“Peers and Turkeys” help us see the real Social Enterprise Challenge/Opportunity!

Social enterprise is the business model used to create a social value marketplace and provide the economic foundation for healthy and inclusive communities. We often refer to social enterprise as a verb, as a route to a desired end.

With that design and goal in mind, we realize our biggest challenge is not the oft mentioned, ‘get to scale’ expectations. But in fact the real social enterprise challenge is the threat it poses to the current dominant economic system. Rather than designed to extract private capital for shareholders, social enterprise is designed to contribute and build wealth and capital within the community.

The last 300 years of a purely economic based marketplace has become the dominant culture and practice of business. Social enterprise disrupts that traditional model by focusing on building a new culture and practice based upon accruing social values and community held capital.

And recently our real challenge was eloquently expressed in an episode of Downton Abbey.

Downton Abbey is a television show set in England 100 years ago, and watches the transition of an aristocratic family within the dramatic social and cultural reforms of the time. Violet Crawley, Dowager Countess of Grantham, or ‘granny’ is the matriarch of the Crawley Family, and spokesperson and protector of all things traditional. Granny epitomizes resistance to change when she says: “A peer (royalty) in favour of reform is like a turkey in favour of Christmas!”

I think we can understand the fundamental message from Granny’s viewpoint: the dominant ‘social and economic system’ will not engage in and change or innovate if the change is not directly serving their perceived needs, or protecting and serving their current status and values. Why would an aristocrat wish to share property ownership with the tenants or share decision-making with the peons? Obviously, no more than a turkey would wish to convey its own death sentence by celebrating Christmas dinner!

How does this principle of ‘peers and turkeys’ apply to the potential growth of social enterprise? Because one view is that social enterprise directly challenges the dominant business model of private wealth generation and shareholder supremacy.

While trying to build a social value marketplace we are challenging the dominant market culture and behaviours of solely using a financial measurement of success.

But let’s take a step back and consider; do we in truth aim to undermine the historic foundation in its entirety through social enterprise? Or do we seek real growth in a preferred model of socially enterprising economy and a social value marketplace?

On the macro scale, there might indeed be the opportunity to use an “economy of choice” to influence the dynamics of the hitherto established economy, for consumers and service users looking for a grounded and value adding alternative.

Social enterprise, seeking to use a business model to create social impact, challenges the standard business model value to maximize financial return. And this challenge to the standard model can bring social enterprise as a principle into conflict with those of the traditional “school”. Or – we can identify a space of influence and voice, bring a demonstrable alternative and model an economy “of moderns”….as Downton’s Granny might have said! We know that today’s society does indeed identify increasingly with the need for a more modern way.

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Building business skills in the social sector and social values into business schools turns traditional curriculum and learning models upside down. This can but doesn’t have to bring conflict – and it certainly does bring innovation through social enterprise – most often at a furious, exciting pace.

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When organizational purchasing seeks to include a social value in the decision making process, it challenges the merits of merely getting the lowest price possible. Social enterprise introduces “modern”, added value and sustainable dimensions into the marketplace; values which multiply and propel whole communities, and their enterprises forward.

So whilst there is a real challenge presented by social enterprise to the traditional economy, should we lift our eyes from that page and see also the opportunity that sits alongside it? And use the innovation so innate within our sector to craft and strongly shape the social economic platform that inspires and dramatically shifts the traditional economy, levering all the opportunity that such a position affords?

Granny didn’t foresee or appreciate the global crises of 2008, neither its causes nor its aftermath. But today’s society does indeed identify increasingly with the need for a more modern way in the wake of these economic tsunamis and ongoing social crisis.

In 2016, consumers, service users and institutional purchasers are increasingly highly discerning. They are actively seeking value. They are actively seeking a value added choice. They know about and look for social and environmental sustainability.

So is the real challenge in fact, right back to our social enterprise community, and for us to provide the resilient avenues and real time alternatives for these choices to be fulfilled?

