Selling Social: Procurement, Purchasing, and Social Enterprises

Sumner, Jennifer (Ed.); Quarter, Jack (Ed.); Luk, Annie (Ed.); Chan, Andrea (Ed.) Book Selling Social: Procurement, Purchasing, and Social Enterprises Provided in Cooperation with: University of Toronto Press Suggested Citation: Sumner, Jennifer (Ed.); Quarter, Jack (Ed.); Luk, Annie (Ed.); Chan, Andrea (Ed.) (2023) : Selling Social: Procurement, Purchasing, and Social Enterprises, ISBN 978-1-4875-3470-7, University of Toronto Press, Toronto, https://hdl.handle.net/1807/126586 This Version is available at: https://hdl.handle.net/10419/279866 Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. 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If the documents have been made available under an Open Content Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated licence. https://creativecommons.org/licenses/by-nc-nd/4.0/ SELLING SOCIAL Procurement, Purchasing, and Social Enterprises Edited by Jennifer Sumner, Andrea Chan, Annie Luk, and Jack Quarter Since the 2010s, all levels of governments in Canada have gradually initiated social procurement as a policy tool to further their social values and political agendas. Social enterprises of various shapes and sizes across the country have served as partners in the execution of those agendas. Selling Social examines the experiences of these enterprises in social procurement and social purchasing. Selling Social presents the findings of a three-year Canadian research project detailing experiences of work integration social enterprises (WISEs) selling their goods and services to organizational purchasers, including governments, businesses, and non-profit organizations. Drawing on survey findings and interviews, the book explores a diverse group of social enterprises from across Canada, showcasing their successes and their challenges based on real-life examples to aid social enterprises that are considering this path. The book emphasizes the importance of including social and environmental considerations in procurement and purchasing decisions, particularly at larger scales and through public policy. In doing so, Selling Social extends the understanding of social enterprises beyond their social and economic outcomes and into the broader movement towards responsible procurement and purchasing. jennifer sumner teaches in the Department of Leadership, Higher and Adult Education and is coordinator of the Adult Education and Community Development Program at the Ontario Institute for Studies in Education at the University of Toronto. andrea chan is a research associate at the Troost Institute for Leadership Education in Engineering at the University of Toronto. annie luk is a sessional instructor at the Ontario Institute for Studies in Education at the University of Toronto. jack quarter was a professor at the Ontario Institute for Studies in Education at the University of Toronto. This page intentionally left blank Selling Social Procurement, Purchasing, and Social Enterprises EDITED BY JENNIFER SUMNER, ANDREA CHAN, ANNIE LUK, AND JACK QUARTER UNIVERSITY OF TORONTO PRESS Toronto Buffalo London Toronto Buffalo London utorontopress.com Printed in the U.S.A. ISBN 978-1-4875-0671-1 (cloth) ISBN 978-1-4875-3471-4 (EPUB) ISBN 978-1-4875-2450-0 (paper) ISBN 978-1-4875-3470-7 (PDF) Library and Archives Canada Cataloguing in Publication Title: Selling social : procurement, purchasing, and social enterprises / edited by Jennifer Sumner, Andrea Chan, Annie Luk, and Jack Quarter. Names: Sumner, Jennifer, 1949– editor. | Chan, Andrea, 1979– editor. | Luk, Annie, editor. | Quarter, Jack, editor. Description: Includes bibliographical references and index. Identifiers: Canadiana (print) 20220424640 | Canadiana (ebook) 20220424691 | ISBN 9781487506711 (cloth) | ISBN 9781487524500 (paper) | ISBN 9781487534714 (EPUB) | ISBN 9781487534707 (PDF) Subjects: LCSH: Government purchasing – Social aspects – Canada. | LCSH: Government purchasing – Environmental aspects – Canada. | LCSH: Nonprofit organizations – Canada. | LCSH: Social entrepreneurship – Canada. Classification: LCC JF1525.P85 S45 2022 | DDC 352.5/30971 – dc23 We wish to acknowledge the land on which the University of Toronto Press operates. This land is the traditional territory of the Wendat, the Anishnaabeg, the Haudenosaunee, the Métis, and the Mississaugas of the Credit First Nation. University of Toronto Press acknowledges the financial support of the Government of Canada, the Canada Council for the Arts, and the Ontario Arts Council, an agency of the Government of Ontario, for its publishing activities. © University of Toronto Press 2023 Funded by the Government of Canada Financé par le gouvernement du Canada CC-BY-NC-ND This work is published subject to a Creative Commons Attribution Noncommercial No Derivative License. For permission to publish commercial versions please contact University of Toronto Press. University of Toronto Press acknowledges the financial support from the University of Toronto Libraries in making the open access version of this title available. Contents Acknowledgments ix Introduction: Selling Social 3 andrea chan, shelley lepp, annie luk, jack quarter, and jennifer sumner Part 1: Overview of Non-proft Social Enterprises, Social Procurement, and Social Purchasing 1 Literature Review 15 andrea chan, shelley lepp, annie luk, jack quarter, and jennifer sumner 2 Procurement and Purchasing Policies for Social Value by Governments in Canada 31 rachel laforest and annie luk 3 A Pan-Canadian Survey of Social Enterprises 49 andrea chan, annie luk, shelley lepp, laurie mook, marty donkervoort, rachel laforest, gordon m. djong, arielle vetro, and jack quarter Part 2: Securing Large Contracts through Relationship Building 4 BUILD Inc. 69 marty donkervoort and art ladd vi Contents 5 SARCAN Recycling: A Division of SARC 83 andrea chan 6 Ever Green Recycling 91 yasmin hariri 7 EMBERS Staffng Solutions 104 marty donkervoort and marcia nozick Part 3: The Importance of Parent Organizations 8 Social Crust Cafe & Catering 117 yasmin hariri 9 ImagineAbility Inc. 127 marty donkervoort and audra penner 10 Wachiay Studio 135 yasmin hariri 11 Diversity Food Services 144 marty donkervoort and kirsten godbout 12 Rainbow’s End Community Development Corporation 157 annie luk and david williams Part 4: The Dilemma of Selling Social Value 13 Let’s Work Atlantic and Market Wizards 173 annie luk 14 Ethnicity Catering 181 anika roberts-stahlbrand 15 Horizon Achievement Centre 191 annie luk and carol pendergast 16 Calgary Progressive Lifestyles Foundation 202 jennifer sumner 17 Stone Hearth Bakery 212 anika roberts-stahlbrand Contents vii Part 5: Balancing Multiple Bottom Lines 18 The Groupe PART (Programmes d’Apprentissage au Retour au Travail) 227 rachel laforest 19 Harbourview Training Centre 239 anika roberts-stahlbrand 20 Challenge Disability Resource Group 249 annie luk and jillian hardie 21 Services and Housing In the Province (SHIP) 258 andrea chan and shirley hannigan 22 LOFT Kitchen 269 jennifer sumner Conclusion: Selling Social: Future Directions 276 laurie mook Contributors 289 Index 293 4 Selling Social individuals who might have faced marginalization also benefited from carpentry training for their futures. Although the Vancouver Olympic Games took place more than a decade ago, it marked a turning point where procurement for social value or benefits became more publicly visible. International sporting events like the Olympic Games are notorious for the infrastructure investments and financial strains imposed upon the host city (Short, 2018). Before every modern Olympic Games, news stories highlight delays in venue construction, overspending, and emerging local tensions. Rarely does any form of financial, environmental, or community impact go unscrutinized. From large construction projects like athletes’ villages, media facilities, and sporting arenas to small initiatives like the merchandise, accreditation badges, and the influx of food required – every decision matters. While the International Olympic Committee officially encouraged and supported environmental and social responsibility in host cities during the 1994 Centennial Olympic Congress, the Vancouver Organizing Committee for the 2010 Olympic and Paralympic Games (VANOC) were the first to explicitly include social considerations in their purchasing and procurement strategy as well as notions of sustainability into the Games’ management structure (Ponsford, 2011). The VANOC was one of the early high-profile organizations ready to embrace social procurement on a large scale. Among the Games’ priorities were considerations of social, environmental, and economic accountability; Indigenous participation and collaboration; and a rethinking of accessibility and inclusivity to ensure that innercity residents and local businesses would benefit from the economic opportunities created by the Games (VANOC, 2010). Apart from the podium construction, other examples of VANOC’s efforts included training and employing marginalized women to assemble the floral bouquets awarded to athletes (Mickleburgh, 2010) and requirements for contractors working the construction of the athletes’ village to provide employment to low-income residents of the Downtown Eastside (LePage, 2014). Critics noted that the social impact of the Games was limited because VANOC did not have a framework in place early enough and contracts awarded to social enterprises through the tendering process were relatively small in both number and dollar value (Revington et al., 2015). However, the Vancouver Olympics Games undoubtedly raised the profile of the social enterprise sector as a whole and established an important precedent for social procurement in Canada. VANOC’s inclusion 5 Introduction of social benefits also became a model for future Olympic Games such as the 2012 Games in London (UK), Sochi (Russia) in 2014, and Rio de Janeiro (Brazil) in 2016, as well as Toronto’s Pan Am Games in 2015. Each of these organizing committees looked beyond the traditional economic bottom line to consider the environmental, social, and cultural implications of their purchasing choices. The Rise of Social Procurement and Social Purchasing The story of the Vancouver Olympics outlines a larger trend coalescing in the late 2000s. While the purchasing considerations of individuals, businesses, and governments were (and still are) typically focused on quality, cost, and risk mitigation, the range of criteria was beginning to expand. The 1970s brought a new consideration for the environment. By the 1990s, mounting awareness of social needs created significant pressure for corporations and government to account for the social impact of their purchasing habits. These trends represented a shift from the conventional financial accounting for just an economic bottom line to an increased accountability for environmental and social impacts (Mook, 2007). Policies around Corporate Social Responsibility (CSR) emerged and social enterprises were included as possible suppliers – together forming the foundations for social procurement and social purchasing (LePage, 2014). In particular, when buying from social enterprises that offer training/work opportunities to individuals traditionally marginalized (work integration social enterprises, or WISEs), the buying decisions contribute not only revenue to support the social enterprises’ missions, but also positive work experience for those struggling to find work in the job market at large. Since the 2010s, all levels of governments in Canada (municipal, provincial, and federal) have gradually initiated adoption of social procurement as a policy tool to further their social agendas. Social enterprises of various shapes and sizes across the country have served as partners in the execution of those agendas. What remains to be examined is the experiences of the social enterprises in social procurement and social purchasing – what we call selling social. Specifically, we distinguish between buying with and without social value/benefit and why the consideration of social value/benefit is important as people make buying decisions. Further, we differentiate social procurement from social purchasing with the former occurring at a much broader scale and higher value, and thus leading to more social value/benefit. One of the emerging trends with buying social is the idea of buying local. We see buying local as a subset of social 6 Selling Social procurement and social purchasing (depending on the scale and value), based on the understanding that benefits to local businesses are a social value/benefit. However, the social value/benefit that really interests us in this book goes far beyond benefiting local businesses and communities. We mostly emphasize the social value/benefits going to those who have been traditionally marginalized, such as people with disabilities or youth living in precarious circumstances. It is within this broad context that we conceived our research project. In the beginning, our goal was to examine the prevalence and impact of social procurement from the perspectives of social enterprises in Canada today. We hoped our contributions would bridge the divides between policy and practice in social procurement by encouraging partnerships as well as advancing and sharing knowledge across sectors and academic disciplines. Specifically, we sought to understand the impact government procurement policies might be having on social enterprises that sell goods and services while also providing social benefits to their communities. We also wanted to learn more about who among the social enterprises might be benefiting from social procurement and how they were experiencing these benefits and tackling the obstacles. We believed that the experiences from those organizations would be invaluable for paving the road for the future. These questions formed the basis of our research – the findings of which are the subject of this book. About This Book Selling Social: Procurement, Purchasing, and Social Enterprises presents the findings of a three-year (2017–20), pan-Canadian research project detailing experiences with social procurement and social purchasing from the perspective of WISEs selling goods and services to organizational purchasers (governments, businesses, and non-profit organizations). At the onset of our research project, we conceptualized social procurement as “the use of purchasing power to create social value. In the case of public sector purchasing, social procurement involves the utilization of procurement strategies to support social policy objectives” (Barraket & Weissman, 2009, p. 3). We conducted our research using mixed methods. We began with a review of social procurement policies at various levels of government across Canada. We then completed a pan-Canadian survey in late 2017, which included 129 social enterprise respondents. As we examined the survey results, we were surprised to discover that the survey respondents reported very little social procurement by governments, 7 Introduction businesses, or non-profit organizations through a formalized purchasing process. However, many still reported these organizations as their regular or intermittent customers, so we surmised that many of the social enterprises were beneficiaries of social purchasing. This unexpected revelation from the survey results caused us to shift the project in two ways. First, we modified our working definition of social procurement as specific to social enterprises as sellers/suppliers and offer the following instead: social procurement refers to all highervalue purchases from social enterprises by organizations (corporate, government, or non-profits), typically involving formal contracts that may or may not be secured through competitive tendering and that include a social, cultural, or environmental intention. We also expanded the research scope to include social purchasing, which we considered a more informal, often spontaneous form of exchange. Second, our initial intention was to examine how social procurement worked from both the seller and the buyer perspectives. In the end, however, the low number of social enterprises participating in social procurement led us to examine both social procurement and social purchasing from the perspective of the social enterprises and the challenges they face in selling social benefits as part of their work. Based on our survey findings, we selected a diverse group of social enterprises as cases to gain a deeper understanding of their experiences with social procurement and social purchasing. We used semi-structured interviews with these social enterprises and also some of their customers to elaborate the survey results. We supplemented our interviews with publicly available information as part of our data collection. The series of qualitative cases, as they are featured in this book, were completed between June 2018 and October 2019. As we present the findings from our research project in this book, we were guided by the following research questions: 1. How do social enterprises understand social procurement and social purchasing? 2. To what extent are social enterprises benefting from social procurement and social purchasing? 3. What are the characteristics of social enterprises that are most likely to attract social procurement and social purchasing? 4. What are the obstacles for social enterprises to beneft from social procurement and social purchasing? 5. How do social enterprises approach social procurement and social purchasing? 8 Selling Social We envision two principal audiences who are interested in these questions. The first audience is the academic circle, including students and scholars engaged with the social economy who seek to further their understanding of how social enterprises are situated in the growing trend of social procurement and social purchasing, based on real-life examples. We aim to extend the understanding of social enterprises beyond their social and economic outcomes and into their engagement with social procurement and social purchasing. Our interest is driven by the potential for social procurement and social purchasing to contribute to the sustainability of social enterprises, which in turn could amplify the social, economic, cultural, and environmental values these organizations create. Many of these values reflect the 2030 Sustainable Development Goals (SDGs), which represent a global attempt to “shift the world onto a sustainable and resilient path” (UN, n.d., p. 5). In fact, the United Nations Inter-Agency Task Force on Social and Solidarity Economy (2014, p. iv) “believes that the SSE [social and solidarity economy] holds considerable promise for addressing the economic, social and environmental objectives and integrated approaches inherent in the concept of sustainable development.” The second audience includes policymakers and practitioners wrestling with how to make social procurement and social purchasing work. For those drafting policies to facilitate and encourage social procurement and social purchasing, this book offers insights from the perspective of social enterprises by showcasing their successes and their challenges. For those working in social enterprises who are wondering how to approach social procurement and social purchasing, the findings presented in this book provide a broad view of the experiences in the field and also some tried-and-tested lessons from their peers. This book follows the chronology of our research journey – with all the twists and turns we faced along the way. Part 1 includes three introductory chapters; each subsequent part of the book presents cases pertaining to one of the themes arising from the research. While most cases touch on all the themes to varying degrees, we selected those that provided the most salient examples of four emergent themes. An overview of the book is as follows: Part 1: Overview of Non-profit Social Enterprises, Social Procurement and Social Purchasing Chapter 1 provides a literature review on the concepts of social enterprise, social procurement, and social purchasing. Chapter 2 offers a scan of social procurement policies by governments in Canada, 9 Introduction highlighting examples from the federal, provincial/territorial, and municipal levels. Chapter 3 presents the results of our 2017 pan- Canadian survey of social enterprises and their experiences in social procurement. Part 2: Securing Large Contracts through Relationship Building Chapters 4–7 look at the importance of relationship building when entering into large contracts with governments. The cases in part 2 demonstrate how social enterprises, aided by a range of policy measures and also champions for social procurement, have been able to secure large contracts through long-term efforts to build and maintain relationships with their purchasers. Part 3: The Importance of Parent Organizations Chapters 8–12 highlight the importance of support from parent nonprofit organizations. The cases under this theme have been reliant on parent organizations to secure sales or contracts. The support could be in the form of purchasing from the social enterprise or connecting the social enterprise to other customers. Some also depend on their parent organizations for in-kind and/or financial support. Part 4: The Dilemma of Selling Social Value Chapters 13–17 look at the dilemma of selling social value. The cases in this theme struggle with whether or not to talk about the social value they create in their goods and services. While social value is core to these social enterprises, many cannot or would not market it as valueadd or part of their value chain. We could infer this to mean that many of their purchasers have yet to incorporate social value into their supply chain. Ultimately, price and quality still trump social impact for purchasers in these cases. Part 5: Balancing Multiple Bottom Lines Chapters 18–22 offer insight into how social enterprises balance multiple bottom lines. The cases under this theme discuss how difficult it has been to balance the programming with the selling aspects of their work. Sometimes these dual aspects of operations conflict with each other, and many decisions require a compromise to either social impact or economic success. 10 Selling Social We conclude the book by looking into the future to offer suggestions to practitioners, scholars, and policymakers on where to go from here. This chapter includes a series of purchaser profiles based on the cases in this book to provide some concrete next steps. REFERENCES Barraket, J., & Weissman, J. (2009). Social procurement and its implications for social enterprise: A literature review. Working Paper No. CPNS 48. The Australian Centre for Philanthropy and Nonproft Studies. https://eprints .qut.edu.au/29060/1/Barraket_and_Weissmann_2009_Working_Paper _No_48_Final.pdf LePage, D. (2014). Exploring social procurement. Accelerating Social Impact CCC, Ltd. https://ccednet-rcdec.ca/sites/ccednet-rcdec.ca/fles/ccednet /exploring-social-procurement_asi-ccc-report.pdf Mickleburgh, R. (2010, January 16). Olympic fower power helps troubled women bloom. The Globe and Mail. https://www.theglobeandmail.com /news/national/olympic-fower-power-helps-troubled-women-bloom /article1320311/ Mook, L. (2007). Social and environmental accounting: The expanded value added statement (Publication No. NR39955) [Doctoral dissertation, University of Toronto]. ProQuest Dissertations Publishing. Offce of the Premier, Ministry of Forests and Range, British Columbia. (2010, February 2). 2010 podiums put B.C. wood in the world spotlight [Press release]. https://archive.news.gov.bc.ca/releases/news_releases_2009-2013 /2010PREM0022-000117.htm Ponsford, I.F. (2011). Actualizing environmental sustainability at Vancouver 2010 venues. International Journal of Event and Festival Management, 2(2), 184–96. https://doi.org/10.1108/17582951111136595 Revington, C., Hoogendam, R., & Holeton, A. (2015). The social procurement intermediary: The state of the art and its development within the GTHA. Learning Enrichment Foundation. https://ccednet-rcdec.ca/en/toolbox/social -procurement-intermediary-state-art-and-its Short, J.R. (2018). Hosting the Olympic Games: The real costs for cities. Routledge, Taylor & Francis Group. UN. (n.d.). Transforming our world: The 2030 agenda for sustainable development. United Nations. https://sustainabledevelopment.un.org/content/documents United Nations Inter-Agency Task Force on Social and Solidarity Economy. (2014). Social and solidarity economy and the challenge of sustainable development. https://knowledgehub.unsse.org/wp-content/uploads/2020/11/2014 Introduction 11 -EN-Social-and-Solidarity-Economy-and-the-Challenge-of-Sustainable -Development-UNTFSSE-Position-Paper.pdf Vancouver Organizing Committee for the 2010 Olympic and Paralympic Winter Games (VANOC). (2010). Sustainability report 2009–2010. https:// stillmed.olympic.org/Documents/Games_Vancouver_2010/VANOC _Sustainability_Report-EN.pdf This page intentionally left blank PART 1 Overview of Non-proft Social Enterprises, Social Procurement, and Social Purchasing Social enterprises are organizations operating in the market that have a social mission. Some maintain that social enterprises represent a shift in the economy from one that has a pure profit orientation to one that includes some social consideration. Others argue that social enterprises are the latest turn in the neoliberal economy where governments offload responsibility for the public to the private and non-profit sectors (Ganz et al., 2018; Spicer et al., 2019). Both sides, however, would agree that the impact of social enterprises goes well beyond the traditional bottom line. This is particularly true of non-profit social enterprises, which reinvest their profits into their social mission rather than paying them out to shareholders. One type of non-profit social enterprise – Work Integration Social Enterprises (WISEs) – aims to integrate marginalized social groups into the mainstream workforce. While WISEs that employ or train members of marginalized social groups have often relied on support from their parent organizations, government funding, charitable foundations, and social purchasing at the community level, increasing policy interest in social procurement offers a new revenue opportunity for social enterprises. The experiences of WISEs engaging in both social procurement and social purchasing have not been studied until now. To set the context for such a study, the first section of this book provides an overview of social enterprises, social procurement, and social purchasing. Chapter 1 presents a literature review providing depth and breadth to these central concepts. It describes the changing marketplace before focusing on social enterprises, particularly WISEs. It also delves into how existing research literature defines two forms of buying social: social purchasing and social procurement. Chapter 2 explores the policies around buying for social value on behalf of governments in Canada. In particular, it focuses on different 20 Chan, Lepp, Luk, Quarter, and Sumner Social Purchasing There is a lengthy history of individuals making purchases based on social criteria such as wanting to support an organization whose mission they identify with. One of the best examples is Girl Guide cookies, which have been on sale in Canada since 1927; many of those who buy Girl Guide cookies are primarily motivated by their desire to support the organization more than a desire for sweets (Girl Guides of Canada, 2016). Organizations can also engage in social purchasing by deciding to purchase certain goods or services from a social enterprise because they want to support its social mission. For example, our research centre at the University of Toronto – the Centre for Learning, Social Economy, and Work (CLSEW) – regularly purchases catering from Common Ground Co-Operative, which supports people with developmental disabilities through training and employment. Unlike social procurement, social purchasing is more informal, discretionary, and possibly spontaneous. While social procurement often involves bids on tenders with criteria that are governed by formal government or corporate policies and a formal contractual agreement, social purchasing does not necessarily require any contract or even formal agreement. Many social-purchasing decisions tend to be one-off, but some like the CLSEW example above are recurring. For social enterprises, social purchases could involve a decision by individual customers and organizational purchasers (i.e., governments, businesses, and non-profits) to support a social enterprise’s sales because these customers wish to support their social missions. Although these purchases are in some ways analogous to a philanthropic contribution or donation because of the intent to support an organization’s social mission, such purchases do not usually qualify as such because they are ultimately a business transaction – i.e., an exchange of goods or services for cash. What distinguishes a social purchase from other forms of purchasing is that the item or service could have been acquired elsewhere using criteria that consumers normally apply (e.g., price, quality, convenience) with the exception of the mission-based considerations that at least in part determine the purchase from a social enterprise. Despite this, we are not suggesting that all purchases from social enterprises are necessarily mission based. Nonetheless, to varying degrees, all purchases from social enterprises result in the realization of an added social value. Social Procurement There are two key concepts in social procurement: social and procurement. The latter – procurement – often refers to policies and processes in Literature Review 21 which governments, private businesses or corporations, and non-profit organizations make purchases that are of significant value or importance to these institutions. In this case, they often rely on procurement policies to guide such decisions, using criteria including competition process, price, quality, timeliness, etc. The simplest example of a procurement policy could be the requirement to obtain at least three price quotes when buying anything over a certain amount, say $1,000. Procurement policies and processes (discussed further in chapter 2) can become increasingly complex, depending on the nature of the goods or services being purchased. For example, the procurement process for the design and construction of a new light rail line in a municipality or the development of a capital campaign for a non-profit organization would involve complex decisions on requirements, budgeting, approvals, etc. Many of the procurement policies and processes are in place to improve the transparency of using public funds and to leverage competition for better pricing or quality of goods and services from suppliers. The former concept – social – adds a new dimension in that it builds social benefits into procurement. As such, social procurement can be defined as “the use of purchasing power to create social value. In the case of public sector purchasing, social procurement involves the utilization of procurement strategies to support social policy objectives” (Barraket & Weissman, 2009, p. 3). Recent studies on social procurement in public construction projects have found that country and contract size predict inclusion of the widest range of social criteria, including employment of people facing exclusion (Montalbán-Domingo et al., 2019), and that the rise of social procurement has created new roles and responsibilities within the construction sector to manage employmentrelated contract requirements (Troje & Gluch, 2020). More generally, social procurement involves modifying the supply chain, so it includes criteria such as quality and price as well as social value (LePage, 2014). The underlying idea is that social procurement policies should open the door for WISEs to bid and be successful on tenders and that social procurement could become one of the ways to support WISEs in their social missions. As a result, social procurement is an increasingly significant option in the context of market-based approaches to workforce integration for marginalized social groups. The concept of leveraging public purchasing to achieve social value dates back before the terminology of social procurement (Barraket et al., 2016; Gardin, 2006; McCrudden, 2004, 2006). Procurement by governments is typically labelled as public procurement; in the context of recent research it is described as social procurement when the criteria include policies that are based on enhancing social benefits or value. Governments in Canada have a long history of linking funding to social 22 Chan, Lepp, Luk, Quarter, and Sumner goals: a classic example is programs after the Second World War to reduce regional inequalities through such means as funding for small to medium-sized enterprises (SMEs) in economically impoverished areas (Beaumier, 1998; Quarter et al., 2018). In the 1980s, the federal government introduced legislation – the Employment Equity Act and the Federal Contractors Program – to encourage businesses selling to the federal government to meet basic equity standards pertaining to women, members of visible minorities, Indigenous people, and people with disabilities. Despite concerns about whether the legislation is meeting its intended goals (Grundy & Smith, 2010; Harish et al., 2010), it serves as evidence of social procurement policies by the federal government. Business corporations are also involved in social procurement and other forms of support for WISEs. However, while anecdotal examples of corporate social procurement are available, there is little research on how widespread it is or to what extent it is targeted to WISEs. Social procurement is believed to be a way for business corporations, as well as government agencies and non-profits, to help WISEs improve the lives of those they train or employ. Social procurement within the corporate sector has been theorized as part of the broader CSR phenomenon (Barraket et al., 2016). Like governments, businesses could also demonstrate their social commitments through social procurement, e.g., supplier diversity programs that engage minority-owned enterprises. Although some research exists on supplier diversity initiatives (Canadian Centre for Diversity and Inclusion, 2016; Shah & Ram, 2006), research on social procurement targeted to WISEs remains scant. For non-profit organizations, social procurement typically involves incorporating environmental benefits for long-term sustainability (Pacheco-Blanco & Bastante-Ceca, 2016; Young et al., 2015). Universities and hospitals are among the largest and the highest profile non-profit organizations facing mounting pressure to consider their purchasing as well as investing with a social lens (Klein, 2015; Yona & Lenferna, 2016). One of the most common ways universities and hospitals engage in social procurement is through their food purchases. The shift to local, organic, and nutritious meals reflects more than fashionable changes in dietary preferences. This shift signals a broader and deeper transformation in how universities and hospitals see their relationships with the