Policy priority: Support for social enterprise activities
Policy priority: Support for social enterprise activities
Many charities and nonprofits engage in business activities in support of their missions, also known as social enterprise activity. However, they face barriers in pursuing these activities that for-profits do not.
Why it matters
Charities and nonprofits have a long history of conducting social enterprise activity to diversify revenue streams, generate local and inclusive economic value, and pursue social and environmental missions in creative ways. These activities take many forms: youth charities that run day camps; nonprofit cafés employing people with barriers to employment; and nonprofit landlords renting out their space to other organizations. Unfortunately, the federal policy environment constrains the ability of these organizations to be as successful as they could be.
Did you know?
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Social enterprise activity is very common: Approximately 58% to 77% of charities already engage in activities that generate earned income.
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Charities and nonprofits are often arbitrarily excluded from federal programs designed to support private sector businesses, such as the Regional and Rural Recovery Fund and the Digital Adoption Program. While its governing legislation does not exclude nonprofit organizations from its loan programs, the Business Development Bank of Canada does not adapt its services to be accessible to nonprofit or charitable social enterprises.
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The federal government is beginning to explore the inclusion of nonprofit social enterprises in its procurement policies (these dictate how the government can purchase goods and services or contract with enterprises on infrastructure projects). This is encouraging for both the growth of the nonprofit social enterprise market, and for ensuring government dollars also generate social and environmental value.
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Rules constrain charities and nonprofits from generating surpluses, which could be used for investments in digital technologies, equipment, and collateral for loans.
Our Ask
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We recommend that the federal government implement the remaining recommendations of the Social Innovation and Social Finance Strategy Co-Creation Steering Group’s report ‘Inclusive Innovation: New Ideas and New Partnerships for Stronger Communities.’
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We support the People Centred Economy group’s recommendations for the second term of the Investment Readiness Program.
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We look forward to working with the government on its platform commitment to extend eligibility for the Canada Small Business Financing Program to nonprofits.
Learn More
Social Innovation and Social Finance Strategy Co-Creation Steering Group, 2018
Special Senate Committee on the Charitable Sector, 2019
Imagine Canada, 2020
Imagine Canada, 2013
McConnell Foundation, 2020
People-Centered Economy Group
Imagine Canada, 2019
Imagine Canada, 2020
Imagine Canada, 2020
Imagine Canada, 2019
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