What impact can social enterprises have on the local economy? About half of total sector revenues according to the Ontario Ministry of Economic Development.
By Dr. Eric Hoskins, Minister, Ontario Ministry of Economic Development, Trade and Employment
Across Ontario, Canada, and the world, social enterprises are working alongside government to tackle society’s persistent challenges, ones that are too difficult—and too important—for the public sector to solve alone. And they are doing it with impressive results.
Social entrepreneurs are increasingly generating new solutions to old problems by turning traditional approaches on their head. That’s why I am looking forward to our first-ever “Impact Ontario,” an event hosted by the Centre for Impact Investing in Toronto, that will bring together Ontario’s groundbreaking social entrepreneurs, investors and advisors, not-for-profits and other parties for pitch sessions and educational seminars. It’s an opportunity for people with innovative ideas to gain access to resources they need to achieve greater impact.
It’s time Canada created a forum where entrepreneurs and other key stakeholders can convene and explore innovative solutions together. I continue to marvel at how adeptly social enterprises develop and deliver dynamic, cost-effective alternatives for dealing with social, economic and environmental challenges. Many are also generating a healthy financial return on investment. Don’t let the term “social” fool you. These are lean and effective businesses.
The impact the social enterprise sector has on Ontario's economy is significant. They're creating jobs, growing entrepreneurship, protecting the environment, promoting local food, helping and empowering Ontario’s most vulnerable residents, and reducing poverty. With more than 10,000 social enterprises in Ontario employing an estimated 160,000 people and serving 3.4 million customers per year, the influence of the sector is important and growing.
Social Ventures: A Critical Partner for Governments
The huge opportunity they present for all parts of our economy to work together on issues that matter to all of us isn’t lost on me. Instead of government acting alone to reduce poverty, provide affordable housing or conserve energy, we are increasingly looking to social ventures as partners who can deliver programs and get results.
For example, JUMP Math, which is targeting the criticality of math skills. Founded in 2002 by mathematician and playwright Dr. John Mighton, JUMP Math has developed a system that provides teachers with a radically different way to teach students in grades 1 to 8 to be proficient—and excel—in math.
Then there’s St. John’s Bakery, which produces organic bread and sweets while providing jobs for people on the margins of society, including those who live below the poverty line or struggle with mental illness. Another is Good Foot Delivery, a courier service in Toronto that provides social and environmental benefits by employing people with developmental disabilities to deliver packages on foot or by public transit.
But doing good is not enough; it has to be done smartly.
Piecemeal approaches must be replaced with an integrated, coordinated and collaborative social enterprise strategy that supports innovative organizations. The right kind of support also helps social ventures move good ideas from the drawing board to the marketplace. It creates the conditions for these enterprises to be profitable and also generate a strong social return on investment.
In Ontario, Canada’s largest province, the provincial government established an Office for Social Enterprise within the Ministry of Economic Development, Trade and Employment to support established and emerging social ventures.
Funding Social Enterprise: Ontario's Government Lends a Helping Hand
We’ve been busy on a number of fronts. To make it easier for social enterprises to apply for funding, last year we launched Grants Ontario, a Web-based platform for administering grant applications. It provides a central portal where applicants can get information on 60 different provincial grant programs, as well as file and track their applications online. This means new efficiencies and better service delivery for grant-seekers and grant-makers alike.
Ontario’s new Solutions Lab is bringing together multidisciplinary teams to explore ideas and develop innovative programs that tackle complex social problems. We’re also piloting a Social Innovation Partnership Challenge to encourage collaboration between social enterprise start-ups and established businesses, ranging from insurance companies to public utilities. The pairing allows companies to bootstrap younger enterprises, while the newer, nimbler social ventures contribute fresh thinking and innovative practices to the relationship.
Getting access to financing is a major issue for social enterprises, just as it is for many businesses. Ontario recently partnered with the TD Bank Group, Microsoft and other private investors to develop a social finance initiative called the Ontario Catapult Microloan Fund. This partnership has been designed to help promising early stage entrepreneurs and innovators with low interest loans of $5,000 to $25,000. Through partnerships with venture philanthropists and impact investors, the province is now developing new social financing tools that channel private investment for public good.
To create a vibrant social finance marketplace, the Province is also exploring the launch of a new $4 million Social Enterprise Demonstration Fund to support early-stage social enterprises.
The Ontario government also recently partnered with the MaRS Centre for Impact investing and the Toronto Stock Exchange to launch the Social Venture Connexion – North America’s first online platform designed to connect social ventures and impact investors. Our goal: to leverage technology to connect investors with business opportunities that simultaneously achieve social good. During its first year of operation, the goal is to help 10 Ontario social enterprises raise $2.5 million in capital.
Investing in social enterprises is a form of community building, and Ontario is a leader in this area, partly owing to the strength of its non-profit sector. The numbers speak for themselves: Some 50,000 non-profit organizations account for almost 30 percent of the total non-profit sector in Canada and close to 45 percent of total sector revenues in the country [Researching the Social Economy, page 25 Chapter 2: A Portrait of the Ontario Social Economy].
The way forward is clear, and I'm looking forward to what participants come up with at Impact Ontario.