Social innovation policy in UK

NINO ANTADZE / RICHARD BLICKSTEAD / TIM BRODHEAD /
LEE DAVIS / TIM DRAMIN / PATRICIA ELSE / AL ETMANSKI /
DON FAIRBAIRN / LOIS FINE / GORDON FLOYD / ALLYSON
HEWITT / DR. CARIN HOLROYD / JAQUELINE KOERNER /
BAYLA KOLK / SEAN MOORE / JOANNA REYNOLDS / JUDY
Key insights from the UK on
ROGERS / DONNA THOMSON / DR. FRANCES WESTLEY /
enabling Social Innovation
ANDREW WHARTON / FAYE WIGHTMAN /

SOCIAL
with Social Finance and
Social Entrepreneurship

INNOVATION
POLICY
TOUR 2009 MARCH 29TH
TO APRIL 1ST

CONTENTS
03 PURPOSE OF THE TOUR

04 KEY DEFINITIONS

05 SETTING THE CONTEXT: SOCIAL INNOVATION IN CANADA
05 Comparing Canada and the UK
05 The Opportunity
05 The Challenge
05 Early Questions from the Canadian Delegation
06 Proﬁles of Social Enterprises in Canada
06 Proﬁles of Social Finance in Canada

09 IN PURSUIT OF ‘AH-HA’ MOMENTS: KEY INSIGHTS FROM THE TOUR
08 Social Finance
08 Public Policy
09 Creating an Enabling Environment

10 SOCIAL FINANCE
10 UK Strategies
11 Lessons for Canada
12 High Level Recommendations

13 PUBLIC POLICY RELATED TO SOCIAL INNOVATION
13 UK Strategies

16 CREATING A CULTURE AND ENABLING ENVIRONMENT FOR SOCIAL INNOVATION
16 UK Strategies

20 ACTION PLAN

21 CONCLUDING REMARKS

22 APPENDIX A: Delegate Bios

23 APPENDIX B: Itinerary

25 APPENDIX C: Tour Organizers

26 APPENDIX D: Key Insights from Speakers

PAGE 2 Social Innovation Policy Tour 2009

PURPOSE OF THE TOUR
The UK is known around the world as a country that has energetically embraced the social innovation
movement. It contains wide and deep networks of social entrepreneurs, new models of social finance,
innovative social enterprises, committed central government support and successful programming which
contributes to the creation of a culture and environment where social innovation flourishes.
In January 2009, Social Innovation Generation (SiG) National and Causeway set in motion a movement
to bring best practices related to social innovation from the UK to Canada by exposing senior Canadian
policy-makers, grant-makers and practitioners to their counterparts operating on the other side of the
Atlantic.
The appetite to learn from the UK is not new. In fact, many conversations and events in Canada over the
years have included guests representing UK-based organisations, including Michele Giddens from Bridges
Ventures, Arthur Wood from Ashoka, Nick Temple from The School for Social Entrepreneurs, and Rod
Schwartz from Catalyst. However never had a group been formally mobilized to visit these friends, as
well as meet some new ones. SiG and Causeway sought to change this by coordinating the first Canadian
social innovation policy tour to London.

Four goals were developed in designing the itinerary for the policy tour;
1. Understand how public policy can be used to stimulate social capital markets
2. Understand how government can create an enabling environment for social enterprise
3. Create a cross-sectoral cohort of people interested in exploring ways to develop an enabling environment
for social innovation in Canada.
Provide first-hand exposure to some of the UK’s innovative policy, finance and programming initiatives
which contribute to its reputation as a global leader in social innovation development.

In addition to these goals, three issue areas were identified as being critical pillars to social innovation
generation and became the framework for the series of events and presentations in London.
Public Policy
Social Finance
Culture and Enabling Environment

With these ambitious goals set, twenty-two delegates from across Canada signed up for the London tour.
This visit took place over four days and included a total of twenty-five speakers, three ‘field trips’ and
exposure to nearly a dozen innovative entrepreneurs.
One of the most important takeaways from this tour was not particular nuggets of information from one
speaker or another, but rather a sense of inspiration. The people and organisations who participated
in this tour, both form the UK and Canada, represent a global community of caring people who share a
commitment to make the world a better and more equitable place. The challenge now is to find ways of
unleashing the creative potential of this community to achieve social and environmental objectives.
The following report summarizes the key insights from this tour and proposes an initial roadmap with sug-
gestions on how Canada might adopt and adapt some of the best practices uncovered in the UK, and apply
them to a national social innovation generation strategy.

Social Innovation Policy Tour 2009 PAGE 3

KEY DEFINITIONS
SOCIAL INNOVATION
Social Innovation assumes a world where ultimate good in society can be not only imagined, but also cre-
ated. It is an initiative, product or process that profoundly changes beliefs, basic routines, resource and
authority flows of any social system in the direction of greater resilience. Successful social innovations
have durability, impact and scale.

SOCIAL FINANCE
Social Finance is sustainable finance with a social or environmental goal. It is the flow of financial capital
to human need uses:
› Affordable Housing
› Social Enterprise
› Support for working families
› Health & Home Care
› Community Development
› Social Economy
› Clean Technology
› Microfinance
› Fair Trade
› Green Building
› Education
› Bottom of the Pyramid Social Finance aims to leverage existing capital

~ Adapted from www.xigi.net to attract new investment for public benefit.