local sellers and suppliers who make up the community (Bohunicky et al., 2019; Klein, 2015). Part of this transformation includes procuring from small businesses as well as partnering with social enterprises instead of relying on large contracts with multinational corporations that have dominated in the foodservices on university and hospital campuses for years (Bohunicky et al., 2019; Klein, 2015; Stahlbrand, 2019). Literature Review 23 Despite this change in procurement practices, price remains a dominant factor when it comes to purchasing decisions, leaving social value as a secondary consideration (Young et al., 2015). Selling Social: The Leap from Policy to Practice For social enterprises, the barriers to accessing social procurement opportunities can be viewed as extensions of barriers to conventional (economic or non-social) procurement. Lack of familiarity with the procurement process, capacity to bid, knowledge of procurement opportunities, and understanding of ways to measure and demonstrate social value have been noted in the literature as obstacles for social enterprises in supplying to public procurement (Barraket & Weissman, 2009; Muñoz, 2009). Pointing to research that has shown similarities between SMEs and social enterprises, Muñoz (2009) notes that burden on human resources, difficulty navigating e-procurement, and lack of confidence are some procurement challenges faced by SMEs. The assumption is that such barriers may also be applicable to social enterprises. Orser (2009) reports findings by the Canadian Federation of Independent Businesses (CFIB) that the size of enterprise as measured by the number of employees varies with likelihood of selling to government, and that SMEs appear more likely to learn of public procurement opportunities via business associations than by monitoring MERX, an official public tendering website (www.merx.com). The relevance of social capital in procurement processes has been examined more generally. Social capital can be engendered through long-term supply chain relationships with the public sector, but this type of partnership approach can have positive outcomes (e.g., improved resource and information sharing, cooperation, reduced transaction costs) as well as negative outcomes (e.g., reduced transparency and opportunism) (Erridge & Greer, 2002). Suggestions from the public sector to social enterprises have included greater professionalization (“more businesslike”) and the forming of consortiums between social enterprises in order to improve the chance of successfully bidding on tender (Muñoz, 2009). Despite the challenges noted above, social procurement is believed to be a way for government agencies, business corporations, and nonprofits to help WISEs assist those they serve. While the prevalence of procurement policies and social enterprises both continue to rise across Canada, there has been little research into their interaction. The objective of our three-year, pan-Canadian research project was to shed light on the relationship between policy and practice, and offer 24 Chan, Lepp, Luk, Quarter, and Sumner valuable insight for organizational purchasers, policymakers, and social enterprises attempting to engage in social procurement and social purchasing. Our findings in the survey of social enterprises in Canada revealed that although approximately 60 per cent of the respondents have submitted bids to at least one type of organizational purchaser, the percentage of those with the bidding experience drops considerably when looking at each individual type of organizational purchaser. This suggests that while WISEs are at least somewhat active in social procurement in the broadest sense, they appear to engage in social procurement on a limited basis as shown in the much lower participation rate when looking at individual types of organizational purchasers. Following up on our survey finding, which revealed this low engagement in a formalized bidding process with the individual types of organizational purchasers, we completed a series of cases taking a close look at how the WISEs were engaged in social procurement and social purchasing. Our results suggest that the WISEs in Canada are often successfully securing contracts – just through different channels, usually long-term relationship building and champions. As a result of the findings, we extended the definition of social procurement from the research literature we have reviewed earlier in this chapter to include all higher-value purchases from WISEs by organizations, typically involving formal contracts that may or may not be secured through competitive tendering. In addition to this enhanced definition of social procurement, we also delineated the two sides of buying and selling social for this research project. For organizational purchasers, social procurement and social purchasing can be characterized as attempts by organizations purchasing goods and services to modify their supply chain to include social value (LePage, 2014). For example, the province of Saskatchewan contracts SARCAN to run a portion of recycling for businesses and residents in the province. The fact that SARCAN offers training and employment opportunities for individuals with disabilities to work in the recycling business adds social value to the province’s overall waste management service. By this definition, social procurement is conceptualized primarily from the side of the purchaser. From the perspective of the WISEs as the sellers of goods and services, we can conceptualize social procurement and social purchasing as channels through which the WISEs could add social value in their value chain. The concept of added social value is related to the analysis of competitive advantages where sellers attempt to stand out in the marketplace by offering something that is of value to the customers, rare, inimitable, and an integral part of their organizational capabilities Literature Review 25 (Barney, 1995). 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Medline:17035570 36 Rachel Laforest and Annie Luk As governments embrace new public governance by creating shared value projects, they push to promote diversity in the supply chain, support suppliers that provide employment opportunities to those who are marginalized, create workforce development opportunities, enable local economic development, and develop technical guidance for others in the private sector and the social economy to pursue social procurement. All these examples illustrate that there are overlapping discourses and approaches to implementing social procurement in Canada with some focusing on labour market activation and others on social value creation. Although there is growing consensus around the language of social procurement, the ways that governments use social procurement vary. Approaches to Leveraging Government Purchases for Social Benefits In Canada, governments have used procurement policies to create social benefits, including economic opportunities for Indigenous communities and environmental goals. In leveraging procurement to support social benefits, governments demonstrate leadership through their own procurement policies to influence organizations in the private sector and the social economy to embed non-economic values across their supply chains for goods and services. In recent years, the approach to social procurement by different levels of government in Canada has shifted from ad hoc projects to a system-based design. One of the key informants stated that “money that is going out the door for capital projects, for operations, professional services, we need to be thinking about how it can do double, triple duty: on environmental, social, and economic sides.” This shift has given rise to policies and programs specifically designed to promote social procurement as well as the retooling of existing procurement programs to provide better linkages with policies at other levels of government. The review of select procurement policies and programs in this chapter reveals four broad approaches used by governments in Canada to pursue social benefits by leveraging their own procurement. Buying from Businesses and Organizations Owned or Operated by Marginalized Groups The first approach, perhaps one of the longest standing, is to set aside procurement opportunities specifically for businesses and organizations that are owned or operated by individuals from marginalized groups. This is akin to affirmative action policies in the past that Policies for Social Value by Governments in Canada 37 ensured a portion of the government procurement opportunities would be allocated to those who have historically been excluded from such opportunities, e.g., women, Indigenous people, people with disabilities, etc. This approach is also known as supplier diversity, meaning it represents governments’ attempts to diversify the suppliers they would use instead of rewarding the same ones that have always been successful (Adobor & McMullen, 2007). The federal government’s Procurement Strategy for Aboriginal Business (PSAB), which was established in 1996, is an example of this approach. Using mandatory and voluntary set asides as well as other methods, the PSAB is designed to assist Indigenous businesses to compete for and win federal contracts. In 2014, when the then Aboriginal Affairs and Northern Development Canada (AANDC) evaluated the PSAB, the department expressed “concern that the approach generally favours larger and more established firms over new and smaller businesses and entrepreneurs” (AANDC, 2014, p. ii). This is a finding first identified in a 2007 evaluation and appears to have remained unresolved (Mah, 2014). The 2014 report also highlights the need to provide “direct and regional training to support newer and smaller Aboriginal firms to navigate the increasingly complex and competitive procurement environment” (AANDC, 2014, p. 35). Despite the policy having been in place for almost twenty-five years, the benefits of the PSAB to Indigenous businesses remain unclear. Mah (2014) reviewed the value of contracts awarded through the PSAB from 1996 to 2006 and found that the value of work through the PSAB as a percentage of the federal government’s overall procurement had actually declined after peaking in 1998, suggesting the policy has not necessarily worked consistently and reliably for Indigenous businesses. In addition, Mah (2014) also warned that while procurement policies for social benefits have the potential to support communities and businesses that are marginalized, over-reliance on such policies could make the gains made by these communities and businesses short-lived, suggesting the need for broader support. In August 2019, the federal government launched a one-year pilot project specifically for social procurement. The goal of the pilot is to “increase the number of under-represented suppliers bidding on, and winning, federal government temporary help services contracts in the National Capital Region” (Public Services and Procurement Canada [PSPC], 2020). The definition for qualified suppliers includes businesses that are at least 51 per cent owned by under-represented groups or Indigenous Peoples. The pilot project is to be evaluated after one year and may be further expanded to other types of government contracting. It could also set the stage for further social procurement at the federal 38 Rachel Laforest and Annie Luk level since social procurement was specifically mentioned in the mandate letter, dated December 2019, for the minister of Public Services and Procurement (Office of the Prime Minister, 2019). Buying from Social Enterprises The second approach is a variation of the first with a focus on social enterprise. While the first approach generates social benefits by directing economic opportunities towards those who are marginalized (assuming they would in turn employ others from the same group), the second approach sees social benefits through social enterprises with missions to create social impact, such as employing, training, or programming for those who are marginalized. This is particularly the case when the social enterprises belong to the subset of Work Integration Social Enterprises (WISEs) that are featured in this book. This second approach is a more recent policy development because social enterprises themselves are a more recent phenomenon. To date, provinces and territories have engaged social enterprises in their procurement to varying degrees. To illustrate the broad range of scope and approaches in their attempt to include more social enterprises in their procurement processes, we use three provinces – Manitoba, Québec, and Nova Scotia – as examples. The development of policies and programs for social procurement in these three provinces in part reflects the long-standing history of these provincial governments nurturing and supporting the social enterprises in their jurisdictions (Bouchard et al., 2015; Elson et al., 2015; Lionais, 2015). The Province of Manitoba, in conjunction with the Canadian Community Economic Development Network, launched the Manitoba Social Enterprise Strategy in 2015 (Government of Manitoba & the Canadian Community Economic Development Network, 2015). One of the components in the strategy is designed to increase the number of procurement opportunities that the Government of Manitoba can offer social enterprises, such as doubling the current amount Manitoba Housing spends on maintenance and capital contracts with social enterprises. Building on the success seen in the case of Manitoba Housing (which has worked with BUILD, one of the cases featured in this book), the Manitoba Social Enterprise Strategy includes a recommendation to mandate provincial “departments and Crown corporations to partner with social enterprises to create business plans for other targeted opportunities, such as child and youth care workers, or northern healthy food” (Government of Manitoba & the Canadian Community Economic Development Network, 2015, p. 17). Policies for Social Value by Governments in Canada 39 Also in 2015, the Government of Québec (2015) released its five-year Social Economy Action Plan. The plan had the objective to strengthen the overall social economy sector in the province. Specifically, it included a new interdepartmental working group to develop and integrate procurement criteria focused on social benefits into tenders issued by the province. The government would also develop an awareness campaign to promote social procurement across departments, public agencies, and municipalities. As the plan stands to conclude in 2020, it is unclear at this time what may be next for social procurement policies in Québec. Finally, the Government of Nova Scotia (2017) launched a policy framework – Advancing Social Enterprise in Nova Scotia – to “create a thriving, sustainable social enterprise sector” (p. 1). The policy recognizes the barriers facing social enterprises in their growth and sustainability as well as the social benefits they generate. One of the pillars in the framework is focused on increasing market opportunities for social enterprises by creating a “strategic procurement planning process to identify procurement opportunities … that have been identified by the social enterprise sector in Nova Scotia” (Government of Nova Scotia, 2017, p. 9). Buying with a Social Purpose The third approach shifts the policy focus directly on creating the social benefits governments seek in the individual procurement opportunities, such as specific environmental standards and employment and training opportunities for people who have traditionally been unable to access them. This approach creates social benefits through government procurement in two ways. On the one hand, it allows governments to directly specify the kind of social impacts they want to generate. For example, the government could specify that the paper products it purchases must meet specific environmental standards. On the other hand, this approach also broadens the types of businesses or organizations that governments can buy from to create social benefits because it enables them to generate social benefits through all types of businesses and organizations, and not only social enterprises or businesses owned or operated by those who are marginalized. In this sense, the governments connect somewhat indirectly with the organizations that are actually generating the social benefits (Barraket et al., 2016). For example, since construction companies are generally not in the habit of hiring and training at-risk youth to work on their projects, governments could specify that a certain percentage of the labour working on these projects be 40 Rachel Laforest and Annie Luk set aside for at-risk youth. Using this approach, governments would be able to direct their procurement dollars to benefit at-risk youth without being limited to only dealing with businesses that fit a specific profile. In 2006, the federal government implemented the Policy on Green Procurement which “requires that the procurement of goods and services actively promote environmental stewardship” (Government of Canada, 2018). Together with the establishment of the Office of Greening Government Procurement in 2005 (Attwater, 2014), the policy is intended to “lever the purchasing power of the federal government to achieve economies of scale in the acquisition of environmentally preferable goods and services, thereby reducing the cost for government and strengthening greener markets and industries” (Government of Canada, 2018). Despite the broad coverage of the policy on every aspect of operation within the federal government, the policy does not have any specific goal in terms of the amount of purchased goods and services or any specific environmental criteria for goods and services; such goal setting is left up to the individual departments to decide (Attwater, 2014). While the policy attempts to set a broad framework to expand procurement considerations beyond the economic ones, it also specifies that “green procurement is set within the context of achieving value for money … [including] the consideration of many factors such as cost, performance, availability, quality and environmental performance” (Government of Canada, 2018). Specifically, the environmental criteria remain non-mandatory for procurement decisions, thus reducing the weight of environmental considerations when compared against economic factors such as price (Attwater, 2014). The overriding factor of price or value for money is similarly found in other social procurement policies and programs, indicating that social benefits remain secondary to economic considerations for most governments. For example, the BC Procurement Strategy specifies that social impact criteria should only be included when appropriate. Even when social impact is a criterion, the strategy indicates that it cannot be a mandatory criterion and can account for no more than 10 per cent of the total points for evaluating bids (BC Ministry of Citizens’ Services, 2020). The circuitous journey of a private member bill – first as Bill C-227 in 2016 and then as Bill C-344 in 2017 – to require the inclusion of community benefits in federal infrastructure spending also highlights this point. From the initial instigation of Bill C-227 in February 2016 to the second reading of a new version of the same bill, Bill C-344, in the Senate in May 2019, the twists and turns this simple amendment has Policies for Social Value by Governments in Canada 41 navigated during the legislative process shows the challenge of making a broad change to legislation regarding government procurement. Even though leveraging government procurement for social impact does have broad support, the overall preference within the government is that such requirements be voluntary and remain subordinate to economic considerations (Bill C-227, 2016; Bill C-344, 2018; Canada/Senate of Canada, 2019). At the writing of this chapter, the bill appears to be in limbo, facing an uncertain future because the second reading in the Senate did not reach any decision on whether the bill should proceed to a committee. On the provincial/territorial level, governments have enacted legislation to leverage their infrastructure spending to create social value. Ontario, for example, adopted the Infrastructure for Jobs and Prosperity Act in 2015 based on the principle of community benefits. The act (2015, p. 3) states that Infrastructure planning and investment should promote community benefts, being the supplementary social and economic benefts arising from an infrastructure project that are intended to improve the well-being of a community affected by the project, such as local job creation and training opportunities (including for apprentices, within the meaning of section 9), improvement of public space within the community, and any specifc benefts identifed by the community. In April 2014, the Toronto Community Benefits Network, a coalition of communities impacted by the construction of the Eglinton Crosstown Light Rail Transit, signed the Community Benefits Framework with Metrolinx (the Ontario provincial agency in charge of the infrastructure project). The framework provides for employment, training, apprenticeship, and social procurement opportunities for local residents and businesses. As the first community benefits program for Metrolinx, the project also serves as a test case for application across future transit projects in Ontario (Metrolinx, 2014). At the local level, a group of like-minded officials including those from rural and remote areas in British Columbia came together to form the British Columbia Social Procurement Initiative (BCSPI). The BCSPI serves as a learning and resource hub that provides support to local governments and First Nations to develop and implement a common approach to social procurement. The BCSPI offers training for elected officials and procurement staff, as well as suppliers and contractors, and as of 2022, thirty-two local government and organization members are part of the initiative (BCSPI, n.d.). 42 Rachel Laforest and Annie Luk Buying with the Help of Intermediaries While the three approaches described so far are not necessarily mutually exclusive and could be use jointly, they do represent distinct approaches to social procurement (Barraket et al., 2016). The fourth approach – the use of intermediaries – is complementary to the other three (Barraket, 2019). Intermediaries reflect the governments’ recognition that the connection between governments on the demand side and social benefits on the supply side is not nearly as robust as the conventional commercial contracting relationships (Dragicevic & Ditta, 2016). As such, intermediaries provide support to initiate and maintain such connection, especially on the supply side where the businesses and organizations may be less familiar with government procurement processes (Dragicevic & Ditta, 2016). Intermediaries can serve a range of functions in social procurement, as Barraket’s (2019) research on intermediaries in Australia indicates. With participants from both the sellers’ and the buyers’ sides, Barraket (2019) identifies five functions that intermediaries could serve: (1) developing and nurturing linkages between sellers and buyers; (2) supporting those involved in social procurement through training; (3) capacity building; (4) building awareness and providing policy advice to governments; and (5) enhancing credibility around buying for social value. In Canada, many of these intermediaries are organizations from the social economy sector itself. For example, Buy Social (www .buysocialcanada.com) actively supports organizations on both the selling and the buying side of social procurement through consulting and training services. Social enterprises could also be certified by Buy Social as a way to objectively demonstrate the social value they generate. Another example is the Canadian Community Economic Development Network (https://ccednet-rcdec.ca); established in 1999, it is a grassroots organization with a broad mandate to promote “inclusion, diversity, and equity.” CCEDNet has been working with governments (such as Manitoba) and social enterprises in encouraging social procurement through initiatives such as the Social Enterprise Ecosystem Project and in creating a standardized approach to demonstrate social benefits. Challenges in Implementation As reflected in this chapter so far, approaches to leveraging government purchases for social benefits require a change in organizational culture to channel spending in ways that are more deliberate and strategic. Despite various discussions on the potential benefits of social Policies for Social Value by Governments in Canada 43 procurement policies, there is scant research on the implementation aspect and how procurement specialists are adjusting their practice (Petersen & Kadefors, 2016). Some of the challenges in implementation are related to the procurement process, such as specifying selection criteria, reporting requirements, and balancing against economic considerations. Regardless of the approach governments may choose to buy for social benefits, they need to spell out reporting requirements for suppliers. This is challenging because very little information is available on how to measure and verify the social impact the suppliers are expected to deliver. With very little operational information available, many government officials need to figure out implementation through trial and error. As we have seen in the review of policies above, the balance between economic and social interests in procurement is often difficult to strike. Governments are reluctant to concede on economic considerations or value for money to pursue social benefits despite acknowledging they could potentially leverage considerable social benefits from their contracting activities (e.g., requiring that social value be a desirable but not mandatory criterion or limiting the points assigned for social benefits). The overall impact of social procurement policies is likely to be limited as long as governments continue to consider social benefits only as secondary and not always required. However, any broad and meaningful changes to the way procurement criteria are set up will need to go beyond the procurement departments. Such changes would need extensive management support to overcome internal resistance. As we see in some of the cases featured in this book (e.g., BUILD and SARCAN), champions who are unreservedly committed to leveraging procurement for social benefits are needed to translate these policies into a meaningful change of practices. The lack of such champions connecting policy to practice leads to inconsistencies in the application of the policy as we see in other cases in this book which work mostly with sporadic procurement opportunities (e.g., Horizon Achievement Centre). This points to one of the underlying factors for the limited and inconsistent implementation of social procurement in governments: buying for social benefits requires cultural or institutional changes that are often not possible for procurement specialists to carry out alone (Petersen & Kadefors, 2016). In addition to an overhaul of how government procurement is conducted, another example of where broad changes are required is the need to coordinate with trade agreements. The implementation of social procurement requires an understanding of the regulations surrounding trade requirements. As Dragicevic and Ditta argue (2016, p. 17), “community benefits and 44 Rachel Laforest and Annie Luk social procurement policies operate within a highly complex legal environment, defined by domestic public procurement and business discrimination laws as well as international trade treaties.” This legal environment can create confusion, particularly at the municipal and provincial levels, in terms of obligations. Specific clarifications for social procurement within the context of trade agreements can be beneficial for ensuring compliance while pursuing social benefits through procurement (Ludlow, 2016). Conclusion This review of Canadian procurement and purchasing policies for social value provides a broad picture of how governments make social procurement a reality in the four circumstances described by Barraket and Weissman (2009). As more governments turn their attention to their ability to leverage procurement for social benefits, they are also becoming aware that culture plays a fundamental part in the shift toward meeting these social objectives. At present, governments still struggle with the balance between economic considerations and social value as they manage their day-to-day procurement processes or supply chains. As they build internal capacity and shift organizational culture, governments may be able to increase social value in their procurement processes. REFERENCES Aboriginal Affairs and Northern Development Canada (AANDC). (2014). Final Report – Evaluation of the Procurement Strategy for Aboriginal Businesses (Project Number: 1570-7/13057). https://www.rcaanc-cirnac.gc.ca /DAM/DAM-CIRNAC-RCAANC/DAM-AEV/STAGING/texte-text /ev_psab_1446467643497_eng.pdf Adobor, H., & McMullen, R. (2007). Supplier diversity and supply chain management: A strategic approach. Business Horizon, 50(3), 219–29. https:// doi.org/10.1016/j.bushor.2006.10.003 Attwater, D. (2014). Promoting sustainable development with Canadian public procurement. Public Contract Law Journal, 44(1), 79–111. www.jstor .org/stable/44742587 Bao, G., Wang, X., Larsen, G.L., & Morgan, D.F. (2013). Beyond new public governance: A value-based global framework for performance management, governance, and leadership. Administration & Society, 45(4), 443–67. https://doi.org/10.1177/0095399712464952 Policies for Social Value by Governments in Canada 45 Barraket, J. (2019). The role of intermediaries in social innovation: The case of social procurement in Australia. Journal of Social Entrepreneurship, 11(2), 1–21. https://doi.org/10.1080/19420676.2019.1624272 Barraket, J., Keast, R., & Furneaux, C. (2016). Social procurement and new public governance. Routledge. Barraket, J. & Weissman, J. 2009. Social procurement and its implications for social enterprise: A literature review (Working Paper No. CPNS 48). The Australian Centre for Philanthropy and Nonproft Studies. https://eprints.qut.edu .au/29060/1/Barraket_and_Weissmann_2009_Working_Paper_No_48 _Final.pdf BC Hydro. (n.d.). Indigenous contract and procurement policy at BC Hydro. https://www.bchydro.com/content/dam/BCHydro/customer-portal /documents/corporate/community/Indigenous-Procurement-Policy.pdf BC Ministry of Citizens’ Services. (2020). British Columbia Procurement Strategy Update 2020. https://news.gov.bc.ca/fles/Procurement -Strategy-2020.pdf Bill C-227: An Act to Amend the Department of Public Works and Government Services Act (Community Beneft). Second Reading 5 December 2016, 42nd Parliament, First Session. https://www.parl.ca/DocumentViewer/en/42-1 /bill/C-227/second-reading Bill C-344: An Act to Amend the Department of Public Works and Government Services Act (Community Beneft). Third Reading 13 June 2018, 42nd Parliament, First Session. https://www.parl.ca/DocumentViewer/en/42-1 /bill/C-344/third-reading Bouchard, M.J., Filho, P.C., & Zerdani T. (2015). Social enterprise in Québec: Understanding their “institutional footprint.” Canadian Journal of Nonproft and Social Economy Research, 6(1), 42–62. https://doi.org/10.22230 /cjnser.2015v6n1a198 Canada. Senate of Canada. (2019). Chamber Sitting: 284 on 7 May 2019, 42nd Parliament, First Session. https://sencanada.ca/en/content/sen/chamber/421 /debates/284db_2019-05-07-e?language=e Canadian Centre for Diversity and Inclusion. (2016). Supplier diversity in Canada: Research and analysis of the next step in diversity and inclusion for forward-looking organizations. https://ccdi.ca/media/1066/ccdi-report -supplier-diversity-in-canada-updated-4072016.pdf City of Toronto. (2016). City of Toronto social procurement program. https://www .toronto.ca/wp-content/uploads/2017/09/9607-backgroundfle-91818.pdf City of Toronto. (2019). Supplementary report – Resourcing the Regent Park social development plan: Update on investments, employment and training. https:// www.toronto.ca/legdocs/mmis/2019/cc/bgrd/backgroundfle-139392.pdf British Columbia Social Procurement Initiative (BCSPI). (n.d.). What is social procurement? https://bcspi.ca/what-is-social-procurement/ 52 Andrea Chan et al. Table 3.1. Distribution of Responses and Response Rate by Province/Territory Location % of Total Distribution Response Rate (%) British Columbia 14.7 38.0 Alberta 3.1 28.6 Saskatchewan 5.4 21.2 Manitoba 9.3 34.3 Ontario 36.4 41.4 Quebec 1.6 25.0 New Brunswick 5.4 38.9 Nova Scotia 16.3 40.5 Prince Edward Island 3.1 66.7 Newfoundland & Labrador 1.6 50.0 Yukon, Northwest Territories, and Nunavut2 3.1 23.5 Total 100.0 37.0 from the supply-chain perspective, many of the WISEs in the survey are still very much operating at a business-to-consumer retail level rather than a business-to-business level. Individual customers engage only in social purchasing while organizational purchasers engage in both social procurement and social purchasing, depending on the specific transactions. Since our research project initially had the objective to investigate the connection between the discussion on social procurement at the policy level and the actual experiences by the WISEs, it is the organizational purchasers and how the WISEs engage with them in social procurement and social purchasing that we were most interested in. Procurement in terms of both volume of sales and resulting revenue have the greatest potential not only to promote the financial sustainability and growth of social enterprises but also to bolster the value they generate in the community. Support from Parent Organizations Despite nearly half of survey respondents being incorporated, almost 80 per cent of the WISEs in the survey have parent organizations. The support the survey respondents receive from parent organizations may include management, space, and monetary assistance. Only 6 per cent 2 The three territories are grouped together because of the small number of survey respondents from each of the territories. A Pan-Canadian Survey of Social Enterprises 53 of the social enterprises with parent organizations consider themselves as an independent social enterprise without much influence or oversight from the parent organization. Although support from their parent organizations and the degree to which WISEs are attached to their parents are not noted in the literature as a factor in social enterprises’ procurement activities, we hypothesized that those with a strong attachment could be more likely to engage in social procurement because of the opportunity to leverage the resources of their parents. We made this inference based on our understanding of the complexity of identifying, understanding, and responding to procurement opportunities as well as the resources and know-how required in navigating these opportunities. Organizational Size The WISEs in our survey are relatively small, with 41 per cent of them having revenue under $250,000. Nearly half in this subgroup have revenues exceeding $100,000 but