TY - JOUR
AU - Mendell, Marguerite
AB - Abstract Social enterprises, at least in the United States, internalize a hybrid mix of public, private and civil society activity, each and all of which are constituent and confluent. Is social enterprise re-embedding the market in civil society through its engagement to generate social wealth, or is it contributing to a process of dis-embedding, as a market-based approach to address societal issues imposes a strategy of commercialization? Simply asking this question demonstrates how difficult it is to capture this phenomenon in a homogeneous “new welfare mix” paradigm that realigns state, market and civil society relations. Not only do national contexts matter, but degrees of marketization or commercialization do as well. This article provides a broad overview of social enterprise in the North American context. In examining the literature on social enterprise, one navigates through a lexicon of numerous terms and definitions. 1 Introduction This article examines the evolving landscape of social enterprise in the United States and Canada. While this term is now more familiar to those directly involved and/or interested in innovative approaches to poverty reduction and social exclusion, the term “social enterprise” continues to generate confusion, because of its hybrid nature that combines business activity with social purpose. Moreover, there are numerous competing terms and definitions that describe similar activity and objectives such as social purpose business, sustainable enterprise, socially responsible enterprise, community enterprise, to name but a few. Where social enterprise is the adopted term, definitions vary both between and within individual countries. This is certainly true in the case of Canada, where the concept is rarely used in Quebec, for example. These differences do not necessarily reflect disagreement; rather, they confirm the novelty and diversity of this hybrid organizational form that combines social and economic objectives in new ways and is yet to be fully understood. Numerous studies describe social enterprises and the public policy environment in which they are emerging. Many countries have passed new legislation distinguishing these enterprises from traditional non-profit organizations, cooperatives, private enterprise and charities, for example. Others have introduced enabling public policy measures for these enterprises to carry out their business activities while meeting social goals. For the many researchers studying social enterprises as they emerge in different countries throughout the world, it is clear that the institutional context determines the nature and role of these enterprises. While the nature of these hybrid enterprises are path dependent and assume varying degrees of social and economic significance that reflect the political culture in which they are embedded, two models of social enterprise seem to dominate (regardless of the nomenclature). The first is largely influenced by the U.K. and the U.S. and is most often associated with less government engagement in social provision; the second, more European in influence, does not suggest reduced government commitment, but does situate social enterprise in a reconfiguration of relations between government and civil society, for example. Mapping social enterprise around the world would reveal a somewhat different and more complex landscape of experiences and policy measures that does not always fit neatly into one of these models or archetypes, even if they influence the policy direction of individual governments. This article situates the evolution of social enterprise in the United States and Canada in their political and cultural contexts. More attention is given to the U.S. because of its significant influence in the development of social enterprise internationally and because of the presence of social enterprise in public policy discourse. In Canada, this is still relatively new. The contribution of this article, however, is to expand the narrative on social enterprise to question its transformative capacity. In our view, the potential for social enterprises to meet their objectives increases if they integrated into a locally rooted socio-economic development strategy with government support. An approach that focuses largely on individuals and individual initiatives raises numerous concerns. This article will situate the evolving landscape of social enterprise in North America in a policy context over the last two decades as well as in a history of asset-based approaches to poverty reduction and social exclusion that is infrequently referred to in the literature on social enterprise and its focus on individual experiences. It will also address the ongoing and unresolved debates on the definition of social enterprise that increase the challenge for policy makers urged to design enabling measures. Not only are we faced with numerous terms to describe similar activity, definitions overlap in some countries to allow all legal forms – private, non-profit and cooperative enterprises – to be considered as social enterprises under specific conditions. 2 Situating current research on social enterprise Over the last two decades, research on poverty reduction and social exclusion has focused on the shift from a welfare state to a social assistance state to reflect the reduction of state engagement in social provision and collective well-being. The focus on the so-called deserving poor in the United States in the 1980s and 1990s reinforced a new political culture that identified a class of dependent and undeserving poor. The dramatic reduction of social programs in favour of active labour market policies led to the adoption of new policy measures to address poverty. However, the 1990s was also a decade in which numerous initiatives based on civil society demonstrated the capacity of citizens to design community-based socio-economic transformation strategies. As these initiatives assumed increasingly significant roles in many parts of the world through the social and solidarity economy and community economic development initiatives, for example, with varying degrees of engagement on the part of governments, researchers described this evolving relationship between the state and civil society as a “new welfare mix” or a “new economy of welfare”. However, these terms miss the more flexible and strategic role that governments have been forced to adopt by implying that such a realignment of state, market and civil society characterizes a new and stable “mix”. An “enabling state” better describes this “mix” as a new process of policy formation, that gave greater voice to civil society actors in policy design in many countries. Indeed, this also describes the nature of state engagement sought by civil society actors. For civil society initiatives to take root, they required a more horizontal, flexible and dialogic approach. I believe that this sets the context for the evolving social enterprise landscape in North America and elsewhere. Social enterprises, at least in the United States, internalize a hybrid mix of public, private and civil society activity, each and all of which are constituent and confluent. Is social enterprise re-embedding the market in civil society through its commitment to generate social wealth, or is it contributing to a process of dis-embedding, as a market driven solution to societal issues imposes a strategy of commercialization on non-profit organizations, for example? Simply asking this question demonstrates how difficult it is to capture this phenomenon in a homogeneous “new welfare mix” paradigm that realigns state, market and civil society relations. Not only do national contexts matter, but degrees of marketization or commercialization do as well. As stated early, this dispels any notion of a homogeneous North American or even an American model of social enterprise as is suggested in the literature. What is its socio-economic and political impact? What is the role of social actors, of foundations, social movements, community associations, etc.? In other words, the question of agency is imperative. Who is driving this process? What is the role of government? A broad overview of social enterprise in the North American context confirms the need for coherent analytical work raised by many researchers (Nicholls, 2008). Much of the existing literature consists of fascinating stories that describe the activities of these enterprises and the people involved. The growing interest in social enterprise and social entrepreneurship in North America has also spawned numerous university programs, especially in the United States that, for the time being, primarily employ case study methodologies in their curriculum. As many of these academic programs include the active participation of practitioners, students have first hand access to these experiences. All of this is contributing to a variegated portrait of new organizational models that cover a large range of organizational forms, from innovative social initiatives to businesses that generate income to enable non-profit enterprises to meet their social objectives. The multiplication of case studies and their accessibility through numerous publications and websites has raised the urgent need for theoretical and analytical work necessary to better understand the role that social enterprise is playing in contemporary society. As many critics have pointed out, social enterprises are increasingly assuming a significant public role as they demonstrate their capacity to address difficult social challenges that neither the market nor the state are able to meet. As new models of social wealth creation, they provide innovative solutions to community problems that “deliver sustainable new social value” (Nicholls, 2008, p. 2). While we are better able to understand social enterprises as a new organizational form, their macrosocial impact is not well articulated. We need to apply “systems