Community

Development Initiatives

› Support for Community Development Finance

Institutions

These recommendations have been instrumental in

the evolution of UK social finance. Many claim that

the role of a strong champion, Sir Ronald Cohen, was

critically important to the success of this taskforce.

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There are three types of champions needed to make this catalyst happen – those within the public sector who can provide leadership, those outside it who can provide practical expertise and advice and the elected officials who reflect the interests of their constituencies when making decisions. It requires an open and productive dialogue among these three champions so that the appropriate model can be co-evolved.

Playing politics means respecting the nature of the game and engaging with all parties to make social innovation an important agenda item outside par-tisan politics. This involves creating shared goals with a focus on increasing opportunities for the sector and focussing on the important role of innovation.

CREATING AN ENABLING ENVIRONMENTAn engagement strategy can connect different capacity builders and innovators. In the finance sector, this could work by the following;

› Enhance Challenge Grants to include a social entrepreneurship element;

› Participate in an International collaboration network for foundations and finance sector (i.e. the Rock-efeller Foundation’s Global Impact Investing Network);

› Develop skill and capacity building programs for social innovation/social entrepreneurship on the com-munity level and academic institutions (i.e. UnLtd.);

› Promote all forms of enterprise education.

There are many complex social issues which require social innovations:

› young offenders, homelessness, mental health, environment, aboriginal rights, poverty and isolation related challenges.

Careful consideration needs to be given to the outcome metrics used in assessing programs that are de-signed to create enabling environments for social innovation.

› SiG @ MaRS is involved in the development of these metrics in Canada.

WHAT IS HAPPENING AROUND THE WORLD....

SINGAPORE: The Economic Development board (EDB) has selected ‘international nonprofits’ as one of its target industries. http://www.sedb.com/edb/sg/en_uk/index/industry_sectors/nonprofit_organisations/ industry_background.html

US: The Obama Administration has set up a $50m Social Innovation Fund focused on nonprofit social enterprises.

http://www.whitehouse.gov/blog/What-Is-the-Social-Innovation-Fund

What’s in a name?

There is concern that the language around

‘third sector’ in the UK may be at risk as the

Conservative Party prepares to come to power

in 2010. David Cameron has publicly suggested

that ‘the third sector needs to become the first

sector’ – a move many say is indicative of his

ambition to drastically alter the existing structure

of the Office of the Third Sector.

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SOCIAL FINANCE

UK STRATEGIES Social Finance Models

The UK has a wide spectrum of financiers who invest in the community of social enterprises, with varying return expectations.

The policy tour provided an introduction to some of the leaders in this space, including.

UnLtd. seed capital for entrepreneurs

Venturesome loans and equity for charities

Catalyst social businesses equity investment

Bridges Ventures venture capital with a focus on deprived areas in London and environ-mental businesses

Bridges Ventures Social Entrepreneurs Fund

investment in social enterprises which focus on impact rather than profit

Triodos equity and loan finance for social enterprises

Futurebuilders loans and grants funded by government

Social Finance Intermediaries

There are also a series of intermediaries who play an important role in ensuring the investment process runs smoothly.

ClearlySo marketplace creation using web-based tools to help entrepreneurs find what they need to scale

Venturesome providing both emergency funding and advisory support to social en-terprises

Social Finance researching different tools that can help social investors better access organisations to invest in

BWB lawyers specializing in social enterprise and charity

Social Finance: Hybrid Legal Corporations

Community Interest Companies (CICs)

One differentiation between the UK and Canadian context is the existence of Community Interest Compa-nies (CICs). In 2004 a concept emerged for a new legal structure to act as an ‘in-between’ option for those social enterprises looking to create social value and impact. Since its launch in 2005, there has been over 2800 of these Community Interest Companies (CICs) registered in the UK.

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There are many supporters of the CIC model, as well as those who see the structure as a first step requiring improvement. The creator of the CIC concepts, Stephen Lloyd, is candid about the advantages and disadvantages.

