Inner City Renovation Inc. is a business with a social mission (a social enterprise in the classification system used in this book), that creates quality jobs in the construction industry in Winnipeg for persons on the margins of the labour force, about half of Aboriginal origin (Donkervoort, 2007a). Inner City Renovation Inc., set up in 2002, is currently the only operating unit of Inner City Development Inc., which in turn is owned by two non-profit organizations: Community Ownership Solutions and Social Capital Partners. The mission of Inner City Development is to create quality jobs for low-income Manitobans. Among the companyʹs...

As discussed in chapter 1, social economy businesses are organizations that balance their economic and social mission and that earn either all or a sizable portion of their revenues from the marketplace. In Figure 1.1, we located social economy businesses in the overlap between the private sector and the social economy, and in chapter 1 we identified as fitting within this overlap co-operatives, credit unions, and commercial non-profits that exchange their services in the marketplace. However, prior to considering in greater detail the organizations within this overlap, we shall discuss the line between the social economy and the private sector,...

As noted previously, we have separated community economic development, or CED as it is commonly labelled, from social economy businesses, although as will be seen in the discussion that follows the line between these two areas of the social economy can blur. Nevertheless, we make this distinction on at least two grounds: first, community economic development is commonly associated with economic and social needs that are addressed only partially through the market. Many CED projects are in regions that have a below average standard of living or involve groups who experience extraordinary challenges. Therefore, special arrangements are created by government,...

This chapter examines social enterprises, also known as a social business enterprise, social firm, non-profit enterprise, social purpose business, and social venture. A social enterprise is a form of community economic development in which an organization exchanges services and goods in the market as a means to realizing its social objectives or mission. In this sense it is similar to a conventional business, but it also requires external support in order to be sustainable and is established primarily to meet a social purpose. The chapter also looks at two other forms of enterprises: businesses owned by Aboriginal communities and online...

Many non-profits, often with a charitable status, overlap with the public sector. Although they have a separate incorporation and their own board of directors, they rely on government agencies for a substantial portion of financing and are influenced in varying degree by government policies. Salamon (1987, 1995) labels this relationship with government as a partnership because non-profit organizations provide services to the public or specific parts of the public that are financed substantially by government and operate within a policy framework created by government. For government, it is advantageous to have non-profit agencies provide the services because they are located...

In chapter 1, we briefly discussed civil society organizations including some differing manifestations and some history. Civil society organizations are arguably the purest example of social economy organizations in that (unlike the previous four groupings in chapters 2 to 5) they neither overlap with the public sector nor with the market. In the latter part of the eighteenth century, scholars conceived of a social space distinct from the state that could serve as a means to counteract despotism (Keane, 1998). Among political theorists of the nineteenth century, Alexis de Tocqueville is most often associated with this viewpoint. In his travels...

The chapter has two main objectives: (1) to highlight the range of organizational strategies and design choices in the social economy, and (2) to present the current thinking and practice of governance in the social economy. As governance crises shook the for-profit sector, there was an associated concern about the governance practices of the social economy, in particular, the effectiveness of non-profit boards. Concern about the well-publicized fundraising practices of Mothers Against Drunk Driving Canada, the misrepresentation as a national organization of the Montreal Society for the Prevention of Cruelty to Animals (Montreal SPCA), and negative publicity about the administrative...

This chapter explores issues around financing in the social economy. The unique characteristics of social economy organizations in relation to this issue are discussed, as well as the challenges that arise as a result. The chapter also outlines some of the innovative funding mechanisms that have arisen in the past two decades to overcome these challenges and move forward financing programs for social economy organizations.

Social economy organizations have less access to financing than for-profit organizations, which can borrow funds through various forms of debt financing such as mortgages and debentures by putting up their assets for collateral. For-profits can...

When social economy organizations prepare conventional accounting statements, they use formats developed for profit-oriented businesses. Yet, as we know, the primary mission of social economy organizations is social, and as such their accounting statements miss a critical feature – that their social impact is a vital part of their performance story. In addition, social economy organizations rely in varying degrees on volunteers and members, yet the value of this unpaid service is normally excluded from accounting statements.

Indeed, conventional accounting reflects primarily the needs of owners and managers of profit-oriented businesses (Hines, 1988; Morgan, 1988; Tinker, 1985). However, there is...