The Rise and Implications of Social Enterprise in East Vancouver

THE RISE AND IMPLICATIONS OF SOCIAL

ENTERPRISE IN THE DTESContextualizing the Social Economy Within the

Political Discourse of Gentrification

Wes Regan

January 2015, Presented to Groundswell

WHO’S THIS GUY AGAIN…?

BUT BEFORE ALL THAT….

SOCIAL INNOVATION

A RESPONSE TO WICKED PROBLEMS?

Wicked Problems (Planning/Sociology Term)

Problems that are extremely complex, sometimes hard to

understand the causes of, most often extremely difficult to solve

Karl Marx (socialist revolution) aside…

Can be created by or made worse through

Lack of political will or ideologically based policy creation

Competing interests

Market Failures (Vancouver housing…)

Loss of an industry or economic shock/restructuring

Public health crisis (disease, aging etc.)

Natural disaster, war, famine

Time

INNOVATION VS SOCIAL INNOVATION

INNOVATION VS SOCIAL INNOVATION

SOCIAL INNOVATION

What can be done NOW?

Finding unique solutions to social problems or social needs where government (public sector) or the market (private sector) has failed to

Often requires a non-profit or for-profit venture of some kind that can bring together elements of public and/or private sector, formal/informal/social economy to take a different approach

BUT can also take place within government or a single NGO or business

Examples…

INSITE – A SOCIAL INNOVATION RESPONSE TO

A PUBLIC HEALTH CRISIS

1998 A Public Health Emergency is declared in Vancouver’s

DTES as growth in intravenous drug use (Heroin) contributes

to a steady increase in HIV/AIDS, HepC and overdoses

INSITE: IMPACT AND CONTROVERSY

LOHA- A SOCIAL INNOVATION RESPONSE TO

VANCOUVER’S AFFORDABLE HOUSING CRISIS

LOHA- A SOCIAL INNOVATION RESPONSE TO

VANCOUVER’S AFFORDABLE HOUSING CRISIS

THE SHARING ECONOMY – NEW WAYS OF

BUYING AND OWNING

CROWDFUNDING - NEW WAYS OF FINANCING

FUNDRISE (U.S.) - REAL ESTATE DEVELOPMENT

DEMOCRATIZATION OF FINANCE & DEVELOPMENT?

SO WHAT IS A SOCIAL ENTERPRISE?

Definition is ambiguous but generally understood to be:

A business that operates to further a social mission or generates revenue for a non-profit or charity that does.

Social Economy (Non-profits, Civil Society, Community Orgs) 3rd Sector (UK) / CED (USA/Canada)

Modern Social Enterprise/Social Entrepreneur identified in early to mid 1990s by Leadbeatter (1997) Rise of the Social Entrepreneur. Though various kinds of entrepreneurial charities have existed for hundreds of years…

In BC – Enterprising Non-Profits (1997) and later the BC Partners for Social Impact (2012)

New Context – Neoliberal government and the turn away from the Welfare State model, de-funding of social safety net that society had relied on post WW2

FINANCIAL CONSIDERATIONS

Blended ROI

Social ROI

Patient Capital (longer timeframe for profitability)

Absorption of additional costs (33% Est. Shahmash,

2010)

Tax credits? (ENP, Buy Social)

Social Impact Bonds?

Community Bonds?

Emerging Procurement Policies?

EMPLOYMENT BASED SOCIAL ENTERPRISE

MISSION POSSIBLE, POTLUCK CAFÉ AND CATERING

SKILL DEV/WOMEN’S HEALTH/ECONOMIC JUSTICE

BASED SOCIAL ENTERPRISE

East Van Roasters

Common Thread Sewing

Cooperative

MICRO-ENTERPRISE FOCUSED SOCIAL

ENTERPRISES

SOCIAL ENTERPRISE REVENUE GENERATOR TO SUPPORT

NON-PROFIT OR CHARITY

SOME “MATURE” DTES SOCIAL ENTERPRISES

United We Can (1995) SOLEfood

EMBERS (2001) Weatherization

Start a Business (SAB)

Grow a Business (GAB)

Atira (2002) Enterprising Women Making Art

APMI

Potluck Café and Catering (2003) 300,000 + community meals served

Corporate team building (Telus, Shaw etc.)

Recipes For Success

PHS launched several between 2007 and 2012 Bugs Be Gone

Our Community Security

Radio Station Café

The Window

Community

EastVan Roasters

Blue Shell Laundry (acquired)

WHAT IS NOT A SOCIAL ENTERPRISE?

A coffee shop that has a pay what you can or pay it

forward coffee?

A business that donates some of its profits to local

non-profits and charities?

A business that has a low-income person who does

the dishes or odd jobs?

A business that supports a non-profit or charity

outside of its community or country?

A business that supports a charity for something

that benefits wealthier people? (Equestrian Club?

Yacht Club?)

TYPOLOGIES AND AMBIGUITY

Social Venture

Social Purpose Business

Social Impact Business

Social Enterprise

Enterprising Non-profit

Community Interest Company (Nova Scotia)

Community Interest Corporation (UK)

Community Contribution Company (BC – 3C)

Benefit Corporation (B-Corp)

Etc. etc.