Community Interest Companies (CIC)

Pros Cons

Founder control of social enterprise Currently no tax break to encourage investment (charities and high growth companies receive this consideration)

Asset-Lock which prevents privatization

Allows for financing through debt (secured or un-secured) or equity (share issuance permitted with dividend cap with a maximum annual dividend, 5% above base rate, total 35% net distributable profits)

Only CICs limited by shares can use debt AND equity – those limited by guarantee can only use debt financing

Allows for payment to directors

LESSONS FOR CANADA Legal Structures

The vibrancy of the UK market is partly driven by the different legal structures available to entrepreneurs. These include for profit businesses, CICs, charities and nonprofits. When introducing new structures, such as the CIC, time needs to be taken upfront to engage with different stakeholders, including end users and investors.

FINANCE DEBATE – SPRING 2009

In response to a public call for tender, in early 2009 Futurebuilders was awarded the £100m Social Enterprise Investment Fund (SEIF). This was a competitive tender, with many other UK organisa-tions submitting proposals to manage this massive fund.

The decision opened up fierce debate in the funding community. Some questioned the ability of Futurebuilders to adequately manage this fund and argued that it was eroding the public social finance markets rather than developing it.

Charles Middleton, managing director of Triodos Bank, and Malcolm Hayday, CEO of Charity Bank, issued a statement which said the Department of Health’s decision was ‘questionable at best’.

‘It provides yet more money to a government funder, which is relatively new to the social finance market, unaccountable to a financial regulator or to wider stakeholders, and which fails to pay a return to investors - factors which raise important questions about how sustainable it really is’ they said.1

1 Gemma Hampson and Chrisanthi Giotis ‘Futurebuilders, Triodos and Charity Bank row escalates’ Social Enterprise Magazine. March 10 2009. http://www.socialenterprisemag.co.uk/sem/news/detail/index.asp?id=866

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Finance Models

In addition to legal structures, the UK also has many different finance models for social enterprises and entrepreneurs. Ranging from grants to venture capital, the spectrum of available funding is based on varying return expectations from investors.

Compared to the UK market, Canada appears to have gaps in the equity class of investment including venture capital for both social and traditional enterprises. Creating more activity on this side of the spectrum requires an investment appetite by Limited Partners (LPs), which might include governments, banks, pensions funds etc. In addition to the capital, there is also need for experienced professionals to manage these funds, metrics to record and track social impact and attractive exit options.

Currently the Canadian market is fortunate to have strong banks that are still able to actively lend. This is a unique global advantage and their engagement could be the bedrock of a strategy to build confidence in the greater market and create a vibrant sector. Big wins in the early days, which banks can help drive, will attract other investors to the social investment space.

Intermediaries

Financial intermediaries have an important role in creating a smooth investment process. Intermediaries include those who can provide a corporate finance role to assist in the management of the contracts and consortium building. Other organisations, including ClearlySo, are experimenting with ways to help connect social entrepreneurs with the partners they need to develop their ideas.

Canadians should be prepared for some of the challenges the UK is facing, most notably around deal flow. Consideration must be given to building out a deep and rich pipeline of investments by creating and enabling culture and environment for social finance to be meaningfully deployed.

HIGH LEVEL RECOMMENDATIONS› Pilot Social Finance Models and Intermediaries

› Create a new Legal Structure (borrowing from revisions to the CIC model)

› Regulatory reform for Foundations, Charitable Tax Law and Nonprofits to remove existing barriers to social entrepreneurship and social innovations

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PUBLIC POLICY RELATED TO SOCIAL INNOVATION

UK STRATEGIES

Office of the Third Sector

The Office of the Third Sector (OTS) was created at the centre of government in May 2006. It is a policy office located in central cabinet which leads work across government to support the necessary environment for a thriving third sector (voluntary and community groups, social enterprises, charities, cooperatives and mutuals), enabling the sector to campaign for change, deliver public services, promote social enterprise and strengthen communities.

There are both opportunities and challenges in the way the Office of the Third Sector in the UK is structured and organised.