thinking” to explore their social, political and economic impact. As Alex Nichols and colleagues point out in a recent book, there are important lessons to be learned from social movements theory (Nicholls, 2008). However, this suggests that social enterprises are engaged in collective action processes. How useful is this analysis in the current context if rather than identifiable, networked and mobilized actors, social enterprises are numerous discrete, individual initiatives that engage the market and the state in variable ways? Can we weave these fragments into a systemic analysis that accounts for this variability, but also captures the reconfiguration of relations between the state, the market and civil society that is common to them all? The question we raise as researchers is whether the cultural specificities of the many countries in which social enterprises now occupy a significant socio-economic and political place are forcing a convergence towards a new global perspective on poverty reduction, social inclusion and socio-economic development. The verdict is still out, but as this article will reveal, despite the variability of policy measures in place to support social enterprises, a North American model of social enterprise, or more specifically the American model or archetype, remains very influential. That said, research on social enterprises in the United States must be historically situated. Are social enterprises a contemporary manifestation of civil society-based initiatives expressed in a new form? If so, placing social enterprise in a larger historical context may alleviate the concern that an American model of social enterprise is being adopted universally. If, on the other hand, social enterprises are distinct from these earlier civil society initiatives such as community economic development initiatives and numerous associational or civic movements in the United States that have successfully put pressure on market actors to meet social objectives, the concern is well founded. What certainly distinguishes today's social enterprises from earlier citizen or community led strategies is the predominance of market led strategies and the risk of de-linkage from their social and community contexts. 3 Asset-based approaches to socio-economic transformation in the United States The following table published by the Aspen Institute in the United States in 2005, is a useful synthetic and historic portrait of community wealth building strategies designed by enterprising organizations that have implemented new “asset-based and other innovative approaches to solving social and economic problems” (Aspen Institute, 2005) (Table 1). Table 1 Community wealth-building institutions: key features and statistics, United States (Aspen Institute, 2005). Institutional form . Number (2005) . Assets (2005) . How it builds community wealth . Community Development Corporations (CDCs) 4000 More than $1 billion Develops local business, retail and community facilities Community Development Finance Institutions (CDFIs) 718 (federally certified-2004 data) $14 billion (2003) Provides financing for homeownership and small businesses in uder-served communities Cooperatives and Credit Unions Approximately 48,000 businesses with more than 120 million members Top 100 non-financial co-ops have $263 billion; credit unions have $629 billion Pools resources to finance businesses on “one member, one vote” ownership model Community Land Trusts (CLTs) 112 nonprofits with a combined 6,000 housing units (2004) Approximately $500 milliion Uses nonprofit ownership of land to ensure permanently affordable housing and other services Employee Stock Ownership Plans (ESOPs) and Employee Ownership 11,000, with more than 8 million members $555 billion Anchors wealth locally by rooting business ownership in the community Municipal Enterprise 25,000 (many are water and sewer companies, but include other industries such as city-owned hotels) 2000 public utility companies alone have $39.6 billion (other estimates not available) Uses local public ownership to provide services and generate non-tax local revenue Non-profit Social Enterprise 500 (2004) More than $500 million Raises revenue for community-benefit work through mission-related business State and Local Pension Funds (economically targeted investments) Used in some form by about half of all state pension funds 43.6 billion (2% of state and local public pension dollars) Invests public pension dollars to earn both social and economic returns Approximate total 90,000 More than $1.5 trillion in assets-up from less than $100 billion in the 1960s Combined strategies anchor capital and build wealth in local communities Institutional form . Number (2005) . Assets (2005) . How it builds community wealth . Community Development Corporations (CDCs) 4000 More than $1 billion Develops local business, retail and community facilities Community Development Finance Institutions (CDFIs) 718 (federally certified-2004 data) $14 billion (2003) Provides financing for homeownership and small businesses in uder-served communities Cooperatives and Credit Unions Approximately 48,000 businesses with more than 120 million members Top 100 non-financial co-ops have $263 billion; credit unions have $629 billion Pools resources to finance businesses on “one member, one vote” ownership model Community Land Trusts (CLTs) 112 nonprofits with a combined 6,000 housing units (2004) Approximately $500 milliion Uses nonprofit ownership of land to ensure permanently affordable housing and other services Employee Stock Ownership Plans (ESOPs) and Employee Ownership 11,000, with more than 8 million members $555 billion Anchors wealth locally by rooting business ownership in the community Municipal Enterprise 25,000 (many are water and sewer companies, but include other industries such as city-owned hotels) 2000 public utility companies alone have $39.6 billion (other estimates not available) Uses local public ownership to provide services and generate non-tax local revenue Non-profit Social Enterprise 500 (2004) More than $500 million Raises revenue for community-benefit work through mission-related business State and Local Pension Funds (economically targeted investments) Used in some form by about half of all state pension funds 43.6 billion (2% of state and local public pension dollars) Invests public pension dollars to earn both social and economic returns Approximate total 90,000 More than $1.5 trillion in assets-up from less than $100 billion in the 1960s Combined strategies anchor capital and build wealth in local communities Open in new tab Table 1 Community wealth-building institutions: key features and statistics, United States (Aspen Institute, 2005). Institutional form . Number (2005) . Assets (2005) . How it builds community wealth . Community Development Corporations (CDCs) 4000 More than $1 billion Develops local business, retail and community facilities Community Development Finance Institutions (CDFIs) 718 (federally certified-2004 data) $14 billion (2003) Provides financing for homeownership and small businesses in uder-served communities Cooperatives and Credit Unions Approximately 48,000 businesses with more than 120 million members Top 100 non-financial co-ops have $263 billion; credit unions have $629 billion Pools resources to finance businesses on “one member, one vote” ownership model Community Land Trusts (CLTs) 112 nonprofits with a combined 6,000 housing units (2004) Approximately $500 milliion Uses nonprofit ownership of land to ensure permanently affordable housing and other services Employee Stock Ownership Plans (ESOPs) and Employee Ownership 11,000, with more than 8 million members $555 billion Anchors wealth locally by rooting business ownership in the community Municipal Enterprise 25,000 (many are water and sewer companies, but include other industries such as city-owned hotels) 2000 public utility companies alone have $39.6 billion (other estimates not available) Uses local public ownership to provide services and generate non-tax local revenue Non-profit Social Enterprise 500 (2004) More than $500 million Raises revenue for community-benefit work through mission-related business State and Local Pension Funds (economically targeted investments) Used in some form by about half of all state pension funds 43.6 billion (2% of state and local public pension dollars) Invests public pension dollars to earn both social and economic returns Approximate total 90,000 More than $1.5 trillion in assets-up from less than $100 billion in the 1960s Combined strategies anchor capital and build wealth in local communities Institutional form . Number (2005) . Assets (2005) . How it builds community wealth . Community Development Corporations (CDCs) 4000 More than $1 billion Develops local business, retail and community facilities Community Development Finance Institutions (CDFIs) 718 (federally certified-2004 data) $14 billion (2003) Provides financing for homeownership and small businesses in uder-served communities Cooperatives and Credit Unions Approximately 48,000 businesses with more than 120 million members Top 100 non-financial co-ops have $263 billion; credit unions have $629 billion Pools resources to finance businesses on “one member, one vote” ownership model Community Land Trusts (CLTs) 112 nonprofits with a combined 6,000 housing units (2004) Approximately $500 milliion Uses nonprofit ownership of land to ensure permanently affordable housing and other services Employee Stock Ownership Plans (ESOPs) and Employee Ownership 11,000, with more than 8 million members $555 billion Anchors wealth locally by rooting business ownership in the community Municipal Enterprise 25,000 (many are water and sewer companies, but include other industries such as city-owned hotels) 2000 public utility companies alone have $39.6 billion (other estimates not available) Uses local public ownership to provide services and generate non-tax local revenue Non-profit Social Enterprise 500 (2004) More than $500 million Raises revenue for community-benefit work through mission-related business State and Local Pension Funds (economically targeted investments) Used in some form by about half of all state pension funds 43.6 billion (2% of state and local public pension dollars) Invests public pension dollars to earn both social and economic returns Approximate total 90,000 More than $1.5 trillion in assets-up from less than $100 billion in the 1960s Combined strategies anchor capital and build wealth in local communities Open in new tab It is useful to reproduce this table here as it situates social entrepreneurship and social enterprise in the United States in a temporal and institutional context. In this way, social enterprise is placed along a continuum of initiatives that, for the most part, have been civil society driven socio-economic innovations to reduce poverty and revitalize communities in decline. They include direct engagement by pension funds, employee stock ownership plans, community-based finance and municipal enterprises, to name a few. Taken individually, these are examples of democratizing economic instruments to reach individuals and communities otherwise unable to access these resources. Taken together, they provide a template for societal change, as they required enabling legislation and state regulatory mechanisms to be put in place. That said, there are two potentially conflicting processes under way. Indeed, social enterprises challenge the conventional wisdom that considers these initiatives as a response to market failure located at the margins of the economy, thus denying their innovative capacity to generate economic wealth. Still, the pressure on non-profits to develop commercial, revenue generating activities to be able to meet their social objectives, may reverse the approach of many earlier socio-economic initiatives outlined in the above table, that emphasized the need to re-embed the market, that is, to make economic instruments more responsive to the needs of communities by designing new tools and strategies. The current accent is on marketizing social services, on profitability, to increase the capacity of non-profits to address “social market failure” through new trading activities. Many will state that this concern is not well founded and that the mix of market and non-market activity that characterizes social enterprises assures their commitment to their social mission. Unlike the community-based initiatives developed in the United States, social entrepreneurship and social enterprise are often decontextualized. Earlier socio-economic experiences based in civil society, demonstrated the need to work horizontally, across social, professional and administrative silos to address economic and social issues simultaneously. This required building alliances and working relationships between activists, financial experts, policy makers, planners and so on. Today, social enterprise may also be seen as part of a larger movement that has put pressure on the private sector to behave in a “responsible” manner. Corporate social responsibility and socially responsible investment require the business community to examine its practices. While it is certainly true that this is also a good business strategy, especially in the wake of the economic crisis and the growing public concern with business ethics, the environment and human rights, it is also true that there is pressure on the private sector to evaluate the impact of their commercial activities on these larger societal issues. Moreover, the emergence of a new economic elite with unprecedented levels of personal wealth has spawned a new class of philanthropists and a new and more strategic approach to philanthropy. The financial difficulties faced by non-profits to meet their goals is fertile ground for new behavioural, organizational and institutional responses. For example, a new class of entrepreneurs and business leaders is converting large portfolios of personal wealth into investment pools for social purpose ventures, transforming traditional donor behaviour into venture philanthropy; non-profits are transforming their organizations into hybrid social enterprises combining trading activities with social engagement. Institutional change, is for now, a process of iterative modifications that have yet to produce a coherent and identifiable regulatory environment (Table 2). Table 2 Behavioural, organizational and institutional transformation. Conventional . Transformed/transforming . Donations/philanthropy Strategic/venture philanthropy Non-profit organizations Social Enterprises (hybridity) Legal and regulatory framework; norms New legislation; regulation; accounting norms (social accounting, for example) Conventional . Transformed/transforming . Donations/philanthropy Strategic/venture philanthropy Non-profit organizations Social Enterprises (hybridity) Legal and regulatory framework; norms New legislation; regulation; accounting norms (social accounting, for example) Open in new tab Table 2 Behavioural, organizational and institutional transformation. Conventional . Transformed/transforming . Donations/philanthropy Strategic/venture philanthropy Non-profit organizations Social Enterprises (hybridity) Legal and regulatory framework; norms New legislation; regulation; accounting norms (social accounting, for example) Conventional . Transformed/transforming . Donations/philanthropy Strategic/venture philanthropy Non-profit organizations Social Enterprises (hybridity) Legal and regulatory framework; norms New legislation; regulation; accounting norms (social accounting, for example) Open in new tab It is not surprising that social enterprise and social entrepreneurship are on the political, economic, social agenda in the United States, given the failure to attenuate poverty and social exclusion, a growing disillusionment with government and/or an embedded critique of government intervention. But is this really new? An ethnography of the current social enterprise movement in the United States explains why this is perceived as “new” and different from earlier experiences outlined above. The leadership is new, as is the discourse. Is there insufficient dialogue between old and new actors? There are numerous questions as one explores the evolution and widespread interest in social enterprise in the United States today. One must, of course, add the extensive media attention given to social enterprise in contrast to the many community-based initiatives that have existed for numerous years. This is not surprising given the focus on individual “social entrepreneurs” and their compelling personal stories. As more of these stories are told by the media and by researchers on social enterprise, insufficient attention is paid to the variability of approaches within the United States and to the debates this has generated.1 What is of great interest for many and certainly distinguishes social enterprise in the U.S. from other countries, including Canada, is the role that foundations are playing in shaping the contours of social enterprise in the United States through their financial capacity to influence the nature, scope and objectives of these enterprises and through their political capacity to influence new policy design. In countries that do not have a tradition of numerous large and wealthy foundations, their role cannot be emulated. Many countries are left with a strategy that advocates social entrepreneurship in the absence of funders and with weak welfare states. This is not a good prognosis. This is especially true in the transition countries that are experiencing a shift in foundation culture from donor to investor as well. 3.1 Deconstructing social enterprise. What is it? While social enterprise and social entrepreneurship are often distinguished in the literature, they are synonymous in the United States where the former is the institutional expression of the latter. There is debate, however, even among its most ardent advocates who question the new revenue generating imperative imposed on non-profit organizations, emphasizing that the only non-profits that can be fully autonomous are those that are fully endowed (Dees, 2001). A great deal revolves around the new “social business” mix that describes the nature of social enterprise in the United States. Much is at stake as these organizations are now forced to develop commercial capacity, whatever form this may take. Still, perhaps the most important question we must ask is why this new imperative is, for the large part, being embraced so widely. While it is commonly thought that definitional debates reflect different national contexts, this is also true within the North American context that grapples with the nature and level of integration between social programs and business activities (Alter, 2007, p. 211). Regardless of the definition adopted, all social enterprises develop a mission, operational capacity and the means to manage all stakeholders, including funders (Bloom, 2008, pp. 285). The term “social entrepreneur” was first used in the US in the 1970s, according to Gregory Dees. But it was in the 1980s with the creation of the Ashoka Foundation by Bill Drayton and New Ventures by Ed Skloot that this new vision of enterpreneurship captured the public imagination (Fontan, Allard, Bertrand-Dansereau, & Demers, 2007). For Drayton, social entrepreneurs applied their skills to social wealth creation. Ed Skloot responded to the financial difficulties of non-profit organizations by proposing revenue generating capacity through trading activities.2 Out of this grew numerous hybrid models of social purpose businesses that are classified by many authors today. While this classification is helpful to deconstruct social enterprise and to separate its various components—a uniform typology does not yet exist, even if many writers now subscribe to the classifications that are available.3 Kim Alter has contributed significantly to our understanding