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Social entrepreneurs and the startup problem


From 2008 to 2010, I was a Social Entrepreneur in Residence at MaRS and part of Social Innovation Generation (SiG). My role was primarily to provide support and advice to people starting up and operating social ventures. Although the team represented a brain trust led by Allyson Hewitt, we struggled daily with the diametric of corporate form: for-profit on one end and not-for-profit on the other.

Fact: Canadian social entrepreneurs have to adopt and adapt to the established legislative forms. So, how to launch a sustainable, scalable triple bottom line venture the commits to people, profit, planet?

We were in the early days of unpacking social innovation. Sandbagging social entrepreneurs with legislative reform was not an option. The pragmatic approach was to recommend the form that most closely fit the initiative and support improvisation without falling afoul of the law. The important thing was to keep entrepreneurs innovating and to manage policy change on a separate track.

In 2010, Allyson co-authored the whitepaper, "Legislative Innovations" with William Chung, Mark Convery, and Kerri Golden, which included bold recommendations for the Government of Ontario.

In support of the entrepreneurial track, Susan Manwaring and Andrew Valentine (Miller Thomson) provided helpful guidelines for navigating the options for structuring social enterprises in Canada in their 2011 paper, "Social enterprise in Canada: Structural options".

Although it was clear that most forms of social enterprise could be accommodated through one or more of the established forms, it was also true that existing legislation pre-dated concepts of social innovation. The doctrine and models were themselves sorely in need of innovation.

In 2012, British Columbia amended the Business Corporations Act to legislate the first hybrid social enterprise structure in Canada, the Community Contribution Company (C3). In 2016 Nova Scotia legislated the Community Interest Companies Act (“CICA”), thereby introducing the Community Interest Company (CIC).

2017: I'm gobstruck. Toronto is the home of powerful forces for social innovation, such as MaRS, the Centre for Social Innovation, and the Ontario Non-Profit Network (to name just a few). I am in awe of the people involved in advocating for legislative change.

The stakeholder recommendations prepared by Deloitte are polite – and reflective of the restraint expected from Canada's largest city and province. Not surprisingly, the Government of Ontario has not made a commitment to legislative change. Making an Impact: Ontario’s Social Enterprise Progress Report offers placation, not action:

"We worked with the Ministry of Government and Consumer Services to assemble a Hybrid Legislation Expert Panel to explore the possibility of amending Ontario’s business incorporation laws. These potential legislative changes would allow businesses to more explicitly pursue a dual purpose — making a profit and also fulfilling a social or environmental goal."

Call me Toronto-centric. If we haven't cracked Ontario, we haven't established a beachhead on Canada's most wicked startup problem.