Office of the Third Sector

Opportunities Challenges

High level exposure within government means that its agenda reaches the eyes and ears of very senior officials

Perceived to be political. Uncertainty how David Cameron will change this office when elections are held in June 2010

Dedicated minister provides leadership and voice both publicly and within government

Requires carefully balance policy development and program delivery

Dedicated office provides structure Needs closer proximity to Treasury

National Endowment of Science Technology and the Arts (NESTA)

In addition to the Office of the Third Sector, The National Endowment for Science, Technology and the Arts (NESTA) is another engagement strategy introduced by the Blair government. It is a £300m endowment dedicated to work across all stages of the innovation process: learning about how innovation works, fund-ing new ventures, building and delivering innovation programs, and disseminating what has been learned, nationally and internationally.

“Our vision is bold: social enterprises offer radical new ways of operating for public benefit. By combining strong public service with business

acumen, we can open up the possibility of entrepreneurial organisations - highly responsive to customers and with the freedom of the private sector - but which are driven by a commitment to public benefit rather

than purely maximising profits to shareholders.” Tony Blair, Forward to Social Enterprise White Paper, 2002

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Associations and Coalitions

Lesson from the UK - Find Champions

Jonathan Bland from the Social Enterprise Coalition shared his organisations’ tactics to ensure social enterprise stays on the map – engage with politicians!

He explained that identifying people early on in their career to take the messaging of social enterprise with them as they progress through the system can lead to strong ties and the creation of internal champions.

The UK community is comprised of associations and coalitions which actively lobby the government to support the social enterprise movement. These organisations include the Social Enterprise Coalition and the National Council of Volunteer Organizations (NCVO), both of which have successfully advocated for social policy related action through their outreach and awareness programs.

LESSONS FOR CANADACanada is uniquely different from the UK in many ways. The government organisation into pro-vincial and federal legislations is an important consideration. Both levels have the capacity to engage in the development of relevant policy initiatives in meaningful and effective ways.

Government Departments

The Office of the Third Sector (OTS) plays an im-portant role in providing exposure to social inno-vation and social enterprise at the highest level. The advantages of its current placement include access to senior officials and some funding. OTS has been successfully integrated into the Labour party political platform, a feat which presents both an opportunity for promotion to the pub-lic, as well challenges in the face of an upcoming election.

At a federal level, the creation of a similar Office of the Third Sector might sit in the Privy Council Office, Canada’s equivalent of a Cabinet Office. As a Secretariat, it would be placed to support and advise the Prime Minister and Cabinet. Each Secretariat has 3 main roles: to support Cabinet committees, to manage the flow of Cabinet busi-ness and to facilitate policy development.

At a provincial level, bespoke models need to be developed to fit with each regions existing legislative system. In Ontario, initiatives that connect to social innovation might easily connect to the Ministry of Research and Innovation (MRI).

EXISTING SECRETARIATS IN THE PRIVY COUNCIL OFFICE

Counsel to the Clerk

Intergovernmental Affairs

Social Development Policy

Economic and Regional Devp’t Policy

Operations

Orders in Council

Cabinet Papers

Priorities and Planning

Communications and Consultations

Macroeconomic Policy

Machinery of Government

Legislation and House Planning

Foreign and Defense Policy

Security and Intelligence

International Assessment Staff

Senior Personnel and Special Projects

Corporate Services

Afghanistan Task Force

2010 Olympics and G8 Security

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‘Right to Request’

The NHS and the Office of the Third Sector encourage and enable staff to start social enterprises through their ‘staff right to request’ program. Employees are encouraged to set up social enterprises to deliver health services – and are guaranteed 3-5 year government contracts as an incentive.

National Endowment

NESTA is another institutional structure Canada might consider adopting. Despite being an endowment NESTA is charged to act as a neutral third party focused on creating a vibrant and flourishing culture of innovation in the UK. In many ways, it is similar to MaRS in Toronto, a private-public partnership which receives funding from three levels of government as well as private sector support.

