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Winnipeg's Marty Donkervoort at the ceremonial circle of the Urban Circle Training Centre in the city's north end. Mr. Donkervoort's social enterprise company Inner City Renovation (ICR) renovated the building for the social organization. ICR employs people from the fringes of society that often would not be considered employable. (JOHN WOODS/GLOBE AND MAIL/JOHN WOODS FOR THE GLOBE AND MAIL)
Winnipeg's Marty Donkervoort at the ceremonial circle of the Urban Circle Training Centre in the city's north end. Mr. Donkervoort's social enterprise company Inner City Renovation (ICR) renovated the building for the social organization. ICR employs people from the fringes of society that often would not be considered employable. (JOHN WOODS/GLOBE AND MAIL/JOHN WOODS FOR THE GLOBE AND MAIL)

Giving changed

New breed of company blurs lines between charity and business Add to ...

But Mr. Donkervoort has seen first-hand how providing meaningful work gives workers pride, independence and stability. “Regardless of ideology, creating a more equal society makes it a more safe society for everyone, including the wealthy,” he says.

A fellow traveller of Mr. Donkervoort's is Angela Draskovic, who spent 16 years climbing the ranks in the telecom world, eventually becoming a vice-president of sales at Lucent Technologies. She too, was tasked with laying people off.

“Quarterly earnings calls were driving too many of our decisions and I just thought, ‘I’m not having fun any more,’ “ she says.

She quit, and spent six years as a fundraiser for the non-profit sector. But it wasn't exactly the right fit.

Instead, Ms. Draskovic wanted to bring a market-driven, sustainable approach to international development, reaching the poorest of the poor. Three years ago, she started Zoë Alliance, which aims to take a slice of the $40-billion North American market in corporate gifts. She works with partners in villages in Haiti, India and Guatemala to supply popular hand-crafted gift items like wooden chess sets and leather luggage tags.

The idea is catching on. Among others, Toronto-Dominion Bank, Nokia and Royal LePage are already clients. “This is real and it’s going to grow,” says Ms. Draskovic, who expects revenue will quadruple this year from last year. “Clients are becoming instant advocates for the idea, because it’s fun and rewarding for the people involved.”

The social-enterprise concept is also spreading in academic circles. Simon Fraser University in British Columbia and Acadia University in Nova Scotia have started courses in social enterprise. Newfoundland’s Memorial University, along with George Brown College and the Rotman School of Management in Toronto, now offer free consulting services to social enterprises.

Meanwhile Net Impact, a global student and professional organization aimed at using business skills to “tackle the world’s toughest problems,” says membership has more than doubled since 2006, to more than 20,000 members and nearly 300 chapters, including 16 in Canada.

“What we’re seeing, not just in Canada and the U.S., but globally, are some of the best and brightest young people turning their attention to this — harnessing the power of a market-based model to address social issues that were historically either not addressed or addressed only partly by government and non-profits,” says Andy Horsnell, manager at Acadia University’s centre for social and business entrepreneurship.

He cites Craig and Marc Kielburger's Me to We enterprise as an example. It sells socially and environmentally friendly clothes, books and music and plows half of its profits into the brothers’ Free the Children charity.

At least one financial institution now wants to tie its brand to social businesses. Capital One recently donated $200,000 to fund youth-led social enterprises, its biggest donation this year. “We would like to brand our company as the company in the banking sector that supports social enterprise,” says president Rob Livingston. The draw for his employees, he says, is that the effort blends innovation and entrepreneurship with local social change.

Other global businesses are jumping on board too. “We see social enterprise as a major way forward for the country at the moment,” London-based director Ian Oakley Smith at PricewaterhouseCoopers said last month.

Still, several factors are thwarting the sector's progress. Charity workers that want to start a business arm don’t have enough access to training, some say.

And unlike other countries such as the U.K., in Canada there still isn’t a legal structure for businesses and charities to let them to form hybrid enterprises. Many such enterprises have a higher cost of doing business (for example, they may need more time to train people and have higher turnover), which makes posting a profit tougher than for other businesses. Mr. Donkervoort says a tax break would ease that pressure. Ms. Finley, the human resources minister, is considering relevant changes in the tax regime.

Longer term, as the lines between business and charity blur, some hope that the whole “social enterprise” name will disappear entirely. “I’m hoping that in my lifetime, business will just be business and a social mission will just be the way you do business, and not an afterthought of philanthropy,” says Mr. Donkervoort.

When Mr. Pollock looks around Winnipeg now, he sees scores of physical markers of his company's impact on the city. “There is a memory of things we’ve done together that have bound us together,” he says.

“It’s a good model for the rest of Canada — the inclusiveness, the tolerance and the patience.”

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