Buying from social enterprises simple, effective and positive

What if I told you there was a way for the city of Vancouver to address its pressing social issues without raising taxes? And what if I added that it would have a nominal effect on the city budget?It’s quite simple.The city purchases just about everything imaginable, from paper clips and dish towels to trucks and catering. Most of the companies producing these products operate with a traditional, profit-oriented model. While there is nothing wrong with making money, there are several businesses in Vancouver that offer goods and services at market rates and at the same time produce a host of positive social impacts. By buying more products from these socially motivated suppliers, the city could achieve a higher overall value without increasing costs.

For example, the Potluck Cafe on East Hastings has a regular, competitively priced restaurant and catering business. At the same time, it also trains and employs at-risk, hard-to-employ residents of the Downtown Eastside. On top of that, the cafe provides 3,000 free meals and 600 subsidized meals a month to low-income members of the community. Potluck invests 100 percent of the proceeds earned through its catering business into its employment and meal service programs.

Now, compare the overall value of awarding a major city catering contract to the Potluck Cafe versus a regular caterer. The owners and employees of any business would benefit from a sizable contract with a stable client. If the city awarded its contract to the regular caterer, the economic benefits would end there. By directing that purchase to a business like Potluck, the city could put money into an economic development and social program without increasing its budget.

This practice is called social procurement, and it’s catching on in other parts of the world. The United States has a federal program that allows businesses from disadvantaged communities to submit a higher bid on a contract and receive preference over traditional competitors. Britain has several national procurement strategies to aggressively target social enterprise.

Ottawa has shown no such leadership in social purchasing. It is up to the municipalities, arguably the most innovative and resourceful governments in this country, to take action to generate societal benefits through purchasing. Municipal governments are also closer to the community and can offer smaller contracts suitable for social enterprise.

Vancouver is regarded as a leader in responsible procurement because of its commitment to purchasing products that are environmentally sound, fairly traded and ethically produced. Yet it lacks a policy that rewards suppliers that generate positive societal impacts.

Social enterprises like the Potluck Cafe have mandates that are driven by a social or environmental purpose rather than a profit-making goal. Other local examples are Starworks Packaging and Assembly, Landscaping with Heart, and the Cleaning Solution, all of which employ workers with mental or developmental disabilities.

Social enterprises face barriers to securing contracts, as they are often small and lack the capacity to bid on a large city contract, and Vancouver does not incorporate social impact criteria into its bid evaluation process.

My research on social procurement in other jurisdictions points to solutions. Contracts can be broken down into smaller, more accessible components; social enterprises can team up with conventional enterprises in a bid; explicit points can be awarded to bidders for social benefits; targeted training can enable social enterprise managers to traverse the contracting minefield, and social enterprises can propose to the local government areas of work that they believe they could fill.

Vancouver needs to step up to the plate and preserve its reputation as a leader in responsible procurement. It has the opportunity to be the first municipality in Canada to encourage its suppliers to generate societal benefits.

Once businesses begin to realize that the city will reward them for socially conscious actions, maybe they will start to incorporate a social hiring policy or community benefit plan into their operations. In the end, won’t we all benefit?

Shelagh Hayes is a graduate of the master’s degree program in public policy at Simon Fraser University.