NESTA commissions research on innovation, deploys funds to support growing ventures and is actively involved in a wide-range of programming. Some of these program ideas, such as The Big Green Challenge, might be adopted by the SiG@MaRS team, however full community stakeholder engagement must be considered very carefully.

NESTA has recently launched The Lab, a unit focussed on helping support innovation related to public service delivery. Though still in its infancy, it will be interesting to chart its successes and challenges over the coming years and see how some of their strategies might be applied to the creation of a similar set of activities in Canada.

Advocacy Organisations and Associations

There are frequent debates around the role of government in allocating public funds to enterprises. Many advocacy organisations and associations, such as the NCVO and Social Enterprise Coalition, have the capacity to diffuse these debates by reporting to the public on the role government is playing in these investments, as well as providing a level of monitoring of how and where capital is being deployed. Though not perfect, these organisations, with the help of the media, are important in their capacity to engage the public by raising flags and celebrating successes.

HIGH LEVEL RECOMMENDATIONSExplore opportunities to create an Office of the Third Sector and/or NESTA

Support the creation of strong advocacy groups and associations

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CREATING A CULTURE AND ENABLING ENVIRONMENT FOR SOCIAL INNOVATIONUK STRATEGIESThe UK is home to many successful programs designed to enable a culture of social innovation. Some of these organisations have been operating for a long time, while others are new and reflect a growing interest in the community to invest and support in the development of social entrepreneurs and enterprises.

There are many different programs directed to different pressure points entrepreneurs face as they develop and scale their enterprises.

Pipeline Development

In the UK there is recognition that one of the most critical things to get right is pipeline growth. Without a pipeline of social enterprises, there is no deal-flow for investors to finance and no com-munity for the policy makers to work with. Or-ganisations such as UnLtd. and The School for Social Entrepreneurs have developed innovative programming which ensures that people who have ideas are given the necessary support they need to grow their enterprises.

In addition to these training programs, early pipeline development is also another hot topic as many organisations actively experiment with ways of engaging with youth. UnLtd. runs a series of successful programs aimed at unleashing the talent of young entrepreneurs, and Make Your Mark is a campaign to encourage young people to be enterprising through their high schools.

Space-Based Support

Entrepreneurs require places to work – one of the services the Hub offers its membership of entrepreneurs. In addition to a desk and access to the basic technology required to set-up and run an organisation, the Hub also offers its members a community where they can work with one another, share contacts and collaborate. The Hub currently has two sites in London and is replicating this successful model around the world. There are other space-based support organisations in the UK including the CAN Mezzanine and the Ethical Property Group.

Uniting the Networks

Social Enterprise Ambassadors

The Social Enterprise Coalition, in partnership with the Office of the Third Sector, has selected 30 social enterprises as ‘Ambassadors’ to the sector.

These Ambassadors are passionate and charismatic people who have been selected to represent the movement. They share their powerful stories to inspire others and illustrate the benefits of social enterprise to the wider public.

YOUTH ENGAGEMENT

Make your Mark with a Tenner

In February 2009, 16,000 young people were

given a ‘tenner’ (£10 note), and challenged to

make as much profit and social impact as they

could! The results were outstanding. The uses

of these ‘tenners’ ranged from the organisation

of raffles, to fashion shows to spas for teachers.

The winning team, from The National Enterprise

Academy, made a return of £765 from the initial

‘tenner’ capital of £50!

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Another key success in the UK as been the ability to unite many networks into one cohesive coalition. The Social Enterprise Coalition is a national body of social enterprise representing many different national and regional support networks. Its role is to promote the sector to the public and influence politicians across the political spectrum. By engaging with the various networks of enterprises and entrepreneurs, it is able to bring them together to create a united voice loud enough to make policy makers and the public take notice.

Knowledge Sharing

Valuable research on social innovation is taking place across the UK, driven by some leading institutions including NESTA, The Young Foundation and The Skoll Centre for Social Entrepreneurship at Oxford Uni-versity. The research range encompasses both practical and theoretical studies – all focussed on how this sector might be further developed. The dissemination of this research is generally focussed at a govern-ment audience, however the private sector also underwrites this activity - often where clear lines can be drawn between the findings and the practicalities of their own business model or industry focus in a traditional CSR framework.