——-

David LePage, Principal, Accelerating Social Impact CCC

david@asiccc.ca

Rachael McCormack, Director, Lanarca

rachael@lanarca.co.uk

 

Social Enterprise Reflections: 2015 Hope and 2016 Challenges…

Pollster Doug Miller in his recently published book, “Can the World be Wrong?” predicts social enterprise ‘as the next big thing’ as we face “the ever-increasing pressure on business to act better in society’s interest…”[1]

His prediction just might be confirmed by the amazing shifts and developments in the social enterprise arena across Canada in 2015. We have witnessed public policy changes, market growth, increased social impact reporting and emerging new partnerships all contributed to a more vibrant social enterprise sector.

Some of what we’ve witnessed in 2015…

In government policy we saw some major steps in new supportive directions, examples include: Social Purchasing Guidelines in BC, Social Enterprise strategy policy initiatives in Manitoba, Ontario, Newfoundland / Labrador, Quebec, and Nova Scotia; and most recently five Federal Government Ministerial mandate letters supporting areas of social enterprise, social finance and social purchasing!

The sector is reaching new business and market share levels. Here are some Vancouver area achievements: CleanStart won a major three-year competitive contract with BC Housing; EMBERS Staffing Solutions is consistently employing over 150 people weekly; and Common Thread expanded their customer base to include sewing contracts with local boutique designers and is launching a training course to meet commercial sewing demand. The same stories could as well come from Halifax, Toronto, London, Manitoba, or just about anywhere.

More and more evidence of sector social impact across the country is emerging. Just take a few minutes to read through the Social Enterprise Sector Surveys. – www.sess.ca; review the stories on the enp-Canada newsroom, www.socialenterprisecanada.ca; or scan the recent Demonstrating Values reports, www.demonstratingvalue.org.

Social purchasing initiatives, like the Toronto Social Purchasing Project and the emergence of Buy Social Canada, www.buysocialcanada.ca are focusing on creating greater demand for social enterprise products and services and building a Canada based social enterprise certification program.

2015 also saw some encouraging new initiatives. To maintain and build upon the core learnings developed by enp-Canada and others the on-line Social Enterprise Institute is under construction, www.socialenterpriseinstitute.ca. The planning for a social purchasing partnership and marketplace between Chantier de l’Economie Sociale and Buy Social Canada is underway. ESDC issued an LOI for the potential funding of a collaborative social enterprise intermediary.

But with the hope of each 2015 advancement, comes a whole set of challenges for 2016!

Social enterprises will have to be even more business savvy and impact conscious to meet the growing demand as social purchasing is imbedded into corporate and government supply chains. Operating in the larger commercial market requires providing competitive products and pricing along with social impact!

As social enterprises grow and scale, they face financing needs along the way. Social financing tools, such as new forms of equity-like patient capital, that fit the evolving growth and needs of non-profit and hybrid social enterprises will have to emerge.

Expanding the social enterprise markets and financing requires supportive and effective intermediaries that can create and nurture new supply chain systems and relationships; mediate financing arrangements; and provide advanced business capacity.

Governments will have to move from the initial strategy and policy level of support, to implementing services that create a ‘level playing field’ for social enterprise businesses.

The private sector and government need to move further along in the process to integrate social value into their supply chains and procurement practices.

As blended value becomes the standard of business success, reporting we will need financial and social impact measurement that is simple, accessible and effective.

And finally, creating a supportive social enterprise ecosystem means greater collaboration within the community sector and externally with the public and private sectors. Collaboration like we have never seen before will be the backbone of any significant steps forward.

Here’s to hoping we meet the challenges of 2016 – which just might move social enterprise further along the path to being ‘the next big thing.’

 

 

[1] “Can the World Be Wrong? Where Global Public Opinion Says We’re Headed”; Greenleaf Publishing, 2016, p. 160-161

Social Enterprise Definition Debate: Is tweaking capitalism enough?

I admit that I have been on both sides of the debate about the definition of social enterprise: sometimes staunchly defending it as critical and essential, and at others times avoiding it as not pertinent and a waste of our time.

But now I realize it is important that we do define social enterprise. Because the argument is not about the meaning of social enterprise itself, it is not just about describing an alternative business model. Defining social enterprise is all about determining the values of the marketplace we wish to create.

In his new book Robert Reich, Saving Capitalism: For the Many, Not the Few helped me focus on the social enterprise debate. He argues that “The central choice is not between the “free market” and government; it is between a market organized for broadly based prosperity and one designed to deliver almost all the gains to a few at the top.” His goal to adjust the prosperity gap is great, but his method that if we change the rules, and let government direct the market then we can level the playing field, falls short.

