Community Economic Development: What Is It, and Why Should it Matter to Corporate Canada? Edward T....
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Transcript of Community Economic Development: What Is It, and Why Should it Matter to Corporate Canada? Edward T....
Community Economic Development:What Is It, and Why Should it Matter
to Corporate Canada?
Edward T. Jackson
Carleton University
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Community Economic Development: What is It?
A field of practice in which community-based non-profits:
blend business and social techniques mobilize both local and external resources to reduce poverty and unemployment and revitalize geographic communities (rural and remote
areas, urban neighbourhoods) or communities of interest
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What Does CED Look Like?
1. Community development corporations2. Community Futures Corporations3. Co-operatives (consumer, producer, worker,
multi-stakeholder)4. Businesses owned by social-service non-profits
or charities5. Aboriginal development corporations6. Community land trusts7. Community loan funds8. Micro-finance programs9. Social venture philanthropy
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Why Should CED Matter to Corporate Canada?
CED contributes to solving social problems Stronger communities have healthier economies Local heroes need allies CED is good for the corporate bottom line
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The Business Case for Corporate Support of CED
CED is a tool for corporate social responsibility that generates benefits to corporate partners, including:
Reputational gains among investors and the public Open policy and regulatory relations with
government Brand differentiation Customer loyalty Employee recruitment and retention Procurement savings A “social license to operate”
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Corporate Social Responsibility through Social Community Economic Development
Strategies:
Grantmaking to CED projects
Venture philanthropy
Joint ventures
Procurement from community enterprises
Employee volunteer engagement
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“Hot-Button” Policy Issues and CED Initiatives
Policy I ssue Knowledge Area CED I nitiatives
URBAN
Homelessness in cities Homelessness and poverty Non-profit and co-operativehousing projects
Social enterprises employingthe homeless
Cultural exclusion/separation Women’s entrepreneurship Microfinance programs Individual development
accounts
Community loan funds andmicrofinance programs forimmigrant women
Savings incentives forimmigrant women
Youth gang/gun violence Youth entrepreneurship Youth-run enterprises inmulti-media, culturalproducts, services, small-scale manufacturing
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“Hot-Button” Policy Issues and CED Initiatives
Policy I ssue Knowledge Area CED I nitiatives
RURAL
Softwood lumber dispute Forestry sector Value-added woodmanufacturing
Multi-stakeholder, sustainableforest management
Mad Cow disease Agriculture and ruraleconomic diversification
New meat and cropproduction
Local food-processing facilities Tourism expansion E-marketing and e-commerce
Aboriginal poverty Aboriginal businessdevelopment
Procurement of goods andservices from Aboriginalbusinesses (eg. equipment,supplies, transport, tourismetc.), including technicaladvice, quality standards andworking capital
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•Governments•Regional Agencies•Corporations
Capital Markets for Community Economic Development
Grants
Loans / Equity
•Governments•Development Agencies•Foundations•Corporations
$1M $2M $3M $4M $5M $6M $7M0 $50K $100K $250K $500K$10K
•Community Futures
•Community Loan Funds
•Credit Unions•Social Venture Capital
•Banks
•Corporations•Credit Unions•Business Development Bank
•Regional Agencies•Labour Funds •Banks
•Corporations•Credit Unions•Targeted Pension Investments
•Regional Agencies•Labour Funds
$1M $2M $3M $4M $5M $6M $7M0 $50K $100K $250K $500K$10K
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Intermediaries Optimize CED Success
Forms: Community development corporation, non-profit umbrella, foundation, program, network, consortium
Functions: Technical assistance (consulting, training, business planning, market studies); financing (grants, loans, equity); management support; political support (promotion, lobbying, regulatory change)
Funding: Foundation, corporate and government grants; loans and other program-related investments; contracts; enterprise surplus; asset appreciation; private philanthropy; donations and gifts; volunteer time
Factors of Intermediary Success: Leadership (skills, vision continuity, succession); structure (flexible, evolving); strategy (growth opportunities, backward and forward linkages, first-mover advantage); management; human resources; innovation; replication and scaling up; financing (diversification of revenues); accountability
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Case Study – New Dawn Enterprises
Cape Breton Association for
Co-op Development
New Dawn Enterprises
(Non-Profit CDC)
Cape Care Services Ltd.
•Home Care Services
Cape Breton Association for Housing
Development•Real estate company for affordable housing
Highland Resources Ltd.
Private career college
New Dawn Guest Home Ltd.
• 30-bed residential care facility
David Realties • Commercial landlord
Credo•Business processes outsourcer
Sydney Senior Care Home Living Ltd
•37-bed program
Pine Tree Park Estates• revitalized military base
Corporate Partnerships
• Home Depot
Government Grants/Contracts
New Dawn Holdings
• Investment Firm
BCA Holdings• Venture Fund (Equity, Loans)
1973
Source: newdawn.ca
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Case Study – Social Capital Partners
Social Capital Partners
Social Venture Portfolio
Renaissance, Montreal
Inner City Renovations, Winnipeg
Social Enterprise
Investment-Decision Steps1. Concept Review2. Business Plan Review3. Due Diligence4. Alignment and Deal structure5. Investment and Ongoing Working
Relationship6. Monitoring and Reinvestment
Social Enterprise
Research on SROI/Evaluation
Bill Young/ Bealight Foundation
Sector and Policy Engagement
•$100K equity•$100K loan•Used to test new ideas in marketing, merchandizing and pricing
•$50 K grant and board involvement
Grants, Loans, Equity
Sean VanDoorselaer, “Venture Capital for Social Enterprise,” Making Waves, 15(3), 2004, 10-13
Challenges• “Dearth of great social entrepreneurs”• Lack of sophisticated business models• Limited sources of social capital
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Evaluation of Community Economic Development
Evaluation Defined: Assessment of social, environmental and commercial results, lessons learned and accountability systems by key stakeholders.
Promising Methods: Return on Taxpayer Investment (ROTI) – Input-output modeling
of direct, indirect and induced effects of government-supported interventions
Social Return on Investment (SROI) – Method for assessing the social costs associated with the individual employees and the community enterprise itself (Social Capital Partners, Roberts Enterprise Development Fund)
Enhanced Value-Added Statement (EVAS) – Quantifies the value of social impacts and volunteer contributions of a non-profit or cooperative (Quarter et al, OISE/UT)
Return on CSR investment in CED to the corporate bottom line (surveys, focus groups on stakeholder perceptions and decisions)
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Questions
I f your company is not engaged in CED, what else
do you need to know in order to decide on taking
action?
I f your company is engaged in CED already, what
strategies can you use to increase the impact of
your efforts?
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Useful Websites
Blended Value Project (tools for social return on investment) blendedvalue.org
Canadian Business for Social Responsibility cbsr.ca
Canadian Community Economic Development Network ccednet-redec.ca
Chantier de l’économie sociale chantier.gc.ca
Community Economic Development Technical Assistance Program carleton.ca/cedtap
Conference Board of Canada Conferenceboard.ca
Imagine Canada imaginecanada.ca
Harvard Business School – Initiative on Social Enterprise hbs.edu/social enterprise
Making Waves (Canadian CED newsletter) cedworks.com
Social Capital Partners (social venture capital) Socialcapitalpartners.ca
Stanford Social Innovation Review ssireview.com
Skoll Foundation (grantmaking to social entrepreneurs) skollfoundation.org
VanCity Credit Union vancity.com
Vibrant Communities Project (15 Canadian cities, including Victoria) vibrantcommunities.ca