In addition to traditional research-projects, several innovative knowledge sharing systems exist to help en-trepreneurs learn from one another – including online platforms. Mentorship in the sector is also a regular occurrence, however often times these are developed through informal networks.

Partnerships with the Private Sector

Many corporations in London have found meaningful ways to engage with social enterprise and entre-preneurs. For example, Accenture has established Accenture Development Partnerships. This is a group within Accenture that provides strategic advice and technical project management support to nonprofit organizations, NGOs, foundations and donor organizations operating in the development sector.

LESSONS FOR CANADACanada should be aware of some of the program models operating in the UK which are successful in pro-moting a culture of innovation and supporting entrepreneurs. This involves building community, both physical and virtual, and networks which, when nurtured properly, will organically expand throughout the country.

Teaching

Providing different kinds of curriculums for people to learn how to be entrepreneurs can help ensure there is a strong pipeline of ideas. The School for Social Entrepreneurs uses innovative models, including action-learning and peer witness programs – focussing on ‘learning by doing’. Other places to develop an entrepreneurial skill-set include MBA programs where graduate students follow a curriculum involving case studies, research and practical business plan projects.

In Canada, there is an opportunity to build on the leading research at the University of Waterloo and pair it with work in business schools (such as Sauder, Queen’s, Rotman, Schulich or specialized graduate pro-grams). This could compliment less purely academic programming which is more focussed on the specific skills needed to run an organisation.

Youth Engagement

The UK is taking youth engagement very seriously – realizing that if this next generation does not embrace the opportunities offered in the sector there will be fewer innovations in the sector that reach scale. Canada might consider replicating some of the high impact projects which have resonated with the young people in the UK.

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A sample of Canadian Universities and Colleges with a social innovation curriculum

British Columbia

› University of British Columbia, Sauder School of Business: Centre for Sustainability and Social Innovation

› Simon Fraser University, Faculty of Business Administration

Ontario

› Carleton University, Centre for Community Innovation

› University of Toronto, Ontario Institute for Studies in Education, Social Economy Centre, Munk Centre

› George Brown College, Centre for Business

› University of Western Toronto, Richard Ivey School of Business

› University of Waterloo, Waterloo Institute on Complexity and Innovation

Quebec

› Concordia University, Karl Polanyi Institute of Political Economy, School for Community and Public Affairs

Advice in Engaging Young People from Young UnLtd.

› Create programs for young people by young people – young ambassadors, young panellists and youth leadership bodies.

› Provide both freedom and structure – respond to young people’s passions and methods, while pro-viding structure and timelines.

› Time bound projects are necessary so young people can fit their projects around school and other commitments.

› Trust young people and the wisdom of the crowds

› Young people are not the future...they are the TODAY!

Awareness

The UK has developed strong awareness programs which provide visibility to the sector. Often these attract attention because they involve more than just one organisation, and rather profile larger groups of entrepreneurs and enterprises. Flotillas of activity can only garner so much attention, so concerted effort must be made to unite the various provincial and national networks into a coalition with critical mass and capacity to drive a united movement.

In building critical mass, case studies of social entrepreneurs and social enterprises that are easy for the public to understand can be critical tools. With definitions still in debate, nothing provides better clarity than a narrative which is sprinkled with actual examples. The public needs to be interested in these examples in order to understand the important role social entrepreneurs and enterprises play in building strong communities. Storytelling is critical.

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UnLtdWorld

In March 2008 UnLtd. launched UnLtdWorld – a global online platform for social entrepreneurs. It provides a community where these entrepreneurs can connect with the people, tools and information they need to change the world.

As of April 2009 there were over 9,000 active members from over 90 countries around the world, with 15% month on month membership growth.