Taxing the wealthy, limiting the power of banks, establishing a living wage, annual guaranteed incomes, and many other schemes for adjusting the current wealth distribution through government interventions are all valuable objectives, in the short term. But only using government rules and regulations to adjust the controls and influence the current private-wealth focused market will not offer an enduring solution.

Building a social value into the marketplace requires establishing the foundations of a business model that exemplifies a social impact principle. So insuring that the definition and measurement of social enterprise success includes both social impact and capital re-investment becomes emblematic of a dramatic shift in why and how we trade; and implicitly directs a social value result into our marketplace transactions.

Relying on government rule changes or letting any ‘good’ business be a social enterprise is just tweaking the underlying values the current marketplace. And in the long term, just tweaking the wealth-driven marketplace of capitalism will do as much good as assuring that the food banks are all well stocked!

To substantially and permanently address issues of poverty, social exclusion, and employment challenges requires adjusting the value base of the market itself.

We have to decide– will we regulate morality in a market that is based on trading in the pursuit of private wealth or use social enterprise to stimulate and fashion a market that creates a healthy local economy?

 

 

Opportunity for City of Vancouver to lead again by becoming a Buy Social city!

The City of Vancouver has recently passed the Healthy City for All “a long-term, integrated plan for healthier people, healthier places, and a healthier planet.” The City’s DTES strategy “provides a vision, policies, and strategies for the Downtown Eastside that focus on ways to improve the lives of low-income DTES residents and community members.” Both policies include a social purchasing strategy to achieve those goals.

Vancouver is already recognized as a Fair Trade City, a Living Wage Employer, and striving to become the world’s greenest city. At next week’s council meeting Councilor Reimer will submit a resolution that the Vancouver City Council endorse the work of Buy Social Canada and directs staff to consider the Buy Social certification program during the development of the City’s social procurement framework as part of the Healthy City Strategy.

Social purchasing leverages existing public purchasing to add social value. The concept is simple; when spending taxpayer dollars for goods and services, the city will also be a catalyst for positive social change.

Social purchasing follows the pattern and builds on the lessons of the environmental. Using the demand side of the value chain, the purchasing power of entities like the city of Vancouver, stimulate greater sustainability in the products and services they purchase.

Along with price, quality, and green, a social lens will help the city achieve greater value through existing purchasing, and move even further along the path to a truly sustainable city.

Cumberland, the small municipality on Vancouver Island was recently recognized as Canada’s first Buy Social Certified municipality. “The Social Procurement Framework ensures that we still access goods and services through a competitive and transparent bidding process, but we are now being a lot more strategic and proactive in procurement. Staff will leverage existing spend to achieve desirable community goals, while working in alignment with community values and maximizing returns for taxpayers” said Mayor Baird.

Social purchasing is not new here. The 2010 Olympics included steps in that direction in their sustainability initiatives. You might remember the beautiful flower arrangements presented to the medal winners that were produced by a local social enterprise providing employment training.

Increasing the business opportunities for social enterprises increases their social impact. Vancouver’s social enterprises every day employ hundreds of people with barriers, and many re-entering the employment. Social Enterprises like Potluck,

H.A.V.E., EMBERS, CleanStart, Mission Possible, Common Thread, JustWorks, Cleaning Solution, Starworks, and Atira represent one of the most vibrant social enterprise clusters anywhere, and their social impact in the community grows every time their business grows.

Social purchasing is emerging as an effective way to address social issues without added costs. The Buy Social certification program began with the Social Enterprise sector in the UK and is now growing internationally.

The city has the opportunity to leverage its existing direct buying, its entire supply chain and development related community benefit agreements to achieve greater social value.

Joining the Buy Social certification program will be a clear signal to the community of the city’s commitment to sustainability integrating a economic, environmental and social values.

Background:

Buy Social Canada is an internationally recognized third-party program, that certifies organizations and government partners, who have demonstrated a commitment to the Buy Social principles, and are proactively working to ensure that procurement works to add, rather than diminish, social value in society.