less than $250,000. However, we should also note that 25 per cent of the WISEs in the survey report at least $1 million in revenue, with a handful of them making $5 million or more. Similarly, 68 per cent of the WISEs have at least one but fewer than ten full-time employees. Apart from their board members, these social enterprises do not rely heavily on volunteers, with 73 per cent saying that volunteers in total contribute less than ten hours per week to their services. These responses on revenue and employees are consistent with the finding that most WISEs in the survey have parent organizations and are dependent on these parents. We could surmise that many of the WISEs that are dependent on their parents operate to some degree as programs or divisions within their parent organizations. The small number of employees is also consistent with the response that many of the WISEs rely on their parents for administrative and humanresources support. Findings While we did not hypothesize a specific level of participation in social procurement at the outset of our study, we were surprised to discover a lower-than-expected level of engagement. Nearly 40 per cent of the WISEs report never having submitted procurement bids to any organizational purchasers. Further, less than 40 per cent of the bids submitted are for tenders with social criteria as part of the evaluation process. Put another way, less than a quarter of all the 54 Andrea Chan et al. WISEs surveyed have tried to secure contracts through formal social procurement. A number of scenarios may account for this result. For example, despite the growing discussion on the policy level among organizational purchasers, WISEs have not been able to participate in social procurement. A possible reason for this is the lack of expertise in accessing opportunities or developing proposals as suggested in the research reviewed (Muñoz, 2009; Revington et al., 2015). However, this may be only a partial explanation, as our data suggest WISEs have moderate success with procurement in general. Another potential explanation is that despite growing discussion on the policy level among organizational purchasers, actual procurement opportunities that include social value have yet to materialize broadly. The small proportion of WISEs with experience submitting bids using social criteria points to this explanation. It is also possible that social procurement may be occurring without the formalized higher-order decision-making we initially envisioned as social procurement. Most likely, the reality is a combination of all the above. Our second surprise was that despite moderate engagement and success in formal bidding, many respondents report that their organizational purchasers also buy from them regularly or intermittently. Again, a number of likely scenarios could explain these findings. It is possible that organizational purchasers are sometimes making oneoff purchasing decisions (similar to individual customers), and thus they engage in social purchasing more than social procurement. It could also be that social procurement may not occur strictly through the bidding process (as we asked in the survey questions), and there may be other ways for organizational purchasers to create opportunities for social procurement. It is also possible that the WISEs who participated in the survey have a different understanding of what constitutes social procurement than that which can be found in research literature. A third interesting finding from the survey is related to the importance of social mission to customers. We asked social enterprises to rate their understanding of the importance of their social mission to their organizational purchasers. The survey results indicate that overall, WISEs believe that their organizational purchasers place a high degree of importance on social mission when making purchasing considerations. The social enterprises in the survey understand their social value to be more important to non-profit purchasers than to governments and businesses. A Pan-Canadian Survey of Social Enterprises 55 Engagement and Success of WISEs in (Social) Procurement In the survey, we asked the WISEs about their experiences of submitting social procurement bids, on their own or in collaboration with other social enterprises, to any of three different types of organizational purchasers: governments, businesses, and non-profit organizations. Almost 40 per cent report that they have submitted procurement bids to governments. The proportions are slightly lower for bids to businesses (36 per cent) and other non-profit organizations (33 per cent). Although 38 per cent of the WISEs indicate that they have never submitted bids to any of these organizational purchasers, almost half of all the WISEs in the survey have won contracts with organizational purchasers through the process of bidding. However, when we turn our focus to social procurement, only 40 per cent of the WISEs that have submitted bids report having been asked to specify social criteria as part of their submission. Strictly speaking, the bids that do not include social criteria should be considered conventional rather than social-procurement bids, because the purchasers have not identified in the tenders their interest in creating social, cultural, and/or environmental value or their use of social, cultural, and/ or environmental criteria to evaluate potential vendors. Nonetheless, our research is interested in sales through procurement more broadly as well, since the organizational capacity required to prepare procurement bids presumably overlaps with those needed for social-procurement bids. We can infer that organizational purchasers are not yet actively asking for social value in their purchases, and thus social value is not yet broadly incorporated into the supply chain by organizational purchasers. Because of this, the social enterprises in our survey have not had the opportunity to leverage their social value more widely as a differentiator in the marketplace. Regardless of purchasing or procuring intent, we acknowledge that all sales facilitate social enterprises’ ability to create social, environmental, and cultural value in addition to economic value in the community. The absence of social value being broadly included as procurement and purchasing criteria by organizational purchasers means the social value generated by social enterprises remains secondary or even a nonfactor when compared to the primary purchasing considerations such as price and quality. This is supported by survey findings where WISEs consistently rank price and quality higher than social value because of their understanding of success determinants in acquiring business. Despite the limited emphasis on social benefit in formal procurement tendering encountered by those surveyed, we continued our analysis   56 Andrea Chan et al. Table 3.2. Proportion of Social Enterprises (SEs) Bidding on Procurement Contracts by Purchaser Groups Purchaser Groups Governments Businesses Non-profits All 3 Combined % of SEs having bid for any 40 36 33 62 procurement contracts % of SEs having bid for social 10 9 11 23 procurement contracts % of SEs having won any 27 25 25 49 procurement contracts into factors that may influence the likelihood that social enterprises would bid on procurement contracts. FACTORS INFLUENCING CONTRACT BIDDING Considering that there was moderate engagement and success in securing contracts through procurement (just not social procurement), we were curious to understand the possible factors leading some WISEs to engage with procurement opportunities. We conducted logistic regressions to identify potential characteristics of the WISEs that would be more likely to submit bids to organizational purchasers. The predictor variables we selected clustered into five areas of organizational characteristics: 1. Parental attachment – whether the WISE has deeper attachment to its parent and the number of different types of parental support the WISE receives 2. Marketing capability – whether the social enterprise has marketing staff and the self-evaluated marketing capability 3. Bidding capability – whether the WISE has at least one person with the expertise in preparing bids, the self-evaluated capability in preparing bids, and the self-evaluated capability in demonstrating social values3 4. Total revenue4 5. Human resources capacity – the number of full-time staff, part-time staff, volunteers, and weekly volunteer hours 3 Self-rating on capacity from 1 to 10: 1 for no capacity at all to 10 for great capacity. 4 Total revenue by categories: Less than $30,000; $30,000 to $99,999; $100,000 to $249,999; $250,000 to $499,999; $500,000 to $999,999; $1,000,000 to $2,499,999; $2,500,000 to $4,999,999; and $5,000,000 and up. A Pan-Canadian Survey of Social Enterprises 57 The selection of these areas was based on existing literature alongside our own understanding of social enterprises through our collective research experience in the field. Parental attachment and support are not noted in the literature as factors in social enterprises’ procurement activities. However, we hypothesized that organizations with strong attachment to their parents would be more likely to bid for contracts because they could leverage the resources of their parents. Variables related to marketing capability were included as proxies for social enterprises operating in a more businesslike manner: marketing orientation, professionalization, and corporatization (Maier et al., 2016). Capacity to prepare bids and demonstrate social value were both noted challenges to securing procurement contracts for social enterprises (Barraket & Weissman, 2009; Muñoz, 2009). Total revenue and human resources were measured for the size of organization, which was noted to influence engagement with procurement by small to medium-sized enterprises (SMEs) (Orser, 2009). The results from our logistic regression analysis show that only two of the five areas of organizational characteristics are statistically significant predictors. The two variables significantly associated with bids to governments are the WISE’s self-evaluated capacity on bidding and total revenue. The odds of social enterprises submitting bids to governments would increase by 36 per cent for every unit increase in the way they self-evaluate their bidding capacity (OR = 1.36, p < .0001). Likewise, the odds for bids to governments would increase by 48 per cent (OR = 1.48, p = .029) for every jump in the total revenue bracket. The higher a social enterprise rates its capacity to prepare bids and the higher its total revenue, the more likely it is to submit a government bid. Repeating the analysis with bids on contracts for non-profit organizations as the outcome variable, we found similar results, with selfevaluated bidding capacity and total revenue again predicting likelihood for social enterprises to bid.5 In contrast, when we conducted the analysis a third time with bids on contracts with private businesses as the outcome variable, we found no statistically significant predictors. In other words, none of the predictor variables we looked at could explain whether a social enterprise would submit bids to businesses. 5 The odds of social enterprises submitting bids to non-profit organizations increase by 19 per cent for every increase in their self-evaluated bidding capacity (OR = 1.19, p = .030), controlling for other variables. The odds of bidding to non-profit organizations increase by 50 per cent for every increase in the total revenue categories (OR = 1.50, p = .024), controlling for all else in the model. 58 Andrea Chan et al. We also asked social enterprises to rate their own understanding of the importance of their social mission to their organizational purchasers. On a 10-point scale with 10 indicating extreme importance to an organizational purchasing group (i.e., high value associated with social mission), social enterprises perceived their social mission to be most important to non-profit purchasers (mean rating of 8.2), followed by government purchasers (mean rating of 7.3) and private-business purchasers (mean rating of 6.3). On whether this perceived importance of social mission is tied to the social enterprises’ likelihood to bid, we found only one statistically significant result. The social enterprises that have submitted bids for government contracts also say that they perceive their social mission to be significantly more important to government purchasers than those that are non-bidders, t(108.80) = −3.62, p < .0001.6 There is no significant difference between bidders and nonbidders in the way they perceive the importance of their social mission, regarding non-profit or private-business purchasers. OTHER POSSIBLE FACILITATORS AND CHALLENGES FOR SOCIAL PROCUREMENT We were surprised by the survey results showing that only 23 per cent of the respondents have submitted social procurement bids (although around 60 per cent have experience with procurement bidding more broadly), especially considering that social procurement has garnered substantive policy interest for some time. We used qualitative interviews to gain a better understanding of why those who have submitted bids have chosen to do so when many of their peers have not. The interviews added to the research literature, which has so far generally focused on the challenges facing social enterprises preparing bids and fulfilling contracts, by investigating the approaches to securing procurement contracts as well as the rationale behind whether to bid on (social) procurement tenders or not (Barraket & Weissman, 2009; Muñoz, 2009). Since the total number of respondents with experience submitting social procurement bids is small, we do not distinguish between social and conventional procurement bids or between different types of organizational purchasers. Experiences varied, with some interviewees 6 Three independent sample t-tests were conducted on the scores of perceived importance of social mission, one for each of the three respective purchasing groups (e.g., government, businesses, and non-profit organizations). The comparison groups for each t-test were social enterprises that (1) bid on tenders, and (2) did not bid on tenders put out by the purchasing group under consideration. A Pan-Canadian Survey of Social Enterprises 59 saying they would wait passively for organizational purchasers to invite submissions while others, especially those without major funders and thus with more pressure to be financially sustainable, take a more proactive approach. WISEs proactively looking for opportunities from both private and public sectors report doing so because bidding is their only means of survival. One interviewee mentions that his organization began actively bidding on government projects after building close relationships with other non-profits and social enterprises (one of which is a major social enterprise in North America), which previously introduced them to the concept. But in general, WISEs appear to be more reactive than proactive in their engagement with the bidding process. One interviewee reports that “[Years ago] someone from the government might have told us that they needed certain products or services, therefore inviting us to bid, as we’re a qualified bidder I guess. From there, we would start looking at their tender list once again and see if that’s something we can or cannot do and then trying hard to get on their ‘preferred’ list.” Although revenue serves as the primary motivation for pursuing bid opportunities, another reason articulated by an interviewee is “the pride of producing something of value that we can sell, and skill-building of course.” Overall, follow-up discussions through interviews confirm the survey findings and align with the challenges identified in research literature – confirming that size and capacity have considerable impact on whether social enterprises choose to submit bids or not. One interviewee mentions that “the government … [has] a very robust and time-consuming process of bidding that is not easy … But again, having the resources, time, capacity, staff to participate in a proper bid, is a full-time thing to do,” highlighting that capacity remains a major issue. Many of the social enterprises in this study are small, suggesting that they lack the necessary resources to submit bids. These WISEs often do not have the budget to hire dedicated staff, and their current staff are already overburdened, further limiting their ability to take on additional projects. Depending on the nature of the projects, some interviewees identify space and modes of transportation as limitations in being able to fulfil the demands of large projects. One interviewee selling baked goods in a rural area points out that it would be difficult to transport products to the nearest urban centre where most organizational purchasers are located. Another interviewee talks about their inability to deliver large orders on short notice, saying this is not possible for the clients or program participants that they employ (i.e., people with disabilities). Yet another interviewee argues that the bureaucracy associated with submitting bids to the governments is too complex. She feels the 60 Andrea Chan et al. social enterprise where she works lacks the confidence to compete with larger organizations that may be generating a financial surplus. A weak financial position, in her mind, could be interpreted by purchasers as not being properly managed to generate a surplus, and as such, the social enterprise might not be trusted with additional projects. In sum, rural locations, complicated bureaucracy, lack of confidence, and lack of organizational capacity are obstacles to submitting social procurement bids. We also asked WISEs whether they believe the inclusion of social mission as part of their bids or proposals (i.e., highlighting the potential social value they could realize as the chosen contractor) could improve success in securing procurement contracts. Many interviewees include their social mandates in their promotional tools (e.g., websites and advertisements) and proposal bids when and if they have submitted. One states that “we have always included our social mandate in our proposals, but the way we talk about it will depend on our understanding of the values of whom we are bidding for,” echoing other interviewees who claim their social mandates as an important part of their identity. The mandates can serve as an edge in promotion and proposal bids, since the social mandates demonstrate how the WISEs can add value by employing individuals from marginalized groups. Although most interviewees see their social mission as an important element of their value chain that should be central to their marketing and sales, some do not feel the same. One interviewee points out that every potential customer has different needs and requirements, and that discussing the social mandate may not always be the best approach. As a result, this WISE only speaks of its social mandate if doing so would be beneficial. Purchasing by Organizations Outside of Competitive Procurement Survey findings reveal that beyond procurement contracts, WISEs are selling to governments, businesses, and non-profit organizations outside of any procurement framework. For all three organizational purchaser groups, substantively more WISEs report having them as regular, non-procurement customers than procurement purchasers. We infer that government agencies, businesses, and non-profit organizations may be engaged in a form of social purchasing, given how central a WISE’s social mission can be to their sales and marketing. These purchases are distinct from procurement as we initially defined it in that they may be smaller in value and executed with less systematic deliberation, as a way for organizations to support WISEs through less formalized and more business-to-consumer type purchases. However,   A Pan-Canadian Survey of Social Enterprises 61 Table 3.3. Social Enterprises (SEs) by Purchaser Groups, by Purchasing Types Purchaser Groups Governments Businesses Non-profits % of SEs with group as regular or 66 90 91 intermittent purchaser % of SEs with group as procurement 27 25 25 purchaser there is also the possibility that these purchases include higher-value transactions formalized by contractual agreements, but these contracts are not secured through competitive bidding. Some of the survey participants hint at the importance of relationship-building with (potential) purchasers during interviews, and a few talk about their substantive and formalized service contracts with governments and non-profit organizations while having no experience with bidding on tenders. Discussion The results of our study reveal that, contrary to expectations, a surprisingly small percentage of respondents have submitted social procurement bids, whether to governments, businesses, or non-profit organizations. Only two factors predict whether a WISE would bid: the level of revenue and the organization’s own evaluation of its capacity to prepare bids. Revenue is typically correlated with the number of employees, and perhaps unsurprisingly the WISEs with higher revenue inevitably have more staff and thus a greater capacity to organize bids. This finding is consistent with those from previous research on SMEs and social enterprises, which found that size and understanding of the tendering process influence engagement with procurement (Barraket & Weissman, 2009; Muñoz, 2009). Our inability to pinpoint consistent organizational characteristics among the successful WISEs may be attributable to the low proportion of respondents experiencing success with bids within each of the three purchaser groups, which is one impediment in our analysis. We were also surprised by these survey results, given the publicity of recent policies designed to facilitate bids from social enterprises (as discussed in chapter 2). These results point to a multitude of possibilities for additional research: for example, what is the capacity threshold that a social enterprise needs to reach before bidding? The supplemental survey interviews affirm the findings of the quantitative data. Small WISEs (in terms of revenue) do not have the capacity to bid. The WISEs see bureaucracy as a hindrance, suggesting that staff 68 Securing Large Contracts through Relationship Building 3. What is the role of a champion in relationship building? 4. How is relationship building for WISEs different with public- and private-sector partners? 5. What does relationship building mean for social enterprises that are smaller than those featured in these cases? REFERENCES Buy Social Canada. (2018). A guide to social procurement. https://buy-social -canada.cdn.prismic.io/buy-social-canada%2F47fa7b64-c5f0-4661-9a00 -93a936f38dd0_bsc_socialprocurement_screen-opt.pdf Government of Canada. (2020, January 15). 2018 Canadian collaborative procurement initiative newsletter. https://web.archive.org/web/20191127122447/https:// www.tpsgc-pwgsc.gc.ca/app-acq/app-collaborat-procur/annuelle-update -2018-eng.html Lupick, T. (2017). Social procurement: State of practice. https://sustain.ubc.ca /sites/default/fles/2017-41_%20Social%20Procurement%20State%20of%20 Practice_Lupick.pdf Muñoz, S. (2009). Social enterprise and public sector voices on procurement. Social Enterprise Journal, 5(1), 69–82. https://doi.org/10.1108/17508610910956417 Revington, C., Hoogendam, R., & Holeton, A. (2015). The social procurement intermediary: The state of the art and its development within the GTHA. Learning Enrichment Foundation. https://ccednet-rcdec.ca/en/toolbox/social -procurement-intermediary-state-art-and-its 4 BUILD Inc. MARTY DONKERVOORT AND ART LADD Introduction It takes time, perseverance, and leadership to develop a successful relationship between a social enterprise and an organizational purchaser. Winnipeg’s BUILD Inc., a work integrated social enterprise in the construction sector, has developed relationships with government, nonprofit organizations, and private-sector businesses resulting in large contracts totalling nearly $15 million in total revenue since its establishment in 2006. The annual earned revenue has increased from $86,000 in 2006 to approximately $1.25 million in the fiscal year ending in 2018 for a compounded annual growth rate of 28 per cent. Backed by a series of champions, BUILD has been a trailblazer in developing social procurement relationships with government, which account for approximately 93 per cent of all BUILD’s earned revenue since its creation in 2006. BUILD’s success has been recognized with numerous awards including ScotiaBank’s EcoLiving Green Employer (2011), Apprenticeship Manitoba’s Employer of the Year (2013), Winnipeg Chamber of Commerce’s Spirit of Winnipeg Award (2015 and 2020), and Manitoba Chambers of Commerce’s Business Award (Finalist 2018). Mission BUILD – which stands for Building Urban Industries for Local Development – is a non-share capital (or non-profit) corporation without charitable status, whose mission is to empower people facing multiple barriers to employment by providing training and employment opportunities. These barriers can include criminal records, low levels of formal education, little or no work experience, and the lack of official identification such as a driver’s licence or bank account. Some of 70 Marty Donkervoort and Art Ladd BUILD’s trainees have experience with the child welfare system, either having aged out of care themselves or having their children in custody of the system. For BUILD’s participants, one of the most serious barriers to employment stems from systemic racism towards Indigenous Peoples and the intergenerational impacts of colonization and residential schools. Almost all of BUILD’s trainees are Indigenous, indicative of how that population disproportionally experience barriers to employment. BUILD works with its trainees to overcome these barriers through a six-month (or 910 hours) training program covering both classroom and on-the-job learning. Participants in the program earn a wage and are provided with a wide range of skills training. The training includes technical skills, such as safety certifications and the use of different tools in the construction trades. Essential skills such as numeracy and literacy tutoring are provided, particularly trades math, where trainees master their skills with tape measures, fractions, and arithmetic. The BUILD program also embeds interpersonal skills and life skills including nutrition, money management, healthy relationships, maintaining stable housing, and managing mental health and addictions, among other topics. Supported by skills instructors, academic tutors, and a case coordinator, trainees spend two months in the classroom and the workshop learning these different skills, preparing them for many challenges they will encounter in work and life. After completing two months of intensive training, trainees are ready to join BUILD’s construction crews on job sites. Over the next four months, trainees work under BUILD’s skilled tradespeople, who lead them through different jobs and scopes of work, mentoring them along the way. BUILD recruits twenty to twenty-four new trainees every two months to replace the trainees who complete the initial two-month in-house training sessions and continue on to BUILD’s construction sites. The BUILD model is different from a conventional work practicum, which typically involves engaging a learner on small discreet projects. At BUILD, trainees are part of the crew and learn the entire scope of work, on actual worksites, for real clients, with deadlines and quality assurance mechanisms. The learning opportunities are immense, as trainees become engaged with on-the-job problem-solving while working with their mentors who often have experienced similar life circumstances or are BUILD graduates themselves. Individual crews are small, providing a desirable instructor-to-trainee ratio. Typically BUILD uses a three- or four-person crew, with a crew lead, a lead hand, and one or two trainees. If a trainee requires extra guidance on any aspect of the BUILD Inc. 71 work, the crew lead is able to work one-on-one with the trainee while the lead hand keeps the job site moving towards completion. As the trainees move through the six-month program, they set goals with the Training Department at BUILD, planning for future education or employment aspirations. The trainees develop their résumés, write cover letters, and do mock job interviews, all of which help them transition towards the end of their time at BUILD. To date, approximately one thousand people have completed BUILD’s training program. As trainees near the end of their six-month term at BUILD, they begin looking for work. Typically, they look for work in the open market, through many of BUILD’s social-enterprise partners, or through employers who subcontract work to BUILD. The last option listed is becoming increasingly successful for trainees. When private-sector construction companies subcontract work to BUILD, trainees have the opportunity to showcase their attendance, work ethic, and willingness to learn directly to the foreman. History In the fall of 2005, going into the winter of 2006, Manitoba experienced a 17.1 per cent spike in the price of primary natural gas, the main source of heating in the province (The Manitoba Public Utilities Board, n.d.). This was a significant increase affecting all Manitobans; however, those already in poverty were hit hardest. In Winnipeg’s inner city, where poverty was concentrated, the old and poorly insulated housing stock combined with the jump in heating prices made for a perfect storm of human misery. People living in poverty in Winnipeg’s inner city were faced with even more impossible circumstances, unable to afford to heat the home in winter, pay rent, and still feed the family. Lawrence Poirier, Executive Director of Kinew Housing, saw these impacts first-hand with his tenants and in the surrounding community. He and other members of the Indigenous community, as well as community activists including Tom Simms, executive director at Community Education Development Association, looked at possible solutions to address the cascading issues of poverty and high utility costs. They were familiar with the success of Inner City Renovation, a Winnipeg-based social enterprise focusing on construction that had laid the groundwork for the role of social enterprises in the construction sector (Donkervoort, 2013). They were also familiar with the role played by Neechi Foods Co-op Ltd., a social enterprise that in 1990 started up a grocery store in Winnipeg’s North End to provide sustainable, 72 Marty Donkervoort and Art Ladd meaningful jobs for individuals from the local Indigenous community and to offer a healthy selection of food at affordable prices. Around the same time, Shaun Loney, director of Energy Policy in the provincial government’s Department of Science, Technology, Energy, and Mines had been working with his team to develop policy addressing the same issue. Their work led to the introduction of Bill 11 in 2006, which required Manitoba Hydro to set aside a percentage of its profits from export sales to establish a fund for the reduction of energy consumption through retrofitting in low-income communities. In the spirit of entrepreneurialism, these individuals conceived an innovative way to address the crisis. Together, they created a contractor enterprise to insulate these inner-city homes and hire the people who lived there to do the work. In July 2006, Building Urban Industries for Local Development (BUILD) was incorporated as a non-profit social enterprise and began changing the employment and energy-consump- tion landscape in Winnipeg’s inner city. BUILD’s first board of directors included several members from Winnipeg’s Indigenous community, including Jerry Woods (chair of the Manitoba Human Rights Commission) and Lawrence Poirier (executive director of Kinew Housing). Knowing that private-sector general contractors were reluctant to work in their neighbourhoods mainly due to safety concerns and low profit margins, they created BUILD to complete the insulation work others were unwilling to do. In the beginning, BUILD’s staff consisted of two community-housing workers, a social-support staffer, a carpenter, and a small number of trainees. They operated out of a two-room shared office space in the same building as Kinew Housing at 424 Logan Avenue, in Winnipeg’s inner city. Around the same time, a number of public and private partners including the province, Manitoba Hydro (a provincial crown corporation), Winnipeg Partnership Agreement (a federal-provincial-municipal funding agreement), and Winnipeg Foundation (a community foundation) funded the Centennial Project1 to address a variety of inner-city issues, such as energy-saving initiatives. The pilot program from the Centennial Project involved energy-saving retrofits in 120 Centennial neighbourhood homes. BUILD was hired by individual homeowners 1 In 1967, as Canada marked its centennial of confederation, the federal government funded a multitude of construction projects across the country, including housing projects in Winnipeg, which by 2005 were in serious need of repair and retrofit (Sanderson, 2016). BUILD Inc. 73 to complete the insulation retrofits on a number of these homes. Homeowners were then compensated by the Centennial Project partners. Another facet of the Centennial Project, the Centennial Fencing Project, saw the City of Winnipeg compensate property owners to repair and build fences on residential properties. BUILD was hired by individual homeowners to do the work. Kinew Housing also took advantage of this city-funded initiative and hired BUILD to install fencing for their residential housing units. The Centennial Project led the way for BUILD’s future relationships with Manitoba Housing and Manitoba Hydro. Between 2006 and 2008, BUILD retrofitted two hundred homes in the inner city. Most of their early projects were installing water-saving devices like shower heads and aerators, as well as insulating basements and attics. The work was made possible by Manitoba Hydro’s Lower Income Energy Efficiency Program (LIEEP), a precursor to the Power Smart Affordable Energy Program (AEP). Labour in those early days was subsidized primarily by grants from government. Most of this initial energy-saving-related work was completed in residences operated by Manitoba Housing. In BUILD’s early years, the organization was managed by the volunteer board along with a project manager who provided leadership to the construction crews. There was no executive director, and the enterprise struggled to find its feet. By 2008, a major development occurred that would significantly change BUILD’s future. Shaun Loney, who had been working with the Manitoba Government, was hired as BUILD’s first executive director. Making the argument that government is the financial beneficiary of the work done by non-profit organizations like BUILD, Loney negotiated a successful secondment from the province to BUILD. This hiring proved to be an important milestone in BUILD’s history and significantly propelled the organization forward. Based on the experience gained from the Centennial