Because the time has come to create new vehicles and instruments that serve to solve social problems more efficiently and selflessly, searching for motivations other than exclusively making money . Environment is our main concern to act.
But the vehicle is an enterprise?
Yes, the vehicle is a business who is financially sustainable after some time and whose goal is to solve a social problem.
Who are the clients?
In a social business, in general, the clients are the same beneficiaries of the products or services who pay a very affordable price and obtain social improvement. In a social enterprise the client can be anyone who receives the product or service and can be also the beneficiaries.
Are there profits?
Yes, but they stay in the business to achieve its goal.
And the investors?
In a social business, according to Mr. Yunus, not a dividend is paid to investors. Social investors pursue social impact as the main goal. In a social enterprise there can be dividends, with limitations.
In a social business this is the way to guarantee that the instrument will not have any pressures from stakeholders. In a social enterprise, the social impact is compatible with the interests of the investors.
What is the goal?
To solve the social issues.
How do you do it?
Creating “social business and social enterprises”which will grow to achieve their goals and to replicate the model as many times as possible.
What is the difference with a social enterprise?
The social business is a concept created and developed by Mr. Yunus, Nobel Peace Prize 2006 due to Grameen enterprises. Most his businesses are in Bangladesh and other developing countries. For instance, Grameen Shakti is a true success installing solar panels in the villages to have access to electricity. The social enterprise is a model developed in rich countries. For instance, Inner City Renovations in Winnipeg is a construction company that belongs to a Charity whose mission is to provide quality employment to people in difficulties (aboriginals, immigrants or low income residents). Les Fermes Lufa In Montreal and Impak Finance are good examples to follow up.
What is the future of the social enterprise in Quebec?
This sector is rapidly expanding. In British Columbia new legislation was adopted in 2013 introducing the C3 or Community Contribution Company. It’s a positive step that will be adopted also in other provinces sooner or later. This new vehicle is important because it is based on previous experience in the United Kingdom with CIC’s and in the USA with the L3 companies. A C3 is a legal enterprise which will pursue profits but that will also have a social impact, since a percentage of the profits have to be used for social purposes (there is a limitation on dividends paid to investors). The articles of incorporation will have to specify what the mission and vision are and to what extent the company is socially oriented.
Can there be investors in a C3?
Sure, like in any other enterprise. Shareholders will know what the social goal is and will be willing to pursue not only profits as an objective. As well as in a social business, the model must be financially sustainable.
What are the advantages of a C3?
This new instrument will help community organizations and associations reach their goals and be more financially sustainable, allowing private funding and not relying only on grants and donations. There will be hybrid companies whose goals are social and not social.
What is the difference with the social economy?
The social economy traditionally refers to cooperatives, Community Centers, Associations, non profits, Charities and NGO’s. This is a vast sector which include economic, non economic activities, for profit and not-for-profit. There are legal differences and requirements to be met and different tax consequences. For example, charities can receive donations which have tax deductions for the donors. This whole sector is well developed in Quebec.
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