This class consolidates the learning students received throughout the course. Students will build a business case for the ventures they’ve assessed using the techniques described in the course (storyboarding, business modeling, etc.), focusing on making a compelling and informed argument for why the social entrepreneur you’ve been working with should pursue the course of action you’ve determined in your analysis.

1. APS 1015: Social Entrepreneurship
Class 8: Building the Business Case for Social
Enterprise
Thursday, May 29, 2014
1
Instructor:
Norm Tasevski (norm@socialentrepreneurship.ca)
Alex Kjorven (alex@socialentrepreneurship.ca)

2. © Norm Tasevski
Agenda
• Marketing for social enterprise
• Break
• Operational considerations
• Legal Considerations
2

3. Marketing for Social Enterprises…
3

4. © Norm Tasevski
A caveat…
4
“Social
Media”
“Social
Enterprise”

5. © Norm Tasevski
A Second Caveat…
Marketing
5
Sales≠

6. © Norm Tasevski
Where does Marketing Fit?
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7. © Norm Tasevski
Some Definitions
• Social Marketing is the systematic application of marketing, along with other concepts
and techniques, to achieve specific behavioral goals for a social good.
– The primary aim of social marketing is "social good", while in "commercial marketing" the aim is
primarily "financial". This does not mean that commercial marketers can not contribute to
achievement of social good.
Wikipedia
• Cause Marketing (or cause-related marketing) is a mutually beneficial collaboration
between a corporation and a nonprofit in which their respective assets are combined to
(1) create shareholder and social value, (2) connect with a range of constituents (be
they consumers, employees, or suppliers), and (3) communicate the shared values of
both organizations.
Jocelyn Daw (Marketing Consultant)
– Cause marketing differs from corporate giving (philanthropy) as the latter generally involves a
specific donation that is tax deductable, while cause marketing is a marketing relationship
generally not based on a donation.
Wikipedia
• Sustainable Marketing is the process of planning, implementing and controlling the
development, pricing, promotion and distribution of products in a manner that satisfies
the following three criteria: (1) customer needs are met (2) organizational goals are
attained, and (3) the process is compatible with ecosystems.
Donald Fuller (Sustainable Marketing Consultant)
– Sustainable Marketing encourages the process of innovation by turning the marketing process into
an experimental, iterative process that has close ties to the customer. Individuals and interactions
on a daily basis are important. Customer Collaboration over customer transactions. Responding to
change over blindly following a plan.
Ivan Storck (founder, SustainableWebsites.com)
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8. © Norm Tasevski
Social Marketing
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Deliver
Satisfaction
Realize
Aspiration
Practice
Compassion
ProfitAbility ReturnAbility SustainAbility
Be Better Differentiate
Make a
Difference
Individual
SocialEnterprise
Mind Heart Spirit
Mission
(why)
Vision
(what)
Values
(How)

9. © Norm Tasevski
Examples of Social Marketing…
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10. © Norm Tasevski
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Examples of Cause Marketing…
One of the first…
1983 – American
Express & the
Statue of Liberty
Restoration Project
2006 – Bono &
Product (Red)
Another…
2010 – Pepsi & the
Refresh Project
Most Recently…

11. © Norm Tasevski
Another Example of Cause Marketing…
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12. © Norm Tasevski
Sustainable
Marketing…

13. © Norm Tasevski
Sustainable Marketing…is tricky…
http://ww
w.youtube.
com/watch
?v=p6aSlb_
lies

14. © Norm Tasevski
Sustainable Marketing Toolkit
Checklist 1

15. © Norm Tasevski
Sustainable Marketing Toolkit
Checklist 2

16. © Norm Tasevski
Sustainable Marketing Toolkit
Checklist 3

17. Break
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18. HR Considerations…
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19. © Norm Tasevski
Where does HR Fit?
1919

20. © Norm Tasevski
A Caveat…
Think of your HR from the perspective of “running a
business”, not “running a charity”
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21. © Norm Tasevski
A Second Caveat…
Your HR Strategy must align with your business model
and align with organizational values
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22. What if you were a…
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Product-based Social Business…
Tethered Social Enterprise…
Employment-Based Social Business…
Accessibility-Based Platform…

23. © Norm Tasevski
A business/business model that provides
products or services with social benefit.
1. Product-Based

24. © Norm Tasevski
2. Employment-Based
A business that hires marginalized people
in good employment opportunities.

25. © Norm Tasevski
3. Tethered
An enterprise started by a charity or non-profit that
generates revenue for the organization.

26. © Norm Tasevski
A business that maintains a purposely low profit margin
to make their products accessible.
4. Accessibility-Based

27. © Norm Tasevski
Other HR Considerations…
• Who/what do you need?
• How do you find the right people?
• How do you define what they do?
• How (and from where) do you pay them?
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28. Operational Considerations…
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29. © Norm Tasevski
DAY 1
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What do you do first?