Project, BUILD shifted its focus to enter into similar work with other community-renewal corporations in the city. BUILD’s training program component became more robust, providing numeracy tutoring and a wide range of health and safety trades training. In addition to the training enhancements, BUILD also secured a wide variety of new work and formed new partnerships. Shortly after Loney started as executive director, BUILD played a critical role in the establishment of Manitoba Green Retrofit (MGR), another social enterprise in the construction sector. Since BUILD’s existing funding agreements prevented it from pursuing work in the private sector, BUILD created MGR as a new non-profit social enterprise that would 74 Marty Donkervoort and Art Ladd not be dependent on government funding and thus not restricted by funding agreements. One of BUILD’s senior managers became MGR’s general manager; MGR also hired some of BUILD’s training program graduates. Since the establishment of MGR in 2011, the funding-related restrictions posed by government have changed and both enterprises have since been able to pursue contracts in the private sector while receiving government funding. Not long afterwards, BUILD formed a partnership with MGR and Pollock’s Hardware, a consumer co-op, to jointly purchase an old warehouse in the north end of Winnipeg. BUILD was hired by the newly constituted partnership to renovate the space for a new social enterprise centre that was to act as a hub for a number of social enterprises and community non-profit organizations. At the same time, BUILD worked with Pollock’s Hardware to purchase low-flush toilets and other building products – a good example of a social enterprise leveraging its purchase power to support another social-econ- omy organization. This relationship was mutually beneficial until the demand for toilets decreased and Pollock’s was unable to sustain its wholesale operations. Key Customers Even after the completion of the Centennial Project, BUILD continued its fruitful relationship with Manitoba Hydro and developed new purchasing relationships with Manitoba Housing as well as private-sector enterprises such as Transcona Roofing Ltd. and community non-profit organizations like Kanata Housing Corp. Each of these relationships is presented in this section. Manitoba Housing Manitoba Housing is a division of the province’s Department of Families, responsible for a wide range of subsidized housing throughout the province. It partners with other government agencies, community organizations, and non-profit groups to provide housing to individuals and families who are not able to find affordable, adequate, or suitable housing in the private market. By embracing a service-oriented approach, Manitoba Housing is working toward more positive relationships with its tenants, community residents, and stakeholders. Manitoba Housing was keen to work in partnership with social enterprises to reduce both poverty and energy consumption. As the largest BUILD Inc. 75 landlord in the province, Manitoba Housing was interested in reducing energy consumption since many utility bills were paid through social assistance programs, ultimately funded by taxpayers. BUILD’s relationship with Manitoba Housing started in 2006 and remained at the time of writing. In those thirteen years, Manitoba Housing purchased more than $12 million in services. In the beginning, the volume of purchasing was slow, totalling less than $3,000 in the first two years. However, it increased steadily thereafter, peaking at more than $2.5 million in 2013. Since then, the amount Manitoba Housing spent with BUILD has declined to just over $800,000 in 2018. Two factors contributed to the gradual increase to 2013. The first was the purchase and installation of low-flush toilets. Once this initiative came to an end, purchasing levels dropped by more than a million dollars over the next year. By 2014, most of the purchasing was related to apartment turnovers. The second factor took place in 2009, shortly after then minister of Housing Kerri Irvin-Ross had taken significant interest in pursuing opportunities for social enterprises and started directing Manitoba Housing to pursue opportunities with social enterprises. By 2011, BUILD’s revenue from Manitoba Housing purchases more than doubled from 2010; and by 2013, it doubled again to $2.5 million. BUILD’s success took champions at both BUILD and Manitoba Housing to consummate the procurement relationship. Historical contract values between BUILD and Manitoba Housing are documented as a supplement at the end of this case. After some initial growing pains related to quality, pricing, and delivery times, BUILD now enjoys an “easy and beneficial” relationship with Manitoba Housing, according to Michael Burrows, director of Social Enterprise Initiative at Manitoba Housing. In consultation with BUILD and other social enterprises in the construction sector, Manitoba Housing works with a standard price cost book for the various components involved in the repair of rental housing units between renters. This has streamlined the relationship with social enterprises as the contract for each unit is based on an agreed-upon price, which, in turn, is based on the components documented in a scope of work prepared by Manitoba Housing. The introduction of this standard price cost book eliminated the tendering for social enterprises. At the time of writing, Manitoba Housing issued purchase orders for one to five units at a time to BUILD based on the predetermined contractual price. The average cost for a standard suite turnover is between $3,000 and $5,000, and completion is expected within thirty days. Units requiring more substantial work can cost as much as $30,000, with a longer completion date. 76 Marty Donkervoort and Art Ladd Based on discussions and negotiations in 2013, the Manitoba government announced its Manitoba Social Enterprise Strategy Framework in 2014. The framework made a commitment for Manitoba Housing to double its then current annual investment in social procurement to $10 million. It also created an intermediary at Manitoba Housing, called the Social Enterprise Initiative, to work directly with social enterprises. The use of an intermediary insulated social procurement from the organization’s other procurement operations. As part of this new initiative, BUILD and Manitoba Housing signed their first Memorandum of Understanding (MOU), which specified their relationship. The MOU was renewed in 2015 and 2017. The MOU signed on 29 May 2017 established a mutually beneficial relationship for repair, maintenance, and minor renovation projects of Manitoba Housing’s residential stock in the City of Winnipeg. One of the missions of the MOU states that “Together the parties enter into this MOU to improve the condition of [Manitoba Housing’s] stock and create local training and economic opportunities.” As such, Manitoba Housing is committed to compensating BUILD for each project according to agreed-upon contract pricing up to a maximum of $100,000 per project and up to a maximum value of $3 million over two years. In 2015, BUILD’s then executive director, Annetta Armstrong, was seconded to Manitoba Housing to assist with developing its social procurement policy. She also helped resolve some of the difficulties in the procurement relationship between Manitoba Housing and other social enterprises. In addition to BUILD and MGR (operating as Purpose Construction), Manitoba Housing started procurement relationships with two other Winnipeg-based social enterprises and one Brandonbased social enterprise in the construction sector: Genesis Property Services, North End Community Renewal Corporation (NECRC), and Brandon Energy Efficiency Program. Manitoba Housing is responsible for approximately $4 to 5 million of annual social procurement with the five social enterprises in Manitoba mentioned above. This amount represents approximately 50 per cent of its $10 million budget for unit turnover renovations and approximately 5 per cent of Manitoba Housing’s annual budget. Purchase orders are issued monthly to each of the social enterprises based on their location and capacity. Manitoba Housing is extremely satisfied with its procurement relationship with BUILD as well as the other social enterprises. It is pleased that some of BUILD’s employees are tenants in Manitoba Housing units and that BUILD is part of removing long-term barriers to employment for residents in inner-city, low-income neighbourhoods. BUILD Inc. 77 Manitoba Hydro Manitoba Hydro is the electric power and natural gas utility in the province of Manitoba, Canada. Founded in 1961, it is a provincial Crown corporation, governed by the Manitoba Hydro-Electric Board and the Manitoba Hydro Act. Manitoba Hydro started its relationship with BUILD in 2006, its first year of operation. In those early years, Manitoba Hydro’s purchases exceeded those of Manitoba Housing. In the first year (fiscal year ending in 2007) BUILD earned more than $83,000 from Manitoba Hydro. Revenue from Manitoba Hydro increased annually until 2011–13 when there was little or no revenue. It picked up again in 2015 and has continued to grow to more than $265,000 in fiscal year end 2018. Since BUILD’s start-up, Manitoba Hydro has purchased services totalling nearly $2 million. From the outset in 2006, the relationship was different from that with Manitoba Housing. The relationship started with a pilot project in Winnipeg’s Centennial neighbourhood where BUILD completed energy retrofits for two hundred houses. Upon completion of this project, Manitoba Hydro developed a partnership with NECRC to promote energy efficiency upgrades in the local community. Once a homeowner’s application to the Power Smart Program was approved, they could choose a service provider. BUILD was well known in the community and recommended by NECRC. Once picked by a homeowner, BUILD would complete the work and invoice Manitoba Hydro. Over the years, pricing the work varied between a predetermined fixed price and a negotiated price. In this way, although Manitoba Hydro pays the invoices, the purchasing decision is actually made by the individual homeowner or housing organization. Through this relationship, BUILD was completing work for Manitoba Hydro’s Lower Income Energy Efficiency Program (LIEEP), which later developed into the PowerSmart Affordable Energy Program (AEP) to increase energy efficiency by better insulating basements and attics (Loney, 2012). The Manitoba Hydro energy saving programs also provided homeowners with free water-saving shower heads and aerators, which were installed by BUILD while also installing low-flush toilets. The relationship with Manitoba Hydro resulted in lower utility bills for inner city residents, created employment for inner-city residents, and provided BUILD with a revenue stream. Manitoba Hydro developed relationships with other social enterprises including Manitoba Green Retrofit (MGR, now Purpose Construction). This relationship saw Manitoba Hydro pay the upfront costs of the 84 Andrea Chan direct service providers in the community, offering a range of assistance including housing, vocational, volunteer, and recreational programs. SARC as the umbrella organization supports its members through sectoral advocacy, networking opportunities, organizational development, and consultancy in areas including human resources, labour relations, and facility planning. Furthermore, SARC administers pension and benefits plans for SARCAN and its other member organizations in the community. As the parent organization, SARC also contributes personnel, space, and financial support towards SARCAN’s operation. A Win-Win Opportunity In Saskatchewan in the mid-1980s, litter and debris (including discarded bottles in ditches and alongside highways) had become a public nuisance. With increased sales and production of beverages in nonrefillable containers, the province had to formulate a plan in anticipation of the waste increase. The province decided upon a strategy that would address two concerns with one policy, modelling their efforts on similar affirmative business models found in other jurisdictions. A recycling depot operated by agencies that provide employment and job training to marginalized people would address two issues: the Ministry of Social Services’ need to support individuals facing barriers to employment and the strain felt by the Ministry of the Environment’s under-equipped recycling system. SARC’s expansive network of member agencies was a vital advantage for creating a province-wide recycling system; in 1988, SARCAN was awarded the provincial contract to create and administer a recycling operation for aluminum cans. The Ministry of the Environment would retain exclusive rights to determine locations for the depots based on population and geography, the types of beverage containers collected, and the amount of the refundable deposit fee on containers paid at the point of purchase. With its member agencies and the Ministry of Social Services, SARC mapped out depot locations with members that indicated an interest in being a part of the business; where there were geographic gaps in coverage, SARC would directly operate the depots through its newly developed social enterprise, SARCAN. Operations SARCAN was launched in 1988 with thirty-two drop-off depots across the province, offering five cents for every aluminum can dropped off for deposit return. Over the years, the contract with the province SARCAN Recycling: A Division of SARC 85 expanded to include all ready-to-serve beverage containers as part of its deposit-return program. SARCAN itself has also grown to include other streams of services at its depots, including the collection of refillable beer bottles, leftover household paint, and end-of-life electronics through negotiated contracts with paint and electronics manufacturers and retailers. Currently present in sixty-five communities, SARCAN directly operates thirty of its seventy-two depots. The other forty-two depots are run by SARC’s member agencies through a franchise arrangement, in which SARCAN covers the expenses incurred by each depot (e.g., wages and rent). SARCAN oversees the collection and operation of the entire social enterprise and provides management services to all depots (i.e., its own as well as all the franchises). SARCAN is also in charge of the logistics of transporting and processing all collected material at its two plants in Regina and Saskatoon, getting the processed material to the end market for recycled material, and ensuring compliance of all contract requirements with the Ministry of the Environment. Financial Position In fiscal year ending 2018, SARCAN’s revenue from its legislated program (i.e., handling of beverage containers that are legislated by the Ministry of the Environment) totalled $37 million. In addition, revenue from its non-legislated program (i.e., handling of used paint and electronics) accounted for just over $1 million. The net income (revenue less expenditure) from SARCAN’s combined recycling programs was approximately $3 million for the same year. SARCAN’s primary revenue source is through activities under contract with the Ministry of the Environment. For the fiscal year 2013–14, the majority of SARCAN’s total revenue came from the legislated program (73 per cent), with salvage sales accounting for 25.5 per cent, and other revenue for the remaining 1.5 per cent. The Ministry of the Environment funds the program primarily through the non-refundable environmental handling charge. Environmental Impact In its 2017–18 Annual Report, SARCAN boasts an overall annual return rate of approximately 85 per cent for all non-refillable beverage containers sold in the province and 7.5 billion containers recycled in total since the beginning of operations in 1998. Since 2011, SARCAN has collected forty-nine million pounds of materials thus diverting them 86 Andrea Chan from landfill. Each year, its recycling programs result in greenhouse gas emissions savings (57,137 metric tonnes) and energy conservation (887,319 BTU) that according to SARCAN’s reporting, are the equivalent to taking more than 12,000 cars off the road and powering more than 8,000 homes, respectively. Supported Employment In order to provide meaningful employment to people living with disabilities, SARCAN provides competitive wages and adheres to a supported-employment model that tailors wraparound support to suit individual employees. For most employees, this involves a personcentred approach focused on helping the individuals succeed in their work through training, skill development, coaching, and mentoring. For some employees, they are best accommodated with a job coach their entire time at work. For others, they meet with their support person once a month as a check-in to ensure well-being at work. Supervisory staff members also receive training that would allow them to best support their team (e.g., communication in accessible language, sign language where a team member has hearing impairment). People-Focused Marketing Compared to some of the social enterprises that participated in the survey discussed in chapter 3, SARCAN has a sophisticated marketing program reflective of the size and complexity of its operations. Although it is the exclusive provider of deposit return on non-refillable beverage containers in the province, SARCAN’s annual return rate of 85 per cent means the remaining 15 per cent represents opportunity for new customers. As part of its annual market survey, SARCAN solicits feedback and perception of the organization’s three pillars: social responsibility, environmental sustainability, and community building. Consistently, survey respondents indicate that social responsibility and employment opportunities through SARCAN are the primary motivations for their support of the depots above other considerations (e.g., deposit-return fees). Based on its own research, SARCAN’s social mandate continues to be a central feature in all its marketing. Furthermore, it has made a conscious decision to not use stock photos of actors but actual photos of employees in all of its advertising and annual reports. The manager at SARCAN points out that We try and show the diversity of our organization, but we defnitely put people experiencing disability to the forefront, even though you may not SARCAN Recycling: A Division of SARC 87 be able to tell. It’s just something that’s important to us. And [market] testing wise, that’s what our customers are saying. That’s what makes us unique and special. Staff members are also continuously consulted through organizational surveys for their feedback on customer relations. As the manager explains, We have some pretty in-depth communication with our staff, because we know that our staff are not only our biggest selling point, but also our best advocate. So, we’re continuously asking them to get a pulse on what’s going on in the community. Share frustrations. What can we do to better communicate with customers? We’re trying not to be as top-down, so with our ads too we pitch ideas to staff. We come up with concepts for in-depot video display advertising, which is our captive audience advertising. We do user-generated content there, so (we ask) “what do you think customers want to see?” SARC’s Other Ventures and Procurement Experiences Until recently, SARC operated other social enterprises in addition to SARCAN. One of SARC’s other longest running businesses was a marketing department that supported the businesses of its member agencies. For the agencies that ran training workshops and produced goods such as wood products, SARC would assist in bringing the products to markets across the province, using the recycling system as logistics to transport products from agencies to warehouses. Although SARC was able to provide members with a cost-effective shipping system, other issues emerged. Consequently, the venture became too difficult to sustain when SARC had to address the need for additional funding to cover the salary of the coordinator who oversaw the business and other external factors such as increasing lumber prices and changing consumer practices. SARC decided to redirect its efforts to provide other support services that would better serve its member agencies. While it was in operation, the marketing department had the responsibility of supporting member agencies in their effort to submit joint proposals in response to provincial tenders. The idea to pool the resources of smaller social enterprises by forming consortia to bid on tenders is well-understood (Muñoz, 2009; Revington et al., 2015). However, the member agencies are competitive with each other in the market, and this made it difficult for SARC as an umbrella organization to assist one group of member agencies when another group was also bidding 88 Andrea Chan for the same contract. As an umbrella agency, “we took the approach of making sure the entire sector is healthy, as opposed to [having] individual agency pitting against agencies,” the manager explains. Furthermore, the overall bidding experience at the time suggests that the social value through procurement was not broadly recognized. Organizational purchasers including the provincial government came across as predominately price sensitive and did not always recognize the social benefits of purchasing from the member agencies of SARC, especially when the purchasers could instead outsource to cheaper vendors. Bidding was an especially difficult task for SARC since there was no in-house expertise on (social) procurement within the organization. An Exception in the Field In a 2013 Canadian environmental scan of social enterprises that are mission driven to provide employment or training to people with intellectual or developmental disabilities, recycling was the most common business activity of the sixty-one businesses identified (Lysaght, Krupa, & Bedore, 2014). But even within this group, SARCAN remains a distant outlier considering the magnitude of its staff size and annual revenue. Alongside the case of BUILD in this part of the book, the experiences of SARCAN demonstrate that the initiative on the part of the Saskatchewan government in awarding that initial contract to SARC/SARCAN underscores the importance of decisive and systematic action on the part of the government if successful procurement arrangements with social enterprises are to be forged. SARCAN as a social enterprise had been established in order to take on a specific government contract. This is precisely why SARC’s more recent attempts at government procurement stand in stark contrast to the concerted, collaborative effort from the province and the community that went into SARCAN’s founding. Interest towards green and social procurement is spreading across Canada at all levels of government, and formal policies are increasingly being implemented. In Saskatchewan, SaskPower established its Aboriginal Procurement Policy in 2012, and more recently in late 2018, the city of Saskatoon updated its purchasing policy to include social and environmental sustainability as criteria for evaluating bids that would provide “best value” (City of Saskatoon, 2018). At this time, it is not yet clear whether more procurement policy updates will emerge and the extent to which these policies will lead to leveraging procurement for social and environmental value in the community. SARCAN Recycling: A Division of SARC 89 Conclusion The concentration of SARCAN’s revenue through a single contract with the Ministry of the Environment is something important to consider. Resource dependence theory suggests that a non-profit organization’s pursuits and maintenance of its resources hold large influence over its behaviour, the implication being that an organization’s autonomy is limited by its financial viability for survival. Hence, non-profit organizations need to diversify their revenue strategies (e.g., seeking donations, applying for government grants, undertaking commercial activity) in order to manage resource dependency or over-reliance on any single revenue stream (Froelich, 1999). Technically, commercial service contracts with the government (i.e., [social] procurement) offer an alternative to the traditional reliance on government grants of many non-profit organizations. If (social) procurement makes government spending on goods that also add social value more palatable to people who ordinarily object to public spending on support for vulnerable populations, then perhaps all the better. However, it is important to acknowledge that the overall reliance on government money still requires a full discussion on issues affecting the well-being and sustainability of social enterprises. Through extensive relationship building, both SARCAN and BUILD have developed their organizations and then diversified their revenue strategy from grants to commercial activity, even though the revenue source remains one and the same (i.e., governments). In the case of SARCAN, it has expanded its business with its non-legislated recycling program, which at this time remains only a fraction of its overall revenue. Lessons Learned 1. Consider your organization’s unique assets when deciding which social enterprise opportunities to pursue. SARC’s network of member organizations across Saskatchewan was an important advantage to a province-wide recycling program start-up. 2. Champions on both the side of the purchaser and the seller are needed to sustain a long-term relationship through political, socioeconomic, and organizational-level changes. 3. Social enterprises may not be the best solution to social/economic value creation in all instances. It is challenging for organizations to frankly evaluate the viability of their social enterprises. Changing markets, funding challenges, and broader sector well-being all factored into the assessment that led SARC to close its marketing social enterprise and redirect its efforts to support its member agencies and communities in other ways. 90 Andrea Chan REFERENCES City of Saskatoon. (2018, December). Purchasing policy C02-C45. https://www .saskatoon.ca/sites/default/fles/documents/new_purchasing_policy_c02 -045.pdf Froelich, K.A. (1999). Diversifcation of revenue strategies: Evolving resource dependence in nonproft organizations. Nonproft and Voluntary Sector Quarterly, 28(3), 246–68. https://doi.org/10.1177/0899764099283002 Lysaght, R., Krupa, T., & Bedore, M. (2014, April). Social enterprise as an employment option for adults with intellectual and developmental disabilities. https://www.mapsresearch.ca/wp-content/uploads/2016/01/Social -Business-in-IDD_Environmental-Scan.pdf Muñoz, S. (2009). Social enterprise and public sector voices on procurement. Social Enterprise Journal, 5(1), 69–82. https://doi.org/10.1108/17508610910956417 Revington, C., Hoogendam, R., & Holeton, A. (2015). The social procurement intermediary: The state of the art and its development within the GTHA. Learning Enrichment Foundation. https://ccednet-rcdec.ca/en/toolbox/social -procurement-intermediary-state-art-and-its Smith, S. (2018, July). The SARCAN story – Crushing it since 1998. SARC. https:// www.sarcsarcan.ca/2018/07/12/the-sarcan-story-crushing-it-since-1988/ OTHER SOURCES Interviews with SARCAN. SARCAN, https://www.sarcan.ca/ SARC, https://www.sarcsarcan.ca/home/ SARC – Annual Report 2013–2014. SARC – Annual Report 2017–2018. 6 Ever Green Recycling YASMIN HARIRI Introduction The case of Ever Green Recycling provides an example of the importance of relationship building in social enterprises engaging in longterm and continued social procurement and purchasing in Canada. Ever Green Recycling is a bottles and materials recycling corporation located in St. John’s, Newfoundland & Labrador. It operates four beverage recycling depots and is one of the largest recyclers of beverage containers in the province. Ever Green is managed by Mike Wadden, the organization’s current president and chief executive officer (CEO); he has been with the company since 2003. The company has just under sixty employees and generates $4 million in annual revenue. Ever Green’s long-term relationship with the province’s largest health authority (Eastern Health) has been a critical support in their nascency, growth, and development. Social and Environmental Mission Ever Green’s mission is twofold. First, it is concerned with assisting individuals experiencing chronic mental health problems and addictions by providing access to meaningful employment as part of their plan to enter or re-enter the workforce. This social mission, however, is not widely promoted because those employed at Ever Green are sensitive to being exposed as having mental health and addiction challenges. Second, its better-known environmental mission is to reduce waste going to the landfill through recycling a variety of materials and assisting companies to develop their recycling programs. 92 Yasmin Hariri Recycling in Newfoundland & Labrador In 1996, the Government of Newfoundland & Labrador established the Multi-Materials Stewardship Board (MMSB). Its mandate is described as the following: MMSB derives its mandate from the Environmental Protection Act and accompanying Waste Management Regulations. MMSB is mandated through these legislative and policy instruments and guided by the Provincial Waste Management Strategy to advance sustainable waste management in Newfoundland and Labrador with a focus on waste diversion and reduction to protect the long-term health and well-being of our environment and communities. (MMSB, 2019) In 1997, MMSB established the Used Beverage Recycling Program. Consumers are charged a beverage container deposit upon purchase of any beverage, a portion of which is refunded when consumers return the containers to a recycling facility. This recycling program created opportunities for businesses to form around the collection and recycling of these cans and bottles at MMSB-branded Green Depots (Government of Canada, 2012). History Ever Green began in 1993 as a clinical mental health program in partnership with Eastern Health. The aim of the program was to provide an opportunity for individuals with moderate to severe mental illness to graduate into the workforce. The program originally consisted of two parts: Green Depots specialized in containers and Mill Lane focused on furniture and textiles. It operated as a partnership between Eastern Health and Ever Green, with each providing half of the overall budget. Participants in the program received employment experience at Ever Green alongside clinical support from Eastern Health’s occupational therapists (OTs). This combined approach prepared participants to enter the mainstream workforce. Transition to a Social Enterprise By the early 2000s, after more than a decade of collaboration, Ever Green and Eastern Health had developed a rich partnership. Both parties, however, felt that the program needed some imagination and innovation to provide a more realistic employment experience for participants. Ever Green Recycling 93 A number of problems also had emerged, many of which were causing immense inefficiencies in the business. First, the main goal of graduating individuals into the workforce was encountering difficulties. The expectations of the program more closely resembled a sheltered workshop with leniencies in sick-day allowances, breaks, and responsibilities. As such, employees were not fully equipped to enter more demanding work situations upon graduation. Second, the program was utilizing half of the province’s OTs, many of whom had to closely support program participants as they completed their work, instead of the conventional model of OTs providing support and care. Lastly, the participants were paid a stipend, rather than market wages, which prevented them from experiencing financial independence. It became clear to both organizations that the program needed improvement. By 2005, Ever Green and Eastern Health decided to reinvent the program, rethink the nature of their partnership, and transition Ever Green to become an independent social enterprise, while continuing to maintain a strong relationship. Driving Innovation As the president and CEO, Wadden was faced with an enormous challenge in turning Ever Green into a sustainable social enterprise essentially running independently as a business. He needed to find a way to overcome the loss of Eastern Health’s $2 million contribution to Ever Green’s operating budget. His first step was to launch two studies evaluating all workplace and materials handling processes in the Green Depots. These studies were supported by grants from the National Research Council Industrial Research Assistance Program (NRC-IRAP) and a team of engineers at the College of the North Atlantic. The first sixteen-week study, completed in June 2005, redefined and simplified the workflow at Ever Green from an eighteen-step operation into a twelve-step operation, making the work easier to manoeuvre for employees. The second ten-week study, completed in March 2006, built on the results of the earlier workflow analysis and provided a prototype for a new dual-sort workstation. After being tested, the new workstation, along with the simplified workflow, provided the basis for a new computerized materials management system. These collaborative studies revealed opportunities for Ever Green to improve their operation and also allowed the team to propose highly innovative solutions. These innovations have assisted the social enterprise to overcome and subsidize any productivity shortfall related to its labour force through technology and operational systems. Furthermore, they have 100 Yasmin Hariri sector, such as The Gathering Place and Voices for Youth on the East Coast as well as engaging in a collaboration with Mars Discovery District in Toronto on a social bonds project. While Eastern Health has developed a culture of seeking out opportunities to support social enterprises and other non-profit organizations, it is yet to develop a formal internal social procurement policy. With a $1.5 billion budget (accounting for 20 per cent of the provincial budget), Eastern Health is aware that its spending decisions can have a profound impact on the community and the province. This awareness has led it to more regularly seek out opportunities for social innovation and to find creative ways to partner and collaborate with social enterprises. Individual Customers The beverage recycling portion of Ever Green, which constitutes 86 per cent of total revenue, is largely driven by 25,000 to 30,000 individual customers. It collects thirty-eight million containers per year, estimated as 22 per cent of the provincial market. However, Wadden believes the majority of individual customers are not social purchasers because they are largely unaware of the primary social mission of Ever Green (a result of the social enterprise’s effort to protect the privacy of its employees). Some are driven by a desire to contribute to environmental benefits through recycling. On the whole, however, most customers are driven by the financial return on their recyclables. As such, Ever Green has found ways to streamline and automate the process for these customers and make their quality of service more appealing than that of their competitors. One example is the automated depot systems where customers can create an account, print personalized stickers to tag their deposit bags, and receive refund information by email. Competition Ever Green currently only serves the province of Newfoundland & Labrador, where it competes with three to four other companies in the recycling industry. These businesses are all much larger than Ever Green. That said, Wadden estimates that Ever Green’s prices are all within one to two cents per can of the other companies, making it a strong competitor. Shortfalls in its beverage recycling business are made up for in materials recycling, ensuring that Ever Green can retain its ability to provide employment to individuals who are marginalized and also operate competitively in the market. Ever Green Recycling 101 Summary: Lessons Learned I talk to social enterprises all the time and they think we are a charity and people are going to support us because of our mission … I’m a reality guy, and I’ve been doing this thing for ffteen years. If you are not as good, if not better, than the guy next to you, customers are going to be going to the guy next door. – Mike Wadden The case of Ever Green is in many ways a common story of social enterprises in Canada: a successful, local business struggling to compete in the broader context of the Canadian economy. Ever Green, however, has in many ways escaped the small business conundrum and made significant efforts to move into a more competitive position. What stands out as a driving force at Ever Green is its self-image. Wadden and his team do not use their status as an employer of individuals with mental health disorders and addiction as an explanation for lower productivity, but instead see it as an opportunity to drive innovation. The importance and impact of identity on the success of social enterprises is well-documented. Wry and York (2017) explore how a social enterprise’s identity can have a profound impact on the logical frameworks that influence management decision-making. They describe how many social enterprises face a duality of identity that puts social and financial aims in conflict with one another. They add that individual founder identities (in particular, social entrepreneurs) greatly shape the identities of social enterprises as a whole. Smith, Knapp, Barr, Stevens, and Cannatelli (2010) also describe that many non-profit organizations that create social enterprises will face an ideological tension between their social and business missions. They explain how many social enterprises that emerge after a parent non-profit has operated for some time often face stronger ideological tensions than those formed at the same time as the parent non-profit. Ever Green, which has transitioned itself into an independent social enterprise from a governmental partnership, appears to have overcome these ideological challenges through the leadership of Wadden and his balanced financial and social identity. Although Ever Green still faces challenges to becoming more engaged in social procurement, its long-standing relationship with Eastern Health helped to bring it to the forefront of recycling – and social-enterprise development – in Newfoundland and Labrador. A few key lessons can be gleaned from the case of Ever Green Recycling: 1. In order to reach a large scale, social enterprises may benefit from structuring and operating the same as a for-profit business. In its 102 Yasmin Hariri earliest days, Ever Green’s identity was primarily attached to its social mission. In reality, this limited the scope of impact on their social mission and held them at a small scale of operation. As Ever Green shifted to become more focused on operating as a for-profit business, the operation rapidly grew, and they discovered more efficient methods of running the business, expanding their impact on their social mission. 