SOCIAL VENTURE CAPITAL
Social Venture Capital is a form of venture capital investing that provides capital to businesses deemed
socially and environmentally responsible. MaRS Whitepaper Series ‘Social Venture Finance: Enabling
Solutions to Complex Social Problems

SOCIAL ENTREPRENEURS
An entrepreneur who engages in business
seeking both financial and social return.
PFC (Philanthropic Foundations Canada)

SOCIAL ENTERPRISE
An organization or venture within an or-
ganization that advances a social mission
through entrepreneurial, earned income
strategies. Social Enterprise Alliance


SETTING THE CONTEXT:
SOCIAL INNOVATION IN CANADA
COMPARING CANADA AND THE UK
Canada UK
2009 Population 31,612,897 61,126,832
2009 Unemployment Rate 8% (April) 7.1% (March)
Weekly Earning $820 $858 (2008)

THE OPPORTUNITY
Canada has the 2nd largest Nonprofit (behind Netherlands) sector with 8.4% of the active population em-
ployed by this sector and 2.7% of the population actively volunteering. When looking at core Nonprofits
(excluding hospitals, universities and colleges) the statistic remains impressive with 5.5% of the active
population being employed by this sector 1.
Main sources of income for this sector come from governments, 49% and earned revenue, 35%. Core
Nonprofits reflect a similar spectrum with 36% of income coming from government (24% provincial and 9%
federal) 43% from earned revenue and 17% from donations and grants, 4% from other sources2

THE CHALLENGE
Foundations across Canada are cutting back, suspending
Canada’s Charity and Nonprofits Sector
disbursements or programs.
There is anecdotal evidence that major gifts are in decline. 161,000 registered Charities & Nonprofits 1

US foundations have experienced a drop in $150 billion in
12 million volunteers 2

assets - which equates to nearly as much as they have given
out over the last 4 years.3 2 billion hours of volunteer time 3

2 million FTE workers 4

EARLY QUESTIONS FROM THE CANADIAN 11% of the economically active population 5

DELEGATION 8.5% of Canada’s GDP 6
The organisers set the tone for the tour on the first day by 1 Imagine Canada February 2009
asking each delegate to introduce themselves and explain 2 Hall, M, et al. (2005). Highlights of the National Survey
of Nonprofit and Voluntary Organizations. Ottawa:
what they hoped to achieve over the following four days. This Statistics Canada.
was followed by a very high level overview of the landscape 3 Hall, M., et al. (2006). Caring Canadians, Involved
Canadians: Highlights from the Canada Survey of Giving,
of social innovation in Canada, including recent trends in Volunteering and Participating. Ottawa: Statistics
financing, policy models, and examples of effective programs Canada.
4 Imagine Canada: February 2009
and emerging research on the field of social innovation. By 5 Ibid
the conclusion of this first day, a few guiding themes emerged 6 Ibid

through questions posed by delegates:

1 © Imagine Canada Source: Johns Hopkins Comparative Nonprofit Sector Project, 2000 National Survey of Giving, Volunteering and Participating,
National Survey of Nonprofit and Voluntary Organizations
2 © Imagine Canada Source: 2003 National Survey of Nonprofit and Voluntary Organizations. http://www.imaginecanada.ca/files/en/nsnvo/
sector_in_canada_factsheet.pdf
3 Strom, Stephanie. New York Times, ‘Foundations Giving in ’08 Defied Huge Asset Decline’, March 30th, 2009.


› What are the limitations of the charity model? What are the new models that are emerging in response
to these limitations?
› What factors (social, economic, political) that contributed to the creation of so many UK models of social
finance? What makes social finance a principal issue for the government? How do different organisations
work together?
› How can Canadians scale-up the impact of social enterprises?
› What are the key programs that have helped, and continue to contribute, to the vibrant culture of social
innovation in the UK?
› Who does and does not qualify for ‘social enterprise’ development programs (funding, government
supports etc.)?
The purpose of this report is to provoke thinking about what Canada might learn from experiments and
the success stories found in the UK. We believe that useful new ideas and models will emerge through
the process of convening working groups co-evolving a strategy with the support of SiG, Causeway, tour
delegates and other stakeholders in the community.

PROFILES OF SOCIAL ENTERPRISES IN CANADA
Phoenix Print Shop
Widely recognized for its success through its printing business providing
vocational training to street involved youth. Contracts include Toronto Hydro,
PriceWaterhouseCoopers, TD Bank, & Toronto Training Board.

BurtonHicks Enterprises
Helps families buy affordable homes and establish a financial foundation,
providing financing for the purchase and then transitions buyers to a regular
bank mortgage within five years.

Haween Enterprises Inc
Employing new Canadians to create custom manufacturing for retail apparel,
promotions and industrial customers.

ReStore Habitat for Humanity
Retail outlets where quality used and surplus building materials are sold,
proceeds support construction of Habitat Homes.

PROFILES OF SOCIAL FINANCE IN CANADA
Renaissance Quebec

Renaissance is a charitable organization aimed at the professional and social reintegration of people ex-
cluded from the labour market. It accomplishes its mission, in part, by operating a Montreal-based chain
of second hand stores called Fripe-Prix. The stores provide affordable clothing and household items to the
community while creating employment opportunities for individuals with significant employment barriers.
Renaissance is affiliated with Goodwill International.
The goods sold at Fripe-Prix are recovered through a home pick-up system. Donations from individuals
and businesses consist mainly of clothing, but the organization also receives furniture, books, toys, small
electrical appliances, electronic components, and computers. Renaissance recovers six million pounds of
used goods per year.


Social finance organization, Social Capital Partners (SCP), provided the grant and loan financing that
allowed Renaissance to launch a new flagship Fripe-Prix store in Montreal. This store is being used to test
innovative pricing, merchandising and marketing strategies to improve sales and profitability across the
chain. SCP also arranged for Renaissance to receive strategic advice from its partner, The Monitor Group.

Edmonton Social Enterprise Fund

Launched in February 2008, the Edmonton Social Enterprise Fund (SEF) combines business expertise with
flexible financing to help Edmonton nonprofit organizations and cooperatives create or expand strong,
sustainable business ventures and affordable housing projects.
Loans for housing projects are short term, may range up to $500,000, are designed to bridge to
conventional and other sources of financing, and may be used for construction, renovation or the purchase
of property.
Loans for social enterprise are available for start-up or expansion of social enterprises. Loans for start-up
may range up to $50,000 and for expansions up to $150,000. Loans are generally for terms of 5-8 years
and may be used to finance operating and equipment needs, building purchases and even the purchase of
a franchise. In certain limited circumstances, building purchase loans will be made for a term of up to
10 years.
All loans are near prime and repayable. The 5-year goal is to secure $11 million in capital and to invest this
capital in loans to social enterprise and housing projects. Repayments will be reinvested in other loans
significantly leveraging the lending power of the Fund.

