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Taking Care Of Business And Social Needs Too

“A lot of times social enterprise comes out of a community looking at how to meet its business needs that can’t be met with a private-market business model.”

– DAVID LEPAGE, PROGRAM MANAGER OF ENTERPRISING NON-PROFITS (ENP) IN B. C.

When women in Altona proposed selling second-hand clothing back in the early 1970s, they only wanted to hold a fund-raiser for Mennonite Central Committee.

Little did they know they would spark a province-wide, and eventually North Americanwide, network comprised of 106 stores in Canada and the U. S.

Today MCC thrift stores, found in large cities and small towns across the continent, generate sales worth about $10 million a year. The funds are all directed toward Mennonite Central Committee’s international development work.

The MCC thrift store is a thriving example of what community development experts often call “social enterprise,” or a business operated by a nonprofit organization.

Social enterprise, even more broadly defined, is an approach to doing business that seeks a so-called “blended return on investment,” or wants to achieve more than earn a profit as a key objective.

MULTIPLE BENEFITS

Social enterprise is business that is socially responsive, generates benefit for entire communities, and often takes up an activity the private sector won’t touch, according to David LePage, program manager for a B. C.-based group called Enterprising Non-Profits (ENP) in Vancouver. He was in Manitoba in June for a conference on community development and social enterprise.

When a community forms a co-op to operate any sort of business, such as a grocery store or café, this is also social enterprise, although most seldom think of it in those terms, says LePage. These are businesses that aim for broader social benefits, in addition to providing goods or services.

“Social enterprise has really been practised for a long, long time. Co-ops and thrift stores have supported social causes for many, many years,” said LePage, during a workshop hosted by the Canadian Community Economic Development Network (CCED Network) which drew over 400 participants to Manitoba in June.

LePage is a member of CCED Network’s policy council and the Social Enterprise Council of Canada, an alliance of social enterprise leaders across Canada offering their expertise to help more Canadians establish social enterprise.

MULTI-PURPOSE

When non-profit groups start running a business, their reasons can range from purely financial – that is, need for cash to fund the group’s work – to wanting to achieve goals by running the business itself, explains LePage. Most often they achieve both.

Whole communities derive benefits from the presence of

MCC thrift stores, for example. Families can purchase affordable, good used clothing and household items at these stores. The stores recycle goods and keep them out of landfills.

In Manitoba, the Friendly Corner Bake Shop, located in Grandview has been owned and operated by Grandview Residential Services Inc. since the early 1980s.

First and foremost, their goal was to create jobs for their clients, said Jim Knox, chairman of GRS Inc.’s board of directors. Today over 30 persons are employed full and part time here. Yet Friendly Corner Bake Shop is also a very popular place to eat in town and a key business for a small community where it’s hard to lure private restaurant owners. “It’s been a really good thing for our community, a win-win for everyone,” says Knox.

LePage says more non-profit groups are exploring business options as government grants for the non-profit sector dry up. “They’re getting very creative in terms of looking at how

a business model can be used to address the social needs of communities,” he said.

LOCAL SERVICES

Community economic development practitioners urge the rural and remote communities they work within to explore this as a way to preserve local businesses and revitalize commercial sectors too. Non-profit groups may be able to realize opportunities that private ownership cannot, says LePage.

“A social enterprise may be able to come in and operate that store or keep that service in the community,” LePage says.

Another example of social enterprise at work in Manitoba is Mrs. Lucci’s Resource Centre in Lac du Bonnet. The secondhand store, begun in 1998 was started in a partnership between the local chamber of commerce, the school division and the North Eastman Health Association. A café was started in 2004. Its goals – and achievements – are threefold. Local service clubs run it and share the profits. Local youth ages 15 to 29 work there and gain valuable work experience. And Lac du Bonnet’s chamber gained another business for its community. Area residents generously donate all merchandise sold at Mrs. Lucci’s.

Brendan Reimer, regional co-ordinator for the Prairies and northern territories of the CCED Network, says co-ops which keep community stores or coffee shops open, and even ventures like community festivals and generate revenues for service clubs supporting them are social enterprise.

“It depends a bit on how you define social enterprise,” says Reimer. “But there are many and some we wouldn’t necessarily think of because they’ve been around for so long.”

RURAL REVITALIZATION

LePage says rural and remote communities should view social enterprise as another way to save and revitalize commercial sectors. This is thinking about business development in a new way, and looking at the option of using the non-profit sector to step in where private enterprise has stepped out.

“A social enterprise may be able to come in and operate that store or keep that service in the community,” he said.

“A lot of times social enterprise comes out of a community looking at how to meet its business needs that can’t be met with a private-market business model.”

“Why did co-ops start? Co-ops started because, by working together in a collaborative way, those who started the co-op knew they could create business for themselves,” LePage said. “When we look at social enterprise, it’s not different. It’s not replacing private business. It’s more complimenting private business. Any healthy community has a diverse range of businesses. You want a financial sector and a retail sector and a manufacturing sector. It’s the same way in ownership models.”

The Income Tax Act and Canada Revenue Agency policy allows a charity to carry on and generate profit from commercial activities that directly accomplish or advance its charitable purpose.

LePage said credit union representatives are knowledgeable about social enterprise and can advise and help groups wanting to develop one.

Local community development officers should also be able to offer advice or steer people to resources, he added.

[email protected]

Want to know more? Log on to:

www.enterprisingnonprofits.ca.

About the author

Reporter

Lorraine Stevenson

Lorraine Stevenson is a reporter and photographer for the Manitoba Co-operator with 25 years experience writing news and features. She was previously a reporter with the Farmers Independent Weekly and has also written for community newspapers in Winnipeg and Manitoba's Interlake.

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