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Selling Social: Experiences of Social Enterprises with Social Procurement and Social Purchasing

Customers making their buying decisions on a basis other than price or sometimes even quality are not a new phenomenon.  Examples like Girl Guide Cookies show us that we sometimes opt for social value in our purchases. in other words, the social benefits that may be generated from our purchases could lead us away from the more typical considerations of price and quality. When individual customers make personal 鈥 sometimes one-off 鈥 purchasing decisions based on the social benefits that their purchases could create, we call that social purchasing. When individuals in organizations work through formal bidding processes for their buying decisions on behalf of the organizations, we call that social procurement. Oftentimes, the costs are higher for social procurement compared to social purchasing. Either way, revenue generated from social procurement and social purchasing is increasingly becoming a critical element for social enterprises to stay sustainable.
 
In the fall of 2017, we conducted a pan-Canadian survey of social enterprises to understand their experiences in social procurement. Following the survey, from the summer of 2018 to the fall of 2019, our team conducted research on 19 social enterprises across the country to get a better understanding of their experiences with social procurement and social purchasing. These cases offer a more nuanced picture of how different social enterprises have approached social procurement and social purchasing.  
 
Our findings show that many social enterprises have found it difficult to participate in social procurement because they are often too small to provide the kind of goods and services that are procured through formal bidding processes. In addition, organizational purchasers 鈥 i.e., governments, businesses and non-profit organizations 鈥 remain primarily interested in making purchasing decisions based on price and quality. Social value or benefits are often after-thoughts, if they come into consideration at all.  
 
For social enterprises interested in pursuing social procurement and social purchasing, the findings of our research highlight a range of practical strategies based on the lessons learned by the cases featured in the project. For policy developers, the findings emphasize the need for a heightened awareness of the limitations and barriers facing social enterprises in engaging with social procurement and social purchasing. For students and scholars of the social economy, the findings illustrate how social enterprises are situated in the growing trend of social procurement and social purchasing, using concrete examples.
 
We are in the process of preparing a book presenting the 19 cases of social enterprises and their experiences with social procurement and social purchasing. We have also produced a set of fact sheets, one of each of our 19 cases, which are available on this website through the links on the right.  In addition, there are a number of summary reports and findings fact sheets prepared based on the survey from the fall of 2017, also available on this website through the links on the right.

Detailed Selling Social Project Description

The stunning growth of social enterprises that employ or train members of marginalized social groups (referred to herein as supported social enterprises) has relied on the ongoing support of non-profit organizations that initiate them and funding from government programs and foundations. One type of support that is less apparent, but nevertheless of great importance, is social procurement; that is, purchasing policies of governments and businesses base that not only rely on economic criteria such as price and quality but also emphasize social values. Numerous social procurement policies and programs have been developed by municipal, provincial, and the federal governments in Canada yet little research has been undertaken to clarify their effects on supported social enterprises serving marginalized social groups.

The Social Procurement Project (which now goes by the name Selling Social) -- supporting the objectives of SSHRC's Insight & Connection programs -- was a new partnership designed to generate knowledge and sustainable cross-sectoral networks in order to strengthen supported social enterprises. This partnership brought together researchers from the Centre of Learning, Social Economy & Work (CLSEW) at the University of Toronto, Queen's University School of Policy Studies, and the Social Enterprise Council of Canada (SECC). SECC is an alliance of social enterprise leaders from across Canada that focuses on social procurement and will benefit directly from the proposed partnership and research activities.
 
We drew on the knowledge and networks of our partnership to examine extensively the social procurement policies of governments and business corporations in Canada as they affect supported social enterprises serving marginalized people, and use that knowledge to strengthen those policies. Through our prior work in the area, we have identified a gap in research about social procurement as it pertains to supported social enterprises. We hoped that our project would address this gap by building a sustainable partnership of key stakeholders to contribute essential knowledge that could be used to strengthen the capacity of the SECC to improve social procurement for supported social enterprises.
 
The project aimed to fulfill four objectives reflecting knowledge gaps and capacity building:

  1. To assess the effects of social procurement on supported social enterprises;
  2. To determine the extent to which social procurement policies for supported social enterprises have been developed by government agencies and the barriers to their implementation;
  3. To clarify the extent to which social procurement for supported social enterprises is practiced by business corporations and the barriers to developing social procurement policies; and
  4. To build capacity in the Social Enterprise Council of Canada to strengthen social procurement policies for supported social enterprises.

Social procurement is a growing phenomenon that has taken on increased significance in the context of market-based approaches to workforce integration for marginalized social groups. Barraket & Weissman (2009, p. 3) define social procurement as: 鈥渢he use of purchasing power to create social value. In the case of public sector purchasing, social procurement involves the utilisation of procurement strategies to support social policy objectives.鈥 For both governments and business corporations, LePage (2014) argues that social procurement involves modifying the supply chain so it not only includes criteria such as quality and price but also considers social value. There is a lengthy history of individuals making purchases based on social criteria (social purchasing) such as wanting to support a particular organization (e.g., purchasers of Girl Guides cookies, sold in Canada since 1927), but social procurement policies among government and corporations, as distinct from social purchasing by individuals, is a more recent phenomenon, pushed by trends such as corporate social responsibility, the environmental movement and the growing strength of the Aboriginal rights movement. Essentially, these social movements have forced governments and business corporations to move beyond traditional business criteria such as price and quality and add social value criteria to their procurement policies.
 
Another trend encouraging social procurement policies is the rapid growth of social enterprises 鈥 businesses with a double bottom line that blends economic and social objectives. Social procurement takes on great importance for social enterprises integrating into the workforce marginalized social groups, organizations that may be supported by a parent non-profit, government programs, foundations and corporations. It is this relationship 鈥 social procurement as it pertains to supported social enterprises integrating marginalized social groups into the workforce 鈥 that is the central theme for this project.
 
This project was one of the first to facilitate research across sectors and academic disciplines to help address policy about social procurement. The objectives for the project included:

  1. to assess the effects of social procurement on supported social enterprises;
  2. to determine the extent to which social procurement policies for supported social enterprises have been developed by government agencies and the barriers to their implementation;
  3. to clarify the extent to which social procurement for supported social enterprises is practiced by business corporations and the barriers to developing social procurement policies; and
  4. to build capacity in the Social Enterprise Council of Canada to strengthen social procurement policies for supported social enterprises.

Survey Reports

April 2018 - The summary report presents the highlights from the survey conducted in the Fall of 2017 with social enterprises to learn about their experiences with social procurement.  Most of the data reported is descriptive statistics from the survey.

Social Purchasing & Procurement Survey of Non-profit Social Enterprises in Canada (First Summary Report)

Case Profiles

We completed cases on 19 social enterprises across Canada to examine their experiences with social procurement and social purchasing. Further details will be available in our upcoming book.

Profile Sheets (1)

 

Profile Sheets (2)

Contact Us

To learn more about Selling Social: Experiences of Social Enterprises with Social Procurement and Social Purchasing, please email Jennifer Sumner at jennifer.sumner@utoronto.ca.

 

This project is supported by the .