Toronto Atmospheric Fund

Toronto City Council established the Toronto Atmospheric Fund (TAF) in 1991 to finance Toronto-based
initiatives that combat global climate change and improve air quality. TAF provides grants and loans
and undertakes special projects to advance its mandate. Working with all sectors of the community, and
with city departments and with city departments and agencies, TAF leverages its resources to develop
innovative local actions that lead to significant emission reduction results.
On an annual basis, TAF has approximately $1.2 million available for grants and special projects. Up to
$8 million in financing is currently available for mandate-related loans.

RECEPTION: MEETING THE UK SOCIAL ENTREPRENEURS


IN PURSUIT OF ‘AH-HA’ MOMENTS:
KEY INSIGHTS FROM THE TOUR
SOCIAL FINANCE
For a successful social finance market to exist, a renewal of multi-sector partnerships (government,
foundations, foundation endowment capital, private sector and the nonprofit sector) is needed.
› No one sector can do it all.

Government contributions and foundation grants are key stakeholders providing both capital and experience
deploying capital.
› Relatively untapped stakeholders in Canada are institutional investors (pension plans & mutual funds
with socially responsible investment strategies) and private sector partnerships.

There are tools and levers that can unleash capital for the social sector.
› Legal structure options for social enterprises (Community Interest Companies – CIC)
› Venture capital funds and seed capital with appetite and capacity to invest
› Intermediary fund managers (Venturesome)
› Risk mitigation tools (i.e. guarantees)

PUBLIC POLICY
A catalyst is required to move the public policy
agenda ahead. THE UK SOCIAL INVESTMENT TASKFORCE

› Debate around what format this catalyst should
In 2000, the Chancellor of the Exchequer announced
take (a government department or an endow-
the creation of the social investment taskforce.
ment) and which level of government should
control it (provincial or federal or both). The chair of this taskforce, Sir Ronald Cohen,
presented their report in October 2000 which
contained 5 key recommendations:
Government trends show there is increasing
› A Community Investment Tax Credit
interest in exploring the role of the third sector
in assisting with public service delivery. › A Community Development Venture Fund (Bridges
Ventures)
› This is an area where the UK has been actively
experimenting. › Bank disclosure on lending in under-invested areas

› There will be inevitable challenges in a › Greater latitude for investment in Community
process where investors, governments and the Development Initiatives
social sector will be required to work closely › Support for Community Development Finance
together. Institutions
› The result will be local economic development These recommendations have been instrumental in
and job creation while simultaneously improv- the evolution of UK social finance. Many claim that
ing the quality of life for its constituents and the role of a strong champion, Sir Ronald Cohen, was
stakeholders. “60,000 British social enterpris- critically important to the success of this taskforce.
es turnover some £27bn” Cabinet Office Liam
Byne, May 12th, 2009.


There are three types of champions needed to
make this catalyst happen – those within the public What’s in a name?

sector who can provide leadership, those outside
it who can provide practical expertise and advice There is concern that the language around
and the elected officials who reflect the interests ‘third sector’ in the UK may be at risk as the
of their constituencies when making decisions. It Conservative Party prepares to come to power
requires an open and productive dialogue among in 2010. David Cameron has publicly suggested
these three champions so that the appropriate that ‘the third sector needs to become the first
model can be co-evolved. sector’ – a move many say is indicative of his
ambition to drastically alter the existing structure
Playing politics means respecting the nature of the
of the Office of the Third Sector.
game and engaging with all parties to make social
innovation an important agenda item outside par-
tisan politics. This involves creating shared goals with a focus on increasing opportunities for the sector
and focussing on the important role of innovation.

CREATING AN ENABLING ENVIRONMENT
An engagement strategy can connect different capacity builders and innovators. In the finance sector, this
could work by the following;
› Enhance Challenge Grants to include a social entrepreneurship element;
› Participate in an International collaboration network for foundations and finance sector (i.e. the Rock-
efeller Foundation’s Global Impact Investing Network);
› Develop skill and capacity building programs for social innovation/social entrepreneurship on the com-
munity level and academic institutions (i.e. UnLtd.);
› Promote all forms of enterprise education.

There are many complex social issues which require social innovations:
› young offenders, homelessness, mental health, environment, aboriginal rights, poverty and isolation
related challenges.

Careful consideration needs to be given to the outcome metrics used in assessing programs that are de-
signed to create enabling environments for social innovation.
› SiG @ MaRS is involved in the development of these metrics in Canada.

WHAT IS HAPPENING AROUND THE WORLD....

SINGAPORE: The Economic Development board (EDB) has selected ‘international nonprofits’ as one
of its target industries.
http://www.sedb.com/edb/sg/en_uk/index/industry_sectors/nonprofit_organisations/
industry_background.html
US: The Obama Administration has set up a $50m Social Innovation Fund focused on nonprofit social
enterprises.
http://www.whitehouse.gov/blog/What-Is-the-Social-Innovation-Fund


SOCIAL FINANCE
UK STRATEGIES

Social Finance Models

The UK has a wide spectrum of financiers who invest in the community of social enterprises, with varying
return expectations.
The policy tour provided an introduction to some of the leaders in this space, including.

UnLtd. seed capital for entrepreneurs

Venturesome loans and equity for charities

Catalyst social businesses equity investment

Bridges Ventures venture capital with a focus on deprived areas in London and environ-
mental businesses

Bridges Ventures Social investment in social enterprises which focus on impact rather than
Entrepreneurs Fund profit

Triodos equity and loan finance for social enterprises

Futurebuilders loans and grants funded by government

Social Finance Intermediaries

There are also a series of intermediaries who play an important role in ensuring the investment process
runs smoothly.