Buy Social Canada, affiliated with Buy Social UK, was launched in the spring of 2015. Buy Social Canada is working with partners across the country to certify social enterprise suppliers and promote social purchasing in the private sector and across government. Buy Social Canada offers certification and program services for social enterprise suppliers and social purpose purchasing entities.

For more information: www.buysocialcanada.ca.

 

Defining social enterprise… it’s a verb and not a noun, and how it’s marketplace value

This blog was originally published on KPN Blog site, “David LePage puts his cards on the table about the definition of social enterprise, why it’s a verb and not a noun, and how it’s marketplace value.”

The definition of social enterprise continues on as a fascinating issue. In fact it seems like the definition quandary just continues to go in every direction possible, and in the last couple weeks it may have gone to completely unsurpassed extremes. Some groups seem to be recognizing any manner of company or entrepreneur that just happens to “do good” through some of its products or social responsibility activities as a social enterprise, even if their profits are the key objective and purely for the shareholders. On the other side, in a recent blog it was stated, “A social enterprise is any entity that exists with the sole purpose of benefiting humanity.” The author argues that doing business is not a requirement of social enterprise, just being a non-profit organization makes an entity a social enterprise. (Indianewengland.com, August 15, 2015)

Will we ever get past the debate of social enterprise definition? Personally I sure hope so, but I don’t think quite yet for two reasons.

One: because the more the sector grows in size and influence and impact the more we need to capture social enterprise as the valuable tool for social impact it can be, before the term becomes a diluted form of social washing or disregards the social and economic change we really wish to create.

Two: because we have to understand social enterprise is a verb, not a noun. I use the term ‘tool’ above, because social enterprise is not the “entity” it is the manner in which we do business. Social enterprise is about the social and economic value we create through marketplace activity.

Does this mean other businesses don’t achieve social value? Not at all, lots of businesses do good and contribute to the community, through products, customer targets, social giving, profit sharing, co-operative structure, and more, but that doesn’t make them a social enterprise – many of us call those them ‘social purpose businesses’. They do lots of good but ultimately operate and evaluate success in the traditional shareholder, revenue driven economy.

Yes, there is a growing new energy emerging in the business world, such as B Corp Certification and the Harvard-based Shared Values movement. Social enterprise includes these values, but also includes another goal that goes beyond just doing and being good citizens, or adding a social value to your products, or being really green – social enterprises want to change the marketplace value system.

For me the best way to understand social enterprise is as a verb. Social enterprise is a way to do business, rather than merely a noun, or a thing. It is not the entity; it is the values it brings to the exchange of goods and services.

So social enterprise isn’t a single model or simple definition, it is the business activity that integrates and prioritizes social impact over private values.  Social enterprise is ultimately about shifting the very tenets of the capitalist based economy. We need a social enterprise marketplace, where we trade goods and services, based on social and community values that drive the economy.

I think we can best define social enterprise by understanding the values that social enterprise operates within, and how it operates, rather than the thing that it is. For me social enterprise operates with a set of values:

  • Why it does business – primarily it has a social, environmental or cultural purpose
  • Who it benefits in the market– its products and services contribute to building a healthy and inclusive community economy
  • How the profits are distributed – primarily to further its social purpose

Social enterprises’ primary purpose, their mission, is to create a social, cultural or environmental impact; they are a business, selling goods and services generates the majority of their income; and they reinvest all or the majority of their profits into the social mission.

Yes, they use a business model.  Social enterprise definitely trades in the market place. It sells something; it is a supplier of goods or services to a buyer. And income is primarily derived from sales.

But, the Social enterprise prioritizes the social over the financial return on investment. It operates a financially sound business, however the social impact dominates or displaces personal or shareholder profits.

And it is incorporated in a way to insure this profit distribution happens in perpetuity. The value created is not just a charitable set-aside, temporary sales or marketing plan, a promotional gimmick or a share valuation scheme.

But ultimately, whether we argue the definition, and where we land in 5-10 years is not the real discussion. The real discussion is about the social value we create through the market place activities. We are building a long-term change in how the economy serves a community; so in the interim, the social enterprise story of its impact becomes tantamount to describe itself.

The Social enterprise quandary is not the definition of what it is, it is understanding social enterprise as part of the process of changing from a short term, shareholder, financial value driven market place, to the trading of goods and services as a means to create social value and a community economy.

