Social Innovation and Social Finance Strategy – Consultation document

From Employment and Social Development Canada

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Context

  • The Government of Canada has committed to developing a Social Innovation and Social Finance Strategy for Canada.
  • A Co-Creation Steering Group of 17 members was appointed in June 2017 to lead consultation activities and to develop the Strategy in partnership with the Government.
  • The mandate of the Steering Group is to co-create the Strategy by June 2018 (12-month process).

Purpose for today

  • To inform you of the work to date.
  • To get your feedback and give you a chance to offer your advice.
  • To hear about how this might relate to your work and understand what your priorities are.

Why the Government of Canada is interested in social innovation and social finance

Canada faces certain persistent challenges where new approaches are needed.

For example:

  • 5% of children and 8% of adults live in food insecure households.
  • The employment rate of Canadians with disabilities is 49%, compared to 76% for those without.
  • Between 36% and 38% of refugees report severe emotional problems.
  • 28% of on-reserve First Nations people and 30% of Inuit live in crowded homes.
  • One out of five seniors reports feeling a lack of companionship, left out or isolated from others.

Through the Strategy, the Government is exploring ways to enable and support communities and social purpose organizations (see definitions at Annex A) in the development of new and innovative approaches to persistent social problems.

Discussion question: What are some of the social, economic and environmental challenges you think would most benefit from new and innovative approaches?

Many communities across Canada are already leaders in social innovation

Employing R&D methods to design better social services

The Winnipeg Boldness Project is aiming to improve outcomes for primarily Indigenous children in disadvantaged neighbourhoods, and has been developed through an innovative process, bringing together community leaders, businesses and residents to co-create solutions.

Mobilizing new sources of funds through social finance

Twenty-three depositors, including foundations, individuals, and corporations, invested in the Resilient Capital Program, a partnership of the Vancity Credit Union and the Vancouver Foundation which has lent over $5.6 million to social enterprises since 2011.

Creating and expanding new business models that advance a social mission, such as social enterprise

Across Nova Scotia, a diverse range of social enterprises like Stone Hearth Bakery, Lake City Woodworkers, and the Flower Cart provide training and employment opportunities to people facing barriers to work, including adults with intellectual disabilities.

Co-operatives such as the Coopérative Temps libre and the Coopérative de solidarité de Lac-Édouard have contributed to the revitalization of depopulated neighbourhoods and rural communities in Quebec by launching innovative new business ventures.

Discussion question: What are examples of social innovation taking place in your community?

The Steering Group began by developing a proposed vision and overall goal for the Strategy

Vision

A Strategy that supports a future for Canada:

  • In which communities thrive and flourish.
  • Where individuals, including those from vulnerable groups, have access to good jobs and homes, healthy food and strong social connections.
  • Characterized by sustainability, inclusion and reconciliation with Indigenous peoples.

The Steering Group’s vision aligns with the United Nations’ Sustainable Development Goals.

Overall goal

To create an ecosystemFootnote 1 that fosters social innovation to improve outcomes for vulnerable populations and create inclusive and sustainable communities, including through the approaches of social finance and social enterprise.

The Steering Group identified six potential and interconnected areas for action to advance social innovation and social finance in Canada

  • Capacity and skills
  • Funding and capital
  • Market access
  • Policy and regulatory environment
  • Knowledge transfer, data and impact measurement
  • Mobilization and awareness

Enabling framework legislation could serve to recognize the contribution of the social economy, direct government to consider social impact in designing and implementing policies and programs and support collaboration between government and social purpose organizations.

Discussion question: What are your views on the proposed vision and overall goal for the Strategy?

Capacity and skills

Current needs and gaps

  • New skills are needed to enable innovative approaches (for example, design thinking, R&D methodologies) and existing training is not sufficient to meet demand.
  • Capacity for social innovation approaches is generally low within government, the not-for-profit sector and the private sector.
  • Federally funded innovation and business supports are not consistently available or promoted to social purpose organizations, with access even more challenging for rural and remote communities and marginalized people.

Early ideas to explore

  • Reviewing and enhancing federally funded innovation and business supports.
  • Creating an online platform to centralize and map out existing capacity-building supports.

Discussion questions

  • Which skills are most needed to build capacity for social innovation?
  • Are there federally funded programs or services that should be reviewed to better support social innovation and the development of social enterprises?

Funding and capital

Current needs and gaps

  • Grant funding rarely enables innovation because it is typically inflexible and short-term.
  • Traditional financial institutions offer few financial products that meet the needs of social purpose organizations, such as the need for patient capital for most not-for-profit organizations.
  • Growth of social finance to bridge this gap faces barriers, including the perception of risk, lack of data, and small deal size.
  • Growth in the social finance market could bring large sums of private and charitable capital to address social challenges.

Early ideas to explore

  • Reviewing existing federal granting practices to better enable social innovation.
  • Creating a central fund to support social innovation.
  • Using public money to catalyze growth in the social finance market.

Discussion questions

  • How can granting be made more flexible while ensuring accountability?
  • How could an injection of public money into the social finance market be set up?