ClearlySo marketplace creation using web-based tools to help entrepreneurs
find what they need to scale

Venturesome providing both emergency funding and advisory support to social en-
terprises

Social Finance researching different tools that can help social investors better access
organisations to invest in

BWB lawyers specializing in social enterprise and charity

Social Finance: Hybrid Legal Corporations

Community Interest Companies (CICs)
One differentiation between the UK and Canadian context is the existence of Community Interest Compa-
nies (CICs). In 2004 a concept emerged for a new legal structure to act as an ‘in-between’ option for those
social enterprises looking to create social value and impact. Since its launch in 2005, there has been over
2800 of these Community Interest Companies (CICs) registered in the UK.


There are many supporters of the CIC model, as well as those who see the structure as a first step requiring
improvement. The creator of the CIC concepts, Stephen Lloyd, is candid about the advantages and
disadvantages.

Community Interest Companies (CIC)

Pros Cons

Founder control of social enterprise Currently no tax break to encourage
investment (charities and high growth
companies receive this consideration)
Asset-Lock which prevents privatization

Allows for financing through debt (secured or un- Only CICs limited by shares can use debt
secured) or equity (share issuance permitted with AND equity – those limited by guarantee can
dividend cap with a maximum annual dividend, 5% only use debt financing
above base rate, total 35% net distributable profits)

Allows for payment to directors

LESSONS FOR CANADA

Legal Structures

The vibrancy of the UK market is partly driven by the different legal structures available to entrepreneurs.
These include for profit businesses, CICs, charities and nonprofits. When introducing new structures, such
as the CIC, time needs to be taken upfront to engage with different stakeholders, including end users and
investors.

FINANCE DEBATE – SPRING 2009
In response to a public call for tender, in early 2009 Futurebuilders was awarded the £100m Social
Enterprise Investment Fund (SEIF). This was a competitive tender, with many other UK organisa-
tions submitting proposals to manage this massive fund.
The decision opened up fierce debate in the funding community. Some questioned the ability of
Futurebuilders to adequately manage this fund and argued that it was eroding the public social
finance markets rather than developing it.
Charles Middleton, managing director of Triodos Bank, and Malcolm Hayday, CEO of Charity Bank,
issued a statement which said the Department of Health’s decision was ‘questionable at best’.
‘It provides yet more money to a government funder, which is relatively new to the social finance
market, unaccountable to a financial regulator or to wider stakeholders, and which fails to pay
a return to investors - factors which raise important questions about how sustainable it really is’
they said.1
1 Gemma Hampson and Chrisanthi Giotis ‘Futurebuilders, Triodos and Charity Bank row escalates’ Social Enterprise Magazine.
March 10 2009. http://www.socialenterprisemag.co.uk/sem/news/detail/index.asp?id=866


Finance Models

In addition to legal structures, the UK also has many different finance models for social enterprises and
entrepreneurs. Ranging from grants to venture capital, the spectrum of available funding is based on
varying return expectations from investors.
Compared to the UK market, Canada appears to have gaps in the equity class of investment including
venture capital for both social and traditional enterprises. Creating more activity on this side of the
spectrum requires an investment appetite by Limited Partners (LPs), which might include governments,
banks, pensions funds etc. In addition to the capital, there is also need for experienced professionals to
manage these funds, metrics to record and track social impact and attractive exit options.
Currently the Canadian market is fortunate to have strong banks that are still able to actively lend. This
is a unique global advantage and their engagement could be the bedrock of a strategy to build confidence
in the greater market and create a vibrant sector. Big wins in the early days, which banks can help drive,
will attract other investors to the social investment space.

Intermediaries

Financial intermediaries have an important role in creating a smooth investment process. Intermediaries
include those who can provide a corporate finance role to assist in the management of the contracts
and consortium building. Other organisations, including ClearlySo, are experimenting with ways to help
connect social entrepreneurs with the partners they need to develop their ideas.
Canadians should be prepared for some of the challenges the UK is facing, most notably around deal
flow. Consideration must be given to building out a deep and rich pipeline of investments by creating and
enabling culture and environment for social finance to be meaningfully deployed.

HIGH LEVEL RECOMMENDATIONS
› Pilot Social Finance Models and Intermediaries
› Create a new Legal Structure (borrowing from revisions to the CIC model)
› Regulatory reform for Foundations, Charitable Tax Law and Nonprofits to remove existing barriers to
social entrepreneurship and social innovations


PUBLIC POLICY RELATED
TO SOCIAL INNOVATION
UK STRATEGIES

Office of the Third Sector
The Office of the Third Sector (OTS) was created at the centre of government in May 2006. It is a policy
office located in central cabinet which leads work across government to support the necessary environment
for a thriving third sector (voluntary and community groups, social enterprises, charities, cooperatives and
mutuals), enabling the sector to campaign for change, deliver public services, promote social enterprise
and strengthen communities.
There are both opportunities and challenges in the way the Office of the Third Sector in the UK is structured
and organised.

Office of the Third Sector

Opportunities Challenges

High level exposure within government means Perceived to be political. Uncertainty how
that its agenda reaches the eyes and ears of very David Cameron will change this office when
senior officials elections are held in June 2010

Dedicated minister provides leadership and voice Requires carefully balance policy development
both publicly and within government and program delivery

Dedicated office provides structure Needs closer proximity to Treasury

National Endowment of Science Technology and the Arts (NESTA)

In addition to the Office of the Third Sector, The National Endowment for Science, Technology and the Arts
(NESTA) is another engagement strategy introduced by the Blair government. It is a £300m endowment
dedicated to work across all stages of the innovation process: learning about how innovation works, fund-
ing new ventures, building and delivering innovation programs, and disseminating what has been learned,
nationally and internationally.