2. The restrictions placed on social enterprises can be seen as opportunities for innovation that competitors are not considering. Ever Green’s growth and productivity can largely be attributed to its innovative posture. The innovative strategy of Ever Green has even allowed the social enterprise to identify an unusual and lucrative revenue source: intellectual property. Utilizing government grant programs and working with local universities and colleges to provide real-world work experiences is an approach that Ever Green uses to drive its innovation. It is inevitable that social enterprises will run into productivity challenges that other for-proft competitors are not faced with. However, Ever Green is an example of how these challenges can be seen as opportunities to discover innovative solutions before competitors are forced to seek them out. These solutions can become competitive advantages and drive the industry forward. 3. Relationships are a critical piece of maintaining government contracts and engaging in social procurement. Ever Green began through a partnership with Eastern Health, a relationship that proved invaluable as Ever Green branched out on its own. This relationship allowed them to continue to engage in social purchasing and procurement and ensured that the business was constantly aware of opportunities for contracts from government institutions. Ever Green has established similar relationships with other large institutions, such as universities, that has allowed them to take advantage of unique opportunities for the business to grow and develop. This case points clearly to the importance of relationships, not just with institutions, but also individuals in those institutions, as a critical element of engaging in both social purchasing and procurement. REFERENCES Government of Canada. (2012, April 27). Beverage container recycling program. http://www.ec.gc.ca/gdd-mw/default.asp?lang=En&xml=5269B114 -FCAC-45E1-A50F-7B8D950A3BDC Ever Green Recycling 103 Government of Newfoundland & Labrador. (2018). The way forward: Social enterprise action plan. https://www.gov.nl.ca/thewayforward/ Multi-Materials Stewardship Board (MMSB). (2019). Find a green depot. http:// greendepotnl.ca/fnd-a-green-depot/ Smith, B.R., Knapp, J., Barr, T.F., Stevens, C.E., & Cannatelli, B.L. (2010). Social enterprises and the timing of conception: Organizational identity tension, management, and marketing. Journal of Nonproft & Public Sector Marketing, 22(2), 108–34. https://doi.org/10.1080/10495141003676437 Wry, T., & York, J.G. (2017). An identity-based approach to social enterprise. Academy of Management Review, 42(3), 437–60. https://doi.org/10.5465 /amr.2013.0506 OTHER SOURCES Interviews with Ever Green Recycling and Eastern Health. Ever Green Recycling, https://www.greencan.ca/ SUPPLEMENTAL INFORMATION Revenue by Purchaser Type: Ever Green Recycling Governments, 4% Individuals, 86% Businesses, 10% 7 EMBERS Staffing Solutions MARTY DONKERVOORT AND MARCIA NOZICK Introduction EMBERS Staffing Solutions (ESS) is a Vancouver-based non-profit work integrated social enterprise (WISE) and a division under EMBERS (Eastside Movement for Business & Economic Renewal Society), a community economic development charity. ESS is located in Vancouver’s Downtown Eastside, a neighbourhood known for its struggles with social issues such as homelessness and substance abuse. Since its inception as a temporary staffing agency in 2008, ESS has provided employment to thousands of people by securing large contracts through relationship building. In 2019, ESS was placing more than three hundred workers into jobs on a daily basis, with over 90 per cent of the jobs in the construction sector. ESS’s revenues increased from $1.6 million in 2013 to $8.8 million in 2018, and it was expected to gross over $16 million in 2021. This case documents EMBERS Staffing Solutions’ mission, history, and social purchasing relationships with some of its organizational purchasers. History and Mission ESS’s parent organization, EMBERS, began as a community economic development charity in August 2001. Its mission is to empower people living on low incomes to become economically self-sufficient and develop meaningful futures. More broadly, EMBERS works to reduce poverty and contribute to the revitalization of Vancouver’s Downtown Eastside. The charity works with thousands of people each year, connecting them with work opportunities, training, and support through four key initiatives: 1. EMBERS Ventures (2003–19) provided accessible and affordable business training and support to low-income entrepreneurs. EMBERS Staffng Solutions 105 2. EMBERS Eastside Works facilitates connections for residents of the Downtown Eastside who face barriers in pursuing employment opportunities. 3. EMBERS Community Employment Services is funded by Corrections Services Canada with an aim of providing employment counselling to parolees in the Vancouver West and Fraser Valley region. 4. ESS is a non-profit social enterprise that connects employers with workers while offering successive opportunities for those workers to secure employment and gain skills. ESS provides temporary workers on a monthly, weekly, or daily basis to a variety of positions in offices and industrial settings. Although ESS places most of the employees in the construction sector, it also provides staffing for special events, warehousing, and manufacturing. The idea for ESS emerged when EMBERS was searching for a new source of revenue. A community member suggested that EMBERS establish a day-labour company to employ Downtown Eastside residents in a way that, unlike conventional employment agencies, recognized the needs and abilities of this particular demographic. The result was a socialenterprise model that fully blended financial and social objectives. In 2008, EMBERS launched ESS, hoping to tap into the bustling hum of construction in Vancouver as well as other activities leading up to the Vancouver 2010 Winter Olympics. As a new business with no brand recognition, ESS was slow to gain traction. Aside from business generated by the upcoming 2010 Olympics, ESS was launching in the midst of a global recession. The 2008 financial crisis had significantly slowed housing construction and commercial development. During the months leading up to the Olympics, ESS was placing fifteen to twenty people a day in jobs, with business coming from a few key employers. However, once the Olympics ended, the jobs all but disappeared, and by the end of 2012 ESS could only place eight to ten participants a day on average. With insufficient revenue to cover its overhead costs, ESS considered shutting down. Convinced the model still had potential, Marcia Nozick – EMBERS’s CEO and founder – persuaded her board of directors to let her run a pared-down version of ESS as a pilot for six more months. ESS’s new business development strategy and a multi-year contract with an important new client helped turn the enterprise around, and it has continued to grow at an astounding rate. One of the drivers for the impressive growth at ESS was a provincial social procurement contract: in 2012, BC Housing initiated the SRO (Single Room Occupancy) Renewal Project – a contract over three-and-a-half years to renovate thirteen SRO hotels as 106 Marty Donkervoort and Marcia Nozick affordable housing in Vancouver’s inner city (BC Housing, n.d.). The contract specified the use of local labour for a portion of the construction. ESS was a labour-provision partner in this project, meaning that ESS finally had an anchor customer with a steady flow of job placements, thus enabling the social enterprise to grow, hire sales staff, and generate a surplus. At the end of 2014, ESS surpassed other programs at EMBERS both financially and in terms of program impact. By 2019, ESS was employing more than three hundred workers on a weekly basis and recorded revenues of $11.6 million by year’s end. ESS is Canada’s only non-profit temporary staffing agency, providing socially responsible temporary services for companies in Vancouver and the Lower Mainland. ESS currently runs out of four different locations. Its mission is to provide its customers with high-quality, reliable, professional workers who exceed their expectations, and to support its workers in improving their skills and advancing their careers. ESS also has the objective to educate, advise, and help its workers succeed in the long term and to assist employees in transitioning from temporary service positions to permanent full-time positions. In addition to employment, ESS also provides its workers with boots and equipment for loan, extended medical and dental benefits for long-time workers, breakfast snacks in the morning, counselling and support services, and – most importantly – certified training opportunities to advance participants’ careers in construction and other industries (Taylor & Svedova, 2015). In 2013, ESS achieved international recognition with the Social Enter- Prize Gold Award presented by the Trico Foundation at the Social Enterprise World Forum in Calgary. In 2015, ESS won the City of Vancouver Award of Excellence for providing low-barrier, meaningful employment opportunities and contributing to a healthy city for all. In 2020, ESS won the Governor General’s Innovation Award. Social Purchasing Customers ESS has developed strong relationships with a number of large and small developers and contractors in Vancouver. Between 2013 and 2019, the four largest organizational purchasers described below accounted for 35 per cent of ESS’s total revenue. Icon West Construction (ICON) ICON is a construction company with an interest in sustainability. Having constructed significant projects in Canada including Fairmont Pacific Rim and Shangri-La Toronto, in 2018 it was building Vancouver House, a significant complex that includes apartments, office space, EMBERS Staffng Solutions 107 and retail at the foot of the Granville bridge in Vancouver. In 2018, ICON was ESS’s largest organizational purchaser, accounting for 25 per cent of ESS’s total revenue. During 2019, ICON hired approximately seventy-five ESS workers including carpenters, labourers, crane/hoist operators, forklift operators, elevator operators, and safety personnel on a daily basis. At the time of writing, it is estimated that ESS staff represented more than half of all labour on the Vancouver House project. This project alone has been responsible for creating more than 75,000 person-days of work spread over four years for ESS. EllisDon Corporation EllisDon is one of the largest construction and building services companies in the world. The company completes over $4 billion worth of contracts annually, in every market sector and across the globe. EllisDon is a privately owned company with more than one hundred employees. In Vancouver, EllisDon provided reconstruction and construction management services for Parq Vancouver. This new development at 39 Smith Street is a multi-use facility, including a parkade and an urban resort with two luxury resort hotels (over five hundred rooms), a conference centre, eight restaurants, retail space, and a new home for the existing Edgewater Casino. During Vancouver’s approval process for this development, the City of Vancouver imposed a Community Benefit Agreement (CBA) on the project. The city uses CBAs to require developers to commit “to actions, targets and/or outcomes relating to employment and local or social procurement … [in] a community where the development is occurring or in nearby communities in where equity-seeking groups, including low-income people and others, can be found” (City of Vancouver, 2018, p. 3). Vancouver is one of the first major cities in Canada to introduce a formal CBA, following community benefit frameworks introduced at the provincial and federal government levels in 2018. The policy adopted by the city aims to reduce poverty and meet established community economic development goals. Groups participating in a CBA may include people who are under-represented based on gender, faith, immigrant status, education level, economic status, or sexual orientation. With a CBA, developers in Vancouver with projects larger than forty-five thousand square metres are required to 1. Designate 10 per cent of new entry-level jobs as available to people in Vancouver, especially to individuals facing marginalization and barriers to employment 108 Marty Donkervoort and Marcia Nozick 2. Purchase a minimum of 10 per cent of goods and services from local businesses, contributing to the positive social and environmental impacts of social procurement The Parq Vancouver project and the related CBA is where the relationship between EllisDon and ESS developed. In order to comply with the CBA, EllisDon agreed to hire 10 per cent of its workforce from the identified groups. The company also hired Jeff Waters as an information coordinator to oversee the implementation of the CBA and monitor its progress and commitments. The City of Vancouver had a consultant assigned to monitor both the process and the outcomes from the CBA. The consultant made introductions between EllisDon and various community groups representing individuals who could benefit from the CBA. ESS presented a relatively easy solution for EllisDon to meet many of its CBA commitments. In addition to ESS, EllisDon also developed relationships with three nearby First Nations to secure workers. In the end, EllisDon surpassed its imposed CBA requirements by hiring twice as many as required on the project from local communities and designated groups. In fact, EllisDon was so impressed with ESS and its workers that it has continued working with ESS on subsequent projects even without CBA requirements. Further, the subcontractors on the Parq project were equally impressed and have since hired ESS workers as well. One of the reasons why EllisDon was so impressed with ESS was the social enterprise’s commitment to training and regular site visits by ESS’s management team. Jeff Waters, the EllisDon information coordinator responsible for the CBA, points out that ESS “provided a higher level of service.” Darwin Construction (Canada) Ltd. Founded in 1987 on Vancouver’s North Shore, Darwin is a familyowned construction and development company. Darwin’s relationship with ESS first started in 2012. Like other contractors, Darwin hires workers from ESS on a project-by-project basis. Quality is the most important factor in its purchasing and hiring decisions. Darwin has been impressed with the quality of work by ESS workers and has hired three former ESS employees as permanent Darwin staff. ESS’s social mission is also an important factor for Darwin, which gave it a high rating in our study. Darwin is also extremely satisfied with ESS’s service. Darwin was one of the major construction companies on the SRO Renewal Project from 2012 to 2015. EMBERS Staffng Solutions 109 Wesgroup Properties Wesgroup Properties is a family-owned real-estate company that has been operating for more than fifty years. The company leases commercial properties to long-term tenants and also designs and develops residential communities, from single communities to masterplanned neighbourhoods. Wesgroup owns, develops, manages, and leases over sixty commercial and mixed-use properties within BC’s Lower Mainland. With purchases just under $1 million, in 2018, Wesgroup was ESS’s second-largest customer, hiring ESS workers exclusively on projects wherever possible. Wesgroup is extremely pleased with its relationship with ESS and has hired at least twelve ESS workers as permanent staff. Wesgroup continues to hire ESS workers for site supervision and safety, as well as carpenters, crane operators, and other construction positions. Although the cost for hiring ESS is slightly higher than other employment agencies, Wesgroup is supportive of ESS because of its social mission, training, and quality service. Although Wesgroup does not have a formal company policy to buy from social enterprises, it has also purchased services from BladeRunners, another community-based social enterprise in the Vancouver area providing life skills, job-readiness skills, work experience/on-the-job training, job coaching, and ongoing supports to youth who are unemployed. Long before Wesgroup started buying from ESS, Beau Jarvis, Wesgroup’s current president, was a volunteer with ESS, driving its workers to job sites before starting his own workday. Summary: Lessons Learned The success experienced by ESS offers valuable lessons and provides important insights into the challenges and opportunities facing social enterprises trying to develop relationships with organizational purchasers. 1. Relationship building with developers and contractors takes time, patience, and perseverance. ESS struggled for years before finally breaking through and getting access to major developers and contractors. 2. Champions who believe in the social enterprise and its mission are critical. EMBERS’s founder Marcia Nozick is that champion for ESS. She persevered even when things were gloomy and was able to eventually turn ESS into a successful social enterprise with annual sales over $16 million (2021). 116 The Importance of Parent Organizations REFERENCE Chan, A., Ryan, S., & Quarter, J. (2017). Supported social enterprise: A modifed social welfare organization. Nonproft and Voluntary Sector Quarterly, 46(2), 261–79. https://doi.org/10.1177/0899764016655620 8 Social Crust Cafe & Catering YASMIN HARIRI Introduction Social Crust Cafe & Catering is a social enterprise initiated by its parent organization Coast Mental Health (CMH), a non-profit based in Vancouver, British Columbia, with a focus on supporting those with mental illness to “thrive in our community.” While yet to engage in social procurement, Social Crust Cafe & Catering has developed social purchasing relationships through support from CMH that are critical to its function. CMH provides a number of supports to those with mental illness or addictions, including housing, support services, employment, and education. The organization is large by most non-profit standards, managing a funding budget of over $36 million in 2018–19. CMH describes its mission as providing “training and develop[ing] businesses that reduce stigma and facilitate social connections, enabling people with mental illnesses to take on meaningful roles and progress towards recovery.” One arm of CMH – Coast Social Enterprise – operates two main social enterprises: Landscaping with Heart and Social Crust Cafe & Catering. Landscaping with Heart was started in 2005 when CMH began experimenting with social enterprise as a means of providing meaningful employment to residents of social-housing facilities. Landscaping with Heart was initially funded through grants; it transitioned to a social enterprise when enough contracts were secured to make it financially viable. The team is led by one individual with up to eight adult employees each season, all of whom identify with mental illness although not all are clients of CMH. The business runs only during the spring/summer season and primarily provides services to social-housing facilities in Vancouver. The business has maintained a steady $100,000 in contracts annually, largely through a relationship with BC Housing as well 118 Yasmin Hariri as a small number of individual customers. The second social enterprise associated with this arm of CMH is Social Crust Cafe & Catering, the focus of this case. Social Crust Cafe & Catering was a long-time aspiration of the senior management of its parent organization, CMH. Understanding the challenges of mental illness and addictions, senior management was eager to find ways to direct youth towards a more productive path. The manager at CMH hoped that training, rehabilitation, and support for young people would mediate further mental-health and addiction problems in later life and assist them in finding and maintaining employment. In 2014, Social Crust Cafe & Catering was started as an experimental project, offering culinary training to youth with mental illness and addictions as well as employing and training them in a functioning cafe and catering company. Established in an unused retail storefront beneath a CMH socialhousing facility, the cafe offers a broad breakfast and lunch menu weekdays from 8:00 a.m. to 2:00 p.m. Alongside the cafe, the space is used to market and run a catering business, offering lunch, dinner, or appetizer packages, largely to organizational purchasers. While the cafe is the face of the operation, the catering business is the prime employer of those in the training program. Shortly after Social Crust began, the staff realized the skills required to run a cafe were ill-matched to the needs of those with mental illness because of the unpredictability in customer flow and work volume. Catering, on the other hand, with its regularity, repetitive production process, and flexibility, is an excellent fit. As such, most participants are employed in the catering business. Culinary Skills Training Program The Culinary Skills Training Program offers youth recovering from mental illness or with other barriers to employment with training, coaching, and work experience so that they can enter the labor force or continue further culinary schooling. (Social Crust Cafe & Catering, 2018) Closely connected to the Social Crust Cafe & Catering business, the Culinary Skills Training Program is a four-month program offered exclusively to youth from the ages of nineteen to thirty. Youth apply to join the program and are selected based on their fit with both the program and the dynamics of the intake cohort. Participants engage in a four-month, intensive skills training program within the Social Crust kitchen before commencing a two-month practicum in the cafe where they put these skills to use. Participants are enrolled in three intakes or Social Crust Cafe & Catering 119 cohorts over the course of the year – Fall (September), Winter (January), and Summer (May). Social Crust aims to have eighteen participants per cohort; however, the cohorts at Social Crust have typically ranged from twelve to fourteen participants with demand steadily growing. Despite the demand for the program, recruiting can be challenging with a small support staff at Social Crust complicated by turnover among those responsible for recruitment. The training program at Social Crust is tailored to the clients at CMH – i.e., youth facing mental illness or addiction challenges. The program assumes participants enter without any prior experience and begins with the basics of cooking and how a kitchen works. Alongside culinary skills, the program emphasizes basic elements of employment such as punctuality, professionalism, and collaboration. The initial work tasks are kept simple so participants can gain confidence in mastering a certain level of competency as they progress through the program. The aim is to build the skills and competencies for graduates to become employment ready. Oftentimes participants are ready in six weeks, but others remain at the cafe beyond two months as they continue to build their skills and proficiency. After completing the program, participants are supported by Social Crust in their job search in the culinary sector since the cafe cannot provide work for more than ten employees. Specifically, the staff help participants find employers that offer a good skills match alongside a supportive and inclusive work culture. Some of the places that have hired from Social Crust’s training program include Joey Restaurant Group, MeeT on Main, and Granville Gardens Retirement Residence. Some participants who graduate from the training program also choose to pursue further culinary training through post-secondary programs. The program coordinator and chef instructors at Social Crust work closely with these participants to develop a post-graduation exit plan and check up on them one year after graduation. Customers Social Crust Cafe & Catering customers are largely split between individual customers who tend to purchase from the cafe and various organizational purchasers who primarily use the catering business. Individual Customers The cafe attracts a wide range of individual customers, largely from the local area. Most are walk-ins searching for breakfast or lunch near their home or workplace; however, some are regular local customers 120 Yasmin Hariri who frequent the cafe. Social Crust also offers a 10 per cent student discount to attract students from the three college and university campuses within walking distance of the cafe. Individual customers typically purchase a single breakfast or lunch meal, averaging five to ten dollars. The cafe recently partnered with Ritual, a pre-ordering mobile application, which allows the social enterprise to tap into an additional market. Organizational Purchasers Social Crust Catering primarily sells to private businesses and nonprofit organizations. Some of its customers make one-off purchases of catering for lunch, dinner, or cocktail events. A lunch purchase includes a soup, sandwich, and salad combo. The catering business has also developed relationships with numerous institutions that provide recurring business. For example, Social Crust provides lunch for a seniors’ living program at Douglas Park Community Centre every Tuesday and Wednesday. Another client, Mimic Studio, is a regular purchaser from Social Crust. Social Crust works with a variety of organizational purchasers and often seeks out other organizations with a social mission or purpose themselves. For example, a non-profit organization hosts a breakfast meeting in the cafe each month and Social Crust allows the use of the cafe, provided that the organization purchases coffee and food. Social Procurement and Social Purchasing Social Crust has not engaged in any form of social procurement to date. Among those interviewed for this case, the staff at Social Crust feel they lack the knowledge and experience to engage in the procurement process, including requests for proposals (RFPs) and bidding. The manager at Social Crust indicates that while they are always seeking opportunities for new and stable contracts, they are already at their maximum operational capacity and cannot handle more growth without increasing the size of their physical space and the number of their support staff. To encourage social purchasing, the manager at Social Crust actively promotes the story of their social enterprise, for example, by sharing the impact a purchase makes in the lives of those who work at Social Curst and those who participate in the training program. Approximately 75 per cent of customers purchase primarily for social impact, including a number of like-minded organizations. The manager at Social Crust believes the importance of their social mission is even more significant Social Crust Cafe & Catering 121 in the catering business, from which customers may initially make a purchase for social impact and be surprised by the quality of the product. Social Crust has considerable experience with social purchasing from government purchasers through relationship building. The catering business has provided meals for meetings at the City of Vancouver and identified BC Housing as a potential customer. Since CMH has existing relationships with a number of provincial and municipal agencies (including BC Housing), Social Crust has been exploring opportunities to provide catering through these networks. Marketing and Advertising Social Crust has heavily invested in developing a manageable, yet ambitious, marketing strategy to grow its business. In 2017, CMH engaged a consultant to create a marketing plan; however, conversations with the consultant made the manager at Social Crust realize the social enterprise was unprepared to meet a surge in sales. Consequently, a less ambitious marketing plan was developed to modulate a more gradual influx in customers. At the time of writing for this case, the manager at Social Crust hopes to engage in a more robust and ambitious marketing strategy once the social enterprise has expanded the kitchen and grown the training program and team to meet the higher demands. The message of Social Crust is primarily built upon its social purpose, as the manager at Social Crust explains: We believe [our social impact] is our competitive edge. What we believe is, if you have a choice to spend your money on a business that is just going back in the owner’s pockets or back into the business, why would you do that if you can help somebody’s life? As such, marketing materials from Social Crust proudly articulate and demonstrate the impact of customers’ purchases and share details of the Culinary Training Program. Social media is a primary focus in Social Crust’s marketing strategy. A carefully designed website showcases the cafe and catering businesses as well as the social mission and training program. Instagram, Facebook, and Twitter accounts keep customers and followers up to date with events, news, participant stories, and food images. Even the cafe’s storefront is part of Social Crust’s robust marketing endeavour. The walls feature stories of the participants in the training program, and flyers for the catering service are prominently displayed near the cash register. Catering customers receive print materials describing 122 Yasmin Hariri the impact of their purchase. Another creative marketing initiative is a partnership with Foodie to host evening events with guest celebrity chefs. Celebrity chefs come and cook a meal with the participants of the training program, and customers pay to enjoy a four-course meal. In addition to bringing in revenue, the evenings also serve as a promotion for Social Crust since these events take place in the cafe, and the staff ensures that the customers are aware of the social mission and the benefits of the events. Adding to Social Crust’s own marketing strategy are the supporting efforts of CMH. For example, the parent organization sends corporate volunteer groups to the cafe to assist with meal preparation alongside participants in the training program. At the conclusion of the volunteer experience, Social Crust shares a meal as well as information about its catering program with the volunteers to promote its use for corporate events. Financial Sustainability CMH is intimately involved in the operations of Social Crust. CMH has a social enterprise board as well as a foundation board, both of which oversee and provide managerial and strategic support to Social Crust. CMH also provides a number of assets and supports to the cafe. First, Social Crust is given its space completely free of charge, since the space is in a facility owned by CMH. Furthermore, CMH covers the wages of all support staff, including the chef instructor, catering chefs, managers, and mental health worker for the training program, the cafe, and the catering service. However, the wages of Social Crust’s management group are funded entirely by donations. The costs associated with the Culinary Training Program, including its staff, are 100 per cent funded by donors to CMH. The manager at Social Crust hopes that the cafe can begin to break even while the catering service starts turning a larger surplus. However, it remains unlikely that the entire social enterprise will become fully independent from CMH’s various kinds of strategic, financial, and in-kind support. Social Crust Cafe & Catering has been experiencing steady growth since its inception, more than doubling its revenue over the last three fiscal years (see supplemental information). The social enterprise is responsible for covering the cost of food, marketing, and junior labour force whereas the support from CMH covers a number of in-kind expenses. Social Crust has been able to turn a small surplus since 2015 (see supplemental information); however, the catering service has not yet been able to generate a surplus, meaning the social enterprise still Social Crust Cafe & Catering 123 relies on the cafe to cover all the expenses. The cafe initially accounted for nearly two-thirds of the total revenue, but the catering service has grown significantly over 2018–19, making up nearly 50 per cent of total revenue. Social Crust has made conscious efforts to expand the catering service, recognizing that catering not only offers a better fit for the participants at Social Crust but also presents advantageous market opportunities. The catering service experienced record-breaking growth in the 2018–19 fiscal year, which generated much excitement within CMH about possibilities for continued growth and expansion. For the fiscal year 2020, Social Crust forecasted a 20 per cent year-to-year increase in catering sales based upon its targeted marketing efforts. While Social Crust actively seeks growth and generates surplus, the social enterprise expresses fear that its facilities and labour force may not be suited to significant growth. The kitchen facility at Social Crust was originally outfitted to support the cafe only and does not actually provide adequate preparation space to assemble large-scale catering orders. Should the catering service at Social Crust begin to expand and experience multiple daily orders, the current kitchen space would be inadequate. The manager at Social Crust is conflicted over the need to expand while feeling uncertainty over the ability to meet that demand. Summary: Lessons Learned Social Crust Cafe & Catering falls under the category of a supported social enterprise because of its closely woven relationship with CMH (Chan, Ryan & Quarter, 2017). While Social Crust independently shapes its brand and develops a uniquely robust marketing program, it still relies heavily on CMH for many aspects of its work. CMH provides space, managerial support, and sales opportunities to support operations at Social Crust. CMH also gives strategic support, including consulting services and board advisory services, to shape and drive the growth of the social enterprise. Without the financial, managerial, and strategic support of its parent organization, Social Crust could not be an independently viable business. This parental relationship provides several opportunities to small social enterprises. Below are some of the lessons that can be gleaned from this case study around the role of parent organizations in the viability of social enterprises: 1. Parent organizations can support small social enterprises to gain access to social purchasing and make important business 124 Yasmin Hariri relationships. Developing relationships with large organizations that are interested in opportunities for social purchasing is not an easy task for a small social enterprise. Several larger contracts and regular customers of Social Crust, however, have come from the extensive reach and network of CMH, including connections to the government sector. Social Crust directly attributes this to the support of their parent organization and believes this to be an important benefit of being linked to a larger organization. 