While we are in this process of transition, the stories we share about our progress are critical to the defining social enterprise. We have to describe how social enterprise is impacting peoples’ lives and creating new opportunities. We have to continue to find the channels to share stories, to build the evidence, to encourage others.

Kibble’s Podcast Network, KPN, is definitely a part of that journey.

http://podcasts.kibble.org/blog/the-social-enterprise-definition-debate-its-necessary-but-only-a-temporary-issue-because-its-not-a-business-model-its-a-marketplace-value

Hybrid Social Enterprise: BC’s Community Contribution Company, C3, Corporate Option is Available Across Canada!

Want to incorporate a social enterprise business that guarantees a social value objective, requires a shared distribution of profits and offers equity shares to investors?

British Columbia remains the only Canadian option for registration of a for-profit hybrid corporation, the Community Contribution Company: “Designed to bridge the gap between for-profit businesses and non-profit enterprises.” http://www.fin.gov.bc.ca/prs/ccc/. To date there are 33 incorporated CCC’s.

But that doesn’t preclude anyone in any province across the country from gaining access to this innovative and emerging “hybrid” business model. (A recent blog from the Shared Value Initiative highlighted the hybrid model, discussion. http://sharedvalue.org/groups/get-ready-hybrid-organization. The most recent issue of California Management Review is cover-to-cover about hybrid organizations.)

The Social Enterprise Institute, SEI, is a new learning and resource platform for social enterprises based out of Halifax, Nova Scotia. Applying the principle of “practice what you preach” we wanted our corporate structure to reflect our business objectives – supporting the growth and success of social enterprises.

As a partner in the new venture with Common Good Solutions in Halifax, I approached Sheila Evani of Medha Legal Services, a Vancouver based lawyer I often work with on CCC models. Sheila’s first response: “It should, might, and could be as simple as incorporating in BC as a CCC and extraprovincially registering the company in Nova Scotia.” It turns out she was right, and SEI is now registered to do business in Nova Scotia, and we launch our beta site in the fall of this year! (Watch for us later this year at www.seinstitute.ca.)

So all the fuss and process and arguments and debate across the country among social entrepreneurs, non-profit, government and policy wonks on “should we, could we, why should we, how would we” do a hybrid on the national or other provincial levels may now be moot. Having the BC CCC option may offer the all-encompassing solution.

It doesn’t answer the business-planning question “should you choose this model for your social enterprise venture?” But, with all the social enterprise issues around CRA, charities, and non-profits making profits, sometimes the CCC is the appropriate corporate model. Inter-Provincial registration allows the option of being a CCC hybrid, regardless of where you want to operate in Canada.

Want to discuss further, get in touch with us David LePage david@asiccc.ca and Sheila Evani sevani@medhalegal.com.

 

British Columbia Ministry of Social Development and Social Innovation Announces Social Impact Purchasing Policy Guidelines!

Social purchasing “is about considering social value as well as financial value when you are evaluating supplier options”[1] according to the Social Impact Purchasing Guidelines that were recently adopted by the BC Ministry of Social Development and Social Innovation. With a very quiet announcement the ministry has made a very big noise in the progress of government led social procurement policy.

The ministry’s Social Impact Purchasing Guidelines, SIP, are a significant development of social purchasing in Canada, and internationally. So real kudos go to the Minister of Social Development and Social Innovation, MSDSI, (past and present) and their staff for taking one more recommendation of the BC Partners for Social Innovation March 2012[2] report and moving it to implementation.

SIP defines social impact purchasing as “a process through which organizations consider not only value for money, but also social and environmental impacts when purchasing goods and services.”

SDSI has accepted the SIP challenge within their ministry but also set a challenge up to others because “…in part to demonstrate to other government ministries and agencies that it can (and should) be done”

In addition, the ministry is hoping its use of SIP will encourage “suppliers to look for new ways to increase their social value and improve their ability to compete for ministry procurement opportunities. Ultimately, SIP will help us to drive innovation and create better social outcomes for all British Columbians.”

SDSI sees two channels for implementation, one, “purchasing goods or services from a social enterprise or socially conscious business” and two “incorporating social value in a solicitation document.”