of social enterprise in the United States. Similar to the Aspen Institute's synthesis of citizen-based socio-economic initiatives over several decades in the U.S., Alter situates social enterprises historically, emphasizing their current public visibility and appeal as the key feature that distinguishes them from earlier income generating activity undertaken by non-profit organizations and from for profit businesses with a clear social mission. As early as the 1960s in the U.S., non-profit organizations established enterprises to create jobs for those excluded from the labour market. Alter traces the roots of these enterprises to cooperatives, community development corporations, microcredit and fair trade activities in the US and abroad (Alter, 2007, pp. 2–4). For example, the Italian “social firm” or “affirmative business” was adopted by many organizations in the U.S. in the 1960s and 1970s, to provide employment opportunities for people with disabilities. In 1996, long before the current interest in social enterprise, the Roberts Foundation Homeless Economic Development Fund defined social enterprise as “a revenue generating venture founded to create economic opportunities for very low income individuals, while simultaneously operating with reference to the financial bottom line” (Alter, 2007, p. 11). NESsT, a non-profit enterprise working in emerging market countries to develop social enterprises that increase the financial sustainability and social impact of civil society organizations, refers to “the myriad of entrepreneurial or ‘self-financing’ methods used by non-profit organizations to generate some of their own income in support of their mission” (Alter, 2007). While the first definition applies a “program approach” to social enterprise, in the second, the emphasis is on a “funding approach” (Alter, 2007). In response to the need for a broad definition, Virtue Ventures suggests that a social enterprise “is any business venture created for a social purpose-mitigating/reducing a social problem or a market failure–and to generate social value while operating with the financial discipline, innovation and determination of a private sector business” (Alter, 2007). For Gregory Dees, in his foundational article on the meaning of social entrepreneurship, these are entrepreneurial approaches to social problems. Social entrepreneurs are “change agents” who create social value through innovation, adaptation and learning. They are bold risk takers. Dees resists the social enterprise label that puts pressure on social entrepreneurs to generate revenue through trading activities; this will force “mission drift”, a deviation from the objectives and priorities of social entrepreneurs. While social enterprises operate in the market, their social mission must be at the core of their activities. 3.2 Social enterprise models As stated above, existing literature focuses both on individuals, profiling social entrepreneurs and on social enterprises. Recent publications are responding to the need to classify social enterpreneurship and social enterprise to distinguish their various forms and activities. This will contribute to the much needed work on standardization and coherence that is critical to the development of enabling public policy. It is in this context that the Fourth Sector Network in the United States is working towards an umbrella term that will resolve this problem.4 It is useful to reproduce a figure designed by the Fourth Sector Network that captures both the difference between its constituent organizations/enterprises and the private, public and traditional social sector, and illustrates the need for a common framework that does not dilute the specificities of the different organizational forms while recognizing their common identity as economic actors serving social goals. This is an important illustration as it also separates the social sector (traditional non-profits, NGOs, the voluntary sector in Canada) from this portrait. It is beyond the scope of this article to enter into a long discussion on the need for this separation, but it is an important step in resisting the pressure for such social organizations to generate independent income through trading activities. This is critical. That said, one can design a bigger umbrella still to include these if their distinct identities are clear.5 4 The emerging fourth sector (Fourth Sector Network Concept Group, 2010) Open in new tabDownload slide Open in new tabDownload slide Other examples that describe this new activity and deconstruct its organizational form include a recent book on social entrepreneurship by John Elkington and Pamela Hartigan in which they present three social enterprise models: (i) leveraged non-profits; (ii) hybrid non-profits and (iii) social business. Their reference to leveraging applies to the potential sources of funding including philanthropic and government support, business partnerships and income from underserved or untapped markets (Elkington & Hartigan, 2008, pp. 30–31). We can then move from organizational form to function and classify these models by their mission orientation, ranging from what Kim Alter refers to as (i) mission centric, (ii) mission related and (iii) unrelated to mission orientation in her analysis of social enterprises. The following combines the models provided by Elkington and Hartigan and classification by Alter. Model 1 (mission centric). Meets unmet needs (public goods to most vulnerable with little or no access) Entrepreneur and organization are “change catalysts” Multiple partners (financial and political support) Founding “entrepreneur” becomes “figurehead” Meets unmet needs (public goods to most vulnerable with little or no access) Entrepreneur and organization are “change catalysts” Multiple partners (financial and political support) Founding “entrepreneur” becomes “figurehead” Open in new tab Model 1 (mission centric). Meets unmet needs (public goods to most vulnerable with little or no access) Entrepreneur and organization are “change catalysts” Multiple partners (financial and political support) Founding “entrepreneur” becomes “figurehead” Meets unmet needs (public goods to most vulnerable with little or no access) Entrepreneur and organization are “change catalysts” Multiple partners (financial and political support) Founding “entrepreneur” becomes “figurehead” Open in new tab Model 2 (mission related). Meets unmet needs (public goods to most vulnerable with little or no access) but it is possible to earn a profit A marketing plan is developed to ease access Enterprise can engage in cost recovery through sale of goods and services thereby tapping new markets Diversified funding (private, public, philanthropic, including loans, grants, quasi-equity investments) Increased participation by investors and business creates pressure to move towards Model 3 to access new funding, especially from capital markets Raises the risk of “mission drift” Meets unmet needs (public goods to most vulnerable with little or no access) but it is possible to earn a profit A marketing plan is developed to ease access Enterprise can engage in cost recovery through sale of goods and services thereby tapping new markets Diversified funding (private, public, philanthropic, including loans, grants, quasi-equity investments) Increased participation by investors and business creates pressure to move towards Model 3 to access new funding, especially from capital markets Raises the risk of “mission drift” Open in new tab Model 2 (mission related). Meets unmet needs (public goods to most vulnerable with little or no access) but it is possible to earn a profit A marketing plan is developed to ease access Enterprise can engage in cost recovery through sale of goods and services thereby tapping new markets Diversified funding (private, public, philanthropic, including loans, grants, quasi-equity investments) Increased participation by investors and business creates pressure to move towards Model 3 to access new funding, especially from capital markets Raises the risk of “mission drift” Meets unmet needs (public goods to most vulnerable with little or no access) but it is possible to earn a profit A marketing plan is developed to ease access Enterprise can engage in cost recovery through sale of goods and services thereby tapping new markets Diversified funding (private, public, philanthropic, including loans, grants, quasi-equity investments) Increased participation by investors and business creates pressure to move towards Model 3 to access new funding, especially from capital markets Raises the risk of “mission drift” Open in new tab Model 3 (unrelated to mission). Entrepreneur establishes a venture as a business with a social and/or environmental mission For profit business model; returns flow to low-income groups and are reinvested in the enterprise to increase the capacity to reach its target population Entrepreneur establishes a venture as a business with a social and/or environmental mission For profit business model; returns flow to low-income groups and are reinvested in the enterprise to increase the capacity to reach its target population Open in new tab Model 3 (unrelated to mission). Entrepreneur establishes a venture as a business with a social and/or environmental mission For profit business model; returns flow to low-income groups and are reinvested in the enterprise to increase the capacity to reach its target population Entrepreneur establishes a venture as a business with a social and/or environmental mission For profit business model; returns flow to low-income groups and are reinvested in the enterprise to increase the capacity to reach its target population Open in new tab Kim Alter's typology is even more useful as she further explores the hybridity of enterprises that, in many cases, are more complex and combine social and business entities, create subsidiaries and diversify their activities. These are usually characteristic of older, more mature social enterprises