“Companies must take the lead in bringing business and society back together. The solution lies in the principle of shared value, which involves creating economic value in a way that also creates value for society by addressing its needs and challenges. We believe that it can give rise to the next major transformation of business thinking.” (In “The Big Idea” by Michael Porter and Mark R. Kramer, Harvard Business Review, January-February, 2011)
Creating sustainable value is our 21st century challenge. That is the message from well-known Harvard business strategist, Michael Porter. The Canadian Task Force on Social Finance focused on accelerating shared value creation when we launched our report, “Mobilizing Private Capital for Public Good” at the end of 2010. MaRS welcomed over 400 people at the release of the report, where they also heard endorsements of the Task Force recommendations from global impact investing leaders, and support for the pioneering work of the community in Canada.
Across the country the investment sector, government departments and the social enterprise sector have stepped forward to express their interest in advancing the Task Force recommendations. Energetic clusters of activity are forming around many of the actions needed to see them realized. What follows are some recent highlights.
Growing federal interest
In December, the Task Force met with Federal Finance Minister, Jim Flaherty, and reviewed the recommendations in detail. Minister Flaherty offered to distribute the report to all his provincial and territorial counterparts and their deputies, which happened later that month.
The federal government is exploring how ideas in the Task Force are relevant to different government departments. In March 2011, Human Resources and Skills Development, Canada (HRSDC) hosted a federal cross-department event with senior staff to learn about the matrix of social innovation, social finance and social partnerships. Also in March, Public Safety Canada hosted a meeting to explore the capacity for social finance to support the department’s mandate.
New provincial initiatives dovetail with Task Force priorities
On March 3rd the Ontario Partnership Project, co-chaired by Minister of Citizenship and Immigration Dr. Eric Hoskins and Chair, Ontario Trillium Foundation Helen Burstyn, released its groundbreaking report on how to modernize the relationship between the government and Ontario’s not-for-profit sector. The Report showcases the Task Force’s work and affirms that “(s)ocial finance is a key factor in the ability of not-for-profits to innovate. Another important component of innovation is social enterprise.”
The report lists the agenda it heard from the sector that echoes the Task Force: Remove regulatory barriers to social enterprise, engage the financial sector, promote education and capacity building, reduce limitations placed on charities, make a range of social finance tools available. Hoskins and Burstyn recommend investing in social innovation by working “with the Government of Canada and Canadian financial institutions to address regulatory and legal barriers to social innovation, and make a range of social financing tools available to Ontario’s not-for-profit sector.”
In January, an informative social finance tour of the BC lower mainland took place and the Task Force report was presented to a welcoming crowd of 200+ at Simon Fraser University’s Segal Graduate School of Business. On this three-day tour, nonprofit, government and business delegates from across Canada shared their perspectives on the opportunities in this emerging field and learned from the pioneering work of social finance practitioners in BC.
Social finance developments in British Columbia are sparking action across the country. MLA Gordon Hogg, BC Parliamentary Secretary for Social Entrepreneurship reporting to the Minister of Finance, has formed an external Advisory Council for Social Entrepreneurship. With the Task Force principles clearly in mind, the Council will make recommendations on how to maximize social innovation in British Columbia, with an emphasis on social finance and social enterprise. The inaugural meeting of the Council featured participation by Premier Gordon Campbell, Finance Minister Colin Hansen and Gordon Hogg.
A BC Labour Market Partnership Project is underway to examine relevant tools for social enterprise business advisory supports, as described in Recommendation #7 on skills development.
Nova Scotia has just included social enterprise for the first time in its provincial economic strategy, jobsHere. The government has an inter-departmental working group addressing these issues and building on ideas that came from a Social Enterprise Working Group (SEWG — a learning partnership between government and community). The government has released the SEWG’s report, Social Enterprise in Nova Scotia: Concepts and Recommendations, which lays out a policy agenda dovetailing the Task Force’s recommendations. Visit socialfinance.ca to stay up to speed on all provincial initiatives.
Community partners endorse Task Force
Recently, the Community Foundations of Canada endorsed the Task Force initiative and encouraged its 178 member organizations to act on Recommendation #1, “CFC commends the Canadian Task Force on Social Finance for its leadership and the call to action made in its report… CFC encourages its members to consider implementing Recommendation 1: that Canadian public and private foundations should invest 10% of their capital in mission-related investments by 2020 and report annually to the public on their activity.” (This and other endorsements can be found on socialfinance.ca. We would welcome addition of your statement of support.)
Philanthropic Foundations Canada, Community Foundations of Canada, and the Canadian Environmental Grant Makers Network will be convening a Philanthropic Social Finance workshop on May 11th, immediately prior to the CFC national conference in Vancouver, focusing on Recommendation #1. That workshop will be repeated at the October conference of Philanthropic Foundations Canada.
Private sector exploring roles in social finance
Like MaRS and Michael Porter, the Task Force believes that business has a critical role to play in building shared value and must invest in a sustainable future. Task Force members have been approached by representatives from banks, mutual fund companies and credit unions interested in implementing the recommendations within their organization. This interest is also fueled by a growing recognition that investors are looking for a new suite of products that will make it possible for their investment dollars to generate both financial and social returns.
As Task Force Chair, it has been extremely encouraging to see the growing momentum behind the recommendations; momentum that we hope will lead to full implementation across sectors over the coming years. In the report’s introduction I wrote that our goal was to raise awareness of social finance and stimulate a national discussion about a new partnership model between profit and public good. Given the activity already underway, I am confident that we will exceed our expectations.
As we move through 2011, the Task Force will keep you informed of developments catalyzed by its recommendations and the working groups forming to pursue a robust marketplace for social finance in Canada. We will report at the end of 2011 on the progress within year one of that journey.