2%

3%

16%

5%

2%

37%

9%6%3%

15%

2%

Figure 1: Survey Response Rates by Province/Territories

Social Purchasing & Procurement Survey of Non-profit Social Enterprises in Canada

This brief report – undertaken throughthe Centre for Learning, Social Economy& Work (CLSEW) at the University ofToronto, the Social Enterprise Council ofCanada, the School of Policy Studies atQueen’s University, and the School ofCommunity Resources & Developmentat Arizona State University –summarizes the highlights of the surveyconducted in the Fall 2017 of 349 non-profit social enterprises servingmarginalized social groups from acrossCanada, including your organization.The survey’s purpose was to gatherinformation on the impact of socialpurchasing and procurement on socialenterprises employing or training themembers of marginalized social groups.

We had a 37% response rate, 129 organizations, somewith more than one social enterprise. As shown infigure 1, those who completed the survey come fromacross Canada, with Ontario, BC, and Nova Scotiabeing most heavily represented.

Nearly 90% of the organizations in this study wereengaged in employment, training, or a combination ofthe two for members of marginalized social groups,the largest being people with developmentaldisabilities. Just over one quarter of organizationsdefined their approach as micro-entrepreneurship,meaning that they were training people to be self-employed. Bear in mind that these were not exclusivecategories and that some organizations utilized two orthree approaches.

Only 22% of the social enterprises lacked a parentorganization. The parent organization was animportant support to these social enterprises, asshown in figure 2. Of organizations with a parent,nearly 90% received personnel support, 75% receivedspace, and two-thirds received direct financialsupport.

April 2018 | page 1

87%

56%

75%68%

18%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Personnel (timeof staff,

administration,management,

etc.)

In-kind (goods,materials,

transportation,etc.)

Space (offices,storage,

accommodation,etc.)

Financial (grants,loans, loss write-

off, etc.)

Other

Figure 2: Types of Parental Support (percentages of Organizations which have parents)

If you’re interested in learning more about the project…

A complete report with a breakdown of each item in the survey, including further details on the surveymethodology, will be available on our website www.oise.utoronto.ca/clsew. This brief overview highlights thekey findings of the report. We are also preparing a paper for a research journal. If you would like a copy when itis available, just email us with the request at OISE.SocialProcurementProject@utoronto.ca.

In addition to socialprocurement, we also were interested in socialpurchasing, meaning: do the clients of the socialenterprises base their purchases in part on theenterprise’s social mission? We didn’t have a directmeasure of social purchasing because it depended onknowing what motivated clients, particularlyinstitutional clients. One interesting finding in ourdata is that even though nearly 60% of the sample didnot make bids on social procurement contracts withgovernment, almost 20% of those who neversubmitted bids said that government agencies were aregular customer and another third said thatgovernment agencies were intermittent customers(figure 4).

April 2018 | page 2

Only a small portion of the sample had success in their bidsfor contracts (figure 3). Fifty social enterprises in oursample bid on government tenders, and of that group, 17,approximately one third of the bidders, were successful.For business tenders, 46 bid and only 9 (22%) weresuccessful; and 41 bid on tenders with other non-profitorganizations such as hospitals and universities and only 9were successful (23%). The small number of successfulbidders made it more challenging to look at whether anyother factors were associated with being successful.

We set out to discover whether non-profit social enterprises servingmarginalized social groups bid on social procurement tenders and benefit from them. We looked at this questionin relation to tenders from government agencies, business corporations or from non-profit organizations such ashospitals and universities. There were two factors that predicted if a non-profit organization would bid on aprocurement tender: the organization’s income, with organizations with a larger income being more likely thanthose with a smaller income, and the organization’s self-evaluation of its marketing capacity, with those with ahigher estimate of its marketing capacity more likely than those who were not. Organizational revenue wasstrongly correlated with an organization’s human resources. Put simply, the organizations with the people to workon a tender were more likely to do so.

Social Procurement Practices

Social Purchasing

67%78% 78%

33%22% 23%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Government Business Other nonprofits

Figure 3: Rates of Success and No Success (among organizations which have submitted bids)

No success Success

Not a customer,

45%

Intermittent customer,

33%

Regular customer,

18%

Missing or null, 4%

Figure 4: Percentages of Purchase Frequency from Government Agencies (among organizations which have never submitted bids)

In the second stage of the study, we intend tofocus on institutional clients of social enterprisesserving marginalized social groups and try tounderstand to what extent they engage in socialpurchasing. It appears that many of the socialenterprises in this study may lack the capacity tobid on procurement contracts, but they maypossibly have less formal arrangements withgovernment agencies, businesses, and other non-profit organizations that support the services thatthey offer.

The survey responses indicate that the participatingsocial enterprises believed that their institutionalcustomers placed a high degree of importance ontheir social mission in making their purchases. On a10-point scale, with 10 indicating that social missionwas extremely important in the purchasing decision,the mean for government agencies was 7.3; 8.2 forother non-profit organizations; and 6.3 forbusinesses.

Similarly, more than 60% of the participating socialenterprises indicated that they have never submittedbids to businesses. However, more than half of thesesocial enterprises that have never bid to businessescalled businesses their regular customers and over30% said that they were intermittent customers (figure5). The numbers were similarly high for other non-profit organizations (figure 6): of those who had neversubmitted a bid for social procurement to anothernon-profit organization, 34% said that they had non-profit organizations as regular customers and 51% asintermittent customers. These findings imply thatgovernment agencies, businesses and other non-profitorganizations may be engaged in a form of socialpurchasing (as distinct from social procurement), inwhich they attempt to support relatively small, non-profit social enterprises serving marginalized socialgroups.

Not a customer,

14%

Intermittent customer,

33%

Regular customer,

52%

Missing or null, 1%

Figure 5: Percentages of Purchase Frequency from Businesses (among organizations which have never submitted bids)

Second Stage of the Study

April 2018 | page 3

Not a customer,

11%

Intermittent customer,

51%Regular customer,

34%

Missing or null, 4%

Figure 6: Percentages of Purchase Frequency from Other Nonprofits (among organizations which have never submitted bids)

This research was supported by the Social Sciences and Humanities Research Council of Canada.