Thursday, October 9, 2008

Social Economy as a term: Is there added value?
Summary of Interviews with Practitioners in Saint John, NB
(Summer 2008)
S. Asimakos, Saint John, NB

The social economy is a new term in Canada for practitioners – workers in not for profit organizations, co-operatives, and community based organizations. The question is whether there is added value for practitioners to use this term as a descriptor for their work. We have begun to ask this question in Saint John, NB, and the early results indicate there may be.

This short paper is a summary of interviews with executive directors of some innovative not for profit organizations in Saint John, NB. Interviews were conducted by first introducing two definitions of the social economy, one, found on the Federal Government website, and the other, used in Quebec by the Chantier de l’economie sociale. Four questions followed. We also introduced the term social enterprise and a definition from the Centre for Social Enterprise in the Fraser Valley, BC, and followed with one question. The definitions are listed below and are followed by a summary of answers to the five questions.

Government Definition of Social Economy (from Government of Canada)
The social economy is a grass-roots entrepreneurial, not-for-profit sector, based on democratic values that seeks to enhance the social, economic, and environmental conditions of communities, often with a focus on their disadvantaged members.

Quebec Definition of Social Economy (from le Chantier)
The Social Economy consists of association-based economic initiatives founded on values of:
- Service to members of community rather than generating profits;
- Autonomous management (not government or market controlled);
- Democratic decision-making;
- Primacy of persons and work over capital;
- Based on principles of participation, empowerment.

Definition(s) of Social Enterprise (as derived from the Centre for Social Enterprise)

$ Social enterprises apply an entrepreneurial approach to addressing social issues and creating positive community change.
$ A social enterprise is an enterprise, owned at least in part by a non-profit organization, which is using entrepreneurial methods to accomplish social goals and providing its profits to its owner(s) for use in continuing their core missions.
$ A social enterprise is a revenue-generating business with primarily social objectives whose surpluses are reinvested for that purpose in the business or in the community, rather than being driven by the need to deliver profit to shareholders and owners.

Following are the questions and summary of answers for each

1. After looking at the above definitions, do you feel your organization is a social economy organization? Why?
Respondents were confident saying they did belong to the social economy. Interestingly enough they did not agree on which definition was most appropriate. Some liked the Quebec definition because it was values based. They could see their organizations’ pursuit of similar values, for instance, enhancing social and economic conditions, valuing people over capital, and in the principles of empowerment. Others felt the Government definition was simpler and was not ‘value laden’.

2. Do you use the term social economy in any of the following: daily work; proposal writing; leveraging partners; other activities?
None of the respondents used the term social economy in their daily work ‘lexicon’, nor had used the term in proposal writing, leveraging partners or in other activities. They did say that they had begun to use the term social enterprise. This is partly due to two local organizations that are either developing social enterprises or providing training in social enterprise development. As well a recent study in Saint John, The Benefits Blueprint, identifies social enterprise as a business case to be pursued in order to insure benefits are realized from the oncoming energy sector boom.

3. Do you see value in describing your organization as falling within the social economy? Why?
Respondents agreed that there is value in describing their organization as fitting in the social economy, with the caveat that if it becomes the industry standard or lingo. There was also value in getting the ‘terminology right’, or that there is agreement on definition. It adds value to their work by stating that this sector contributes to the economy and that the economy should be balanced. When referred to as not for profit, there is some devaluation by the rest of society of a significant piece of the economy. It also raises the bar by saying that the sector is not only dependent on the government, that it not only is an advocate for the poor and dislocated, or is solely a critic of the market economy and the government. It puts the sector more directly involved in generating the economy.

4. Do you see other terms as being more useful as descriptors? If so, what are they? Respondents spoke about common terms that they have used such as non profit, the third sector, and more recently community based organizations. A general perception is that social economy may be a better descriptor because it does not leave the perception that it is a drain on the economy but a contributor to the economy.

5. Would you consider your organization a social enterprise? Why?
Surprisingly, there were mixed responses to this question. It was regarding the terms entrepreneurial and enterprising. While some respondents wanted to be seen as an entrepreneurial organization, or as being enterprising, another respondent questioned the term entrepreurial. It may be too associated with business. All felt that associated themselves to at least pieces of the definitions. One respondent spoke of the need to be more enterprising, and that they are just at the early stages of ‘turning their mind to earning money’. Non profits often waited for core funding grants, now there is a feeling that they can earn money in different ways and that it is actually more sustainable to have mixed incomes. The idea of ‘commodifying’ their services for sale was introduced by a respondent, such as facilitation, planning, information, facilitation, research, training, etc. One of the big problems in the sector has been de-valuing services, that is selling the service or the program at a price so low that workers were underpaid with little benefits, and little money was there for sustainability. So a lot has to be done on valuing programs, services and products of the sector in line with the formal economy.

Conclusion and Next Steps
It is clear that the few respondents in this quick scan in Saint John indicate value in the term social economy. There is also value in the term social enterprise. It will be important to come to agreement on definitions of both and then initiate a grass roots education process to engage and raise the level of awareness of the term (s) and the implications in the use of the term (s). Some interesting strands for research include the valuation of the products and services of the sector. If we are indeed embarking on this new linguistic and philosophic landscape, there need to be real shifts in practice and in the tools we use to measure our value to the economy.

The inquiry has just begun in Saint John. The next step is to conduct more interviews this summer with a broader sample of the sector, including the co-operatives. Stay tuned.