SO WHAT’S WHAT? AND DO THEY DELIVER THE

SAME TYPE AND SCALE OF BENEFITS?

WHAT ABOUT THE SOCIAL SAFETY NET?

Is it a good thing that Social Enterprise, Social

Purpose Business etc is “booming” in the DTES?

Or is this just further proof that we need to demand

accountability and proper levels of investment into

the social safety net from Government?

WHY DO WE DO THIS?

CAN EVEN UNDENIABLY “GENUINE” #SOCENT EVEN

HAVE NEGATIVE IMPACTS TOO?

YET HERE WE ARE….

Social Enterprise has come to play an increasingly

important role in the economy of the DTES

Social Impact or Social Purpose Businesses have also

gained profile

Save on Meats, Olla Flowers, Recycling Alternative

Estimated to be roughly 60 Social Enterprise in the area

with over 300 in BC and Alberta (Hall, Markey, 2010)

and more than 220 in BC (Hall, 2009) this has likely

gone up since then.

The largest concentration of social enterprise and most

mature social economy network in Canada (Nicole Chaland

on DTES Social Enterprise)

Serving a range of needs for a range of people

WHAT WILL BE KEY MOVING

FORWARD?COMMUNICATING INTENTION AND

IMPACT

The need to be realistic about intended impact

The need to be transparent about actual impact

The need to adopt methodologies to measure

impact

Social Return on Investment or Blended ROI

Demonstrating Value

B Corp

3C

Report to the Community

Social Impact Assessment

CommunityWise (?)

Certification (?)

WHAT MAKES A GOOD SOCIAL ENTERPRISE?

SOME ANSWERS FROM OUR RESEARCH…

Clear Social Mission

Clear attachment to a legitimate well governed non-

profit or charity

Accountability and transparency in the community

Operations are part of the mission (not just about

raising money for a non-profit)

WHAT MAKES A BAD SOCIAL ENTERPRISE?

Some more answers from our interviews…

Is not financially feasible and takes money from the

non-profit or charity for operations

Goes bust because it thought it would have an

advantage thanks to being a social venture

Does not deliver on impact (SROI) or exaggerates

impact

FUNDING AND RESOURCES FOR STARTUPS

For-profit

3F (Friends, Family and Fools) Debt financing (loans, line of credit), equity raise (Eligible Business Corporation, issue shares to investors – tax creditable for EBC) Crowdfunding (Indiegogo, Kickstarter) Futurpreneur, Small Business BC, Angel Investor (the Unicorns of the investment world) LUSH FUNd

Non-profit

Foundations - Vancity Community Foundation, Vancouver Foundation, the Real Estate Foundation, Mconnell Foundation, Central City Foundation, Tides Foundation, Ashoka, Lush

Government Granting Agencies – Provincial (Proceeds of Crime, BC Gaming) City of Vancouver (Direct Social Services Grants, DTES Capital Grants, Social Innovation Fund,

Greenest City) Federal Government – Arts Council, IRAP (technology)

THE PIPELINE

(OR ECOSYSTEM OR SOMETHING….)

Groundswell

RADIUS, ISIS (UBC), THNK

Futurepreneur

Ashoka (BC Ideas)

DTES Community Investment Fund (BOB)

Community Futures (Regional ED in BC)

Small Business BC

WESBC

IRAP

Tides

Vancity

DevCo (BC Co-op Association)

Foundations/Government Grants

BDC/investors (scaling up)

SOME FOOD FOR THOUGHT FOR STARTUPS

RISK, FAILURE AND LEARNING

Part of entrepreneurship is assuming risk

It’s ok to be a little bit scared or intimidated, this is totally natural, but the more you validate your assumptions (or prove them wrong and pivot) the more confidence you will gain

Don’t let fear of failing stop you from starting

But if you do fail, embrace it fully as a learning opportunity

For social entrepreneurs you are taking on additional challenges as running a “regular” business is hard enough as it is!

That being said…BE ACCOUNTABLE. What you are doing will affect people. Be responsible.

RADIUS – FAILURE WAKE 2013

BUT DON’T BE AFRAID OF SUCCESS EITHER!

CONCLUSION

BE PRESENT AND EMBRACE THE PROCESS,

BE CURIOUS, BE HONEST, BE HUNGRY

Good luck social entrepreneurs!

https://www.linkedin.com/in/wesleyregan

wes@shapecontent.com

BIBLIOGRAPHY

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BIBLIOGRAPHY

Myers, Jan, and MacDonald, Martha (2014), Reciprocal relationships: the role of government and the social economy in the construction of social policy in Atlantic Canada, Canadian Public Policy 40, 17-25

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WEB SOURCES

http://www.sauder.ubc.ca/Faculty/Research_Centres/Centre_for_Social_Innovation_and_Impact_Investing/Resources/~/media/6196C5D2961E4665BC3639F3266CF6A5.ashx