that create multi-sector organizations linked through differentiated markets (target populations), creating business ventures to finance their multiple activities. The Council of Community Clinics (CCC) in San Diego is an interesting example of such a hybrid, complex, mixed model. These clinics provide services to the uninsured and the underinsured poor. The CCC, a non-profit organization focuses on advocacy and lobbies for new legislation. The second entity in this structure, the Community Clinic Health Network (CCHN), a non-profit subsidiary of CCC provides technical support to increase the capacity of community clinics. The third structure, Council Connections, is a wholly owned for profit subsidiary of CCC that purchases supplies and pharmaceuticals in bulk which it then sells to community clinics for profit, but at considerably reduced prices. I note this example in detail because it demonstrates how a non-profit organization can remain at the head of a hybrid, mixed structure that generates income not only to sustain its own activities but to increase purchasing power for low income populations by offering essential goods at reduced price (Alter, 2007, p. 48). Of course, this begs the question of free access to pharmaceuticals for the elderly. But this example can be presented as a structure with a different set of goods and/or services. Elkington and Hartigan provide examples of these models by focusing on social entrepreneurs (Alter, 2007, pp. 33–43). While Alter includes illustrations of the classification she has produced, the focus is on working through the features that distinguish social enterprises so as to move towards more coherent and standardized definitions of the different models. All three draw upon American and international examples of social entrepreneurship and social enterprise, revealing the extensive engagement of Americans in social enterprise development in the South. In the United States, the stories told provide examples of social enterprises that, in many cases, serve high end markets, generating sufficient income to finance their activities, to expand existing services and to develop new ones. And paradoxically, the declining donations from foundations that along with declining government contributions was the stimulus for non-profits to explore business strategies, has re-engaged foundations as investors championing these new enterprises. While the logic has shifted from giving to investing and while a great deal of interest is currently focused on the changing nature of foundations and their capacity both to influence the social agenda and to reinforce disengagement by the state, as we have already noted, in reality their investment of approximately $100 million annually is, to quote Elkington and Hartigan, “a drop in the bucket” (Alter, 2007, p. 80). This suggests that their direct contribution to developing strategies of social inclusion is far less than their potential negative impact on state funding of social programs in the United States and elsewhere through their growing influence. Access to capital continues to be a critical issue for social enterprises. Regardless of what appears to be a rapidly growing social finance market, much like social enterprises, the capacity to raise capital is most often hindered by the absence of enabling public policy standardization, information, evaluation and coordination. A legal framework for social enterprise does not yet exist (Elkington & Hartigan, 2008, pp. 81). This is now being addressed by the Fourth Sector Network in the US that recently brought together leaders in social enterprise with government representatives (national) and researchers to propose enabling legislation and a menu of policy measures. Will the common framework sought by this network resolve the confusion that seems to prevail as individual states adopt new legislation for B-Corporations or “for benefit corporations”, for example, while other legal innovations such as the L3C business entity, introduced in 2008, are not widely used?6 The hybridity, flexibility and novelty of social enterprise is also its Achilles heel. Accessing capital markets and drafting enabling public policy requires basic parameters that are comprehensive. Social accounting, triple bottom line, blended value are terms that are well understood and the basis for a new calculus for social purpose business. In many ways, exploring the literature and information on social entrepreneurs and social enterprise in the United States suggests that these innovations in measurement and evaluation are insufficient to move from individual experiences to a systemic approach. Or, as we suggest, is the absence of direct political engagement the real issue? The policy work initiated by practitioners who are collaborating with government in drafting new measures is commendable, but our question is a larger one. No one has yet calculated the benefit of this transfer in social responsibility to private initiative. This is necessary to be able to evaluate the impact of social enterprise if it implies, as it does in the American context, a considerably reduced role for government. It is no surprise that living and working in Canada generates these concerns. This does not suggest the disengagement of government; it implores government to work differently, to work collaboratively to generate the best policies. The benefits to government are clear; a piecemeal or “bricolage” approach, which seems to prevail in most countries, risks policy failure and the associated high cost to government of misaligning means and objectives. 5 Social enterprise in Canada This article has deliberately focused on social enterprise in the United States, given the impact the American vision and experience is having internationally. While social enterprises in other countries reflect their cultural context and are path dependent, as noted earlier, the American model has had widespread influence. This is certainly as true for Canada as it is elsewhere, at least through the incorporation of the concept of social enterprise into the public discourse, though as stated above, this is not as widespread in Canada and has yet to be part of the vocabulary in Quebec. That said, the distinct political cultures of the United States and Canada create important distances not reflected in their geographical proximity. The culture of individualism that underlies social entrepreneurship, for example, is less present in Canada than in the United States.7 Despite a swing to the right in Canada, especially with the current conservative government but also associated with the former government and its commitment to reduce government spending, cut social programs and introduce active labour market policies, there is an entrenched welfare state culture in Canada that has fought for the preservation of public goods, in particular the fragile health care system that has been under attack across the country in recent years. The Canadian heritage of social citizenship has deep roots, distinguishing it from the United States. Unlike its southern neighbours, citizens in Canada, for the most part, resist the privatization of public services. That said, they are also concerned with accessibility and the deterioration of the quality of these services, two realities that are exploited by critics from the right who argue for an American approach to health care and social service provision more generally. In a recent literature review on social entrepreneurship in Canada, Sherrill Johnson of the Canadian Center for Social Entrepreneurship at the University of Alberta, one of the few Canadian universities with a designated program, notes the need for research in this area that is, for the time being, largely practitioner driven (Johnson, 2000). Moreover, there appears to be less enthusiasm in Canada about social entrepreneurship than in the U.S., except among young people. Johnson confirms our view that this is largely attributable to an embedded welfare state culture and the resistance by the business community to this approach. Johnson also notes the important overlap with community economic development strategies and practices that blur the distinction between these more integrated and collective approaches and the current advocacy for social entrepreneurship in Canada. Similar to the United States, comprehensive data on social enterprise in Canada does not exist. Nor have definitional debates been fully resolved. For the time being, figures are taken from the Canadian Voluntary Sector Initiative and from data on cooperatives and mutual associations (VSI, 2002). In 2002, there were over 160,000 non-profit organizations in Canada employing 2 million people, generating over $75 billion in annual revenue. Input-output analysis of the Canadian economy for this period estimates the total value of services offered by non-profit welfare organizations at $3.4 billion and those offered by other non-profits serving households at $10 billion.8 There are approximately 9000 cooperatives, 1000 credit unions and caisses populaires across the country with a total of $225 billion in assets and 16 million members. Approximately 125 mutual associations with $2 billion in total assets, cover one million policy holders. Added to this complex portrait are over 3000 community economic development organizations with approximately 3500 employees and 19,000 volunteers across the country. 