2. Growth can also be limited by the support of the parent company. During the discussions about growth possibilities, the manager points out that Social Crust cannot grow much further without extensive renovations to the existing physical space. They would like to see these renovations funded by CMH as they do not have the revenue internally to fund these extensions. It was clear in this case that the growth of Social Crust would always be dependent on the support available from its parent company (or at least until they became independently fnancially stable). While opportunities for growth existed, including marketing plans and large contracts, its growth was limited and dependent on CMH being able to extend the physical facility. Without independent viability, social enterprises will remain dependent on their parent company to seek out or take advantage of opportunities for growth. 3. Social procurement may be dependent on the scalability of business. Social Crust shared that they were looking into opportunities for social procurement but felt that the business was not yet ready to meet the demands of larger, more consistent contracts. This simple example may provide insight into why so many smaller social enterprises are yet to engage in social procurement. Without the physical facility, human resources, or business acumen to meet the demands of larger procurement contracts, social enterprises may remain excluded from this form of growth opportunity. The situation at Social Crust raises questions about the function and structure of social enterprise when it is significantly supported by a parent organization. If a social enterprise’s stability involves such close ties and reliance on a parent organization for stability, can it be evaluated as an independent business? Or should it be considered a business venture of the parent organization? Whatever the answer, this model Sales by Business Unit (2015–19): Social Crust Cafe & Catering $300,000 $250,000 $200,000 $150,000 $100,000 $50,000 $- 2015–16 2016–17 2017–18 2018–19 Café Sales Catered Sales Social Crust Cafe & Catering 125 still demonstrates the immense opportunities for parent organizations to develop revenue-generating business units that can simultaneously train and employ the participants these organizations seek to support, while also generating additional revenue. REFERENCE Chan, A., Ryan, S., & Quarter, J. (2017). Supported social enterprise: A modifed social welfare organization. Nonproft and Voluntary Sector Quarterly, 46(2), 261–79. https://doi.org/10.1177/0899764016655620 OTHER SOURCES Interviews with Social Crust Cafe & Catering and Coast Mental Health. Coast Mental Health. (2019). Coast Mental Health Annual Report 2018/2019 [PDF fle]. Retrieved from https://www.coastmentalhealth.com/assets/media /2018/07/cmh_annual_report-2019-07-25.pdf Social Crust Cafe & Catering, https://www.socialcrustcafe.com/ Coast Mental Health, https://www.coastmentalhealth.com/who-we-are/about/ SUPPLEMENTAL INFORMATION 132 Marty Donkervoort and Audra Penner wholesaler specializing in fasteners (i.e., nuts, bolts and screws, washers, anchors, and threaded rods) and cutting tools. In addition, A. Adams Supply provides customized products to the aerospace and the oil and gas sectors. It is in the oil and gas sector where its relationship with ImagineAbility lies. The relationship with ImagineAbility started more than twenty years ago when a company called the Dixon Group started buying from Versatech (which later became ImagineAbility). Dixon Group provided the equipment to Versatech to cut metal link chain in six- and twelve-inch lengths and attach S-hooks to both ends, then began delivering fortyfive-gallon barrels filled with chain to start production. These pieces of chain were then sold to buyers in the oil and gas sector. Later, Dixon Group contracted A. Adams Supply to source and deliver the chain length pieces and sold the equipment to A. Adams Supply, which has maintained the relationship with Versatech (now ImagineAbility) for more than twenty years. The finished pieces of chain are hung vertically in crates provided by A. Adams Supply and shipped to Dixon Group, which incorporates them into equipment destined for the oil and gas sector. Since the very beginning, the work completed by ImagineAbility is priced on a piecework basis. ImagineAbility was initially approached for this contract due to the tedious nature of the work. Jack Enns, A. Adams Supply general manager, has managed this contract with ImagineAbility since joining the company fifteen years ago. He is extremely pleased with the “very easy [working] relationship” with ImagineAbility: “I have never had an issue with the quality or delivery of the work done by Imagine- Ability.” The contract with A. Adams Supply represents approximately $3,000 revenue for ImagineAbility. Although without a formal policy on social procurement or social purchasing, A. Adams Supply also purchases from another social enterprise, Kindale, in Steinbach, Manitoba. Hold It and Opportunity Partners The product Hold It and Opportunity Partners account for approximately $20,000 (less than 4 per cent of total earned revenue) for Imagine- Ability. Opportunity Partners distributes Hold It across Canada through relationships with Canadian Tire Corporation and Home Hardware Stores Ltd. Founded in 1922 and headquartered in Toronto, Canadian Tire Corporation is a Canadian retail company selling a wide range of automotive, hardware, sports and leisure, and home products. Since 2010, Canadian Tire has been distributing Hold It. The sales to Canadian Tire bring in approximately $300,000, representing roughly 85 per cent ImagineAbility Inc. 133 of total annual Hold It sales revenue. Another long-standing Canadian retailer, Home Hardware Stores is a privately held Canadian home improvement, construction materials, and furniture retailer founded in 1964 and headquartered in St. Jacobs, Ontario. Home Hardware Stores started distributing Hold It in 2009. The annual revenue from Home Hardware Stores for Hold It is between $40,000 and $50,000, representing approximately 15 per cent of annual Hold It product sales revenue. Summary: Lessons Learned The success experienced by ImagineAbility offers valuable lessons and important insights into the challenges and opportunities facing social enterprises. 1. It is important to offer a service that can be difficult to source. One of the main reasons for customers initiating a relationship with ImagineAbility is related to the difficulty in finding workers/companies who can meet their specific needs. 2. Offering a quality and timely service is key to developing long-term relationships with organizational purchasers. Many of the relationships with ImagineAbility have been maintained over many years, for example, Coghlan’s (more than ffty years), A. Adams Supply (more than twenty years) and Amsted Rail (almost ten years). 3. Excellent quality and competitive pricing are both more important than the social mission. Businesses currently purchasing services from ImagineAbility identify quality and competitive pricing as the two main reasons for supporting ImagineAbility, with its social mission ranking third. 4. Regardless of the level of earned revenue, many non-proft supported social enterprises (including ImagineAbility) that provide local employment and training programs require grant or government funding. Earned revenue alone is not suffcient to sustain them. Earned revenue at ImagineAbility accounts for only 20 per cent of its total annual revenue. 5. It is important to align potential work with participants’ abilities and interests. ImagineAbility only enters into relationships with potential purchasers once participants and staff have reviewed the work entailed and determined that participants are not only able to do the work but also have expressed an interest in doing it. 6. Even with more than thirty-fve organizational purchasers in the private sector, ImagineAbility has not yet been able to sell to the government. Only the City of Winnipeg and the provincial Crown 134 Marty Donkervoort and Audra Penner corporation Liquor and Lotteries have made small, isolated purchases, representing less than 1 per cent of sales revenue over the years. 7. Starting a stand-alone business like Opportunity Partners is challenging for the parent organization. It can take considerable resources including funds, time, and expertise to start a new social enterprise. SOURCES Interviews with ImagineAbility, Coghlan’s Ltd., and A. Adams Supply (1969) Ltd. ImagineAbility, https://imagineability.ca/ 10 Wachiay Studio YASMIN HARIRI Introduction Wachiay Studio is a screen-printing social enterprise located in Courtenay, British Columbia, on Vancouver Island. It began in 2012 as an afterschool program at the Wachiay Friendship Centre, teaching Indigenous youth (fifteen to twenty-nine years old) the art and technique of screenprinting. After experiencing growth and success selling at local events, Wachiay Studio saw an opportunity to expand into a stand-alone operation and become a business, progressing from offering classes to printing and selling original goods and services. In 2015, the Friendship Centre opened a 2,500-square-foot studio, fully equipped with commercial screen-printing equipment and materials. Wachiay Studio became a corporation, owned by its parent organization Wachiay Friendship Centre, with a social focus. Any profits are reinvested into the studio to expand programming and grow the business, creating jobs and opportunities in the small community while reducing the parent organization’s reliance on grants to operate. Despite being interested, Wachiay Studio has not yet engaged in social procurement. Sales and Marketing Wachiay Studio is a small business with gradually increasing annual sales, which approached $250,000 as of 2018. The studio operates two main product lines: production of screen-printed goods for customers and screen-printing services consisting of workshops and classes. Those interested in the services can participate individually or in a group, committing to a single class or multiple workshops. The main source of income for the studio comes from the screen-printing business, producing prints on items such as clothing and paper. Although 136 Yasmin Hariri Wachiay Studio runs an online store for purchasing goods and services (e.g., original t-shirt designs, limited-edition art prints, courses and workshops, etc.), online sales account for less than 15 per cent of total sales. The studio earns the majority of its revenue from direct sales to local businesses, organizations, and individuals. Wachiay Studio has been run by Andy MacDougall since its inception. MacDougall had over thirty-five years of experience in the screen-printing industry in Edmonton, Vancouver, and elsewhere around the world when he returned to Vancouver Island to help the Wachiay Friendship Centre establish Wachiay Studio. He is responsible for managing the social enterprise along with two to three support staff who assist in art production, printing, teaching, and administrative functions. Wachiay Studio’s marketing is fairly limited, with most of its sales driven through social networks and referrals. The studio intentionally promotes its social mission in its print and online marketing materials, but MacDougall himself indicates that the marketing content is infrequently updated. Its Facebook page is more active and regularly includes business updates and news. Beyond this, Wachiay Studio does not actively engage in conventional marketing to grow its business. Parent Organization The Wachiay Friendship Centre, the parent organization of the studio, has been serving the Indigenous community in the Comox Valley (K’ómoks First Nation’s Unceded Traditional Territory) on the east side of Vancouver Island for over twenty-five years. The Friendship Centre offers its services to Indigenous people in the urban area although it is open to anyone in the community. These services include youth activities, Elders programming, legal advocacy, housing, tax assistance, the Helping Hands dry food program, the Roots program, services on behalf of the Ministry of Child and Family Services, and the FASD (fetal alcohol spectrum disorder) Keyworker program. Recently, the Wachiay Friendship Centre purchased the building where it has been operating and installed a large childcare centre, youth centre, and additional office space. Wachiay Studio was initiated to support the Wachiay Friendship Centre by contributing to its financial stability and functioning. Wachiay Studio pays rent and utilities to the Friendship Centre for use of the facilities. The studio also collaborates with the Friendship Centre to offer customized programming for youth and adults. Alongside training programs, the studio fosters the health and growth of Indigenous Wachiay Studio 137 culture and individuals through employment and artistic expression. The studio gives priority to hiring Indigenous youth as summer students and promotes Indigenous arts and crafts in its business. Social Mission and Programming The mission of Wachiay Studio is to create opportunities and provide skills training for Aboriginal youth and artists in the graphic arts and screen-printing. Profts from our operations will be reinvested in the ongoing operations and programs of the Wachiay Friendship Centre. While this statement highlights Wachiay Studio’s social aims, conversations with MacDougall and Wachiay Studio’s purchasers reveal other dimensions to the social enterprise’s community focus. One Tribe Wachiay Studio provides training and employment to urban and rural Indigenous youth through One Tribe, a collaborative initiative with the Friendship Centre. In One Tribe, youth participants learn how to create original designs, apply screen-printing techniques, and print their designs on clothing and paper goods. Their work is showcased and sold through a mobile booth that Wachiay Studio brings to festivals and events around Vancouver Island. A portion of the profits from their designs goes back to the studio while the rest are given as a commission to the young artists themselves. Wachiay Studio has created an online store and a Facebook page to promote its artwork and events. Environmental Aims Wachiay Studio is also a promoter of environmentally conscious printing practices. In its own studio, it uses water-based inks and trains participants to make conscious choices in their printing practices. MacDougall is actively engaged in a global discourse on environmentally conscious printing practices, including making trips to Mexico and Spain to demonstrate and train screen-printers in the use of environmentally friendly printmaking materials. Wachiay Studio promotes its environmental choices to customers as a purchasing factor. 138 Yasmin Hariri Economic Development Wachiay Studio is also proud of its contributions to the local economy in the Comox Valley. The studio has supported a number of new artists and screen-printers to develop small businesses on Vancouver Island and beyond. The studio supports the growth of the local economy by developing sustainable small businesses and training a skilled labour force to help these local businesses grow. MacDougall estimates that Wachiay Studio has assisted in the establishment of fifteen small maker businesses in the Comox Valley. In a desire to create favourable conditions for a differentiated marketplace, Wachiay Studio makes a point of not infringing on the business of like-minded enterprises in the Comox Valley region, especially those run by individuals trained and supported by the studio. Instead, the studio seeks opportunities to generate sales from outside the community through attracting new markets to its business. Social Purchasing Supported in its tight-knit community, Wachiay Studio primarily earns its revenue through social purchasing. As a business, the studio offers a high-quality product and delivers a consistent experience to its customers. MacDougall believes that customers are largely purchasing the studio’s goods and services because of their quality. He indicates the social mission is a partial factor for purchasing, estimating that around 40 to 50 per cent of a customer’s purchasing decision may be related to the social value of the studio. MacDougall remarked that most of our [business-to-business] customers use us because we are good at what we do, we are friendly to work with, and we use environmentally friendly materials. The fact we are a social enterprise is secondary to the quality of the product and service delivered. Wachiay Studio’s customers are a mix of organizational purchasers and individual consumers, the majority of whom are local to Vancouver Island. Organizational purchasers mostly place orders of customprinted goods (e.g., t-shirts, paper materials, bags, etc.); however, some also buy group workshops or classes. The average order is between $500 and $1,000. These organizational purchasers do not put forth a tendering process but often ask the studio to provide price quotes before purchasing. To a degree, Wachiay Studio has catered the screenprinting business towards working with organizational purchasers Wachiay Studio 139 since the studio has noticed that organizational purchasers are more likely to place orders regularly, whereas individual customers tend to purchase one-off orders. In contrast, workshops and online sales are largely driven by individual consumers. Some of its customers include a school board, an art and clothing business, and an FASD treatment organization. District Principal, Indigenous Education (Comox Valley, British Columbia) The school board became acquainted with Wachiay Studio through connections in their shared small-town community. The school board purchases from Wachiay Studio between ten to twenty times per year for its roster of schools. A typical purchase from the school board includes both goods (around twenty to three hundred items) and classes for students. Each purchase ranges between $300 and $3,000. Bruce Carlos, the district principal, indicates that he purchases from Wachiay Studio because of the strong relationship that he has with MacDougall and his team, and the specific nature of the classes and training the studio offers. While there are other studios in town, he goes to Wachiay Studio because it allows students, many of whom are Indigenous, to engage in a hands-on way with tasks such as t-shirt design and printing. While the social mission of Wachiay is not a primary purchasing factor for Bruce, it is certainly an added benefit. He is primarily drawn to the quality of the product, its competitive price point, and the benefit of supporting a local business. The district principal speaks very highly of working with Wachiay Studio and mentions how well the studio trains the school board staff in supporting students. West Coast Karma West Coast Karma – an art and clothing business – is a regular customer of Wachiay Studio, purchasing about twice a month. A typical purchase involves custom-printed goods (e.g., wood pieces, t-shirts, etc.) and averages $350 per order. West Coast Karma became connected to the studio through a referral from another customer. They are primarily attracted to the competitive pricing, the charitable status of the business, and the ability to support the local community. Gabby Mason, the owner of West Coast Karma, indicates that the social mission of Wachiay Studio is definitely a factor in the purchasing decision. He says he has not been able to find any other business with a social mission that is able to offer comparable pricing. Mason notes that he would characterize his social purchasing as “marketable” since he likes the fact that he 140 Yasmin Hariri can promote his decision to purchase from a social enterprise in his own marketing. As a business, Mason expresses a distinct interest in buying more exclusively from socially minded businesses. However, he still feels that it is often difficult to find these businesses. Mason would like to see a central repository on social enterprises in Canada, by industry and category, to make social purchasing more accessible.1 He believes there should also be a means of quality control to support social enterprises in offering as high-quality goods as large corporations, allowing them to compete on par in the marketplace. Mason hopes to expand his purchasing to include occasional rental of Wachiay Studio’s facilities. Whitecrow Village Whitecrow Village is an FASD treatment organization and an intermittent customer of Wachiay Studio, having purchased twice in 2017. Its orders were entirely printing services and averaged $1,100 each. The organization learned about Wachiay Studio through its connection to the Wachiay Friendship Centre. Kee Warner, the executive director, states that the social mission of Wachiay Studio was a significant factor in the non-profit organization’s purchasing decision and that the studio’s shared worldview around the engagement of individuals with symptoms of FASD was incredibly important. Their primary reasons for purchasing from Wachiay Studio were the employment of FASD participants, support for the local community, and reduction of community vulnerability. As an organizational purchaser, Whitecrow Village tries to purchase from socially aligned organizations on a regular basis. Warner indicates that the organization referred other people to Wachiay Studio about five times in 2017. Social Procurement Despite a keen interest in the new business opportunities procurement may afford, Wachiay Studio has not yet participated in formal procurement of any kind. MacDougall talks about two of the barriers that make him hesitant in seeking procurement opportunities: lack of human resources and production capacity. 1 Editors’ note: While such information is available through sources including Buy Social’s Certified Social Enterprise Suppliers, Social Enterprise Toronto, and Chantier de l’économie sociale in Québec, compiling a list of social enterprises that serve one’s own local community still requires considerable effort. Wachiay Studio 141 Lack of Human Resources One of the most significant barriers for Wachiay Studio to pursue social procurement is securing the human resources required to seek out and produce large-scale orders. Located in a rural town with a limited labour force, Wachiay Studio struggles to find or train screenprinters who can produce prints at the requisite quality. There is little margin for error or spoilage in the business, so the studio requires individuals who can produce consistently high-quality prints. Mac- Dougall points to the significant difficulty in attracting highly skilled individuals to live and work in a small town on Vancouver Island. As a social enterprise, Wachiay Studio prefers to hire and train local people, particularly Indigenous youth, with the necessary training taking approximately six months. The studio has applied for various grants or funding programs from local organizations, but it rarely receives timely responses. The lengthy application process means the youth participants willing to be trained often end up finding other lowskill employment, which translates into a lost opportunity for local human-resource development. This labour shortage could cause a major bottleneck in the business. At the same time, Wachiay Studio is so overwhelmed with existing business from social purchasing that it is unable to pursue procurement opportunities at this time. MacDougall stresses that without additional production support, he becomes consumed in production himself and has little latitude to focus on growth opportunities. Production Capacity Beyond human resources, MacDougall does not believe Wachiay Studio’s physical infrastructure and craftsmanship would be suited to meet the consistency demands of larger-scale procurement. The studio produces handcrafted goods – a contrast to what MacDougall believes procurement contracts would require, i.e., machine-made products to ensure consistency in production. MacDougall’s insight is based on his experience in other Vancouver screen-printing businesses that engaged in public procurement. He has not yet explored what kinds of procurement opportunities exist and whether Wachiay Studio may be suited to any of them. Summary: Lessons Learned Wachiay Studio raises a number of questions about the opportunities afforded to small social enterprises looking to scale up and participate 244 Anika Roberts-Stahlbrand craft nights with friends, they can also see what is happening at Harbourview first-hand without having to be told about it. For example, the woodworking shop at Harbourview is visible to all. Hennessey describes the value of this: A lot of our products are broken-down into the smallest steps so that every person with some sort of ability gets to contribute in some way … we don’t market it like that, but because we live in a small community we see a lot of family members, public come into our building, and our building is very open, so when they come in they witness it, frst-hand. Customers who see the workshop are attracted to the beautiful woodwork products, but they are also attracted to the fact that people with intellectual disabilities “could be part of a beautiful project, and that [participants] could have a feeling of contribution and feeling of success.” The interactions between participants and community members at the cafe, the ice cream stand, and the workshop are how Harbourview makes its work visible and communicates its social impact. In a small-town context, Hennessey believes this is highly effective because Harbourview is well known by the community as a whole. Harbourview gains knowledge of market opportunities as a result of being embedded within the community. This is consistent with research findings on other social enterprises based in rural settings (Steiner & Teasdale, 2019). Hennessey describes this approach by saying “we feel like we belong to the community and the community supports us. Many of the things that we make here are because we know what the community wants.” Harbourview is a social enterprise of and for the rural fishing people of Souris, as Hennessy points out: We wouldn’t start making, I don’t know, a bunch of wine racks, because we’re not wine connoisseurs here, you know. But we do make lobster traps and lighthouse crafts because we’re a fshing community. Because we feel like we know the community, and so therefore we are making stuff that then we know the community would want, so it’s back and forth. Engagement with Procurement and Purchasing Harbourview does not participate in any formal procurement; instead, it participates in less formal social purchasing. For Harbourview, both the participants and the customers are understood as being in relationships of receiving from Harbourview – the participants receive support, and the customers receive the purchased goods and services. Harbourview Training Centre 245 Hennessey makes it clear that the participants with intellectual disabilities are not simply producers for the customers; the participants are the most important service recipients at Harbourview. This prioritization of participants over generating financial surplus is also reflected in Hennessey’s comment that “we run like a business, but we’re not like a business because our number one priority is service to the [participants].” By prioritizing the participants, Harbourview remains cautious about the benefits of social procurement. As Hennessey describes: “If something happens and our clients need our services more, and our bakery couldn’t operate, then we wouldn’t be able to commit to a contract.” Having said that, Hennessey points out that Harbourview is not against procurement, but “it would have to be very specific to what we could do and what we could handle and the fact that we would still be able to provide the finished product we are used to doing, which is great.” Harbourview is wary of social procurement because the obligation to fulfil a contract, at least the way contracts are likely to be structured, could come into conflict with its primary goal of supporting participants. Due to the importance Harbourview puts on placing participants first, Hennessey feels that social purchasing is more aligned with its mission. Through social purchasing, Harbourview can choose to take or decline a request in the moment depending on the capacity of current participants and existing production commitments. Harbourview sells regularly to a variety of organizations. It provides the snacks for the parent council meetings at the local school and is considered the “go-to” place to create decorations for celebratory events organized by the Souris City Council (e.g., for “the Mermaid Tears Sea Glass Festival [the council] wanted specific mermaids cut out and painted and fish made and painted”). For Hennessey, the willingness of the council to collaborate with Harbourview facilitates the balancing of the needs of participants and customers. While large purchases and contracts may be a way for social enterprises to increase their income and grow, this traditional approach to scaling up may not work for rural social enterprises (Steiner & Teasdale, 2018). For the social enterprises in rural settings, diversification is a more appropriate strategy for growth (Casolari et al., 2013). This is reflected in Hennessey’s comment that Harbourview’s current programs will not grow, but the organization may start branching off into affordable housing, which serves a specific need for its participants. At this time, Hennessey is focused on serving the participants and less interested in scaling up the operations at Harbourview. Even though Harbourview has consistent relationships with multiple purchasers, Harbourview actually never intentionally sought them out. As 246 Anika Roberts-Stahlbrand Hennessey explains, “we aren’t that big, that if you spoke out too much, we’d have to say no to people because we wouldn’t be able to accommodate. We’re growing at a pace that we are creating, not work creating us.” Harbourview only wants to grow if the growth remains in its control and in the service of its participants. It is important to note that Harbourview’s agency to define appropriate scale based on participant needs, rather than always pushing for customer growth, is predicated on the fact that a majority of its funding comes from the government, instead of earned income. As shown in this case, social enterprises do not need to be viewed as businesses with a goal of revenue generation, but rather as an innovative and responsive mode of social service provision that must be continually funded by grants like other social services. Government-funded rural social enterprises allow the power to stay at a local level and provide services specifically catered to the community while being funded from a higher level of government with a broader tax base. As noted above, the social enterprises at Harbourview account for 18 per cent of its total revenue, with government funding making up 68 per cent. Although the surpluses of the social enterprises are very modest, a low level of earned income does not mean Harbourview’s social enterprises are failing. Instead, it raises the question of whether social enterprises can or should ever replace public funding for social services in a significant way. This case shows how a social enterprise can be valuable even if it does not generate significant financial value. Harbourview’s social enterprises provide many important services to the participants, as well as services to the broader community. The organization is rooted in its community and can therefore provide more efficient, relevant, and effective programming. Harbourview generates significant social value that is important and meaningful, regardless of whether this generates, or can be translated into, monetary value. Summary: Lessons Learned The case of Harbourview highlights specific elements unique to social enterprises in rural communities, which require further investigation. The case also brings to the fore the tricky question for rural and urban social enterprises alike of how to balance multiple bottom lines, and indeed, whether this is possible. 