Turning good will into good business

When she helped found a non-profit organization to bring perpetrators of genocide to justice, Jayne Stoyles didn’t expect to find herself a businesswoman.

But now, here she is, hiring a consultant to determine the best way not to raise money – but to earn it.

Stoyles runs the Canadian Centre for International Justice, which helps victims in Canada pursue justice against those responsible for human rights violations around the world.

Sherry Smart is a client of Ottawa-Carleton Lifeskills. It’s starting a catering company to generate income and give its clients a new activity.

To help generate income, Stoyles is working on creating a company that will sell a service – legal training courses — and funnel its profits back into her organization.

“I realized It’s ridiculous that I’m going with my hand out to law firms asking them for donations when we have expertise that they might pay for in a course,” Stoyles says.

The company will be what’s called a social enterprise – a business that both earns money through sales, and serves a social benefit.

Some social enterprises are owned by non-profits, as Stoyles’ will be, while others are private businesses that have a philanthropic goal as part of their mandate.

While the trendy moniker “social enterprise” is new, the concept isn’t. Businesses from Salvation Army thrift stores to local theatre troops generate income through sales for a social good.

But less traditional variants like Stoyles’ centre are now emerging more and more frequently across the country.

In Ottawa, a project called CISED — the Collaborative for Innovative Social Enterprise Development – is encouraging non-profits and private businesses alike to become social enterprises.

CISED began three years ago as a partnership between seven different local organizations, including the Ottawa Community Loan Fund, the Causeway Work Centre and Algonquin College.

It’s working not just on the supply of social enterprises in the city, but on demand for them too, by encouraging governments and large companies to set aside parts of their procurement budgets for these socially minded businesses.

So far, CISED has piqued the interest of about 40 or 50 non-profits, says Jonathan Wade, who works for the project as a “social enterprise sector developer.” Interest from the private sector has been more muted.

CISED is armed with $5,000 grants, which allow non-profits like the justice centre to hire a consultant for market research, a feasibility study or a business plan.

But some of those 40 or 50 non-profits are further along the way to generating revenue than others – while some have dropped out entirely.

“Three years as a time frame is not uncommon to start a business and a lot of charities will just get bored or tired or under-impressed with the slow rate of change,” Wade says.

The toughest discovery for most non-profits, Wade says, is that a lot of social enterprises simply won’t ever be profitable – only about 15 to 20 per cent will be, by his estimate.

What all social enterprises can do, however, is further the mission of their parent organizations, while recuperating some costs.

For example, one Ottawa non-profit that runs a day-program for developmentally challenged adults is teaching them responsibility, teamwork – and baking skills — by putting them to work in its own catering company.

“You can see they’re really happy. It gives them something to do and they know they have to do a good job at it because it’s for sale,” says Kimberley Gallant, a program director at Ottawa-Carleton Lifeskills.

“Some of our guys actively participate in the catering and some just like being there with people, and hanging out, and seeing the activity,” Gallant says.

Canadian social enterprises face an additional barrier in CRA regulations, which see businesses either as for- or non-profit. There’s no in-between. The UK created a separate legal entity called a Community Investment Company in 2005. “Canada is a really late player in the game,” Wade says.

As for Stoyles at the Canadian Centre for International Justice, she says she’s hopeful that a social enterprise that sells legal training can be successful – and profitable.

All lawyers have to do continuing legal education, and they’ll be especially drawn to the centre’s company, Stoyles says: “We also offer this bonus that the fees that they would have to pay anyway are going toward charitable work, and not another for-profit corporation.”

The centre is already offering two courses in international justice on a trial basis, which are bringing in about $20,000, annually. There are no costs, since the instructors, experts in their field, are volunteers. With a new company, Stoyles hopes to increase that revenue figure to $200,000 eventually – and in her wildest dreams, even higher.

Right now, she’s waiting on a consultant’s market research to back up her plan.

For Stoyles, the dream of a successful social enterprise is a bulwark against shrinking donations from foundations.

But it required a change of mindset: “It’s a tough shift if you’re a charity person or a not-for profit person to think in dollars and cents. You have this sense that it sullies your work a bit to think of money…  But it’s really just a matter of realizing there’s some value in some of the things you’re doing and that there might be an audience where there’s no ethical dilemma in charging money for the services that you offer,” she says.