5.1 An embedded social enterprise model It is difficult to address social enterprise from a Canadian perspective given the regional diversity of Canada and a variegated political and economic landscape that includes a legacy of social democracy in some of the western provinces, a conservative orientation in the oil rich province of Alberta and shifting political sands in the rest of the country. While the US shares this diversity, as already noted, there is a more coherent discussion of these issues nationally and space to negotiate with legislators and policy makers. In Canada, the current political context prevents such a discussion from taking place; innovations in policy are occurring at the provincial level. Today's community-based initiatives and social enterprises are rooted in a long history of cooperatives, credit unions, community economic development initiatives, and adult education in many parts of the country. The leaders of the Antigonish Movement in Nova Scotia, laid the foundations for contemporary community-based initiatives in the 1920s. In Quebec, today's social economy traces its roots to the establishment of the Mouvement Desjardins, the credit cooperative established in rural Quebec at the turn of the 20th century. These are important illustrations of citizen-based socio-economic transformation strategies. It is useful to note some landmark initiatives that were built on these historic experiences. In 1976, New Dawn Enterprises, located on the island of Cape Breton in Nova Scotia, established the first community economic development corporation in Canada (New Dawn Enteprises http://newdawn.ca). As a non-profit organization dedicated to community development, one could say this was a social enterprise before the term was used and generalized to refer to social purpose or mission driven businesses. However, it is the implementation of a multi-sectoral and multi-stakeholder comprehensive community initiative for socio-economic revitalization by New Dawn Enterprises from the outset, that is the foundation for what I will refer to as an embedded social enterprise model to distinguish the Canadian model or vision of social enterprise, for the most part. This goes further than the important classification provided by Kim Alter of a mixed or complex model to describe the most hybrid of social enterprises. From the beginning, New Dawn established numerous place-based integrated initiatives and enabling economic instruments, including real estate, financial and commercial activities, training and social services. In fact, the strategy adopted by New Dawn is closer to the American community development initiatives of the 1970s than to the current accent on individual social enterprises and social entrepreneurs. While social enterprises in the United States serve community needs, they most often contribute indirectly to broader development strategies. The focus on self-reliance refers to the enterprise, a non-profit organization that can stand on its own as a social enterprise. While social enterprises in the U.S. are established to address community needs, in most cases, these refer to target populations and are less frequently or less strategically integrated into spatial strategies. In contrast, New Dawn Enterprises and the numerous community economic development initiatives across the country in Canada work towards community self-reliance. I note this to suggest that although social enterprise in Canada shares many of the same the same features as its American counterpart, it is more closely tied to a community or a collective approach to socio-economic innovation, poverty reduction and economic revitalization. Within Quebec, the first community economic development corporations (CDECs) were established in the early 1980s in urban neighbourhoods in Montreal by social activists who responded to the economic crisis of the 1980s by initiating a process of instituted collaboration between the private sector, community organizations, the labour movement and social movements. The depth of the crisis could only be addressed through dialogue and the co-construction of new socio-economic approaches to local development. The CDECs were the seeds of what we now recognize as intermediary public spaces designed by social actors. For example, labour market re-integration through training businesses was facilitated through enabling policy, providing the necessary public support for these enterprises to operate. These training businesses are the precursors of today's social enterprises, given their mandate to address “employability” and social exclusion and not only job creation. This is but one example of the capacity to innovate in a multi-stakeholder environment. Many would later interpret such labour market policies as pro-active in contrast to the so-called passive assistance programs associated with the welfare state. However, in the context of the evolution of social enterprise in Quebec and Canada, this is an important illustration of policy innovation and realignment of government and social actors. It demonstrates the capacity of government and social actors to co-innovate in the area of labour market policy that is applicable to the numerous other sectors of activity in which civil society organizations are better able to serve the public interest many of which might now be identified as social enterprises.9 The CDEC experience illustrates the value added that integrated multi-stakeholder intermediaries bring to addressing complex socio-economic challenges within a public interest perspective enabled by accommodating policy innovation. The evolution of the social economy in Quebec today and the incorporation of social enterprise into the current discourse reflects an underlying comprehensive and collaborative approach with its roots in community initiatives of the 1980s and to the earlier role of the cooperative movement in Quebec throughout the century. It is not surprising that today's leadership includes many of those who led the community economic development movement in the early 1980s. The continuity from the early cooperative movement to social enterprise today distinguishes the Canadian experience. This is largely due to a common vision, a shared commitment to progressive social change. Today, experiences in Quebec, for example, are foundational for current thinking on the social economy and social enterprise across the country. The diversity of Canada is revealed in many ways, not the least of which is the definitional debate on the social economy throughout the country. Whereas the social economy has common roots in cooperatives and mutual associations, the contemporary social economy in Quebec, an integrated economic model of socio-economic transformation, finds common ground with the community economic development initiatives in the rest of the country. The social economy has its own network in Quebec. The Chantier de l’économie sociale (Chantier de l’économie sociale www.chantier.qc.ca) is, in fact, a network of networks representing collective enterprises in numerous sectors producing goods and services. Collective enterprises refer to both cooperatives (producer, consumer, worker and most recently solidarity cooperatives10) and non-profit enterprises. It is important to note that non-profit organizations in the social economy are not exclusively providing social services; they engage in the production of both goods and services, distinguishing these from American social enterprise. Moreover, there are limits here as well. Community organizations and advocacy groups in Quebec are not under pressure to transform into social enterprises engaged in market activities, a risk that is present in the U.S. and in many countries that are transferring social engagement to these enterprises.11 In Quebec, a model of social entrepreneurship and social enterprise is evolving to reflect the embeddedness of these initiatives in organizational or territorial collectivities. The privatization of social services through social enterprise is not a strategy that is advocated. That said, the increasing presence of social purpose enterprises leaves open possibilities for developing markets and commercialization. How this is realized also varies across the country. Community-based businesses may be privately owned; in Quebec, social enterprise remains associated with the social economy and its commitment to collective ownership. This is an evolving landscape (Tables 3 and 4). Table 3 Social enterprise in Quebec (definition adopted by the Chantier de l’économie sociale)a. Social enterprises emerge from a collective process. It is a business that is both financially viable and socially profitable Social enterprises are collectively owned Governance in social enterprises is democratic and participatory in contrast to the U.S. accent on profit distribution restrictions Social enterprises engage in the production of goods and services. They meet both new and unmet needs; they respond to critical social needs but also to new opportunities and aspirations (new sectors such as social tourism, culture, recycling, communications) Social enterprise is located within an intermediate public space—the network of social economy networks–involving public, private and civil society actors Social enterprises emerge from a collective process. It is a business that is both financially viable and socially profitable Social enterprises are collectively owned Governance in social enterprises is democratic and participatory in contrast to the U.S. accent on profit distribution restrictions Social enterprises engage in the production of goods and services. They meet both new and unmet needs; they respond to critical social needs but also to new opportunities and aspirations (new sectors such as social tourism, culture, recycling, communications) Social enterprise is located within an intermediate public space—the network of social economy networks–involving public, private and civil society actors a The many sectors of activity in the social economy in Quebec include: tourism, culture, housing, agriculture, training businesses (labour force integration); adapted business (for disabled workers), daycare, home care, recycling, new technologies, fair trade, community media, manufacturing, recycling. Open in new tab Table 3 Social enterprise in Quebec (definition adopted by the Chantier de l’économie sociale)a. Social enterprises emerge from a collective process. It is a business that is both financially viable and socially profitable Social enterprises