About Social Procurement
What is social procurement?
Every purchase has an economic, environmental and social impact, whether intended or not. Social procurement is about capturing those impacts and seeking to make intentional positive contributions to both the local economy and the overall vibrancy of the community.
Individual consumers are already considering the impact of their purchases by buying products certified as fair trade, local, organic and/or ethical. By scaling up this growing trend to include government and corporate purchasing, the potential impact can be tremendous.
Social procurement is about using your procurement dollars to achieve overarching institutional, governmental, or individual goals such as environmental and social sustainability. By adopting a social procurement framework, you can seek to maximize the value you receive from your existing purchases.
Why is social procurement important?
The health of a community is not measured by economic value alone. Healthy communities require multiple types of capital, which are collectively referred to as community capital: human capital, economic capital, social capital, cultural capital, and physical capital. Building community capital is the means for creating healthy communities.
Traditional procurement practices have focused on success measured through creating stores of physical and economic capital. Social procurement changes that perspective, and procurement becomes more than merely a financial transaction; it becomes a tool for building community capital: communities that are rich in human, social, cultural, physical and economic capital.
Who defines ‘local’?
If local is an objective of your social procurement program, work with your community and stakeholders to determine what local means in your context. This could be something as specific as a postal code or neighbourhood, to as broad as a regional or provincial scope. A concentric circle model for prioritizing local may also be helpful, with most local at the centre, and then expanding levels of local after that.
It’s important to note that for public purchasers, local procurement may not always be possible under the trade agreements.
Read the Buy Social Canada Trade Agreements Local Briefing Note for more information about what is and isn’t allowed for above threshold purchases.
What are the goals of social procurement?
Each organization will set goals depending on your existing strategies and plans.
Defining your goals is the first step in developing a social procurement policy. Success is only achieved when we use existing purchasing to achieve defined goals that could include buying from social enterprises, creating employment opportunities, training and apprenticeships, local buying, diversity in suppliers, and social value outcomes.
What about the trade agreements?
Governments and other public sector purchasers must comply with trade agreements. You cannot restrict competition, but you can seek social value outcomes from all bidders. The important part is making the process open, competitive and transparent for all bidders.
All trade agreements have financial thresholds for when they come into effect. You will need to check the most stringent requirements in your jurisdiction for the actual dollar value thresholds.
There are also several purchasing ‘exemptions and exclusions.’ One very important exemption is buying from non-profits. Almost every social enterprise in Canada is operated through a non-profit, so direct award to a non-profit social enterprise is an option for above threshold purchases.
There is also allowance for Indigenous or Aboriginal set asides under the trade agreements. You can develop a program to focus parts of your purchasing on buying from Indigenous businesses.
Does social procurement cost more?
In terms of proposals received, so far there has not been an increase in costs. In fact, by unbundling projects (breaking large contracts into smaller, clearly separate parts), there has even been significant cost savings that result from goods and services being delivered by local businesses. However, depending on what the goals might be, a decision could be made to pay more for greater value.
Some rural communities do find purchasing from local businesses, if that is one of their social procurement goals, sometimes does cost more. In those situations, it is important to consider what you are buying, what the cost difference is, and what the impact potential could be for your local economy to make that purchase. When there are higher costs, there may still also be higher social value that makes that purchase the best value.
Can social procurement practices be included in contract requirements?
Yes, social procurement practices can be built into contract requirements. When an organization inserts social procurement criteria and/or outcome requirements into contracts, suppliers must comply with these terms and conditions. When social procurement criteria become part of a contract, this makes the social procurement component legally enforceable. It is required to make any accountability measures or enforcement mechanisms clear to suppliers in the bid process.
Is it possible to measure the results from social procurement programs?
Yes, there are multiple ways to measure the results from social procurement. It is important to measure outcomes that are aligned with your social procurement goals. These can include metrics such as spend with priority business types, number of contracts with social value criteria, employment of equity groups, apprenticeships and more.
How can I get started with social procurement?
Become a Social Purchasing Partner
Buy Social Canada is excited to recognize and work with your organization to support you in your social procurement journey and connect you with social enterprise suppliers across Canada.
“If just a small fraction, for example 5%, of what the public and private sectors currently spend on procuring goods and services was directed to social enterprise businesses, that collective buying power will build dynamic local economies and create more inclusive communities.” – Elizabeth Chick-Blount, Buy Social Canada CEO
Join the Buy Social Pledge, learn and implement as a Buy Social Engage member, impact your local community as a Buy Social Local Member or design your own Buy Social Journey.
Other ways to get started
- Sign up for the Buy Social Canada newsletter to stay up to date on news, tools and events
- Get in touch for social procurement consulting support, or support to implement social procurement in construction and on projects with a Community Benefit Agreement (CBA).
- Register for social procurement training.
- Find local social enterprises to purchase from in your area.
About Social Enterprise
What is social enterprise?
A social enterprise is a business that generates a significant portion of its revenue through the sale of goods or services, embeds a social, cultural or environmental purpose into the business, and reinvests 51% or more of profits into the social, cultural or environmental mission.
This definition is internationally aligned with Social Enterprise World Forum, Social Enterprise UK, Buy Social Scotland, Social Traders in Australia, Buy Social USA, Buy Social Ireland, and many others.
