A. INTRODUCTION
In November 2011, the British Columbia Advisory Council on
Social Entrepreneurship (the "Council") published its draft report, Together:
Respecting our Future, (“Draft Report”) for public
comment. The purpose of the Council is to direct consultation, advice and
feedback on proposals to support “social innovation”, “social enterprise” and
“social entrepreneurship” in B.C. Those terms, which are defined below, generally
refer to analyzing social issues from a new perspective to develop creative
solutions. For example, new relationships can be forged between all sectors and
stakeholders (e.g. non-profits, charities, governments, etc.) to collaborate
and address complex social problems. By supporting those activities, the
shortage in public service funding will be alleviated.
This Charity Law Bulletin provides a brief overview
of the Draft Report and recommendations. Interested individuals may view the Draft
Report and submit comments online at http://socialinnovationbc.ca.
There is no deadline for submissions. However, as the Council’s deadline for
submitting the final report and recommendations is March 31, 2012, those interested
in submitting comments are advised to submit them well in advance of that date.
B. BACKGROUND
In order to appreciate the Council's draft
recommendations, it is necessary to provide context concerning the challenges
that it is attempting to address. In general, the overarching problem is a
shortage of resources to address a variety of social issues, such as elderly
care and poverty. Specific challenges include: overburdened caregivers of the
elderly; the reduction of government resources that may result of the
renegotiation of federal-provincial cost sharing agreements in 2014; unexpected
social, financial, and environmental emergencies and disasters (e.g. SARS); and
ineffective solutions that have failed to address certain social issues like
homelessness. These challenges inform the draft recommendations made by the
Council.
C. RELEVANT CONCEPTS
In advocating for a different approach to addressing
social issues, the Council uses certain concepts to support its draft
recommendations. These concepts form the basis of the approach that the Council
recommends for adoption in B.C. Accordingly, it is worthwhile to review these
important concepts.
The draft report defines social innovation as:
ideas, products, services, processes,
statutes, resources, protocols, and technologies that solve a social problem
while generating new social relationships, partnerships, collaborations,
connections and financing. In other words, social innovation profoundly impacts
an existing challenge while increasing our resources to tackle the inevitable
next set of challenges.
In the companion paper, Social Innovation Primer,
social innovation is also defined as “the need for new approaches to old
problems.”
Social enterprise refers to non-profit organizations
operating a business or operating like a business. Although neither the draft report nor the companion paper define social
entrepreneurship, the term can be defined as recognizing social problems and
using creative approaches to design, establish and manage ventures to create
social change and achieve a positive economic return.
D. RECOMMENDATIONS
One of the Council’s recommendations is that the “change
lab” methodology for problem-solving be adopted in B.C. A change lab refers to processes and facilities established globally which
provide a forum for creative, all-sector, multi disciplinary, problem solving,
social innovation and decision-making. This methodology for problem
solving is focused on whole system transformation by bringing together
stakeholders from government, business and civil society to find solutions to
social issues.
Another recommendation is the use of multiple
infrastructure investments. In the short term, financial incentives, such as a
Social Innovation Investment Tax Credit and B.C. Social Innovation Bond, should
be created. The Social Innovation Investment Tax Credit would bring in new
investors and capital as well as help build new social enterprises. According
to the Council, as there is already an existing tax credit regime in place,
social enterprises could be included as a new eligible category. Without any
accompanying explanation, the Council states that the B.C. Social Innovation
Bond would be a risk-free way for governments to finance innovations that seek
to address the root causes of problems. This type of financial instrument is
used in other jurisdictions, such as the United Kingdom.
A notable medium term multiple infrastructure investment
recommended by the Council is the establishment of “Community Contribution
Companies” (“CCCs”). Without going into detail, the Council explains that CCCs
would be a new vehicle for raising capital. They would be “hybrid structures”
based on their combined social and financial objectives. This recommendation seems have picked up where the B.C. Ministry of Finance
consultations left off last year regarding the amendment of the Business
Corporations Act to allow for the incorporation of Community Interest
Companies (“CICs”), which appear to be similar to CCCs.
E. CONCLUSION
The Draft Report presents some innovative ideas for
addressing complex social problems. However, while the Council acknowledged
that it purposely omitted the details concerning its recommendations, it would
nonetheless be beneficial to have those details included in the final report in
order to have a better idea of how the recommendations would work in practice. Individuals
and organizations interested in the Draft Report are advised to review and
submit comments on it to the Council online at http://socialinnovationbc.ca.