“Our vision is bold: social enterprises offer radical new ways of operating
for public benefit. By combining strong public service with business
acumen, we can open up the possibility of entrepreneurial organisations
- highly responsive to customers and with the freedom of the private
sector - but which are driven by a commitment to public benefit rather
than purely maximising profits to shareholders.”
Tony Blair, Forward to Social Enterprise White Paper, 2002


Associations and Coalitions

Lesson from the UK - Find Champions
Jonathan Bland from the Social Enterprise Coalition shared his organisations’ tactics to ensure social
enterprise stays on the map – engage with politicians!
He explained that identifying people early on in their career to take the messaging of social
enterprise with them as they progress through the system can lead to strong ties and the creation
of internal champions.

The UK community is comprised of associations and coalitions which actively lobby the government to
support the social enterprise movement. These organisations include the Social Enterprise Coalition and
the National Council of Volunteer Organizations (NCVO), both of which have successfully advocated for
social policy related action through their outreach and awareness programs.

LESSONS FOR CANADA EXISTING SECRETARIATS IN THE PRIVY COUNCIL OFFICE
Canada is uniquely different from the UK in many
ways. The government organisation into pro- Counsel to the Clerk
vincial and federal legislations is an important
Intergovernmental Affairs
consideration. Both levels have the capacity to
engage in the development of relevant policy Social Development Policy
initiatives in meaningful and effective ways. Economic and Regional Devp’t Policy
Operations
Government Departments Orders in Council
The Office of the Third Sector (OTS) plays an im- Cabinet Papers
portant role in providing exposure to social inno-
Priorities and Planning
vation and social enterprise at the highest level.
The advantages of its current placement include Communications and Consultations
access to senior officials and some funding. OTS Macroeconomic Policy
has been successfully integrated into the Labour
Machinery of Government
party political platform, a feat which presents
both an opportunity for promotion to the pub- Legislation and House Planning
lic, as well challenges in the face of an upcoming Foreign and Defense Policy
election.
Security and Intelligence
At a federal level, the creation of a similar Office
International Assessment Staff
of the Third Sector might sit in the Privy Council
Office, Canada’s equivalent of a Cabinet Office. Senior Personnel and Special Projects
As a Secretariat, it would be placed to support Corporate Services
and advise the Prime Minister and Cabinet. Each
Afghanistan Task Force
Secretariat has 3 main roles: to support Cabinet
committees, to manage the flow of Cabinet busi- 2010 Olympics and G8 Security
ness and to facilitate policy development.
At a provincial level, bespoke models need to be developed to fit with each regions existing legislative
system. In Ontario, initiatives that connect to social innovation might easily connect to the Ministry of
Research and Innovation (MRI).


‘Right to Request’
The NHS and the Office of the Third Sector encourage and enable staff to start social enterprises
through their ‘staff right to request’ program. Employees are encouraged to set up social enterprises
to deliver health services – and are guaranteed 3-5 year government contracts as an incentive.

National Endowment

NESTA is another institutional structure Canada might consider adopting. Despite being an endowment
NESTA is charged to act as a neutral third party focused on creating a vibrant and flourishing culture of
innovation in the UK. In many ways, it is similar to MaRS in Toronto, a private-public partnership which
receives funding from three levels of government as well as private sector support.
NESTA commissions research on innovation, deploys funds to support growing ventures and is actively
involved in a wide-range of programming. Some of these program ideas, such as The Big Green Challenge,
might be adopted by the SiG@MaRS team, however full community stakeholder engagement must be
considered very carefully.
NESTA has recently launched The Lab, a unit focussed on helping support innovation related to public
service delivery. Though still in its infancy, it will be interesting to chart its successes and challenges over
the coming years and see how some of their strategies might be applied to the creation of a similar set of
activities in Canada.

Advocacy Organisations and Associations

There are frequent debates around the role of government in allocating public funds to enterprises.
Many advocacy organisations and associations, such as the NCVO and Social Enterprise Coalition, have
the capacity to diffuse these debates by reporting to the public on the role government is playing in
these investments, as well as providing a level of monitoring of how and where capital is being deployed.
Though not perfect, these organisations, with the help of the media, are important in their capacity to
engage the public by raising flags and celebrating successes.

Explore opportunities to create an Office of the Third Sector and/or NESTA
Support the creation of strong advocacy groups and associations


CREATING A CULTURE AND ENABLING
ENVIRONMENT FOR SOCIAL INNOVATION
UK STRATEGIES
The UK is home to many successful programs designed to enable a culture of social innovation. Some of
these organisations have been operating for a long time, while others are new and reflect a growing interest
in the community to invest and support in the development of social entrepreneurs and enterprises.
There are many different programs directed to different pressure points entrepreneurs face as they
develop and scale their enterprises.

YOUTH ENGAGEMENT
Pipeline Development Make your Mark with a Tenner
In the UK there is recognition that one of the
most critical things to get right is pipeline growth. In February 2009, 16,000 young people were
Without a pipeline of social enterprises, there is given a ‘tenner’ (£10 note), and challenged to
no deal-flow for investors to finance and no com- make as much profit and social impact as they
munity for the policy makers to work with. Or- could! The results were outstanding. The uses
ganisations such as UnLtd. and The School for of these ‘tenners’ ranged from the organisation
Social Entrepreneurs have developed innovative of raffles, to fashion shows to spas for teachers.
programming which ensures that people who have The winning team, from The National Enterprise
ideas are given the necessary support they need to Academy, made a return of £765 from the initial
grow their enterprises. ‘tenner’ capital of £50!

In addition to these training programs, early
pipeline development is also another hot topic as many organisations actively experiment with ways of
engaging with youth. UnLtd. runs a series of successful programs aimed at unleashing the talent of young
entrepreneurs, and Make Your Mark is a campaign to encourage young people to be enterprising through
their high schools.

