On this page
- Why is scaling your business important?
- Social enterprise success stories
- Financing
- Federal Corporations Fact Sheet
Why is scaling your business important? Footnote 1
Like most businesses, it is important for social enterprises to scale their operations to grow. Scaling your social enterprise may be the best way to increase your social impact.
Social impacts and profits are not incompatible. In fact, whether you are an enterprising not-for-profit or a for-profit social enterprise, revenues are important to retain talent, reach a wider customer base, and operate a sustainable business.
Some ingredients that can help your social enterprise grow are:
- Having a solid network of business and community partners;
- Employing innovative marketing strategies;
- Accessing financing opportunities; and
- Creating a subsidiary.
Social enterprise community
Social entrepreneurship is a growing industry and many provinces have social enterprise organizations that provide a network of social entrepreneurs, but also training for social entrepreneurs, and funding opportunities. Also, by connecting with these organizations you may find peers who can provide guidance or mentorship for the road ahead.
Below is a list of some social enterprise organizations and resources across Canada:
- Advancing social enterprise in Nova Scotia: a framework
- Centre for Social Enterprise
- Centre for Social Enterprise Development
- Centre for Social Innovation
- Chantier de l'économie sociale
- Common Good Solutions
- Groundswell
- Innovate BC
- LiFT
- Manitoba Social Enterprise Strategy
- Ontario's Social Enterprise Strategy
- Pond-Deshpande Centre
- Prince Edward Island Entrepreneurship and Start-up
- Radius — A Social Innovation Hub
- Saint John Social Enterprise Hub
- School for social enterprise
- Social Economy Research Network of Northern Canada
- Social Enterprise Action Plan (Newfoundland Labrador)
- Social Enterprise Council of Canada
- Social Enterprise Development (Newfoundland Labrador)
- Social Enterprise Ecosystem Project
- Social Enterprise Institute
- Social Enterprise Manitoba
- Social Enterprise Network of Nova Scotia
- Social Enterprise Ontario
- Soshent
- Trico Foundation
If you are interested in starting a co-operative, there are many provincial co-operative associations that can help you.
Marketing, promotion and certification
Marketing your social enterprise is essential to find the right customers for your business and to retain a customer base. There are a number of resources available to help you understand the basics of marketing, marketing strategies, and promoting and advertising your business. The Business Development Bank of Canada also offers a marketing plan template to help you organize your marketing strategies.
Interested in social procurement? Check out A guide to Social Procurement to learn more.
You may also consider certification to promote your social and/or environmental objective. Certification is a recognition by a third-party that your social enterprise has a special competence. Certification can provide your social enterprise's service or product with extra visibility and credibility.
Becoming a B-Corp
B Corps are for-profit companies certified by the nonprofit B Lab that meet rigorous standards of social and environmental performance, accountability, and transparency. If you are interested in the B-Corp approach, there are three steps you can take to become one. The short 30-minute assessment will provide you with a better idea of how B-Corp could benefit your business.
Buy Social
Buy Social Canada is a Community Contribution Company that offers a third party certification program that can recognize your organization as a verified social enterprise, and enhances your marketing potential as a business that actively prioritizes community benefits and social impact over private profit and shareholder returns
Being Fair Trade
Fair trade is a social movement whose stated goal is to help producers in developing countries achieve better trading conditions and to promote sustainable farming.
What about other sustainability certifications?
The Business Development Bank of Canada offers further details regarding certifications that may help your business achieve greater environmental sustainability.
Funding platforms and business support
Few businesses are self-financed, and social enterprises cannot rely purely on loans and grants for their business to stay afloat. Done right, you can tap into financing opportunities to grow your idea beyond the start-up and early growth stage, and turn your social enterprise into a sustainable and successful company.
The Government of Canada's business grants and financing platform offers funding opportunities through loans and capital investment, public, and private sector funding. In particular, Innovation Canada can link your enterprise to government funding tailored to your needs and situation.
While you do not need a business background to be a social entrepreneur, it is important to receive some kind of business training and be surrounded by people with some business acumen. Many of the social enterprise platforms listed above provide webinars, classes, and training for social entrepreneurs.
In addition, the BDC's entrepreneur's toolkit, the Futurpreneur platform (targeting socially minded business owners aged 18 to 39), and the Government of Canada provide various tools and tips on how to grow your business.
Subsidiaries and trusts
Creating a subsidiary can help your social enterprise grow and circumvent some of the limitations of its corporate structure. This is particularly the case for "non-profit" and charitable organizations who want to explore commercial opportunities, or "for-profit" entities who want to focus their social impact through a designated entity.
For-profit entities like business corporations, not-for-profit, or co-operatives can create a subsidiary to conduct their social goal. For-profit entities can reduce their taxable income through charitable giving to their own social enterprise. You can visit the CRA website to learn more about claiming tax credits and charitable giving. In addition, you could set-up a "charitable trust", although trusts are very complicated instruments and require special attention.
Non-profit organizations and charities can create a for-profit corporation to maximize their social mission. However, creating a subsidiary business may affect the organization's non-profit or charitable status under the Income Tax Act. The CRA makes the determination of whether a subsidiary is sufficiently distinct from the non-profit's or charity's parent company to benefit from tax exemptions. It is important to consult tax or legal expert when setting up such subsidiaries to prevent a situation that could jeopardize your tax-exempt status.
Setting up a for-profit subsidiary has multiple advantages. First, it protects the non-profit or charitable status of the parent corporation, especially if the parent corporation has discovered a commercial opportunity not related to the social mission. Second, it enables the subsidiary to issue equity ownership to outside investors, enabling the business to grow in scope and attract outside talent. Third, the subsidiary can generate revenue, without constraints, that can flow back into the social enterprise. For instance, where the parent corporation is a charity, the for-profit subsidiary can make charitable donations back to the parent company for up to 75% of its annual income in exchange for tax credits.
Social enterprise success stories
Financing
Did you know that you might be eligible for government financing programs? Visit the Business Benefits Finder to learn about the different programs available to your social enterprise.
Federal corporations fact sheet
The chart below compares the differences in corporate structure, at the federal level, of for-profit corporations, not-for-profit corporations, and co-operatives. This chart will enable you to understand how an incorporated social enterprise might be run, and may guide you towards making an informed decision.
Ownership
Cooperative Corporations under the Canada Cooperatives Act | For-Profit Corporations with share capital under the Canada Business Corporations Act | Not-for-Profit Corporations under the Canada Not-for-profit Corporations Act |
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Source: Information Guide on Co-operatives
Directors
Cooperative Corporations under the Canada Cooperatives Act | For-Profit Corporations with share capital under the Canada Business Corporations Act | Not-for-Profit Corporations under the Canada Not-for-profit Corporations Act |
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Source: Information Guide on Co-operatives
Voting
Cooperative Corporations under the Canada Cooperatives Act | For-Profit Corporations with share capital under the Canada Business Corporations Act | Not-for-Profit Corporations under the Canada Not-for-profit Corporations Act |
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Source: Information Guide on Co-operatives
Sharing in the surplus
Cooperative Corporations under the Canada Cooperatives Act | For-Profit Corporations with share capital under the Canada Business Corporations Act | Not-for-Profit Corporations under the Canada Not-for-profit Corporations Act |
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Source: Information Guide on Co-operatives
The information provided is to assist you in understanding more about social enterprises. It is not intended to replace legal advice. Consider consulting a lawyer or another professional advisor to ensure that the specific needs of your corporation are met.