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Monday, March 19, 2012

The "British" Push Social Enterprise Upstream

UK passes the Social Value Bill & British Columbia introduces Community Contribution Company 


 The last several weeks have been successful for the social enterprise movement - both overseas and here in Canada.  Within the past few years there has been a continuous stream of milestones reached, and since the beginning of 2012 its current has flowed faster than ever. 

I've always thought the social enterprise movement needed to be mobilized by the  private sector - I believe government has good intensions but moves too slowly for enough momentum to build.  While this remains true in many regions and sectors, recent progress proved that I was overgeneralizing in my convictions. 

 The UK has been a leader in social business since this idea propelled into action less than a decade ago.  In 2004, the UK authorized legislation for the Community Interest Company (CIC), allowing enterprises to legally share their profits with the community, as opposed to acting solely in the best interest of shareholders.  The CIC is a essentially a new type of legal entity that takes on the principles of a social enterprise.  This was a big step forward. (Click here to read about the UK's progress with social enterprise sector)

Then in 2010, we saw the UK government's implementation of the Social Impact Bond - the first in the world. Another big step. 

MP Chris White
Now in 2012 we see their government looking inward, challenging their own practices. The New Social Value Bill was passed on February 28th, 2012.  Sponsored by Conservative MP Chris White, the bill requires the government to prioritize social enterprises and other community organizations when hiring outside service contracts.  In my opinion, this is a HUGE deal.

For a sector to really grow, it requires more than new companies.  A new sector needs infrastructure - other types of organizations and government support to help build demand and efficiency.  The Social Value Bill is helping to foster that growth by encouraging the use of social enterprises. Currently, the UK government spends hundreds of billions of dollars on commissioning services, and 11% of these contracts are with social enterprises.  When the new bill is implemented,  that proportion will inevitably grow, ultimately expanding the sector. 

I love the way Peter Holbrook, CEO of Social Enterprise UK, describes the impact of this new bill: 
"Our taxes shouldn’t be a vehicle for the upward redistribution of wealth. As a result of this law, public bodies will be the first to showcase what responsible capitalism really looks like." 
I believe leading by example is the most effective form of leadership. It has proven to work in our sector as we've seen other countries begin to replicate the UK's progress.  In 2008, the US instituted the Low-profit Limited Liability Company (L3C), a similar entity to the CIC. I am also pleased to share what is happening here in Canada. Just over a week ago British Columbia followed suit by introducing its first legal social enterprise the new "Community Contribution Company". 

These are exciting times for our sector.  I look forward to the day when my company Better The World can incorporate as a Community Contribution Company. And so the question remains: When will Ontario take the leap? 

The information about the Social Value Bill for this post was taken from this article

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