The implementation of the SIP policy guidelines will break new purchasing policy ground within the Ministry and across BC government. Beyond BC this policy innovation will influence others considering similar efforts in government or any sector seeking social value through their existing purchasing.

The guidelines accept that this is new ground for government purchasers, “…these guidelines will provide you with information about how this can be done.”

So they provide an understanding to both the why and how: “If you are responsible for procurement, these guidelines will help you to:

  • understand social impact procurement
  • identify potential suppliers in your community
  • develop a procurement process that assesses both 
financial and social value”

So we look forward to working with the Ministry and others, because “like all social innovations, [this policy initiative] will evolve as we ‘learn by doing,’ and your input is a critical part of that process.”

See www.buysocialcanada.ca

[1]The quotes in this blog come from the BC SIP Policy Guidelines unless other wise noted. http://www.sdsi.gov.bc.ca/social-innovation/docs/si-purchasing-guidelines.pdf

[2] http://www.eia.gov.bc.ca/social-innovation/docs/si-action-plan.pdf

Positive Social Finance Recommendations from Federal Government Committee!

The Government of Canada HUMA Committee issued the report on their social finance study on June 17, 2015. I was honoured to be a witness in the process.  We’re very pleased with a number of the recommendations and have bolded the key items.

You can find the full report at: http://www.parl.gc.ca/HousePublications/Publication.aspx?DocId=7992744&Language=E&Mode=1&Parl=41&Ses=2

 

RECOMMENDATION 1

The Committee recommends that Employment and Social Development Canada build on the work of Canada’s National Advisory Board to the G-8 Social Impact Investment Taskforce by creating an advisory panel, involving stakeholders from the public, private, non-profit and charitable sectors, to help define a national strategy on the development of the social finance marketplace in Canada.

RECOMMENDATION 2

The Committee recommends that Employment and Social Development Canada with other departments examine the structure and fund sourcing of catalytic capital funds in other jurisdictions and make recommendations with respect to how such a fund might best be established in Canada.

RECOMMENDATION 3

The Committee recommends that the federal government consider legislative and policy measures, as appropriate, to allow charities greater flexibility to conduct business activities for the purpose of re- investing profits back into their charitable missions.

RECOMMENDATION 4

The Committee recommends that the Department of Finance and the Canada Revenue Agency review current regulations with respect to the profit-generating activities of non-profit organizations, and consider options to allow some non-profits with a clear social purpose to generate surplus revenues in some circumstances.

RECOMMENDATION 5

The Committee recommends that the Department of Finance and the Canada Revenue Agency conduct a review of current policies with respect to program-related investments, with a view to improving the communication and/or clarity of these measures, as necessary.

RECOMMENDATION 6

The Committee recommends that Employment and Social Development Canada work with the provinces and relevant stakeholders to create national guidelines for defining and measuring the impacts of social finance projects in order to ensure reliable and consistent standards for social outcome measurement across Canada.

RECOMMENDATION 7

The Committee recommends that the federal government expand eligibility criteria for existing programs to support small- and medium- sized enterprises, such as Industry Canada’s Canada Business Network, to expressly include charities and non-profit organizations working in the field of social finance, where appropriate, and consider the creation of programs aimed at developing the technical capacity of these actors to participate in the social finance market.

RECOMMENDATION 8

The Committee recommends that Employment and Social Development Canada, in collaboration with relevant federal departments and agencies, explore social procurement.

RECOMMENDATION 9

The Committee recommends that Employment and Social Development Canada continue to encourage cross-sector collaboration on social finance by convening regular meetings of stakeholders from the for-profit and the non-profit and charitable sectors, in order to encourage partnership development and to share information and best practices.

 

Social enterprise definition: “a butterfly with a briefcase!”

How do we solve the problem of the incessant pursuit of a definitive definition of social enterprise? I think I may have a way to move that discussion forward, what do you think of this: A social enterprise is “a butterfly with a briefcase!”

The butterfly emerges from multiple stages of development, and once it is mature, according to one theory, the flapping of its wings in one end of the world, can cause a hurricane in another.

The briefcase holds business documents.

So together you have “a movement that creates amazing impact blended with a solid business case.”