are collectively owned Governance in social enterprises is democratic and participatory in contrast to the U.S. accent on profit distribution restrictions Social enterprises engage in the production of goods and services. They meet both new and unmet needs; they respond to critical social needs but also to new opportunities and aspirations (new sectors such as social tourism, culture, recycling, communications) Social enterprise is located within an intermediate public space—the network of social economy networks–involving public, private and civil society actors Social enterprises emerge from a collective process. It is a business that is both financially viable and socially profitable Social enterprises are collectively owned Governance in social enterprises is democratic and participatory in contrast to the U.S. accent on profit distribution restrictions Social enterprises engage in the production of goods and services. They meet both new and unmet needs; they respond to critical social needs but also to new opportunities and aspirations (new sectors such as social tourism, culture, recycling, communications) Social enterprise is located within an intermediate public space—the network of social economy networks–involving public, private and civil society actors a The many sectors of activity in the social economy in Quebec include: tourism, culture, housing, agriculture, training businesses (labour force integration); adapted business (for disabled workers), daycare, home care, recycling, new technologies, fair trade, community media, manufacturing, recycling. Open in new tab Table 4 The Social Economy in Quebec (2002) (most recent data). 7822 enterprises (3881 cooperatives; 3941 non-profit organizations) Business volume without credit unions (caisses populaires) $17.2 billion ($15.9 cooperatives; $1.3 billion non-profit organizations) Business volume with credit unions $102.5 billion ($101.2 billion, cooperatives; $1.3 billion, non-profit organizations) 7822 enterprises (3881 cooperatives; 3941 non-profit organizations) Business volume without credit unions (caisses populaires) $17.2 billion ($15.9 cooperatives; $1.3 billion non-profit organizations) Business volume with credit unions $102.5 billion ($101.2 billion, cooperatives; $1.3 billion, non-profit organizations) Open in new tab Table 4 The Social Economy in Quebec (2002) (most recent data). 7822 enterprises (3881 cooperatives; 3941 non-profit organizations) Business volume without credit unions (caisses populaires) $17.2 billion ($15.9 cooperatives; $1.3 billion non-profit organizations) Business volume with credit unions $102.5 billion ($101.2 billion, cooperatives; $1.3 billion, non-profit organizations) 7822 enterprises (3881 cooperatives; 3941 non-profit organizations) Business volume without credit unions (caisses populaires) $17.2 billion ($15.9 cooperatives; $1.3 billion non-profit organizations) Business volume with credit unions $102.5 billion ($101.2 billion, cooperatives; $1.3 billion, non-profit organizations) Open in new tab Two recent studies in Quebec interviewed social entrepreneurs as defined by the researchers, since this term is now adopted to refer to leaders in community economic development and the social economy (Fontan et al., 2007; Navarro-Flores, Lévesque, & Mendell, 2010). Not surprisingly, the individuals interviewed share a background of militancy and activism in social movements, community organizations and the labour movement. They have assumed a leadership role in community-based economic development, in many cases over several decades, in other cases more recently. They identify with the term social entrepreneurship to name what they have been doing and as a basis to develop networks among themselves. For example, social entrepreneurship clubs are springing up across the province. In most cases, however, these individuals have the support and training provided by intersecting sectoral, inter-sectoral and territorial networks such as the community economic development corporations in Quebec and more than 100 local development centers established by the Quebec government in 1997 as part of its decentralization strategy largely influenced and inspired by the CDECs and the Chantier de l’économie sociale. All this to say that social enterprises are not emerging as individual de-contextualized experiences, or less so than the discourse would suggest. 5.2 A systemic approach to social enterprise The above definition in Quebec has influenced debates on social enterprise across Canada. It is increasingly linked with community economic development, community-based business and local development strategies. In other words, social enterprise is integrated into a systemic approach to social exclusion, labour market transformation, territorial (place-based) socio-development strategies. This was clearly articulated in a Standing Committee Submission to the federal government in Canada (2006) that also included innovative methods of service delivery and increasing productivity and competitiveness to the list of contributions by social enterprises to Canadian society. While we have outlined many of the differences between the United States and Canada that set the framework for how social enterprises are evolving in these countries, paradoxically, a more integrated approach in Canada has drawn upon important lessons from the United States, in particular the community economic development movement, community-based finance (part of a new financial architecture referred to as social or solidarity finance today) and comprehensive community initiatives. The recent networking of social economy and community economic development organizations in Canada is permitting a dialogue that cuts across individual enterprises and territorial or place-based strategies. Policy discussions involve actors and government representatives in a more horizontal dialogue. A “National Summit on a People-Centred Economy” held recently drafted a declaration that embeds or re-embeds the development of social enterprises across the country within a comprehensive framework. Policy coordination between the provinces and the federal government remains a challenge. 6 Conclusion: social enterprise and policy innovation in the United States and Canada In Canada, emphasis is placed on the need for a supportive environment for social enterprises that includes the development of markets, enterprise skills, access to capital investment, promoting visibility and enabling public policy. But it also includes the need for intermediary organizations, for cross-sector support, which goes beyond the call for networking and resource mobilization in the U.S. that refers primarily to the enterprises themselves. The recognition that intermediaries are critical for social enterprises calls for new public spaces (Enterprising Non-Profits, 2008; Torjman, 2008) where representatives of community organizations and social enterprise, the private sector and all levels of government can meet. Clearly government capacity is limited by jurisdictional responsibility. But as we have seen in Canada, even this can be overcome if there is political will. Enterprising Non-profits, a Canadian network of social enterprises, has recently reinforced the need for sectoral intermediaries tied to the specific needs of social enterprises. However, in Quebec, we have learned that for these intermediaries to be effective, they must be designed as coordinated horizontal spaces that can address these needs inter-sectorally. But most important is the increasing recognition of these intermediaries as sites for innovation in public policy.12 Such deliberative and dialogic public spaces permit more efficient responses to challenges that these enterprises face, from developing business skills, to raising capital and creating markets. And some public policy initiatives can easily be adopted by all levels of government – municipal, regional and national – such as procurement practices to develop stable markets for social enterprises. Governments are also urged to recognize the positive outcomes and policy payback from supporting social enterprises through enabling macropolicies that reduce the burden of government in many areas. In parts of Canada, notably in Quebec, citizen-based service delivery paid for largely by government is considered a service contract and not a subsidy (except by its political detractors). Citizen-based initiatives, including social enterprises, are delivering services in the public interest. These are investments in the public good and not expenditures. Governments have to calculate the social return on these investments. This logic is increasingly well understood for social enterprises and by governments supporting such initiatives, but it is not applied to government itself, where a subsidy logic that interprets such engagement as the price paid for market failure, dominates. I believe that this discrepancy best captures the fragmented and ad hoc manner in which the social enterprise agenda is developing both in Canada and the United States. Although we have noted the sources of difference between these two countries that are establishing the parameters for social enterprise, the growing recognition for conceptual innovation to accompany the behavioural, organizational and institutional innovations underlying social enterprise that we have identified, has yet to produce the much needed transformation of logic in government. While both the U.S. and Canada have introduced policies to accommodate social enterprise, the U.S. with its more characteristic legislative approach and Canada in its more characteristic program approach, these remain within the existing parameters of policy that are themselves determined by deeply rooted perceptions that translate into a calculus bound by fixed categories of income and expenditures. As a result the policy menu is largely predetermined. Jed Emerson, a pioneer and leading thinker on these issues of social enterprise