HIGH LEVEL RECOMMENDATIONS› Unite the Networks to build a coalition

› Create a spectrum of training programs; engaging young people, developing practical training and involving the academic community

› Create spaces; The Hub

› Find ways to meaningfully engage private sector partners

KINGS CROSS HUB: STEPHEN LLOYD & LINDSAY DRISCOLL ON THE COMMUNITY INTEREST COMPANY

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ACTION PLAN Social Finance

To develop the social finance sector in Canada, capital is required to invest in social enterprises. Canada can build on experience from regional community loan funds, aboriginal community economic development funds and provincial social enterprise funds in Quebec and Alberta. In addition, smaller grants are available for enterprising nonprofits. BC and Ontario have developed business plans for pilot social venture funds.

The challenge is to take this finance capacity to scale by mobilizing existing funding to lever and attract new sources of capital. UK investors following similar strategies include Bridges Ventures, Catalyst and Triodos.

In addition to funds, Canada needs to explore different capital market instruments which can facilitate investment. Causeway and other regional actors will begin a research project to better understand social impact bonds, as well social capital funds more broadly.

Causeway, in partnership with financial stakeholders (members of the traditional funding community and foundations) will conduct a feasibility study to understand what kind of service infrastructure is required for social finance to grow. The scope of this research project will include an investigation into the best practices for stakeholder, public outreach, and infrastructure operations (back office support through to exit options for social enterprises).

A more robust social finance market in Canada could be developed with regulatory and tax reform for foundations, charities and nonprofit organizations. A working group of tour delegates from the funding community will lead two projects; the first to explore revisions to CRA and PRI guidelines for foundations, and the second to look at how tax breaks for social enterprises (and investors in social enterprises) might be applied to make these business models more attractive.

Canada will need a separate category of legal structure for social enterprises, following the example of the UK’s CIC model and the US’s L3C model. Another working group of tour delegates, alongside other organisational leadership, will design and advocate for the creation of a new legal structure in Canada – applying the best practices of both the UK and US in creating a model which is unique to Canada and is acceptable at both provincial and federal levels.

Public Policy

Canada needs a public policy catalyst to promote the importance of social innovation within government and mobilize necessary resources to deliver services to the public. This catalyst might take the form of a government body, a government endowment, or both and will be designed to fit within the Canadian context and work across both provincially and federally.

Creating an Enabling Environment

There are many programs in the UK which might easily be adapted and adopted to Canada. Feasibility studies for programs focussed on creating an enabling environment for social enterprise need to be mobilised. These initial replication projects might include The School for Social Entrepreneurship, UnLtd. and The Hub.

Another step in creating a strong culture of innovation involves building critical mass by uniting the networks and creating a national coalition of organisations supporting social entrepreneurship and enterprise. This may be a role that SiG National is naturally suited to fill.

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Overall Outreach

All participants of the policy tour will play an important role in engaging stakeholders and developing strategies to see that there are tangible and practical actions.

Initial coordination of communications will be managed by Causeway and SiG. This will involve knowing the status of the activity in each of the three focus areas (finance, policy and programming) and sharing regular updates with the larger network.

Causeway has agreed to create a series of tools to enable communication between these groups (web-based or otherwise) and will report their findings to the key stakeholders by convening update meetings and to the public using a media strategy.

CONCLUDING REMARKS

There are complicated systems in play in the process of generating, implementing and delivering social innovation. Despite four long days of events, meetings and presentations the tour concluded with energy and a sense of purpose.

There was consensus that though the UK was many steps ahead of Canada in terms of both the availability of finance models, the support of government and the diversity of programming to foster a culture of innovation, there was a sense of optimism around how Canada could take a giant leap forward by adapting and adopting many of the practices. The building blocks exist in Canada – and through the connections and bonds built on the tour – action to explore opportunities to see ideas turned into action is inevitable.

The UK presenters have expressed their interest in staying in touch with Canada as it builds its social innovation movement – and have offered to help in the process where they can. Looking forward, it isn’t hard to imagine a day when the entrepreneurs, investors and policy-makers in the UK cross the Atlantic to learn more about the activities in Canada.