Market access

Current needs and gaps

  • Social enterprises need a market for their goods and services and often struggle to participate in large procurement processes.
  • Procurement processes of large purchasers do not systematically consider social impacts.
  • Large-scale purchasers and individual customers alike lack tools and information to assess the social impact of goods they are buying or the organization they are buying from.

Early ideas to explore

  • Securing social procurement commitments from large purchasers, including governments.
  • Building social procurement capacity within government, potentially through new frameworks, guidelines, and centres for expertise.

Discussion questions

  • What would enable you to participate more easily in procurement opportunities?
  • What kinds of tools and information do purchasers need to assess the social impact of the goods and services they are buying?

Policy and regulatory environment

Current needs and gaps

  • Many rules are difficult to navigate, inhibit innovation, or focus on prohibiting behaviour instead of enabling change.
  • Stakeholders have cited problematic rules, including those related to business activities of charities and non-profit organizations and to program‑related investments made by charitable foundations.
  • Rules internal to government, for example Treasury Board policies and directives on transfer payments or on procurement at the federal level, also affect the ability of the public sector to use or fund innovative approaches.

Early idea to explore

  • Establishing a joint, multi-sectoral table for discussing regulatory issues as they arise.

Discussion questions

  • What are some existing rules or policies relevant to innovation which you consider to be unclear or constraining?
  • What kinds of regulatory changes could enable social innovation?

Knowledge transfer, data and impact measurement

Current needs and gaps

  • Social purpose organizations and funders need data to demonstrate their impact and to make decisions on where to invest.
  • Data and knowledge needed at multiple levels, from field-level data to improve service delivery, to aggregated, national-level data sets to identify proven intervention models. 
  • There is a lack of mechanisms to assess, share and disseminate best practices and innovative approaches across Canada.

Early ideas to explore

  • Establishing a national Knowledge Sharing Network to help organizations share data, evidence and success stories.
  • Investing resources for new surveys and data production and collection.

Discussion questions

  • What kind of data and knowledge is your organization most in need of? Why?
  • What would enable common reporting standards for social impact within your organization?

Mobilization and awareness

Current needs and gaps

  • Few spaces and venues exist for organizations from different regions and sectors to come together and collaborate around specific challenges.
  • Low awareness of social innovation and the approaches of social finance and social enterprise in the charitable and non-profit sectors, the private sector and the public sector, as well as among the general public.
  • Low awareness inhibits social purpose organizations from attracting funders, buyers and other partners.

Early ideas to explore

  • Creating a national table on social innovation to enable ongoing dialogue across sectors.
  • Establishing a focal point for social innovation and social finance within government.
  • Launching an awareness-raising campaign.

Discussion questions

  • What kind of supports or tools could help organizations mobilize across sectors?
  • What is the best way to tell Canadians about the potential and promise of social innovation?

Idea to explore: framework legislation

  • Creating an ecosystem that supports social innovation will require changing established mindsets, processes and behaviours. 
  • Framework legislation, like that adopted in Quebec and other jurisdictions abroad, could help the Government of Canada:
    • align activities across departments;
    • define key concepts;
    • direct the Government to take into account social impact in the development and implementation of policies and programs;
    • create mechanisms for ongoing dialogue;
    • align with the United Nations’ Sustainable Development Goals;
    • commit to strategies over the longer term.

Discussion question: Do you agree that national framework legislation might be needed to help realize the Strategy’s vision? What could the legislation look like?

Concluding discussion questions

Areas for action. Which of the six areas for action most affects your community, your organization or your sector? What have we missed – what isn’t covered by the six areas?

Prioritizing solutions. What kind of supports would make the biggest difference in your day-to-day work? Are there actions that could kickstart change?

Measuring success. What would success look like? How do we measure it?

Definitions. What do you think of the working definitions in Annex A?

What comes next

Stay up to date by visiting the Social Innovation and Social Finance Strategy webpage and the Employment and Social Development Canada consultation page. Your views will inform the development of the Social Innovation and Social Finance Strategy.

Thank you for your contribution!

Annex A – Working definitions

Social innovation: New ideas — whether they are programs, services, products, processes or types of organizations — that meet social needs in more effective ways than existing approaches. Successful social innovations are widely adopted, generate measurable benefits, and typically involve collaboration across sectors.

Social finance: An approach to investing that involves placing capital to generate both a financial return and measurable social impact. Social finance mobilizes private and charitable capital for public good.

Social enterprise: [An organization] which seeks to achieve social, cultural or environmental aims through the sale of goods and services. The social enterprises can be for-profit or not-for-profit but the majority of net profits must be directed to a social objective with limited distribution to shareholders and owners. [Innovation, Science and Economic Development Canada, Directory of Canadian Social Enterprises]

Social economy: All economic activities with a social purpose carried out by enterprises whose activities consist, in particular, in the sale or exchange of goods and services and which operate in accordance with specific principles, including democratic governance [Abridged; refer to the Chantier de l’économie sociale (in French only)]

Social purpose organizations: The entire spectrum of organizations that seek to advance a social, cultural or environmental mission. Social purpose organizations straddle the not-for-profit sector (such as registered charities, incorporated non-profit organizations and co-operatives), the private sector and hybrid entities such as Community Contribution Companies and Community Interest Corporations.

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