and social entrepreneurship recently remarked on the growing number of conversations between the business community, social entrepreneurs and various investor groups, concluding that rather than more initiatives and organizations, what is needed are ways to connect these to “leverage individual insight to achieve sustainable, global change” (Emerson et al., 2005, pp. 404). My own conclusion to these reflections on social enterprise in the U.S. and Canada is that indeed intersecting inter-sectoral networks are critical in both these countries to leverage the numerous initiatives that fall under this new rubric of social enterprise. But the missing piece here, I believe, raises a question Emerson does not ask. If, indeed, the ability for non-profit organizations to achieve their social goals rests on their ability to transform their behavioural and organizational culture and if this is perceived more widely as the most effective “disruptive social justice” strategy for poverty reduction and social inclusion (Nicholls, 2008) for countries like Canada, where social justice remains within the public realm, how can governments maintain this commitment and reconceptualize their own role? I believe that the cultural legacy of Canada will provide the pressure to keep this question on the social enterprise political agenda. The significant place occupied by the social economy in Quebec in society is leveraging both the capacity of other parts of the country to work within their regions and to collectively press for a common policy framework at the federal level. This seems to be the major difference between social enterprise in Canada and the U.S. In Canada, the foundations for an embedded social enterprise model exist that distinguish it from its neighbour to the south. The contribution of this article is to situate social enterprise in the history of community-based or civil society initiatives in the US and Canada that have transformed the lives of individuals and communities. In so doing, social enterprise falls on a continuum of socio-economic innovation and transformation, dispelling the myth that this is a new phenomenon. But more significantly, the article suggests that for social enterprise to respond to complex social and economic challenges, it must be integrated into a comprehensive approach, in contrast to confining it to a new organizational form that expands the capacity of business to meet social objectives. I believe that the different contexts in the U.S. and in Canada converge in such an approach. References Action for Neighbourhood Change ( 2010 ). http://www.anccommunity.ca. K. Alter . Social enterprise typology . 2007 ; Virtue Ventures LLC .124 pp. Google Scholar Google Preview OpenURL Placeholder Text WorldCat COPAC Aspen Institute . Enterprising Organizations. New asset-based and other innovative approaches to solving economic and social problems . 2005www.aspeninstitute.org G.M. Bloom . The Social Entrepreneurship Collaboratory (SE Lab): A University incubator for a rising generation of social entrepreneurs . N. Alex. Social Entrepreneurship. New Models of Sustainable Social Change . 2008 ; Oxford University Press . 270 – 306 . Google Scholar OpenURL Placeholder Text WorldCat J.G. Dees . The meaning of “Social Entrepreneurship” . March 2001http://www.fuqua.duke.edu/centers/case/documents/dees_SE.pdf J. Elkington , P. Hartigan. The power of unreasonable people. 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Google Scholar Google Preview OpenURL Placeholder Text WorldCat COPAC Navarro-Flores , Olga , Lévesque , B., & Mendell , M. ( 2010 ). Social Entrepreneurs in Quebec . Unpublished Working Paper. Montreal. New Dawn Enterprises ( 2010 ). www.newdawn.ca. Alex Nicholls . Social entrepreneurship. New models of sustainable social change . 2008 ; Oxford University Press : Oxford, UK Google Scholar Google Preview OpenURL Placeholder Text WorldCat COPAC PriceWaterhouseCoopers (March 2006 ). Social enterprise economics: Report . Sabetti , H. ( 2010 ). The emerging fourth sector. Executive summary. Washington . Fourth Sector Concept Working Group . S. Torjman . Shared space. The communities agenda . 2008 ; Caledon Institute of Public Policy . Google Scholar Google Preview OpenURL Placeholder Text WorldCat COPAC Vibrant Communities . www.vibrantcommunities.ca. Voluntary Sector Initiative. Building a stronger voluntary sector: How the VIS is making a difference . Voluntary Sector steering group report to the voluntary sector in Canada. Autumn 2002. Footnotes 1 It is beyond the scope of this article to address the diversity of experiences found in different states across the U.S., but it is worth noting that while the issues are discussed nationally, innovations are frequently found in individual states, especially as regards policy. To add to the nomenclature conundrum, recent policy measures have been introduced in at least two states to enable the emergence of the “B-corporation” or “for benefit corporation”. These are social enterprises that now have legal recognition in Maryland and Vermont with bills in dicussion in New York, Pennsylvania, North Carolina, Colorado and Oregon (Field, 2010). To address what I have called ‘nomenclature clutter’ work is underway by the Fourth Sector ConceptNetwork Working Group in Washington to integrate all these hybrid forms of enterprises/organizations fulfilling social objectives under a common “fourth sector” umbrella. As we write, this group is pressing for new legislation, regulatory mechanisms, public policies to facilitate the work of these hybrid entities (Sabetti, 2010). This is at the national level. Different states will clearly take the leadership on this; others will follow and still others may not embark on this at all. 2 US federal and state funding to non-profits declined by 23% in the 1980s and 1990s (Johnson, 2000). 3 Many countries have recently introduced legislation for these new hybrid business entities. Examples include the law on Social Purpose Business, Belgium (1995); the Community Interest Company in the UK (2004); Law on Social Enterprise in Italy (2005); Social Enterprise Promotion Act, South Korea (2006) to name a few. This does not include the many hybrid social cooperatives (Italy, France, Poland, Portugal, Quebec, Greece, Spain) that have performed “social enterprise” functions for many years. Work integration social enterprises (WISE) have existed in numerous countries for many years, that benefit from enabling policy measures, and so on. 4 The Fourth Sector Network was established in 1998. This is interesting as the term social enterprise was not widespread at the time but hybrid “social” enterprises did exist without a common framework to capture their objectives. After all, community development corporations (CDCs) were established in the 1960s, and so on. 5 This is an important discussion in Canada where the umbrella term is the “social economy”. In a short-lived attempt to create statistics for the social economy, the “voluntary sector” as it is known in Canada, was under the large umbrella definition. These are important discussions to be pursued as governments are increasingly persuaded of the need for appropriate data to measure and evaluate the activities of these hybrid organizations. 6 Comments made at recent “Establishing an Appropriate Policy Environment for Fourth Sector (For-Benefit) Organizations.” dialogue organized by the Fourth Sector Network and the Aspen Institute's Program on Philanthropy and Social Innovation, Washington, June 8, 2010. Low-profit Limited Liability Company (L3C) is a business entity that facilitates investment in “socially beneficial” for-profit ventures. Other legal innovations to address this need include a bill to create “flexible purpose corporations”. 7 For example, almost 30% of workers in Canada are unionized; over 40% are unionized in Quebec. This in contrast to about 13% in the U.S. 8 These figures increase significantly with the addition of religious organizations, sports and recreation clubs and non-profit educational institutions for a total activity of $21.9 billion representing $12.6 billion in wages and salaries (this is 2.4% of all wages and salaries in Canada, but they pay close to 60% of their income in salaries compared to under 25% for the economy as a whole) (Price Waterhouse). 9 The Quebec government established an inter-sectoral labour market advisory board that includes the private sector, the labour movement, social movements and government. It also created numerous sectoral committees to address labour market issues, including one for the social economy and community organizations. 10 Legislation was passed in 1997 establishing solidarity cooperatives that include stakeholders (citizens) as members. These are an adaptation of the Italian social cooperatives. 11 The work by the Fourth Sector Network and its separation of “social” organizations is especially important to reduce this risk. The question is whether this is sufficient as many of these organizations have existed for a long time as charities, advocacy NGOs, etc. 12 See especially the examples of Vibrant Communities and Action for Neighbourhood Change in Canada both of which are important illustrations of horizontal, multi-stakeholder intermediaries established to address poverty reduction and social inclusion. (www.vibrantcommunities.ca; www.anccommunity.ca). © 2010 Policy and Society Associates (APSS) This article is published and distributed under the terms of the Oxford University Press, Standard Journals Publication Model (https://academic.oup.com/journals/pages/open_access/funder_policies/chorus/standard_publication_model)
TI - Reflections on the evolving landscape of social enterprise in North America
JF - Policy & Society
DO - 10.1016/j.polsoc.2010.07.003
DA - 2010-08-01
UR - https://www.deepdyve.com/lp/oxford-university-press/reflections-on-the-evolving-landscape-of-social-enterprise-in-north-jWhBs9acmh
SP - 243
EP - 256
VL - 29
IS - 3
DP - DeepDyve
ER -