COMMENTS FROM THE UK

‘Thanks for the opportunity to come and speak’ Whitni Thomas, Triodos

‘A pleasure (to join you) and as ever happy to help in any way’ Arthur Wood, Ashoka

‘I fully enjoyed the meeting and the reception...Please share my details with the Canadians’ Buzz Schmidt, Guidestar International

‘We had a brilliant time and love all you Canadians even more now!’ Ben Ramsden, Pants to Poverty

‘(The delegates) were lively folk and gave intelligent input. Always good to have both of those!’ Cliff Prior, UnLtd.

‘It was lovely to meet your delegates. Let me know if anyone would like to talk to the Chief Executive of Futurebuilders England’ Rosemary Mitchell

The findings of this report are based on information available in the spring of 2009.

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APPENDIX A: Delegate BiosNino Antadze PhD candidate, School of Planning, University of Waterloo

Richard Blickstead CEO Wellesley Institute

Tim Brodhead President and CEO, J.W. McConnell Family Foundation

Lee Davis President and CEO Vancity Capital

Tim Dramin Executive Director, SiG National Chair, Causeway Social Finance Senior Fellow, Tides Canada Foundation

Patricia Else Director, Grant Operations, Ontario Trillium Foundation

Al Etmanski President and Co-Founder PLAN

Don Fairbairn President, DCF Consulting

Lois Fine Director of Finance, YWCA

Gordon Floyd Executive Director and CEO, Children’s Mental Health Ontario

Allyson Hewitt Director, Social Entrepreneurship, MaRS Director, Social Innovation Generation, SiG@MaRS

Dr. Carin Holroyd Department of Political Science, University of Waterloo

Jaqueline Koerner Chair, Ecotrust Canada

Bayla Kolk Associate Assistant Deputy Minister, Income Security and Social Development (HRSDC)

Sean Moore SiG Fellow

Joanna Reynolds Program Coordinator, Causeway SiG National

Judy Rogers Chair Board of Directors, 2010 Legacies Now

Donna Thomson – Tour Observer Special Advisor, PLAN Institute

Dr. Frances Westley JW. McConnell Chair in Social Innovation, Director, SiG@Waterloo

Andrew Wharton (update required) Special Advisor, Disability Services, BC

Faye Wightman President and CEO Vancouver Foundation

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APPENDIX B: Itinerary

DAY 1 – SUNDAY MARCH 29TH .........................................................................................................................................

9:00 AM Welcome Tim Brodhead and Tim Draimin

11:00 AM Core Concepts Al Etmanski and Frances Westley

2:00 PM Reflections from The Skoll World Forum Allyson Hewitt

4:00 PM Discussion Summary Frances Westley and Tim Draimin

4:50 PM Agenda Review Tim Draimin

6:00 PM Dinner Rod Schwartz, CEO Catalyst Fund Management and ClearlySo

DAY 2 – MONDAY MARCH 30TH .........................................................................................................................................

9:00 AM Recap: review of key points from Day 1

9:30 AM Social Finance and Social Finance Research Arthur Wood, Ashoka

Buzz Schmidt, F.B. Heron Foundation and Guidestar International

11:00 AM Social Enterprise Coalition Jonathan Bland, Social Enterprise Coalition

1:00 PM Social Finance – Private Investment Models Antony Ross and Skye Elliot, Bridges

Ventures

2:00 PM TRACK ONE School of Social Entrepreneurs

Nick Temple, School for Social Entre-preneurs

2:00 PM TRACK TWO Social Finance

Toby Eccles and Alastair Ballantyne Social Finance Ltd.

4:00 PM TRACK TWO Housing and Homelessness

Andy Gale, Specialist Advisor, CLG

5:00 PM Discussion Summary Frances Westley and Tim Draimin

6:00 PM Trans-Atlantic Social Innovation

RECEPTION

Davy’s Wine Bar

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DAY 3 – TUESDAY MARCH 31ST .........................................................................................................................................

9:00 AM Recap: review of key points from Day 2

9:30 AM Social Finance – VENTURESOME Paul Cheng, Investment Manager, Venturesome

11:30 AM Regulatory Environment Charity regulation and new instruments

Stephen Lloyd and Lindsay Driscoll, Bates, Wells and Braithwaite LLP

1:00 PM Public Policy – Office of the Third Sector and Futurebuilders

Emma Jones, Senior Policy Analyst, Public Sector Partnerships Team

Rosemary Mitchell, Futurebuilders Policy Manager

3:30 PM Supporting Social Entrepreneurs – UnLtd. Cliff Prior, Jonathan Jenkins, Jessica Nugent and Michael Norton, UnLtd.

7:00 PM Informal dinner The Duke of Cambridge

DAY 4 – WEDNESDAY APRIL 1ST .........................................................................................................................................

9:00 AM Recap: review of key points from Day 3

9:30 AM Report Planning Tim Brodhead, Tim Draimin and Frances Westley

12:30 PM The Role of Banks Whitni Thomas, Opportunity Fund – Triodos Bank

1:30 PM The Young Foundation - Social Innovation Rushanara Ali, Associate Director, The Young Foundation

2:30 PM The Phoenix Economy John Elkington, Founder of Volans and SustainAbility

Maggie Brenneke, Director of Client Services, SustainAbility

4:30 PM Concluding Remarks Tim Draimin

7:00 PM HBS SOCIAL ENTERPRISE EVENT

Topic: The Power of Unreasonable People and The Phoenix Economy

Home House

DAY 5 – THURSDAY APRIL 2ND .........................................................................................................................................

AM Check out and departures

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APPENDIX C: Tour Organizers

Social Innovation Generation (SIG) is a collaborative partnership between the Montreal-based J.W. McCon-nell Family Foundation, the University of Waterloo, the MaRS Discovery District in Toronto and PLAN Insti-tute in Vancouver. The project is designed to provide practical support for social innovators in cultivating organizations and initiatives across Canada. The primary aim of SiG is to encourage effective methods of addressing persistent social problems on a national scale. The activities of SiG serve to facilitate the ex-ploration of structural, institutional and systemic evolution in order to promote broad social change. Learn more about SiG at http://www.sigeneration.ca

CAUSEWAY is a national collaboration to fast-track Canada’s adoption of social finance, ensuring there is a healthy social finance marketplace supported by mainstream financial institutions serving a national constituency of social enterprises, social economy entities, community economic development institutions, cooperatives and the enterprising nonprofit sector. Causeway operates in three spheres:

1) Supporting knowledge development and capacity building 2) Enabling the development of showcase social investment funds serving non-profits 3) Promoting policy changes to enable both the capital providers and capital users

CAUSEWAY is supported by SiG@MaRS

MaRS drives social and economic prosperity by leading Canada’s innovation mission.

We at MaRS envision Canadian communities that are prospering through enhanced employment prospects, the creation and retention of local wealth and an enriched cultural and social environment. To realize this vision, we foster and promote Canadian innovation.

CAUSEWAY national collaboration includes: SiG National, Carleton Centre for Community Innovation, PLAN Institute, Igniter, The Canadian Cooperative Association, and University of British Columbia Sauder School of Business, Ashoka Canada.

Focusing on the business of social innovation, Volans is part think-tank, part consultancy, part broker and part incubator. We are a for-profit company based in London and Singapore and we work globally with en-trepreneurs, businesses, investors and governments to develop and scale innovative solutions to financial, social and environmental challenges.

Volans recently launched its report The Phoenix Economy: 50 Pioneers in the Business of Social Innovation. The report explores the new markets, technologies and business models that are emerging from the ashes of the old economic order.

For the Phoenix Economy to take wing, we need people who have the necessary Talent and organizations with the appetite to find future-friendly Solutions. Volans provides and encourages leadership through our Outreach initiatives. Learn more at www.volans.com

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APPENDIX D: Key Insights from Speakers

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SOCIAL INNOVATION POLICY TOUR 2009Key insights from the UK on enabling Social Innovation

with Social Finance and Social Entrepreneurship


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