Making the Leap to a True Economy

Blogpost: Making the Leap to a True Economy: An Interview with David LePage

This blog is part of the ‘Voices of New Economies‘ series within Cities for People – an experiment in advancing the movement toward urban resilience and livability through connecting innovation networks. 

The Voices of New Economies series is collectively curated by One Earth and The Canadian CED Network

This series is an exploration of what it takes to build the economies we need – ones that work for people, places, and the planet. We are connecting key actors, finding patterns, noting interesting differences, and highlighting key concepts and initiatives. Together, this series offers insights into the new economies movement as it develops.

By Jane Zhang

After working in the non-profit and social enterprise arena for over three decades, David LePage founded Accelerating Social Impact in 2013 to pioneer an unusual type of business – a Community Contribution Company. This hybrid enterprise model blends the traditional for-profit corporate model with a targeted social purpose, and allocates 60% of its dividends to this purpose. This differs from typical social purpose businesses and benefit corporations, who are not legally bound to divert profits from investors.

The purpose of ASI itself is to accelerate this blended business world and help invigorate the social value of business, from policy all the way to purchasing and supply.

  1. In your view, what are some key elements of “new economies”?

I think it’s actually the old economy. In North America 2000 years ago, the Aboriginal communities had a thriving cross-continent trading system that went from Mexico to Quebec to Vancouver, based on the exchange of goods and services to create healthy communities. If you trace historically the exchange of goods and services anywhere, it was based on a culture of mutual benefit, or “what do you have that I need?” mentality.

It wasn’t until the industrial revolution that we developed this idea of “you can’t have what I have unless you pay me more”. We created workers and factories, exploitation and the profit motive.

What some call the “new economy” is what I call the “true economy” or “community economy” – the economy as a tool to help us create healthy communities. In the modern world, we’ve switched it around and made the economy the objective.

  1. How do we make the leap to a community economy in the 21st century?

A recent article by Robert Reich looked at how many people employed now are actually producing material things. When you add in the new technology of 3D production and robotic construction, there aren’t many people making things. We’re just exchanging dollars and services. I think the conversation we’re having is about shifting the culture of today’s economy. It’s a new exchange, but we haven’t figured out how to shift from the old model of paying someone to make stuff and someone else buying it. The structure of our economy needs to catch up with how we function as a society.

  1. What would a more just and equitable system look like?

We need to change the structure of the economy and what we value as a society. We still have a minimum wage that makes people poor, and that working at fast food restaurant is not a legitimate job. We need to rethink what’s considered professional versus a service. We now have doctors running businesses based on what they can charge, yet people working in the service industry – nurses, naturopaths, homeopaths, and others outside of mainstream – having to struggle because it’s not seen as professional. This applies to any industry, where the dichotomy of working and owning is just changing.

Another aspect is that we have to do the environmental, social and economic all together. People complain about WalMart selling organic food because organic without a fair living wage is only halfway there.

More people nowadays are conscious of externalized social and environmental costs. The government has subsidized so many things to create a market for certain partners. We just don’t know what a McDonald’s hamburger costs, for instance. When we account for all of its impact on environment, society, and future generations, who’s going to pay $175 for a hamburger? We need to look past the artificially low prices, and be aware of the actual “costs” of what we’re buying.

  1. Are today’s new sharing economy platforms good examples of “true economy”?

Again, people are saying this is all new, but libraries have been around for a long time, and they’re a great example of the sharing economy. Farmers have had co-ops for almost 200 years and other models like tool-sharing and credit unions. Calling it the sharing economy and exploiting people doesn’t make it any different from the traditional economy. Take Uber for example, where they charge people more at busier times. Instead of paying a taxi driver, you’re just paying this other guy. I think whenever we create a platform, we have to look behind the name and evaluate the exchange value.

  1. How do these relate to cities?

As more opportunities arise, we won’t have everyone moving to cities but we may start having urban and rural cities again. In Canada especially, we have a concentration of people in urban areas, and rural communities are devastated in terms of jobs and opportunities. If we start to shift the meaning of a job or opportunity, people can start to be healthy in their own communities.

  1. What does real wealth mean to you?

Real wealth is putting community ahead of the individual. It’s not just about financial capital but social, cultural, and environmental capital as well. What truly makes a community wealthy is having a balance, maybe even an abundance, of multiple capitals.

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