1. Canada’s social economy movement is rooted in the rural context of the Antigonish Movement in Nova Scotia and the Movement Desjardins in rural Quebec in the early 1900s. However, currently Harbourview Training Centre 247 there is a lack of attention to rural social enterprises in practitioner, academic, and policy discussions in Canada. This case highlights that the local context matters, and we need to reinvigorate research on rural social enterprises, not simply transpose the research findings from urban social enterprises onto the rural context. 2. This case suggests that, in rural contexts, the substantially subsidized social-enterprise model may be a more effective and effcient way to provide contextual and community-integrated social services. Government-funded rural social enterprises allow for the agency to stay at the local level, and this funding means that social services can be provided across the country without the ineffciency of government buildings in small population centres, or long commutes for rural people who need access to government supports. This lesson warrants further study to see if it applies to other rural contexts and social enterprises. 3. If a social enterprise is replacing government supports, this case suggests that this kind of social enterprise needs to be seen as a different mode of government social-service provision, rather than as a different method of social-service provision separate from government. Seen in this light, Hennessey’s hesitancy to engage in social procurement is understandable because it requires a prioritization of product delivery over participant support. The way Harbourview has been able to balance its multiple bottom lines is only through signifcant government subsidy. The growing popularity of social procurement exists within the context of the rise of neoliberal policies and the associated reductions in government spending on social programming (Quarter et al., 2018). This case suggests that social enterprises can provide innovative solutions to social challenges but should not be seen as a way to justify a reduction in a public commitment to support and empower citizens of all abilities. REFERENCES Casolari, E., Craig, M., & Dunbar, J. (2013, October 2–4). Rural revitalization: How social enterprise keeps rural communities viable. Panel conducted at the meeting of the Social Enterprise World Forum, Calgary, Canada. https:// tricofoundation.ca/rural-revitalization-how-social-enterprise-keeps-rural -communities-viable/ Choi, E.J., & Kim, S.H. (2013). The study of the impact of perceived quality and value of social enterprises on customer satisfaction and re-purchase intention. International Journal of Smart Home, 7(1), 239–52. 248 Anika Roberts-Stahlbrand Lang, C., & Ferguson, M. (2012). Rural social enterprise project: Documenting the learning. Foundation for Rural Living. https://ccednet-rcdec.ca/sites /ccednet-rcdec.ca/fles/frl_rsep_learning_document_fv.pdf Lang, C., Ferguson, M., & Harrison, B. (2016). Rural social enterprise and community ecosystem development: Policy leverage points. The Ontario Nonproft Network. https://theonn.ca/wp-content/uploads/2016/05 /NewDirections-Research-Report-Final-April-10-2016.pdf Madill, J., Brouard, F., & Hebb, T. (2010). Canadian social enterprises: An empirical exploration of social transformation, fnancial self-suffciency, and innovation. Journal of Nonproft & Public Sector Marketing, 22(2), 135–51. https://doi.org/10.1080/10495141003674044 Quarter, J., Chan, A., & Ryan, S. (Eds.). (2015). Social purpose enterprises: Case studies for social change. University of Toronto Press. Quarter, J., Mook, L., & Armstrong, A. (2018). Understanding the social economy: A Canadian perspective (2nd ed.). University of Toronto Press. Steiner, A., & Teasdale, S. (2019). Unlocking the potential of rural social enterprise. Journal of Rural Studies, 70, 144–54. https://doi.org/10.1016/j .jrurstud.2017.12.021 OTHER SOURCES Interviews with Harbourview Training Centre. Harbourview Training Centre, https://www.harbourviewtraining.com Harbourview Training Centre – Financial Statements 2016 and 2017. 20 Challenge Disability Resource Group1 ANNIE LUK AND JILLIAN HARDIE Introduction The Challenge Disability Resource Group (Challenge) is a charitable non-profit organization located in Whitehorse, Yukon, with the mission to “assist individuals with disabilities to learn life skills and job skills by empowering them to be engaged in the community.” First incorporated in 1976 as Challenge Community Vocational Alternative, the organization changed to its current name in 2012. Challenge began as a day program for adults with moderate to severe developmental disability before it evolved into a sheltered workshop offering work activities for participants. In the 1980s, as social acceptance grew to recognize the contributions of adults who have developmental disability, Challenge shifted its focus from day programming to job development and vocational training so adults with developmental disability could work for market wages in an integrated work environment. Since then, Challenge has expanded its support to also include individuals with other forms of disabilities, including those that are not formally diagnosed. Challenge is situated in the north end of downtown Whitehorse on Front Street, facing the Yukon River and the river boardwalk. Although located downtown, it is slightly outside the main tourist area. As the primary hub of Canada’s North, Whitehorse is home to over 60 per cent of Yukon’s population. The city has a prominent public sector, hosts a number of natural resource sectors (e.g., mining, oil, and gas), and is home to a vibrant tourist industry. The Yukon Visitor Information Centre is next door to the Yukon Government administrative building, where one of Challenge’s social enterprises – a cafeteria – operates in the basement. 1 Since the research for this book was conducted, Challenge Disability Resource Group has changed its name to Opportunities Yukon. 250 Annie Luk and Jillian Hardie Services and Programming Challenge offers three main lines of service: residential services, employment support, and social enterprises. The residential services and employment support assist the program participants in their active and independent living. The residential services are provided through two facilities. The first, Takhini Haven, opened in 2012–13 and offers five bedrooms for adults who need long-term care. Programming is also available to help residents who are interested in transitioning into an independent lifestyle. The second is the Transitional Treatment Program, located in downtown Whitehorse, which opened in 2015 and is specifically designed to support residents with mental health challenges. The six-unit, ten-bed facility was retrofitted from a building previously operated by the Yukon Building Corporation (Government of Yukon, 2015). The Transitional Treatment Program supports both long-term and short-term stays and offers programming focused on life skills. The employment services at Challenge provide support to community members who may find it difficult to find a job because of their disabilities. The funding support for the employment services comes from the Income Support Unit, which is part of the Yukon Department of Health and Social Services. Three core services are available to program participants: job coaching, employer supports, and communityinclusion support. Challenge also delivers the EmployAbility Skills Program, which is a fifteen-week training program for up to twelve participants at a time. The program is run by a five-person staff team, including one coordinator, one team lead, and two job coaches. Participants learn both technical and workplace skills, such as time management, conflict management, learning styles, and WHMIS.2 The staff also help participants connect with other social and community services, such as mental health or learning support, to ensure participants receive wraparound assistance. The program is connected with Challenge’s social enterprises, which offer employment training in woodworking, catering, and landscaping. 2 WHMIS stands for Workplace Hazardous Materials Information System. It is one of the legal requirements that employers and workers have to comply with in order to protect those who work in places where hazardous materials are used (Yukon Workers’ Compensation Health and Safety Board, n.d.). https://wcb.yk.ca /QuestionResults/OHS/WHMIS/Q0297.aspx. Challenge Disability Resource Group 251 Social Enterprises In 1983, Career Industries was formed as a social enterprise within Challenge. Career Industries started out selling core boxes to the mining sector. These wooden boxes are used for protecting and transporting boring or core samples. The samples are tested for mineral before the mining companies make the decision to proceed with the mining operation or determine where to drill. Back in the 1980s, Yukon was experiencing a boom in the mining sector (since then, the sector has experienced several more boom-and-bust cycles). Aware of the woodworking shop at Challenge, some of the mining companies proposed a program to help develop participant skills through the production of core boxes. The executive director at the time, in consultation with the job coach at the woodworking shop, believed this could be made into a viable business. From there, Challenge started its ventures into social enterprises. Its customers now include mining companies in Yukon as well as Alaska. Interestingly, the success of Career Industries attracted competition. Several years ago, the then executive director went on the radio to tell the story of Career Industries making core boxes for the mining sector. Two persons who heard the story decided to open their own business to make core boxes – thus creating competition for Career Industries. However, despite competition and the fluctuations inherent in the mining sector, Career Industries has outlasted many of its competitors. Jillian Hardie, Challenge’s current executive director, credits consistency as Career Industries’ key to success: “Our product is consistent. Our suppliers are consistent. And our buyers are consistent.” It also helps that Career Industries charges fairly to the mining companies. Hardie also believes that the development of corporate social responsibility policies has created incentives for these mining companies to buy from Career Industries. At Career Industries, the woodworking process is divided into distinct tasks for each participant/employee. For example, one of the participants is responsible for operating the lathe. According to Hardie, “we call him the King of Pointy Sticks and he just loves it. He just [uses the] lathes all day long.” Currently, Career Industries runs two shifts of seventeen participants who make core boxes. The core-box operations recently moved to a new location because the social enterprise was running out of space. Those who build core boxes can work at Career Industries for as long as they want after they have completed the training, provided that Career Industries has work for them to do. New participants coming to work at the core-box plant may receive 252 Annie Luk and Jillian Hardie wage subsidies during the first six months of their employment. After that, they are paid entirely by the core-box plant. In addition to core boxes, Career Industries also operates Bridges Catering and The Ledge. Both are social enterprises specialized in foodservices. Bridges Catering, which employs up to seven individuals, is run at Challenge’s head office on Front Street. Staff at its commercial kitchen prepare catering orders for customers around Whitehorse. The number of staff varies, depending on the volume of catering orders. Everyone at Bridges, including the chef, lives with disabilities. Similar to those who make core boxes, participants at Bridges can stay working as long as they want and as long as Bridges has work for them to do. Wage subsidies are not available for those working at Bridges. The Ledge, first opened in April 2013, is a cafeteria located in the basement of the Yukon Government’s administrative building on Second Avenue (Government of Yukon, 2013). The cafeteria is also open to the broader public, although signage to the cafeteria is not conspicuous. The Ledge runs an integrative lunch program for those from the Fetal Alcohol Spectrum Society, offering them an opportunity to enjoy their lunch with the general public. Once those who work at The Ledge have gained some confidence, the staff work to find them outside employment on a case-by-case basis. Since The Ledge is designed to provide training, all those who work there receive wage subsidies. One of Career Industries’ success stories comes from a participant who first started out at The Ledge. Until he arrived at Career Industries, he had never been employed a day in his life. When he began, he could only manage to work four hours a day. Career Industries accommodated him for whatever number of hours he was able and ready to work. After a while, Career Industries asked him if he would be interested in working a half hour more. He accepted the offer and started working four and a half hours each day. With gradual half-hour increments, he eventually reached full-time hours. After two years working at the cafe, he entered the culinary program at Yukon College. He successfully graduated from the culinary program and asked to return to the cafe so that, in Hardie’s words, “he could get grounded before he goes out into the regular workforce.” He worked out so well that Career Industries ended up hiring him as the team lead and supervisor at The Ledge. In the summer of 2018, when the head chef had to take a twomonth leave, this former participant looked after the kitchen as well as the front of the house for the cafe. Until March 2019, Career Industries also operated Twisted Wood Works and Twisted Wood Works Retail. Twisted Wood Works – the custom woodworking shop for individual retail customers – as well as Challenge Disability Resource Group 253 the retail store were shut down because they were unable to generate positive cash flow. This shutdown reduced the number of social enterprises from five to the current three. During its eight years of operation, Twisted Wood Works never managed a surplus. When it was becoming increasingly difficult to secure the government wage subsidies for those working at Twisted Wood because the employees could not stay working there on a permanent basis, Twisted Wood tried to shift its model from training to production. However, it still could not turn its finances around to generate a positive cash flow. Ultimately, the decision leading to the shutdown was financially based. In addition to the core boxes and foodservices, Career Industries also offers business services including mail assembly and giveaway package assembly for public campaigns such as promotion for smoking cessation and sexual health. In 2018, more than seventy-five participants at Challenge worked for the social enterprises, which delivered goods and services to over 140 customers, earning over $320,000. As the parent organization for the social enterprises, Challenge provides personnel, in-kind, space, and financial supports. None of the social enterprises is incorporated and they all operate as programs within Challenge. Marketing Much of the marketing for Challenge is through word of mouth, including referrals from customers. Many of the business opportunities come to Challenge directly. The organization also has a considerable advertising plan using social media, the local Whitehorse directory, and the Yellow Pages. The marketing efforts are important to Challenge because of the organization’s reliance on commercial revenue and the fact that it does not receive any government grants for its operations, as Hardie points out: All invoices, advertising and menus have the mission statement on it. Facebook page is attached to Challenge Disability Resource Group page. Marketing to the US is primarily on the social responsibility. Marketing in Canada is not as big on the social aspect. They aren’t as interested. Online marketing includes a website and social media. Although Career Industries does not yet sell online, there are plans for the future. It is estimated that less than 10 per cent of expenses are for marketing. No staff member is dedicated to marketing at this point, which means everyone does some aspect of it. Challenges evaluates its own 260 Andrea Chan and Shirley Hannigan Credit, and in the buildings there were two retail locations … [one of these locations] remained empty [after the purchase] and became a drop-in centre for the individuals we supported in the community. And through the drop-in, there was conversation around, “wouldn’t it be cool to make something out of this space that would look like more of an employment initiative?” That was the language back then [as opposed to “social enterprise”] as it was long before people did feasibility studies. It was just – “wouldn’t it be great to have a cafe here, so let’s do this!” We applied for a grant, involved some community partners, and that’s how it started. Consistent with its person-centred approach, SHIP noticed early on that customer service may not have been the most suitable form of work for participants employed or training at the enterprise. To work in a cafe, there needs to be a certain level of communication skill, an upbeat personality characterized by casual banter that Hannigan describes: “Good morning, how are you? What can I get you?” … and for some staff that didn’t come easily. And that’s when we looked at [other job options] … SHIP has a number of capital buildings that we own and require cleaning on a regular basis. And we thought this may be a good opportunity for individuals who aren’t comfortable within the cafe model and might appreciate a little bit more independent work. From there, DC Cleaning was born as a cleaning service for residential and commercial buildings. SHIP continues to leverage its expertise in housing operations with its experience in community-based small business to expand its social-enterprise portfolio. As part of its bid for procurement with the Region of Peel to manage Peel Youth Village, SHIP committed itself to starting social enterprises for youth within Peel Youth Village as part of its contract, proposed on its own initiative. Hannigan explains: And as part of our proposal [to the request for tender], there was an agreement that we would operate three social enterprises … One was [Acorn] café and catering, the second was cleaning – and that’s the cleaning in that building, and the third was security, which we very quickly changed to [residential] painting as security was just a bit more risky. Services and Housing In the Province (SHIP) 261 Structure, Operation, and Sales Social enterprises at SHIP employ between ten and twenty-four people and provide volunteer training opportunities for four to five people a year. While the social enterprises operate individually and have separate staff, they are jointly managed by Hannigan and her colleagues as part of their broader duties at SHIP. For fiscal year ending 2017, the social enterprises had a combined revenue in the category of $100,000 to $249,999. Ultimately, one of SHIP’s goals for the social enterprises is for them to be financially sustainable through sales income. Hannigan was quick to clarify, however, that while not all the social enterprises are able to break even, as a group of businesses they do. She adds that It’s not to say that every one of our social enterprises is on the plus side. But overall, and that’s how we look at it, overall … So cleaning is an easier one to master because you don’t clean unless you have a contract. You get paid if you have a contract. The cafe is very different. You can have sales of ten coffees a day versus one hundred coffees another day. So some days it might cover, some days it might not. But overall, we create enough revenue. SHIP as a parent organization provides ongoing in-kind support to all of its social enterprises, from space to personnel and administrative support such as payroll and staff recruitment. The social enterprises are not incorporated separately and thus operate under the SHIP umbrella. Hannigan explains there is no program funding specifically to support the social enterprises: As we don’t receive direct monetary support through our organization’s funders, portions of my salary are sourced from other revenue streams to support the vocational and employment program. Contemplating Customer Intention By SHIP’s estimation, the social mission of its social enterprises has greater sway with organizational (i.e., bulk) purchasers than with individual customers, who may just happen upon one of the storefronts. Hannigan explains: 262 Andrea Chan and Shirley Hannigan For those that just want a cup of coffee and choose to come to us because they were walking past us, they don’t care. Maybe I shouldn’t say that so glibly. Maybe they don’t care the moment they walk into the door. They may feel differently when they leave … Not every customer [understands our social mission], but those that do, value it. Although individual customers make up the majority of those who purchase from SHIP’s social enterprises, organizational purchasers account for anywhere between a quarter to a half of sales for all the social enterprises combined. SHIP counts among its organizational purchasers Peel Region; other non-profit organizations such as Georgian College, Indus Community Services, Lakeshore Community Health Centre, and Associated Youth Services of Peel; and private businesses located around Port Credit. Some organizational purchasers have standing contracts with the social enterprises (e.g., to provide daily cleaning service) while others make recurring single purchase orders (e.g., five to ten orders for catering per month). From the perspective of one of the non-profit organizations that regularly buys from Destination Café, the social mission of the cafe is an important factor in the overall purchasing decision. Aware of how its purchases could bring social benefits, the non-profit organization is willing to pay a premium on the product (i.e., a weekly order of ground coffee that averages around twenty-five dollars): “Although the coffee is more expensive than what we could source through other means [i.e., cans of ground coffee from the grocery store], we purchase to support what (they) do.” This testimony reflects SHIP’s own understanding in terms of the importance of its social value to its customers. For organizational purchasers from governments and other businesses, SHIP believes that competitive pricing and reducing community vulnerability are the main influential factors and what makes it unique. Nevertheless, SHIP emphasizes that quality of goods and service is always an important factor in the purchasing decisions of all customers, organizations, or individuals. Despite the regular purchases made by non-profit organizations and governments (and to a lesser degree local businesses), SHIP has not benefitted from any social-procurement opportunities. Seeking Social Procurement Although expressly interested in social-procurement opportunities, SHIP has yet to submit any social-procurement bids for its social enterprises and the reason is simple: it has yet to encounter any requests for Services and Housing In the Province (SHIP) 263 tender that would be appropriate for its enterprises. “There’s just not enough time in the day to do some of the research that may be needed to find some of these opportunities,” explains Hannigan. She goes on to give examples of the way municipalities could straightforwardly set up their bids and tendering process for social enterprises. From her perspective, the requests for proposals and tenders could be accessed through an online portal where they would be centralized and searchable, and where potential bidders could register to receive notifications for new tenders that would be of interest to their organization. Against the hurdle of finding the opportunities, Hannigan believes that networking with organizations such as the Toronto Enterprise Fund (TEF, a United Way program that supports employment-focused social enterprises in Peel Region, Toronto, and York Region) can help increase awareness of social-procurement opportunities. TEF-supported networking has also been a strategy of LOFT Kitchen, the social enterprise featured in the following chapter. Unlike many social enterprises that may hesitate to bid on tenders because of inexperience or lack of capacity, SHIP as an agency is in a unique position in that it sees itself as having tremendous strength in proposal development and tendering. “As an organization, we are RFP [request for proposal] heavy,” Hannigan maintains. It is the demonstration of social value required in a social procurement bid that raises uncertainty, as she clarifies: I think one of the challenges we’ve talked about over the years is measuring success of a social enterprise. I fnd that even within the other work that we do, in community development, it’s sometimes diffcult to measure things that are more anecdotal than when they are numbers-based. We can look at sales, but that doesn’t necessarily refect the success of an individual person. So sometimes that social value … in the corporate world, in the business world, it’s all about proft. Whereas here, it’s about people before proft. And I think that makes a world of difference, and it’s just a bit harder to track. You can track retention, you can track people requesting time away, you can track absenteeism, the ability to train, learn new things, and some of those other things, but in the end, sometimes it’s hard to put a value on, “did this change somebody’s life? Is their life a bit better?” SHIP is confident in its ability to respond to procurement opportunities and yet admits to facing challenges in its ability to demonstrate social value, which stands in contrast to the results of our survey from 264 Andrea Chan and Shirley Hannigan chapter 3. The survey found on average social enterprises rate their ability to demonstrate social value on a procurement bid higher than their overall capacity to prepare bids at all. The challenge of communicating social impact is common among social enterprises, but it may be particularly salient to organizations interested in becoming involved in social procurement. Mission and Marketing Like the large majority of organizations that participated in our national survey, the social enterprises at SHIP dedicate less than 10 per cent of their resources to marketing. Until now, many organizational purchasers come to know SHIP’s social enterprises primarily through SHIP itself, events organized by local business-improve- ment areas or word of mouth. Currently, the social enterprises have a limited online presence. The website of Destination Café remains under construction, previously having been without a website for some time. At the time of writing this case, SHIP is developing its first marketing strategy, which includes examining ways to increase customer engagement via social media. It also has plans to venture into e-commerce. The marketing challenges faced by SHIP are not uncommon among smaller social enterprises. Although there is a general increase in understanding social enterprise as a concept, knowledge of specific social enterprises operating in the community may still elude the typical consumer, which is exacerbated by the limited marketing coming from the social enterprises themselves. An example would be the organizational purchaser for Destination Café from the nonprofit sector mentioned earlier. While this organizational purchaser supports the café through regular social purchases, this customer has never purchased from and is not familiar with any other social enterprises. Admittedly, this customer rates itself as having low awareness of other social enterprises in the community, and accordingly, does not currently have an in-house social-purchasing policy. Of its existing marketing, SHIP’s social mission has always been front and centre. The brochure for Destination Café states: “Our goal is to build a sustainable business while providing employment opportunities for individuals living with the challenges of mental health.” Identifying people as consumers/survivors of the mental health system as part of a social enterprise’s identity has inherent challenges. But as Hannigan explains, Services and Housing In the Province (SHIP) 265 We always look for buy-in from the people that we support through employment because they’re the face of the cafe, so we need to ensure that they’re okay with the messaging. And that’s been key, and they really are okay with the messaging. Centralizing the mission in the marketing not only helps attract customers who wish to support the community, it can also offer workers a platform to speak about meaningful employment. Hannigan points out that “when sharing or promoting our business, [the social enterprises’] staff speak freely around their employment supports, their experience and what it has meant to their recovery.” Although the message of its social mission has always been strong in the branding of SHIP’s social enterprises, SHIP plans on making it stronger still in any future marketing. Challenges to Growth The social enterprises at SHIP express their interest in expanding their operations, and similar to other employment-focused social enterprises, such plans for growth require a delicate balance between financial and social objectives. For example, the well-being and safety of its participants makes it cost-prohibitive to take on cleaning contracts with individual customers in their homes. As Hannigan explains, Not a week goes by that I don’t get that call [about cleaning for individual customers], and it’s been on our radar to try and look at how to do that. But there’s risk levels in terms of [sending one staff], and it becomes very costly to have two staff. But we get a lot of calls for it. The limitations to providing cleaning services for residential units mean passing on an additional opportunity to support people with mental health challenges. Hannigan went on: “Within mental health and addiction, those are sometimes the first thing to go, not being able to maintain your home, and that leads to potential issues around your tenancy.” Being able to provide cleaning services within homes could be the next form of peer support for those receiving housing support through SHIP. Additionally, investments that go into streamlining processes or extending the lifecycle of the foodservice business have to be funded primarily through grants. In 2013, the Central West Health Local Integration Network funded the purchase of a coffee roaster that quadrupled 266 Andrea Chan and Shirley Hannigan the speed with which coffee could be roasted. More recently, Destination Café received modest funding to undertake a makeover of the physical layout of the storefront. For social enterprises such as the ones operated by SHIP, the capital injection needed to increase service capacity or to refresh the brand to maintain and increase its customer base is often hard to come by. On top of which, social enterprises have to contend with the same external threats faced by any other small to medium-sized businesses, such as economic downturn and policy changes. The rise of minimum wage, as Hannigan describes, has impacted the social enterprises’ financial situation: We create enough revenue, [but] it’s gotten trickier, and I’m being very candid, because of the increase in minimum wage. It had a pretty big impact on us as I’m sure it did on many social enterprises or small, medium-size businesses, period. Despite the above challenges, growth remains a focus for the social enterprises at SHIP. One goal for this year is to increase the number of customers using DC Cleaning from the broader community outside of SHIP. Locating SHIP among Other Social Enterprises The story of SHIP and its social enterprises reflects other cases presented in this book. For one, SHIP believes that, irrespective of its social mission, the quality of its goods and services speaks for itself (in line with Horizon Achievement Centre, Let’s Work Atlantic, and Ever Green). For another, its social commitment, in this case to ensure a safe work environment for its participants, overrides its impulse to capitalize on market opportunities (i.e., expanding service to include in-home cleaning, which is similar to the discussion on Harbourview Training Centre). The marketing approaches and constraints of SHIP’s social enterprises are also common, not only among the cases featured here but more broadly across the sector; they are consistent with the chapter 3 survey findings and current research literature. Word of mouth as the primary promotional tool among social enterprises has been documented, in part because of their budget constraints, but also because it can lead to enduring relationships and legitimacy that can be fostered with key stakeholders. Furthermore, the penny-wise spirit of word-of-mouth marketing aligns with the normative notion of “social Services and Housing In the Province (SHIP) 267 mission first.” (Mitchell et al., 2015). SHIP’s interest in increasing the social enterprises’ presence on social media and participating in sectorrelevant networking (e.g., with the Toronto Enterprise Fund) is consistent with the call for social enterprises to embrace a marketing model that is more relationship-oriented rather than product-oriented. The more relational (as opposed to transactional) approach is perceived to be more appropriate, especially for social enterprises engaged in public service delivery like SHIP’s (Powell & Osborne, 2014). Conclusion When balancing multiple bottom lines, the question of how social value is defined and measured (and by whom) as part of the procurement process remains under consideration (Barraket et al., 2015). The challenge that social enterprises face in defining and demonstrating social value has been raised since early research on social procurement (Muñoz, 2009). Although SHIP stands as a unique social enterprise with confidence and capacity in procurement, it shares many similarities with others that hope to fulfil their mission while balancing both economic and social value. Lessons Learned 1. Different social enterprises grow at different paces, and their development trajectory is specifc to their organizational context. Revenue growth is desirable in so far as it contributes to meaningful improvements in the well-being of people supported through employment. An organization may have to forego market opportunities if there is a risk such opportunities may end up impeding the enterprise’s primary social goals. 