Profit reinvestment is a central part of the social enterprise business model, and it verifies that these businesses put mission before profit, prioritizing people and the planet over shareholder and owner wealth.
Social enterprise is a powerful business model to tackle the challenges our economy and communities are facing today.
What is social enterprise? (webpage)
How are social enterprises different from other businesses?
Because their social, cultural or environmental mission is at the heart of everything they do, social enterprises put people and planet before profits, with little to no profit redistribution to shareholders and owners. They compete with traditional for-profit businesses, but use their earnings to invest in vibrant, healthy communities.
Why is it important to purchase from social enterprises?
Buying from social enterprises may be the most direct—but not the only way—to accomplish your social procurement objectives.
When you purchase from a social enterprise, in addition to getting the product or service you’re paying for, your dollars go toward supporting community outcomes including:
- supportive and inclusive employment and skills training for newcomers, Indigenous people, youth, women and other equity-deserving groups;
- social inclusion;
- transitional work for people exiting the carceral system;
- sustainability initiatives including green energy and waste diversion;
- poverty and homelessness reduction;
- and much more.
The future of business is social enterprise: the business model whose foundation is built on justice, equity and inclusion for employees, owners, customers, the environment, and community stakeholders.
How social enterprises define success (blog post)
What do social enterprises sell?
Social enterprises sell everything; chocolate and candy, corporate catering, junk removal, construction services, healthcare, family services, employment assistance, arts and culture, consulting, landscaping, clothing and textiles, and much more.
Explore the Certified Social Enterprise Directory to see the full range of goods and services provided.
Can social enterprises handle large contracts?
While not every social enterprise is focussed on contract opportunities or large enough to take them on, there are many social enterprises delivering on contracts from tens to hundreds of thousands and up to millions of dollars.
In a recent survey of Buy Social Canada Certified Social Enterprises, 90% of survey respondents said they had capacity to take on larger contracts than they currently had, while 33% of respondents said they could take on contracts over $1 million. With time to grow, they indicated they could take on contracts up to $50 million in the next three years.
Why does certification matter?
Buy Social Canada Social Enterprise Certification is not about evaluating the impact of an organization or how “good” it is. We are recognizing when the structure of a business prioritizes reinvesting money (majority of profits) into their mission instead of shareholder wealth.
Our mandate is to recognize and support businesses with this structure. We see this type of business as key to transforming the marketplace and maximizing community capital.
Our certification ensures that the business isn’t using social value as a business strategy for more financial gain to go to shareholders and owners.
How can I become a Certified Social Enterprise?
If you are a Canadian business that sells goods or services, embeds a social, cultural or environmental purpose into the business, and reinvests the majority of profits into your social mission, we’d love to connect.
Purchasers are increasingly putting a social value into their purchasing criteria, and they are asking for verification. Verify your social impact with Buy Social Canada Social Enterprise Certification to show stakeholders, clients, and your team that you put your money where your mouth is and contribute to community wellbeing.
Social Enterprise Certification (webpage)
About Buy Social Canada
Who is Buy Social Canada?
We are a social enterprise that believes that procurement is more than an economic transaction, it contributes to community social and economic goals. We see opportunities to buy and sell with impact at all levels in the marketplace.
Through social procurement advocacy, education and consulting, we are taking back control from the invisible hand of capitalism. As we create a social value marketplace, we are unleashing the transformative power of the market.
What do we do?
We bring together purchase-driven purchasers and social value suppliers to build business relationships that generate social benefits for communities across the country.
We offer social procurement consulting for the public and private sectors, including policy design and implementation, community benefit agreement design and implementation, and stakeholder engagement.
We work with community to advocate for social procurement and social enterprise, hosting virtual and in-person engagements and events to increase awareness, network and share learnings.
We provide social procurement training to purchasers and suppliers and share free resources on our website.
We offer a recognized, Canada-wide social enterprise certification that opens the door to our growing network of social purchasers.
What is Marketplace Revolution?
During the pandemic, Buy Social Canada’s founder David LePage put 50 years of work and experience on social enterprise and community economic development into his first book, Marketplace Revolution. It outlines the potential of the market that needs to be harnessed to generate community capital instead of shareholder wealth. It describes the potential and current impact of the social value marketplace.
“It’s time to transcend the dogma and practices of extraction economics that result in social exclusion and income inequality. It’s time for social enterprise, social procurement, and social value finance to converge to create community capital. It’s time for Marketplace Revolution.
“In government, business, and community, the tools, practices, pilots, and capacity to make it happen are already in hand. All that is necessary is for us to make the commitment to build the healthier communities we all know are possible and launch the Social Value Marketplace.” – David LePage
Buy the book in paperback, digital or audiobook versions:
Marketplace Revolution: From Concentrated Wealth to Community Capital
How can I get involved?
Verify your impact:
Work with us:
- Explore social procurement consulting
- Get support to implement social procurement in construction and on projects with a Community Benefit Agreement (CBA)
- Subscribe to the Buy Social Canada newsletter for updates on events, training and news from the sector
- Register for social procurement training
- Bring us in to present to your organization
- Join Buy Social Canada engagements to connect with peers
- Register for upcoming events
Advocate for social procurement and social enterprise:
- Speak to your local government and representatives about adopting or strengthening social procurement policy
- Help raise awareness about social enterprise and social procurement in your networks
- Find local social enterprises to purchase from in your area
Get in touch: