Thank you Stephen for this opportunity to chat about the federal government’s efforts to develop a national social innovation and social finance strategy. As a member of the strategy’s Co-creation Steering Group
, you are at the heart of the public consultations and discussions for this initiative. But first, tell us about the government’s impetus for this work?
Efforts to develop the strategy are a direct result of the Prime Minister’s Mandate letters for the Minister of Families, Children and Social Services, the Minister of Employment, Workforce Development and Labour and Treasury Board. The government recognizes that in order to navigate the ‘wicked’ problems facing us we require cross-sectoral approaches ─ and we need to bring social finance and social innovation strategies to bear on them.
What are the themes you have been hearing from the public consultations, which are taking place this fall?
A major theme has been the need to reshape the relationship between civil society and the public sector and a desire to build on this current engagement process and sustain it over time --- perhaps to create a public clearinghouse where issues could be addressed in a timely way.
There has also been a strong emphasis on the need for investing capital to finance systems change, including major investments in social infrastructure. Some of this capital might be in the form of ‘pay for performance’ models, injecting funding up front that will enable cost savings as well as improved social and environmental outcomes. As the environmental sector knows, conservation costs less than remediation. To get more capital flowing into the social and environmental sectors, we should look at models from other countries like Big Society Capital
in the UK. It was created out of funds from dormant bank accounts and is investing in sustainable, equitable solutions that achieve positive investment returns. Given the size of the capital needs, philanthropy on its own isn’t enough. However, we’re part of the solution and can play a critical role in investing strategically to spur others to invest in a sustainable and inclusive economy.
We have also heard a lot concerning the opportunity to deploy government procurement dollars to support environmental and social outcomes, instead of just using lowest cost as the basis for decisions.
Something else we’re hearing is about the need to apply social innovation and social finance strategies to regional priorities.
Capacity building is another need that has been mentioned a lot. Working in new ways requires investment.
What are your own aspirations for this work? What outcomes are you looking for?
We need a broad re-engagement between government and civil society and to do that we need to reshape the policy and regulatory structure for charities and non-profits. Implementing the recommendations
issued in the Report of the Consultation Panel on the Political Activities of Charities
would be a good start. We also need to establish a joint sectoral table where we can find ways to put more capital to work for a low carbon future, for reconciliation and for other societal priorities. Encouraging capacity building within the public sector to allow it to work differently with civil society, and vice-versa, is a critical opportunity. Public sector and civil society staff need to be able to see the systems we are working in and co-create solutions that advance our shared goals.
Right now, reporting requirements on government grants put too much emphasis on measuring activities in a rigid way, rather than on outcomes. Introducing an outcomes focus goes along with giving charities and co-funders the flexibility to adapt strategy. With current federal restrictions on how funders can operate, it is difficult for philanthropy to work with governments on large-scale challenges. Funders need the latitude to be able to provide loan guarantees and other financial supports to generate integrated approaches to inclusive growth. That means being able to fund non-profits and social enterprises in addition to making grants to charities. If government worked from a purpose and outcomes orientation, rather than from an activities and outputs perspective, it would free up the ability for all of us to work more effectively.
What can funders do to assist with the push for a strong social innovation and social finance strategy?
: I urge CEGN members to review the consultation docs
and post their ideas on the online consultation site
. As funders, we should use this opportunity to develop ambitious goals for working with government — to focus on the bold, as well as the incremental. I also urge funders to share the consultation process with their grantees and encourage them to engage too.
This is Canada’s opportunity to catch up to other jurisdictions. In the U.S., the Nonprofit Finance Fund
is using innovative financing and other measures to scale solutions to social issues and the U.S. federal requirement that banks invest in their local communities is a model to look at. And we do have examples here at home that could be emulated across the country, including Quebec’s Chantier de l’economie sociale
which was created with a $30 million infusion of federal funds and used to grow the social economy in the province. That economy now includes 7000 social enterprises with annual turnover of $40 billion, more than the combined sectors of construction, aeronautics and mining.
Improving access to capital – whether it be philanthropic, government, private sector or pension funding — is key. For funders and the organizations to which we grant and in whom we invest, we need to move away from an antiquated charity model and become partners with a broader range of stakeholders to achieve the systemic changes needed to ensure a sustainable and inclusive society.
We’ll look forward to tracking the evolution of the strategy and its implementation. Thanks very much for your leadership and commitment on social innovation and social finance.