FAQ

Definitions of social enterprise vary and there is considerable debate about whether a social enterprise can be for-profit or must be a not-for-profit business.  There does seem to be a general consensus around the fact that social enterprises place more value on their social and environmental mission than profit seeking.  One definition that we find appealing is: “A social enterprise is a business owned by a nonprofit organization, that is directly involved in the production and/or selling of goods and services for the blended purpose of generating income and achieving social, cultural, and/or environmental aims. Social enterprises are one more tool for non-profits to use to meet their mission to contribute to healthy communities.” – The Social Enterprise Council of Canada

We usually aim to complete a business plan in 3-6 months, however each organization that we work with progress at different paces.  With regular meetings and active involvement from the internal management team a business plan can be completed in an average of 3 months.

The main difference is that a social business has two objectives – growth of a social cause and profits, whereas a social enterprise has one primary objective of achieving social impact, and any profit achieved is re-invested into the social mission, rather than going back to investors. Social enterprises can be funded by outside sources (such as the government), while social businesses are completely self-sustaining and often return profits to investors.

These investments are usually called  “Social Investments” or “Impact Investments”. The investors come in many forms, including value banks, social Investment advisors, social stock exchanges, venture philanthropy funds, social investment funds, and funded consultancies. The investments themselves can come in the form of grants, loans, equity funds, infrastructure projects, crowd funding, social impact bonds and even fundraising.

If you’re going to start a social enterprise, you need to know whether it is a related business to your cause. The only way to achieve this is to review and have knowledge of the CRA Guidelines on defining a related business and then seek relevant legal advice, if necessary. The risk of running an unrelated business and not paying taxes is that your charitable status could be revoked. We have included a link to the CRA Guidelines below:

What is a Related Business? 

 *We do not give legal advice but we can direct you to a trusted source for legal advice in this area.

Outcome-based evaluation looks at how the organization affects its clients in the short and long term. It uses a system that pays special attention to the goals, strategies, activities, outputs, indicators of the program, to ensure that results are documented, tweaked, monitored and reported effectively, conveying the value of the program.

Developmental evaluation is experimental in nature and is a better form of evaluation for a constantly evolving program that doesn’t have a standardized or defined model. This is because it provides real-time data and feedback, and looks at the deeper impact. This type of evaluation helps organizations measure, develop and adapt their practices as well as bring multiple stakeholders together, and is performed during the generative process, rather than after. It is used when outcomes and situations are unknown.

Social impact is measured through the values, vision, aims and objectives of the program or organization. It involves the changes to the lives of clients and stakeholders brought about through the organization’s mission-based activities. It is specifically measured through defining and analyzing quantitative and qualitative measures and then regularly tracking and documenting results over time. 

Community-based research aims to be community-situated, collaborative, and action-oriented. In this type of research, the resources, processes, and results are shared with community members, especially those most affected by the research topic. The benefits of community-based research are that community members have an equal voice, are included in the decision-making process and are ensured that the research is relevant. By drawing on their situation and experience, this enables the research to be accessible and understandable to the community, and commonly leads to heightened community engagement.

Capacity building refers to a methodological approach to engaging in a process, which shares responsibility for task completion and aims to have clients retain knowledge and long-term benefit. The capacity building approach is the approach that has clients take on an active role throughout planning and research processes. This means the consultant role is primarily that of the facilitator, guide and coach, whereby the consultant doesn’t do everything for the client – it is a co-working approach. Implications for project management is that clients often must have some time to allocate to projects in addition to the financial resources.  Having clients and their stakeholder groups take on a participatory role in planning means that many of them learn and develop new skills increasing their capacity.