Space-Based Support

Entrepreneurs require places to work – one of the services the Hub offers its membership of entrepreneurs.
In addition to a desk and access to the basic technology required to set-up and run an organisation, the
Hub also offers its members a community where they can work with one another, share contacts and
collaborate. The Hub currently has two sites in London and is replicating this successful model around the
world. There are other space-based support organisations in the UK including the CAN Mezzanine and the
Ethical Property Group.

Uniting the Networks

Social Enterprise Ambassadors
The Social Enterprise Coalition, in partnership with the Office of the Third Sector, has selected 30
social enterprises as ‘Ambassadors’ to the sector.
These Ambassadors are passionate and charismatic people who have been selected to represent the
movement. They share their powerful stories to inspire others and illustrate the benefits of social
enterprise to the wider public.


Another key success in the UK as been the ability to unite many networks into one cohesive coalition. The
Social Enterprise Coalition is a national body of social enterprise representing many different national and
regional support networks. Its role is to promote the sector to the public and influence politicians across
the political spectrum. By engaging with the various networks of enterprises and entrepreneurs, it is able
to bring them together to create a united voice loud enough to make policy makers and the public take
notice.
Knowledge Sharing

Valuable research on social innovation is taking place across the UK, driven by some leading institutions
including NESTA, The Young Foundation and The Skoll Centre for Social Entrepreneurship at Oxford Uni-
versity. The research range encompasses both practical and theoretical studies – all focussed on how this
sector might be further developed. The dissemination of this research is generally focussed at a govern-
ment audience, however the private sector also underwrites this activity - often where clear lines can
be drawn between the findings and the practicalities of their own business model or industry focus in a
traditional CSR framework.
In addition to traditional research-projects, several innovative knowledge sharing systems exist to help en-
trepreneurs learn from one another – including online platforms. Mentorship in the sector is also a regular
occurrence, however often times these are developed through informal networks.
Partnerships with the Private Sector

Many corporations in London have found meaningful ways to engage with social enterprise and entre-
preneurs. For example, Accenture has established Accenture Development Partnerships. This is a group
within Accenture that provides strategic advice and technical project management support to nonprofit
organizations, NGOs, foundations and donor organizations operating in the development sector.

LESSONS FOR CANADA
Canada should be aware of some of the program models operating in the UK which are successful in pro-
moting a culture of innovation and supporting entrepreneurs. This involves building community, both
physical and virtual, and networks which, when nurtured properly, will organically expand throughout the
country.

Teaching

Providing different kinds of curriculums for people to learn how to be entrepreneurs can help ensure
there is a strong pipeline of ideas. The School for Social Entrepreneurs uses innovative models, including
action-learning and peer witness programs – focussing on ‘learning by doing’. Other places to develop
an entrepreneurial skill-set include MBA programs where graduate students follow a curriculum involving
case studies, research and practical business plan projects.
In Canada, there is an opportunity to build on the leading research at the University of Waterloo and pair
it with work in business schools (such as Sauder, Queen’s, Rotman, Schulich or specialized graduate pro-
grams). This could compliment less purely academic programming which is more focussed on the specific
skills needed to run an organisation.

Youth Engagement

The UK is taking youth engagement very seriously – realizing that if this next generation does not embrace
the opportunities offered in the sector there will be fewer innovations in the sector that reach scale.
Canada might consider replicating some of the high impact projects which have resonated with the young
people in the UK.


A sample of Canadian Universities and Colleges with a social innovation curriculum

British Columbia
› University of British Columbia, Sauder School of Business: Centre for Sustainability and Social
Innovation
› Simon Fraser University, Faculty of Business Administration

Ontario
› Carleton University, Centre for Community Innovation
› University of Toronto, Ontario Institute for Studies in Education, Social Economy Centre, Munk Centre
› George Brown College, Centre for Business
› University of Western Toronto, Richard Ivey School of Business
› University of Waterloo, Waterloo Institute on Complexity and Innovation

Quebec
› Concordia University, Karl Polanyi Institute of Political Economy, School for Community and
Public Affairs

Advice in Engaging Young People from Young UnLtd.
› Create programs for young people by young people – young ambassadors, young panellists and
youth leadership bodies.
› Provide both freedom and structure – respond to young people’s passions and methods, while pro-
viding structure and timelines.
› Time bound projects are necessary so young people can fit their projects around school and other
commitments.
› Trust young people and the wisdom of the crowds
› Young people are not the future...they are the TODAY!

Awareness

The UK has developed strong awareness programs which provide visibility to the sector. Often these
attract attention because they involve more than just one organisation, and rather profile larger groups of
entrepreneurs and enterprises. Flotillas of activity can only garner so much attention, so concerted effort
must be made to unite the various provincial and national networks into a coalition with critical mass and
capacity to drive a united movement.
In building critical mass, case studies of social entrepreneurs and social enterprises that are easy for the
public to understand can be critical tools. With definitions still in debate, nothing provides better clarity
than a narrative which is sprinkled with actual examples. The public needs to be interested in these
examples in order to understand the important role social entrepreneurs and enterprises play in building
strong communities. Storytelling is critical.


UnLtdWorld
In March 2008 UnLtd. launched UnLtdWorld – a global online platform for social entrepreneurs.
It provides a community where these entrepreneurs can connect with the people, tools and
information they need to change the world.
As of April 2009 there were over 9,000 active members from over 90 countries around the world,
with 15% month on month membership growth.