Community Interest Companies (known as C.I.C.’s) are one of the fastest growing community oriented enterprise movements in the country. Roughly 1 in every 200 new companies last year was aCIC, and as of Mar 2014 there are almost 9000 CICs on the Regulators register…The CIC legislation was introduced as a legal form under the Companies Act 2006 and subject to that Act and company law generally” Community Interest Companies Association accessed June 3, 2014 at http://www.cicassociation.org.uk/about/what-is-a-cic

“The question of whether a simple non-profit (i.e. without charitable status) can own a C3 is more nebulous. Non-profit ownership of a C3 may signal profit intent, which could jeopardize the income tax exemption of the non-profit itself. CRA will provide opinions on a case-by-case basis.” Accessed July 12th at http://www.centreforsocialenterprise.com/C3_BC.html

Feeding Vancouver's poor a foundation for business: For Save On Meats owner Mark Brand, launching a charitable foundation could be the key to making his social enterprise profitable, Business In Vancouver, Dec 11, 2012 accessed June 3, 2014 at http://www.biv.com/article/20121211/BIV0106/312119944/feeding-vancouvers-poor-a-foundation-for-business

Is Save On Meats’ token gesture to the poor still a money maker for gentrifier Mark Brand? Carnegie Community Action Project accessed June 3, 2014 athttp://ccapvancouver.wordpress.com/2012/12/07/saveon/

Simon Fraser University Adjunct Professor and lawyer Tony Wilson describes the area in the Globe and Mail as: “It’s world-renowned for having the poorest postal code in Canada. The landscape is replete with boarded-up buildings, squalour, poverty, intravenous drug users, sex trade workers, crackheads, meth, cocaine and heroin addicts, and the homeless, not to mention crime. It’s an urban slum and many businesses gave up on the neighbourhood decades ago.” The Globe and Mail, February 26th 2013

Former police officer Leo Knight describes the DTES as “…a neighbourhood that plays host to the world’s largest open-air drug bazaar” Money Wasted on Vancouver’s DTES, 24 Hours Vancouver, Tuesday July 1st 2014 accessed July 3rd at http://vancouver.24hrs.ca/2014/07/01/money-wasted-on-vancouvers-dtes

Wendy Pedersen was one of a handful of instrumental people who were recognized at the Potluck Café and Catering Ten Year Celebration: “Please join us for a lively celebration and silent auction in the historic District 319 theatre. Ticket price includes tapas by Potluck Catering and one complimentary wine/beer.Our event will also feature awards honouring the following: Potluck Pioneers: Ken Lyotier, Wendy Pedersen, Elizabeth Lougheed Green & Scott Fitzsimmons” Accessed July 2nd at http://www.ticketweb.ca/t3/sale/SaleEventDetail?dispatch=loadSelectionData&eventId=3894945

Pidgin protests in Downtown Eastside concern activist funder, Frances Bula, The Globe and Mail, April 29th 2013 accessed July 3rd at http://www.theglobeandmail.com/news/british-columbia/pidgin-protests-in-downtown-eastside-concern-activist-funders/article11623767/

Pidgin owner defends controversial new Vancouver restaurant, CBC News, Feb 18th 2013 accessed July 3rd at

http://www.cbc.ca/news/canada/british-columbia/pidgin-owner-defends-controversial-new-vancouver-restaurant-

1.1411431

Downtown Eastside eatery is a bold entrepreneurial move, Tony Wilson, The Globe and Mail, Tuesday February 26th

2013

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Vancouver, accessed July 3rd 2014 at http://www.francesbula.com/uncategorized/anti-gentrification-strategies-in-the-

downtown-eastside-get-as-much-attention-as-the-actual-gentrification/

Carnegie Community Action Project, a social justice advocacy and activism organization in Vancouver’s DTES, has been

resolutely critical of for profit social entrepreneurs like Mark Brand. His business Save On Meats was targeted by anti-

gentrification activists who stole his sandwich board in an act of righteous indignation.

Save On Meats hit by vandals; owner suspects anti-gentrification “anarchists” The Vancouver Sun, August 26th 2013

accessed June 3, 2014 at

http://www.vancouversun.com/life/Save+Meats+vandals+owner+suspects+anti+gentrification+anarchists/8129222/story.

html

“ Mark Brand, one of Vancouver’s most recognized social entrepreneurs, will discuss the challenges and victories of

operating businesses in Vancouver’s Downtown East Side. Having successfully opened seven businesses in the DTES,

Mark will share stories and answer questions about integrating diverse communities and finding unconventional solutions

to social issues. It is through his philanthropic efforts that Mark has found a unique balance, proving that you can be

successful in business while serving the greater needs of your community.” VancityBuzz, March 12th 2014 Accessed

June 3, 2014 at http://www.vancitybuzz.com/events/mark-brand-serial-entrepreneur/

Young Entrepreneur works to help a community to help itself with revitalization of Save-On-Meats, Vancity Credit Union,

Stories of Impact accessed June 3, 2014 at

https://www.vancity.com/AboutVancity/InvestingInCommunities/StoriesOfImpact/Realestate/Saveonmeats/