Foreign Policy Blogs

Giving Social Enterprise a Chance

As a side project to my day job, I’ve been exploring the world of Canadian public policy.  Given the opportunity to participate in a very smart program for non-profits called the Max Bell Public Policy Institute – I’ve been opening my eyes ( & brain) to the world of social enterprise and public policy.

In Canada, charitable organizations have the available structures (legal frameworks) to create related business.  Related business activities help charities to diversify their revenue.   There are two kinds of related business a charity can conduct 1) business that are linked to a charity’s purpose and subordinate to that purpose and 2) business that are run substantially by volunteers. 

However, creating a related busines not a simple process. 

Fraught with regulation, creating related business – or trying to run a social enterprise – doesn’t happen easily.  Some organizations who run “social enterprises” are really running employment programs or are earning extra income.  They are not necessarily running a business that advance social good.

Looking at steps that have been taken in the UK and US to set up Community Interest Companies (CIC) and Low-Profit Limited Liability Company (L3C) structures gives Canada a way to envision what is possible.  Social enterprise doesn’t have to mean a “charity doing business” rather it can just be “doing business”.

The CIC and L3C structure options for incorporation are underway.  Canada would be served well to pay attention and to reflect on lessons-learned.  While creating a separate legal framework for social enterprise may not solve all the world’s problems, it gives us another tool in our box.

I’m excited by the public policy possibility – even if it involves words like legal, tax, and regulation.