30. © Norm Tasevski
DAY 180
What does your average week look like?
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31. Legal Forms Applicable to Social
Enterprise…
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32. © Norm Tasevski
A Caveat…
There is no defined (national or provincial) legal form
for social enterprise in Canada
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33. © Norm Tasevski
A Second Caveat…
Form follows function
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34. For-Profit
Corporation
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Non-Profit
Corporation
CharityPartnership
Sole
Proprietorship
Co-Operative
Corporation

35. © Norm Tasevski
For-Profit Corporation
• Incorporated under the Business Corporations Act (Ontario) (the “OBCA”) or the
Canada Business Corporations Act (federal) (the “CBCA”)
• With share capital
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• Most flex in terms of
profit-making activities
• Can access all forms
of investment (debt,
equity, etc)
• Provides clarity of
purpose (i.e. the
financial bottom line)
• Limited personal
liability
• Pay corporate tax
• Cannot access grants
• Cultural/psychological
barriers with operating a
“for-profit social
business”

36. © Norm Tasevski
Charity
• Incorporated via Letters Patent under the Corporations Act (Ontario) or Canada
Corporations Act (federal)
• Without share capital
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• Don’t pay corporate
tax on earnings
• Can issue tax receipts
• Can access many
government/foundatio
n/corporate grants
• Least flex in terms of
profit-making activities
• Limited in the types of
investments you can
access (e.g. equity)
• Time-consuming!
• Psychological barriers with
operating a “social
business”
• An aversion to “risk taking”
• Can lose status if “too
successful”

37. © Norm Tasevski
Sole Proprietorship
• Registered via Business Names Act (Ontario) or Canada Corporations Act (federal)
• Without share capital
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• The simplest (and
quickest) legal form
• You have full control of
business decisions
• Flexibility to make
business decisions
quickly
• No separate filing for
income tax
• Unlimited liability!!
• The business is the
entrepreneur
• Hard to find investors
• Limited creative input
(i.e. you’re the only one
with ideas!)
• Less “professional” than
other forms

38. © Norm Tasevski
Non-Profit Corporation
• Incorporated via Letters Patent under Corporations Act (Ontario) or Canada
Corporations Act (Federal)
• Generally without share capital
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• Can access grants
• Can access debt
financing
• Tax exempt as long as
organized and
operated for defined
social/community
benefit
• Some NPs are more
open to (limited) risk-
taking
• Can’t issue tax receipts
• Limited in the types of
investments you can
access (e.g. equity)
• Psychological barriers
with operating a “social
business”
• Can lose status if “too
successful”

39. © Norm Tasevski
Partnership
• Registered under the Partnerships Act (Ontario)
• With or without share capital
• Usually organized using a Partnership Agreement
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• Similar benefits to sole
proprietorship
• Combines
skills/competencies of
two people
• Can sign contracts
and borrow money in
its own right
• For most partnerships,
unlimited liability! (at
least in Canada…)
• Acrimony between
partners is common
• Difficult to find investors

40. © Norm Tasevski
Co-Operative Corporation
• Incorporated under the Co-Operative Corporations Act (Ontario) or Canada
Cooperatives Act (Federal)
• Wither with or without share capital
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• Well-established
structures
• Integrates the concept
of “community benefit”
already
• Cannot issue tax receipts
• Generally not exempt
from paying tax
• Psychological barriers
with operating a “social
business”
• Difficulty making
decisions (too many
people at the table)

41. © Norm Tasevski
Talk to a Lawyer!
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42. Legal Innovations…
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43. © Norm Tasevski
Legal Innovation: CIC (UK)
• Established to trade (goods or services) for the
community good
• Requires “community interest statement” application to
the CIC Regulator. Publically-available annual reports
required to confirm (adherence to) community interest
requirement
• May issue shares in order to raise capital
• Cap on returns (dividends paid) set by the Regulator
• Subject to an “asset lock”
– Assets and profits must be permanently retained by the CICs
for community benefit, or transferred to another CIC subject
to an asset lock, or to a charity
• Taxed in the same manner as other businesses
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44. © Norm Tasevski
Legal Innovation: L3C (US)
• Variation on American Limited Liability Companies (LLCs)
• LLC investors are members rather than shareholders
• Terms of the operating agreement guarantee the public
benefit nature of the entity’s work
• Like LLCs, L3Cs are not subject to federal income tax
themselves, but the income they pay to members is
taxable according to the rates applicable to each
member
• Able to attract private capital through the sale of shares
and other securities, various forms of loans, or other
commercial financial arrangements.
• Ability to receive Program Related Investments from
foundations
• No asset lock and no dividend cap
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45. © Norm Tasevski
Legal Innovation: B Corp (US)
• To be certified as a B
corporation under the B Lab
system, the corporation
must:
– Achieve a minimum score of
80 (out of 200) on the B
Ratings System, a tool to
assess a company's social
and environmental
performance.
– Agree to make legal
changes to its articles of
incorporation to expand the
responsibilities of the
company to include
consideration of stakeholder
interests.
– Pay B Lab an annual
licensing fee.
– Recertification is required
every two years.
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46. © Norm Tasevski
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47. © Norm Tasevski
What did we learn?
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