Social Finance for For-Profit Social Ventures

For the past few days I have been in the Ottawa area attending the Imagine Canada/Volunteer Canada forum on Business & Community.  During this time I have had the opportunity to meet with social change agents in the non-profit sector and their funders (corporate and government).  While the conversations were interesting the needs of these organizations are great, there was a distinct gap in the dialogue.  I feel that missing from the table were Small and Medium-sized Enterprises (who make up approximately 80% of Canada's business market-place) and For-Profit Social Enterprises (there was representation from non-profit social enterprieses).

Last year Dexterity Consulting facilitated millions of dollars in transactions to Canadian and American charities.  Even though we are a small company, we like many other SMEs, play a vital role in how our country is shaped.  It is my impression, after attending this event, that Imagine Canada and Volunteer Canada missed an opportunity by not engaging SMEs.  It is my opinion, that by not having these voices at the table, the largest segment of our population who are driving the economy and advocating on social issues are not adequately represented.  This in turn fosters the perception that only the "wealthy" can be active contributers to the philanthropic space; encourages the "this is not my issue" or apathy within society; and takes the responsibilty and ownership of social change out of the hands of those who have power in numbers to affect change.

So that you don't have the impression that I am all Buh-Humbug about this conference. I did meet some amazing people, in the charitable sector, who are really trying to address the social change agenda. Ilona Dougherty from Apathy is Boring and Peter Deitz from Social Finance are two thought AND action leaders who are pushing their agendas forward.

I was asked the question about the mentality of social investors and whether they are using their philanthropic dollars to finance/invest in for-profit (or B-Class) social enterprises.  So far, it has been my experience, that these types of investors are using their philanthropic dollars to finance for-profit social ventures.  In their minds, philanthropy is philanthropy (i.e. for charitable purposes) and social investing is a business decision with business expectations (profit motive driven).  This of course makes it harder for social enterprises to seek funding (the pool of potential investors is that much smaller than traditional investors).  Just because someone is philanthropic by nature, does not mean that s/he is a social investor from a business perspective.

How do we bring these groups together? I think for-profit social enterprises are ideal partners with charities (large and small), as well as with traditional companies to work towards addressing the social issue that connects them. 

Call to Action: Are you a for-profit social venture? Let the federal government know you are out there.  The social finance committee is meeting and we need to start showing that there is more to social change than being a big company with a community investment/corporate citizenship budget.