2. Being part of any local social-enterprise network can be an effcient way to share information on social-procurement opportunities, learn from the experiences of others, and contribute to a peer-support system of practitioners. 3. The formal process of evaluating an organization’s social value is costly and time-consuming. Although it may already account for the more readily measurable social outcomes (e.g., number of people employed, changes in absenteeism), more substantive measures on improvements in social and economic well-being are challenging to collect and maintain. Since social procurement requires competing firms to demonstrate their social value, social enterprises need to weigh whether the investment into a formal evaluation process will be worth the potential return on investment. 268 Andrea Chan and Shirley Hannigan REFERENCES Barraket, J., Keast., R., & Furneaux, C. (2015). Social procurement and new public governance. Routledge. Mitchell, A., Madill, J., & Chreim, S. (2015). Marketing and social enterprises: Implications for social marketing. Journal of Social Marketing, 5(4), 285–306. https://doi.org/10.1108/JSOCM-09-2014-0068 Muñoz, S. (2009). Social enterprise and public sector voices on procurement. Social Enterprise Journal, 5(1), 69–82. https://doi.org/10.1108/17508610910956417 Powell, M., & Osborne, S.P. (2014). Can marketing contribute to sustainable social enterprise? Social Marketing Journal, 11(1), 24–46. https://doi.org /10.1108/SEJ-01-2014-0009 OTHER SOURCES Interviews with Services and Housing In the Province (SHIP). Services and Housing In the Province (SHIP). https://www.shipshey.ca/ 22 LOFT Kitchen JENNIFER SUMNER Introduction LOFT Kitchen is a work integration social enterprise located in Toronto that focuses on serving marginalized youth. As part of the Christie Ossington Neighbourhood Centre (CONC), it balances multiple bottom lines by offering both cafe and catering services to customers in the surrounding area, while also developing the employability of local youth facing barriers. Through LOFT Kitchen, these young people access hands-on training in the food and hospitality industries, along with leadership, mentorship, and networking opportunities, social supports and work-readiness programming. LOFT Kitchen engages in social purchasing but has not been successful in bidding for procurement contracts although it clearly values their importance. LOFT Kitchen’s strength is its strong support of marginalized youth – young people aged sixteen to twenty-nine who are experiencing poverty, precarious housing, mental health challenges, and parenthood. In 2017, 515 youth participated in LOFT Kitchen’s training and volunteer programs, and the social enterprise served 90,045 meals and 30,495 snacks. This translates to roughly 300 meals per day to its various programs at CONC, while also catering to external customers, thus creating significant opportunities for employment and job training. Although LOFT Kitchen does market its services, it uses marketing materials that do not mention that participants are in a program. The participants are simply seen as part of the staff teams in order to avoid further marginalization. Instead, LOFT Kitchen emphasizes quality of goods and services, employment/job training, and support of the local community. In preparation of this case, we interviewed Sawyer Pow, LOFT Kitchen’s youth and social-enterprise manager. Pow is also responsible for dropin programs, the culinary program, and other training and programs. Conclusion: Selling Social: Future Directions LAURIE MOOK Introduction Selling Social offers a glimpse into the world of social enterprises across Canada. Social enterprises are market-based organizations that operate to make both a social impact and a profit. Work integration social enterprises (WISEs) have an extra dimension: they provide training and employment to support individuals in marginalized social groups in gaining meaningful and productive employment that enhances both their income and their sense of self-worth. This adds another layer of complexity to the management and leadership of such organizations, from funding and managing human resources to marketing, purchasing, and procurement. Governments, businesses, and non-profit organizations are increasingly incorporating a social dimension into their procurement and purchasing policies with the intent of making positive contributions to their social agendas. As David LePage of Buy Social Canada says, “every purchase has an economic, environmental and social impact, whether intended or not. Social procurement is about capturing those impacts and seeking to make intentional positive contributions to both the local economy and the overall vibrancy of the community” (Buy Social Canada, 2018, p. 7). Procurement and purchasing involve different procedures. In procurement, the organizational purchaser sends out a request for proposals (RFP) or request for tender (RFT), and potential sellers compete to win the contract. In this case, the seller or supplier seeks out the purchaser to make possible sales. In purchasing, on the other hand, the organizational purchaser approaches the seller, and while the purchaser may still require estimates, the onus is on the purchaser Purchaser initiates RFP and invites sellers to bid  Social enterprise chooses to bid  Purchaser chooses from those bidding Social enterprise creates a market presence  Purchaser seeks out sellers through word-of- mouth or by consulting advertisements, websites, etc.  Purchaser makes purchasing decision and may choose WISE Social criteria Social criteria or intent not or intent included included Regular Social procurement procurement Regular Social purchasing purchasing Selling Social: Future Directions 277 Figure 23.1. Differentiating (Social) Procurement and (Social) Purchasing to seek out the seller. Typically, regular procurement bids are for formal contracts of higher value and extensive scope of work which are awarded based on price and quality, and social procurement adds some social criteria or intent to be fulfilled as per social policy aspirations. Like procurement, regular purchasing is also mediated by price and quality though of lower value and smaller scope of work, and social purchasing includes and may even give social criteria or intent a higher weight in the decision to buy. Figure 23.1 summarizes the differentiation between regular and social procurement and purchasing. Social procurement as a way for organizational purchasers to address social concerns through WISEs is an idea that, in theory, seems reasonable. However, in practice, many social enterprises do not have the capacity to bid for such contracts and deliver the required volume of business. Two factors emerge from our survey results as significant predictors of whether or not a social enterprise would submit bids to government and non-profit organizational purchasers: total revenue and self-evaluated capacity in preparing proposals, both with a positive correlation (chapter 3). In other words, the higher the total revenue for an organization and the higher its self-assessed capacity in preparing bids, the more likely it is to bid. However, only 23 per cent of social enterprises have submitted bids to organizational purchasers whose tender documents included social criteria. This concluding chapter provides a summary of our findings from the nineteen cases in this book and looks to the future. We 278 Laurie Mook start by exploring the question from the perspective of the social enterprises – why are social enterprises not more actively pursuing procurement and social-procurement opportunities? Next, we take on the perspective of the organizational purchasers by delving deeper into the decision-making criteria by individual and organizational purchasers outside any formal procurement framework to conceptualize purchaser profiles for social enterprises. These purchaser profiles offer snapshots for social enterprises to recognize the specific factors underlying purchasing decisions, thereby providing insights into how social enterprises may cater their marketing efforts. The chapter concludes with a discussion on implications of these purchaser profiles for researchers, practitioners, and policy developers, as well as a reflection on future directions in these changing times. What Facilitates Procurement and Why Aren’t More Social Enterprises Bidding? Eight of the nineteen cases in this book indicate that they have submitted bids on procurement contracts. While these cases represent only their own experiences and cannot be generalized, we are able to identify several key factors which facilitated their engagement with procurement; the policy context of the province where they are situated, the capacity of the organization, and relationship building are all important. In Saskatchewan, SaskPower established its Aboriginal Procurement Policy in 2012, and more recently in late 2018, the city of Saskatoon updated its purchasing policy to include social and environmental sustainability as criteria for evaluating bids that would provide “best value” (City of Saskatoon, 2018). (chapter 5) However, social-procurement policies are not in themselves sufficient to facilitate participation by social enterprises. The capacity of organizations to prepare and submit bids and to fulfil the potential order at competitive pricing and high quality is also necessary, as we see in the example of Let’s Work Atlantic (chapter 13): Smith also offers a unique perspective on government bidding because she has the experience of reviewing and evaluating bids. On the commitments of governments to buy from social enterprises, she says, “Verbally they do [support it]. But I’ve been behind the scene reviewing the tenders. Selling Social: Future Directions 279 It’s only my experience, but 95 to 98 per cent is about the dollars. If it’s down to two very similar prices, the social value might tip the balance.” In and of itself, the social value from bids does not appear to be a key or even necessary factor in winning procurement contracts. Finally, relationship building is a key factor in the success of finding and being successful in procurement bids, as we see in the cases featured in part 2 and also in Groupe PART (chapter 18) in the quote below: In order to tap into procurement opportunities, the frst thing Thomas did was to join the Conseil d’économie sociale de l’île de Montréal (CÉSIM) – a multi-stakeholder round table – to support Groupe PART in developing connections with public institutions and private corporations in order to grow its business. For those organizations with no experience submitting bids, the reasons for not bidding fell into four categories: lack of production capacity, lack of capacity to prepare proposals, the complexity of the bidding process, and the challenge of demonstrating social value. Some social enterprises such as Horizon Achievement Centre (chapter 15) overcame the lack of production capacity by partnering with other organizations: Horizon partnered with a printing company in the private sector to submit and win a bid to work with the province on designing, printing, and delivering fve hundred thousand tourism booklets in 2013. This partnership allowed Horizon to leverage its existing relationship with Canada Post to handle the mailing and delivery portion of the project while the private-sector partner handled the graphic design and high-gloss offset printing. In coming together as a team, Horizon and its partner managed to offer a competitive price and a high-quality product for the province. In contrast, many smaller social enterprises such as Wachiay Studio (chapter 10) note they do not have the production capacity to satisfy the requirements of procurement opportunities, nor do they have the possibility of expansion: Despite a keen interest in the new business opportunities procurement may afford, Wachiay Studio has not yet participated in formal procurement of any kind. MacDougall talks about two of the barriers that make him hesitant in seeking procurement opportunities: lack of human resources and production capacity … There appears to be an infection point where 280 Laurie Mook a social enterprise reaches a stage of success in the context of its local community but needs signifcant changes to scale up and participate in the broader economy. (Corner & Kearins, 2018; Lyon & Fernandez, 2012) While remarking on the complexity of the process, smaller social enterprises also lacked the capacity and time to look for bids and prepare proposals. In the words of Let’s Work Atlantic (chapter 13), bidding is so much work. It’s a lot of work, and you really have to understand how to manoeuvre the terminology … If you miss one little thing, you get disqualifed. It’s almost like you need a degree to get this together. I went to one information session [put together by a government agency], but the information session didn’t address the diffculty in putting bids together. Another critical issue hindering social enterprises in participating in social procurement is how to demonstrate their social value, as SHIP (chapter 21) points out: I think one of the challenges we’ve talked about over the years is measuring success of a social enterprise. I fnd that even within the other work that we do, in community development, it’s sometimes diffcult to measure things that are more anecdotal than when they are numbers-based. We can look at sales, but that doesn’t necessarily refect the success of an individual person. So sometimes that social value … in the corporate world, in the business world, it’s all about proft. Whereas here, it’s about people and proft. And I think that makes a world of difference and it’s just a bit harder to track. You can track retention, you can track people requesting time away, you can track absenteeism, the ability to train, learn new things, and some of those other things, but in the end, sometimes it’s hard to put a value on, “did this change somebody’s life? Is their life a bit better?” From the survey data and the cases featured in this book, we can see that while social enterprises are able to sell to organizational purchasers on a one-off basis through social purchasing, organizational purchasers are not yet creating social-procurement opportunities on a broad basis (despite considerable discussion around policies). Where we can observe social enterprises being able to pursue social-procure- ment opportunities, these opportunities have not been created through the traditional competitive tender process. Instead, these high-value, formal contracting opportunities have come through because of the Selling Social: Future Directions 281 specific organizational purchasers’ active pursuit of and long-term commitment to including social value in their purchasing decisions as in the cases of BUILD (chapter 4) and SARCAN (chapter 5). Once the social enterprises can work with champions within the organizational purchasers, the relationships thrive. These champions are able to push for changes not only on an individual level among their colleagues but also at an organizational level, changing how procurement and purchasing decisions are made. The cases in this book show that relationship building between social enterprises and organizational purchasers is primarily how social procurement takes place at this point in time. From the perspective of social enterprises as sellers of goods and services, organizational purchasers and policy developers need to appreciate the challenges facing social enterprises that run employment and training programs for marginalized groups. The additional cost necessary to create social value through their goods and services means that these enterprises may not be able to compete with private businesses that can offer lower prices. In short, these social enterprises have to contend with the challenges in seeking out and responding to procurement opportunities while balancing the level of effort and resources required to run programs for participants. The cases in this book show that both the social enterprises as sellers and the organizational purchasers need to come together to make social procurement and social purchasing work. Social value (as well as environmental and other non-economic benefits) needs to be embedded in purchasing decisions in terms of both positive and negative impacts. As long as social and environmental benefits remain secondary to economic considerations, the supply chain is unlikely to see the inclusion of social value on a broad basis. This means that social enterprises will remain unable to tout the social benefits they can add to their goods and services and truly use their social value as a competitive advantage. For these changes to take place, we are likely to need broader shifts in societal attitudes beyond individual and organizational choices. In the interim, social enterprises could focus their marketing and selling efforts more specifically depending on the specific profiles of organizational purchasers. Profiles of Organizational Purchasers Purchaser profiles help social enterprises understand the decisionmaking criteria of individuals and organizational purchasers, pursue future customers, and plan strategically. The decision-making criteria of different types of purchasers can inform marketing strategies too. 282 Laurie Mook Defining different clusters of purchasers helps focus resources and attention on those segments that most contribute to the mission and sustainability goals of the social enterprise. As social enterprises focus on specific purchaser groups, intermediaries such as Buy Social Canada could facilitate relationship building with potential customers. The role of these intermediaries in anticipating future needs of purchasers could also be an impetus for funding and starting new social enterprises. The purchaser profiles are broken down into different clusters representing individuals and organizational types: non-profit organizations, businesses, and governments. Each of these clusters are analyzed according to primary purchasing criteria, such as price, quality, convenience, customer service, and social mission. As a result, ten categories of purchasers were identified. Individual Purchasers 1. The category of individuals as regular purchasers includes those who generally do not know that the organization they are purchasing from has a social mission, or the mission is a secondary feature. They are buying based primarily on price and quality. This might be because the social enterprise does not promote the social aspect of the business to protect the privacy of its employees, or because the individual customer finds the establishment by living in the local area or happening to pass by. In the latter case, the social enterprise may choose to showcase its social impact once the purchaser is in the door, as the Calgary Progressive Lifestyles Foundation does (CPLF; chapter 16): In the frst place, we need to showcase our great food, we need to win their business with great food. Once we get them in the door, then that’s an opportunity to showcase a little bit of our enriching story, and that’s how we win our business. We don’t lead off with “we’re here to support the community.” The public just wants a good burger, and enough said. So we sell that burger the way they want it to be sold and then we feed them with further enriching stories. 2. Socially minded individual purchasers are aware of the social missions of these WISEs, and this is a key reason they choose to purchase from them. For instance, Let’s Work Atlantic (chapter 13) notes that “we have customers that buy because they want to do something good for their community. The younger people really want to do something great.” However, while the social mission might get them in the door, the quality and price have to be good enough to bring them back. EthniCity Catering (chapter 14) points out that customers are “looking for deals. Selling Social: Future Directions 283 And if the food didn’t turn out, they’re gonna complain the same way they would for a private enterprise. I feel like the expectations remain the same.” Non-profit Organizational Purchasers 3. For some of the non-profit organizations that purchase from social enterprises, price and quality are the critical factors in their purchasing decisions. The social mission is a bonus and sometimes gives the social enterprise a competitive edge, as in the case of Wachiay Studio and CPLF: While the social mission of Wachiay is not a primary purchasing factor for Bruce, it is certainly an added beneft. He is primarily drawn to the quality of the product, its competitive price point, and the beneft of supporting a local business. (chapter 10) CPLF cold-calls potential customers to gain contracts. Neal feels that the mention of CPLF’s social mission has made these cold calls easier to convert to sales. Neal’s assessment is that CPLF initially wins sales on price and good food; secondarily it is the good feeling that customers experience – this is what brings repeat business. (chapter 16) 4. Most non-profit purchasers, however, are very much influenced by the social mission and want to support like-minded organizations. They may even pay a premium if that is within their reach. The committee [of the Eucharist Church] decided it would be important to hire someone who could beneft from the employment beyond the paycheque: “The main reason to work with a social enterprise is because we believe in their mission serving folks with mental health concerns.” (Rainbow’s End, chapter 12) Working with a fxed budget for meals, Johnson says “pricing is always a concern for us, but it’s always a balancing act too.” In choosing Stone Hearth, Johnson is “willing to pay a bit more for that premium product because we know the residents are going to be happier with it than they would with something else … we believe in what they are doing. And we really enjoy using them.” (chapter 17) Overall, Pow believes that LOFT Kitchen has earned a signifcant portion of its catering business through word of mouth, especially within the nonproft sector. He points out that customers may be drawn by the social value but return for the quality of service, the food as well as the reasonable pricing. (chapter 22) 284 Laurie Mook Business Organizational Purchasers 5. Businesses as a regular purchaser are looking primarily for price and quality. Same as the regular non-profit purchasers, the social mission is a secondary benefit and could provide a competitive edge, as Wachiay Studio (chapter 10) points out: Most of our [business-to-business] customers use us because we are good at what we do, we are friendly to work with, and we use environmentally friendly materials. The fact we are a social enterprise is secondary to the quality of the product and service delivered. 6. A second type of business purchasers are those businesses that have ethical or social sourcing/purchasing policies in place and seek out social enterprises as their suppliers. These business purchasers may even pay a premium as they realize the value of social impact. One engineering consulting firm that buys from Horizon (chapter 15) mentions that If a social enterprise is slightly higher than another “big” business, we’d still choose the social enterprise as it’s a worthier purchase, in our opinion … While we applaud the mission, the service, quality, and effciency keep us coming back. A small, ethically minded cafe guided by an informal ethical purchasing policy to make purchases that are affordable, ethical, local, and nutritious buys from Stone Hearth (chapter 17) because, as a former manager noted, it “met all our requirements.” 7. The third type of business purchaser purchases wholesale from social enterprises. As a result, these social enterprises may not actively promote the social side of the business. As Stone Hearth Bakery suggests when talking about larger organizational purchasers, “sometimes you shouldn’t promote the program because people will think there is something wrong with the products, that a professional didn’t make it.” 8. The social enterprises that contribute to larger projects such as construction often sell their services as subcontractors to the construction companies leading the projects – the fourth type of business customer. These social enterprises note that they do not necessarily have the production capacity to produce the quantities needed to submit for procurement or social procurement. However, they would participate indirectly in social procurement as larger companies seek them out to fulfil social criteria. For example, EMBERS Staffing Solutions (chapter 7) Selling Social: Future Directions 285 was contracted by one of the large construction and building services companies in Vancouver to meet the city’s Community Benefit Agreement (CBA) commitments. Government Organizational Purchasers 9. The regular government purchasers represent traditional purchasing from a government agency that emphasizes value for money. For instance, the executive director of the Challenge Disability Resource Group (chapter 20) notes that the City of Whitehorse’s purchase decisions are based on value for money before any considerations for social mission. 10. As noted in chapter 2, when governments at all levels recognize the possibility of using their purchasing power to contribute to achieving their social agendas, the government organizational purchasers add social value to their purchases. For example, at the territorial level, the Yukon government has a mandate to purchase locally and is a customer of the Challenge Disability Resource Group (chapter 20). Another government agency buys lunches and snacks from the Horizon Achievement Centre (chapter 15). Implications For many social enterprises in this study, participating in procurement and social-procurement bidding is prohibitive. However, the organizations are still able to compete in the economic and social markets through the purchasing and social purchasing of their individual and organizational purchasers. Understanding the supply and demand sides in terms of procurement and purchasing criteria has implications for several audiences: social enterprises as sellers, researchers, and policy developers. For Social Enterprises as Sellers These purchaser profiles highlight that different types of customers have different purchasing goals. There were differences between the following groups: • Individuals and organizations, which are further divided into nonprofit organizations, businesses, and governments • First-time customers and returning customers • The economic marketplace and the social marketplace This page intentionally left blank Index A. Adams Supply Ltd. See ImagineAbility Inc. Aboriginal Affairs and Northern Development Canada (AANDC), 37 Aboriginal Procurement Policy, 88, 278 Amsted Rail (Griffin Wheel). See ImagineAbility Inc. barriers to social procurement, 142, 186 benefits, social, 31–3, 35–40, 42–4 British Columbia Social Procurement Initiative (BCSPI), 41, 45 BUILD Inc., 66, 69–82; Kanata Housing Corporation, 79; Manitoba Housing, 74–6, 82; Manitoba Hydro, 77–8, 82; Transcona Roofing Ltd., 78–9 buying local, 5, 257 buying social, 5, 13, 19, 31, 65, 66, 200, 220 Calgary Progressive Lifestyles Foundation (CPLF), 202–11, 282–3; Cookies on the Go, 202, 204–5; Lifestyles Bistro, 202, 205, 207–8, 210 Canadian Community Economic Development Network, 38, 42 Canadian National Social Enterprise Sector Survey (SESS), 50 capital, social, 19, 23 Career Industries. See Challenge Disability Resource Group CBCL Limited. See Horizon Achievement Centre Centennial Fencing Project, 73 Centennial Project, 72–4 Centre for Learning, Social Economy, and Work (CLSEW), 20, 169 Centre for Newcomers (CFN). See EthniCity Catering Challenge Disability Resource Group, 216, 224, 249–57, 285; Career Industries, 251–3 champions for social procurement, 43, 67, 80, 89, 153, 281 Christie Ossington Neighbourhood Centre (CONC). See LOFT Kitchen Coast Mental Health (CMH). See Social Crust Café & Catering Coghlan’s Ltd. See Imagine Ability Inc. Common Ground Co-Operative, 20, 169 Community Benefit Agreement (CBA), 65, 67, 107, 110, 285 competitive procurement, 32, 37, 60 competitive tendering, 7, 24, 62, 65–6 294 Index Conseil d´économie sociale de l´île de Montréal (CÉSIM). See Groupe PART Cookies on the Go. See Calgary Progressive Lifestyles Foundation corporate social responsibility (CSR), 5, 16, 22, 177, 208, 217, 251, 257 Culinary Skills Training Program. See Social Crust Café & Catering Darwin Construction (Canada) Ltd. See EMBERS Staffing Solutions (ESS) Destination Café. See Services and Housing In the Province (SHIP) Diversity Food Services, 144–56; FortWhyte Alive (FWA), 151–2; Southeast Resource Development Council (SERDC), 152; Supporting Employment & Economic Development Winnipeg (SEED), 145–6, 153; University of Winnipeg Community Renewal Corporation (UWCRC), 144–6; Vita Health Fresh Markets (VHFM), 150 Eastern Health. See Ever Green Recycling EllisDon Corporation. See EMBERS Staffing Solutions (ESS) EMBERS Staffing Solutions (ESS), 104–10; Darwin Construction (Canada) Ltd., 108; Eastside Movement for Business & Economic Renewal Society (EMBERS), 104–6, 109; EllisDon Corporation, 107–8; EMBERS Community Employment Services, 105; EMBERS Eastside Works, 105; EMBERS Ventures, 104; Icon West Construction (ICON), 106–7; Wesgroup Properties, 109 Employment Equity Act, 22 EthniCity Catering, 181–90, 282; Centre for Newcomers (CFN), 181–4, 186, 188 Eucharist Church. See Rainbow’s End Community Development Corporation Ever Green Recycling, 66–7, 91–103; Eastern Health, 91–3, 96, 98–102 Federal Contractors Program, 22 fetal alcohol spectrum disorder (FASD), 136, 139–40 FortWhyte Alive (FWA). See Diversity Food Services Groupe PART, 223–5, 227–38, 279; Conseil d´économie sociale de l´île de Montréal (CÉSIM), 235–6, 279; marketing strategy, 232–3 Harbourview Training Centre, 223–4, 239–48, 266 Hold It. See ImagineAbility Inc. Horizon Achievement Centre, 191–201; CBCL Limited, 197–8; Rotofast Inc., 197–8 Human Resources Development Association. See MetroWorks Icon West Construction (ICON). See EMBERS Staffing Solutions (ESS) ImagineAbility Inc., 127–34; A. Adams Supply Ltd., 129, 131–4; Amsted Rail (Griffin Wheel), 129, 131, 133; Coghlan’s Ltd., 129–31, 133; Hold It, 128–9, 132–3; Opportunity Partners, 127–30, 132–4; Vita Health, 129, 131, 148, 150 Indigenous Contract and Procurement Policy, 32 investment, social, 33–5 Index 295 Kanata Housing Corporation. See BUILD Inc. Let’s Work Atlantic (LWA, pseudonym), 173–80; procurement opportunities, 175–9 Lifestyles Bistro. See Calgary Progressive Lifestyles Foundation LOFT Kitchen, 269–75; Christie Ossington Neighbourhood Centre (CONC), 225, 269–72 Manitoba Green Retrofit (MGR) Manitoba Housing. See BUILD Inc. Manitoba Hydro. See BUILD Inc. marginalized social groups, 13, 17– 18, 21, 182, 276; disadvantaged workers, 18; ex-convicts/ parolees, 34, 105; Indigenous people, 32, 34–7, 70–2, 79, 135–52; LGBTQ+ persons, 34, 271; marginalized youth, 269; people with addictions, 34, 70, 91, 94, 96–7, 101, 117–19; people with disabilities, 22, 37, 59, 130, 169, 176–7, 202–8, 222; people with intellectual or developmental disabilities, 88; people with mental illness, 92, 96, 117–19, 212, 216, 258; visible minorities, 22 market micro-segmentation, 286 Market Wizards (MW, pseudonym), 173–80 MetroWorks. See Stone Hearth Bakery Multi-Materials Stewardship Board (MMSB), 92; Green Depots, 92–3 multiple bottom lines, 9, 223–75 neoliberalism: agenda, 17; economy, 13; policymaking, 62, 247 new public governance, 33, 35–6 non-profit community organizations, 79, 127, 130 non-profit social enterprises, 13–14, 17–18, 72–3, 81, 105 One Tribe. See Wachiay Studio Opportunity Partners. See ImagineAbility Inc. organizational purchasers: business organizational purchasers, 284–5; government organizational purchasers, 285; individual purchasers, 282–3; non-profit organizational purchasers, 277, 283; organizational purchaser profiles, 278, 281–6 parent organizations, 9, 52–3, 83–4, 113–67; community-based services, 128; parental support, 56, 113, 115 people with disabilities. See marginalized social groups procurement, 15, 20–1; bidding, 50–1, 53, 55, 58–61; challenges, 23; competitive, 32, 37, 60; public, 21, 23, 44, 141, 197, 217, 220; relationships, 67, 69, 75–80; strategies, 21, 31–2, 37–40, 80 purchasing decisions, 16, 20 Rainbow’s End Community Development Corporation, 157–67; Eucharist Church, 163–4; St. Joseph’s Healthcare Hamilton, 113–14, 157–62, 164–5 relationship building, 24, 61, 65–112 resource dependence theory, 89 ReStore of Habitat for Humanity, 17–18 Rotofast Inc. See Horizon Achievement Centre 296 Index SARCAN Recycling, 83–90 selling social, 5, 23–5, 179, 200, 276–87 Services and Housing In the Province (SHIP), 224, 258–68; Destination Café, 259–60, 262, 264, 266; personcentred approach, 259–60 small to medium-sized enterprises (SMEs), 22–3, 57, 61 social benefits, 31–3, 35–40, 42–4 social capital, 19, 23 Social Crust Cafe & Catering, 117– 26; Coast Mental Health (CMH), 117–19, 121–4; Culinary Skills Training Program, 118–19 social enterprise, 4–9, 13, 16–19, 276–87; community-based, 109; double-plus bottom line, 16; forprofit social enterprise, 114, 127; government-funded rural social enterprises, 246–7; identity, 60, 101–2, 162, 264–5; independent social enterprise, 53, 93, 96, 99, 101; multiple bottom lines, 223–37; rural social enterprises, 142, 240, 245–7; social welfare organization, 18, 62 social investment, 33–5 social procurement: barriers, 142, 186; definition, 6, 7, 21; policies, 5–6, 8, 14, 21–3, 32–9, 42–4; provincial social procurement contract, 105–6; supplier diversity, 22, 37; workforce integration, 21, 232 social purchasing: definition, 7, 19, 20; intermediaries, 42, 65, 149, 282 Social Return on Investment (SROI), 81, 144 social value, 5–6, 169–222 Southeast Resource Development Council (SERDC). See Diversity Food Services St. Joseph’s Healthcare Hamilton. See Rainbow’s End Community Development Corporation Stone Hearth Bakery, 169, 212–22, 283–4; MetroWorks, 212–13, 215 Supporting Employment & Economic Development Winnipeg (SEED). See Diversity Food Services sustainability, 8, 18, 22, 39, 52; Sustainable Development Goals, 8 tendering, competitive, 7, 24, 62, 65–6 Transcona Roofing Ltd. See BUILD Inc. University of Winnipeg Community Renewal Corporation (UWCRC). See Diversity Food Services value, social, 5–6, 169–222 Vancouver Olympic Games, 3–5, 33 Vita Health. See ImagineAbility Inc. Vita Health Fresh Markets (VHFM). See Diversity Food Services Wachiay Friendship Centre. See Wachiay Studio Wachiay Studio, 135–43; Indigenous education, 139; One Tribe, 137; Wachiay Friendship Centre, 114, 135–7, 140, 142; West Coast Karma, 139–40; Whitecrow Village, 140 Wesgroup Properties. See EMBERS Staffing Solutions (ESS) West Coast Karma. See Wachiay Studio Whitecrow Village. See Wachiay Studio work integration social enterprise (WISE), 5–6, 13, 18–19, 21–5; value chain, 24, 60