› Unite the Networks to build a coalition
› Create a spectrum of training programs; engaging young people, developing practical training and
involving the academic community
› Create spaces; The Hub
› Find ways to meaningfully engage private sector partners

KINGS CROSS HUB: STEPHEN LLOYD & LINDSAY DRISCOLL ON THE COMMUNITY INTEREST COMPANY


ACTION PLAN
Social Finance

To develop the social finance sector in Canada, capital is required to invest in social enterprises. Canada
can build on experience from regional community loan funds, aboriginal community economic development
funds and provincial social enterprise funds in Quebec and Alberta. In addition, smaller grants are available
for enterprising nonprofits. BC and Ontario have developed business plans for pilot social venture funds.
The challenge is to take this finance capacity to scale by mobilizing existing funding to lever and attract
new sources of capital. UK investors following similar strategies include Bridges Ventures, Catalyst and
Triodos.
In addition to funds, Canada needs to explore different capital market instruments which can facilitate
investment. Causeway and other regional actors will begin a research project to better understand social
impact bonds, as well social capital funds more broadly.
Causeway, in partnership with financial stakeholders (members of the traditional funding community and
foundations) will conduct a feasibility study to understand what kind of service infrastructure is required
for social finance to grow. The scope of this research project will include an investigation into the best
practices for stakeholder, public outreach, and infrastructure operations (back office support through to
exit options for social enterprises).
A more robust social finance market in Canada could be developed with regulatory and tax reform for
foundations, charities and nonprofit organizations. A working group of tour delegates from the funding
community will lead two projects; the first to explore revisions to CRA and PRI guidelines for foundations,
and the second to look at how tax breaks for social enterprises (and investors in social enterprises) might
be applied to make these business models more attractive.
Canada will need a separate category of legal structure for social enterprises, following the example of
the UK’s CIC model and the US’s L3C model. Another working group of tour delegates, alongside other
organisational leadership, will design and advocate for the creation of a new legal structure in Canada –
applying the best practices of both the UK and US in creating a model which is unique to Canada and is
acceptable at both provincial and federal levels.

Public Policy

Canada needs a public policy catalyst to promote the importance of social innovation within government
and mobilize necessary resources to deliver services to the public. This catalyst might take the form of
a government body, a government endowment, or both and will be designed to fit within the Canadian
context and work across both provincially and federally.

Creating an Enabling Environment

There are many programs in the UK which might easily be adapted and adopted to Canada. Feasibility
studies for programs focussed on creating an enabling environment for social enterprise need to be
mobilised. These initial replication projects might include The School for Social Entrepreneurship, UnLtd.
and The Hub.
Another step in creating a strong culture of innovation involves building critical mass by uniting the networks
and creating a national coalition of organisations supporting social entrepreneurship and enterprise. This
may be a role that SiG National is naturally suited to fill.


Overall Outreach

All participants of the policy tour will play an important role in engaging stakeholders and developing
strategies to see that there are tangible and practical actions.
Initial coordination of communications will be managed by Causeway and SiG. This will involve knowing
the status of the activity in each of the three focus areas (finance, policy and programming) and sharing
regular updates with the larger network.
Causeway has agreed to create a series of tools to enable communication between these groups (web-
based or otherwise) and will report their findings to the key stakeholders by convening update meetings
and to the public using a media strategy.

CONCLUDING REMARKS
There are complicated systems in play in the process of generating, implementing and delivering social
innovation. Despite four long days of events, meetings and presentations the tour concluded with energy
and a sense of purpose.
There was consensus that though the UK was many steps ahead of Canada in terms of both the availability
of finance models, the support of government and the diversity of programming to foster a culture of
innovation, there was a sense of optimism around how Canada could take a giant leap forward by adapting
and adopting many of the practices. The building blocks exist in Canada – and through the connections and
bonds built on the tour – action to explore opportunities to see ideas turned into action is inevitable.
The UK presenters have expressed their interest in staying in touch with Canada as it builds its social
innovation movement – and have offered to help in the process where they can. Looking forward, it isn’t
hard to imagine a day when the entrepreneurs, investors and policy-makers in the UK cross the Atlantic to
learn more about the activities in Canada.

COMMENTS FROM THE UK

‘Thanks for the opportunity to come and speak’ Whitni Thomas, Triodos

‘A pleasure (to join you) and as ever happy to help in any way’ Arthur Wood, Ashoka

‘I fully enjoyed the meeting and the reception...Please share my details with the Canadians’
Buzz Schmidt, Guidestar International

‘We had a brilliant time and love all you Canadians even more now!’
Ben Ramsden, Pants to Poverty

‘(The delegates) were lively folk and gave intelligent input. Always good to have both of
those!’ Cliff Prior, UnLtd.

‘It was lovely to meet your delegates. Let me know if anyone would like to talk to the Chief
Executive of Futurebuilders England’ Rosemary Mitchell

The findings of this report are based on information available in the spring of 2009.


APPENDIX A: Delegate Bios
Nino Antadze
PhD candidate, School of Planning, University of Waterloo
Richard Blickstead
CEO Wellesley Institute
Tim Brodhead
President and CEO, J.W. McConnell Family Foundation
Lee Davis
President and CEO Vancity Capital
Tim Dramin
Executive Director, SiG National
Chair, Causeway Social Finance
Senior Fellow, Tides Canada Foundation
Patricia Else
Director, Grant Operations, Ontario Trillium Foundation
Al Etmanski
President and Co-Founder PLAN
Don Fairbairn
President, DCF Consulting
Lois Fine
Director of Finance, YWCA
Gordon Floyd
Executive Director and CEO, Children’s Mental Health Ontario
Allyson Hewitt
Director, Social Entrepreneurship, MaRS
Director, Social Innovation Generation, SiG@MaRS
Dr. Carin Holroyd
Department of Political Science, University of Waterloo
Jaqueline Koerner
Chair, Ecotrust Canada
Bayla Kolk
Associate Assistant Deputy Minister, Income Security and Social Development (HRSDC)
Sean Moore
SiG Fellow
Joanna Reynolds
Program Coordinator, Causeway SiG National
Judy Rogers
Chair Board of Directors, 2010 Legacies Now
Donna Thomson – Tour Observer
Special Advisor, PLAN Institute
Dr. Frances Westley
JW. McConnell Chair in Social Innovation, Director, SiG@Waterloo
Andrew Wharton (update required)
Special Advisor, Disability Services, BC
Faye Wightman
President and CEO Vancouver Foundation


APPENDIX B: Itinerary

DAY 1 – SUNDAY MARCH 29TH
.........................................................................................................................................

9:00 AM Welcome Tim Brodhead and Tim Draimin

11:00 AM Core Concepts Al Etmanski and Frances Westley

2:00 PM Reﬂections from The Skoll World Forum Allyson Hewitt

4:00 PM Discussion Summary Frances Westley and Tim Draimin

4:50 PM Agenda Review Tim Draimin

6:00 PM Dinner Rod Schwartz, CEO Catalyst Fund
Management and ClearlySo

DAY 2 – MONDAY MARCH 30TH
.........................................................................................................................................

9:00 AM Recap: review of key points from Day 1

9:30 AM Social Finance and Social Finance Research Arthur Wood, Ashoka
Buzz Schmidt, F.B. Heron Foundation
and Guidestar International

11:00 AM Social Enterprise Coalition Jonathan Bland, Social Enterprise
Coalition

1:00 PM Social Finance – Private Investment Models Antony Ross and Skye Elliot, Bridges
Ventures

2:00 PM TRACK ONE Nick Temple, School for Social Entre-
School of Social Entrepreneurs preneurs

2:00 PM TRACK TWO Toby Eccles and Alastair Ballantyne
Social Finance Social Finance Ltd.

4:00 PM TRACK TWO Andy Gale, Specialist Advisor, CLG
Housing and Homelessness

5:00 PM Discussion Summary Frances Westley and Tim Draimin

6:00 PM Trans-Atlantic Social Innovation Davy’s Wine Bar
RECEPTION


DAY 3 – TUESDAY MARCH 31ST
.........................................................................................................................................


9:30 AM Social Finance – VENTURESOME Paul Cheng,
Investment Manager, Venturesome

11:30 AM Regulatory Environment Stephen Lloyd and Lindsay Driscoll,
Charity regulation and new instruments Bates, Wells and Braithwaite LLP

1:00 PM Public Policy – Ofﬁce of the Third Sector Emma Jones, Senior Policy
and Futurebuilders Analyst, Public Sector Partnerships Team
Rosemary Mitchell, Futurebuilders Policy
Manager

3:30 PM Supporting Social Entrepreneurs – UnLtd. Cliff Prior, Jonathan Jenkins, Jessica
Nugent and Michael Norton, UnLtd.

7:00 PM Informal dinner The Duke of Cambridge

DAY 4 – WEDNESDAY APRIL 1ST
.........................................................................................................................................


9:30 AM Report Planning Tim Brodhead, Tim Draimin and Frances
Westley

12:30 PM The Role of Banks Whitni Thomas,
Opportunity Fund – Triodos Bank

1:30 PM The Young Foundation - Social Innovation Rushanara Ali, Associate Director,
The Young Foundation

2:30 PM The Phoenix Economy John Elkington, Founder of Volans and
SustainAbility
Maggie Brenneke, Director of Client
Services, SustainAbility

4:30 PM Concluding Remarks Tim Draimin

7:00 PM HBS SOCIAL ENTERPRISE EVENT Home House
Topic: The Power of Unreasonable People
and The Phoenix Economy

DAY 5 – THURSDAY APRIL 2ND
.........................................................................................................................................

AM Check out and departures


APPENDIX C: Tour Organizers

Social Innovation Generation (SIG) is a collaborative partnership between the Montreal-based J.W. McCon-
nell Family Foundation, the University of Waterloo, the MaRS Discovery District in Toronto and PLAN Insti-
tute in Vancouver. The project is designed to provide practical support for social innovators in cultivating
organizations and initiatives across Canada. The primary aim of SiG is to encourage effective methods of
addressing persistent social problems on a national scale. The activities of SiG serve to facilitate the ex-
ploration of structural, institutional and systemic evolution in order to promote broad social change. Learn
more about SiG at http://www.sigeneration.ca

CAUSEWAY is a national collaboration to fast-track Canada’s adoption of social finance, ensuring there is
a healthy social finance marketplace supported by mainstream financial institutions serving a national
constituency of social enterprises, social economy entities, community economic development institutions,
cooperatives and the enterprising nonprofit sector. Causeway operates in three spheres:
1) Supporting knowledge development and capacity building
2) Enabling the development of showcase social investment funds serving non-profits
3) Promoting policy changes to enable both the capital providers and capital users
CAUSEWAY is supported by SiG@MaRS
MaRS drives social and economic prosperity by leading Canada’s innovation mission.
We at MaRS envision Canadian communities that are prospering through enhanced employment prospects,
the creation and retention of local wealth and an enriched cultural and social environment. To realize this
vision, we foster and promote Canadian innovation.
CAUSEWAY national collaboration includes: SiG National, Carleton Centre for Community Innovation, PLAN
Institute, Igniter, The Canadian Cooperative Association, and University of British Columbia Sauder School
of Business, Ashoka Canada.

Focusing on the business of social innovation, Volans is part think-tank, part consultancy, part broker and
part incubator. We are a for-profit company based in London and Singapore and we work globally with en-
trepreneurs, businesses, investors and governments to develop and scale innovative solutions to financial,
social and environmental challenges.
Volans recently launched its report The Phoenix Economy: 50 Pioneers in the Business of Social Innovation.
The report explores the new markets, technologies and business models that are emerging from the ashes
of the old economic order.
For the Phoenix Economy to take wing, we need people who have the necessary Talent and organizations
with the appetite to find future-friendly Solutions. Volans provides and encourages leadership through our
Outreach initiatives. Learn more at www.volans.com


APPENDIX D: Key Insights from Speakers


Social Innovation Policy Tour 2009

SOCIAL INNOVATION POLICY TOUR 2009
Key insights from the UK on enabling Social Innovation
with Social Finance and Social Entrepreneurship

Social innovation policy in UK

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