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Social procurement helps entrepreneurs create real change

Businesses that source ethical products and services don’t just make money—they make a difference, too

Ineeded 5,000 promotional buttons—and fast—for an upcoming conference. I was launching my Toronto-based feminist media company, LiisBeth, and I wanted every cent we spent on the business to provide more opportunities and revenue to diverse women-identifying and non-binary entrepreneurs. I made it my mission to buy our buttons from a company that was at least 51 percent women-owned. Women make up 50 percent of the population, so how hard could that be?

OK, it was a little harder than I thought. I found three suppliers whose prices seemed right, but when I went to each of their websites to see who owned the companies, staff pictures were available, but ownership information was not. So I got on the phone to ask who was really in charge. After some nice but ultimately fruitless conversations, I realized that none of these companies fit our criteria.

Turns out that while women make up half the population, only 16% of small and medium enterprises in Canada are majority women-owned. I felt frustrated, but it also made me more determined: That was exactly the problem I could help to address by sticking to my gender-justice guns. Finally, within a few hours of me posting about my search on LinkedIn, the founder of a women-owned promotions company reached out. I gave her my business. She was especially thrilled to take my order, as they were just starting out. Mission accomplished! It took a little longer than if I’d just gone for the cheapest or fastest option, but it felt so worth it to see our core values in action.

Like anyone who’s running their own business, we socially conscious entrepreneurs want to do well—but we also want to do good. So when we’re creating or revising our business plans, more and more of us are working a social procurement strategy into the big picture. In layperson’s terms, that means we want to spend our business dollars intentionally to support people in our communities who are all too often overlooked and underserved. While my company champions gender justice, yours will have its own unique social priorities.

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Strategic spending on everything from beans for the office coffee machine to courier services to art for the boardroom can have a powerful impact on our communities (and society at large) in terms of inclusion, equity and social stability—necessary conditions for enterprise success.

Companies with social strategies typically end up building stronger, more diverse and more enduring community connections, not to mention resilient local economies. A recent report on urban planning in Toronto notes that “Diverse and inclusive cities and communities have more social, economic and physical resilience in the face of unforeseen challenges because community members are equipped with the values of equity, diversity and inclusion to adapt to changes and create positive opportunities for community-(re)building.” And a 2013 study by Ernst & Young to assess the impact of a Vancouver company’s social procurement strategy showed that, for every dollar spent with a target employee group, the social return on investment was $3.32.

Social procurement takes a little extra effort—especially when you’re building your network of suppliers and service providers from scratch—but it’s one of the most powerful tools you have to effect change and support your local economy as a business owner. Here are eight strategies to help you get started.

1. Find socially minded suppliers and service providers at the Toronto Enterprise Fund
Once you’ve figured out how you want to make your business dollars work for social change, if you’re in the Greater Toronto Area, you can visit the Toronto Enterprise Fund (TEF), a United Way Greater Toronto initiative, to find GTA companies that can put your values into action.

If your social goal is to support single mothers, for example, you might want arrange office cleaning services with TEF-funded Carefirst Cleaning Services, a social enterprise that creates jobs for lone parents and newcomers. If you’d like to help eradicate racial discrimination, you could get your carpentry, maintenance and construction jobs done by the team at Out of the Box, where racialized young people access quality training, mentorship and job opportunities. Or if you want to tackle homelessness, you could get your flyers and banners printed up at Phoenix Print Shop, a social enterprise that trains and hires youth who are either homeless or at risk of homelessness.

2. See dead-end searches as opportunities to educate
Recently, I was hunting for a new business-insurance provider and was referred to a company that, on further investigation, turned out to have no women in leadership positions. Rather than move on right away, I emailed them my observation. They got right back to say they were working on improving gender balance, so at that point I was able to offer some guidance by sending them a link to our social procurement policy, as well as the Women’s Empowerment Principles (WEPs), a set of best practices outlined by global industry leaders. The insurance company didn’t get my business this time, but hopefully our conversation got them thinking.

3. Expect the unexpected—in a good way
In seeking out socially minded suppliers and service providers, not only did my company get terrific value and service, we also, and in some cases, developed innovative partnerships with like-minded entrepreneurs, who consistently inspire my whole team with their tenacity and creativity. And their participation can bring unexpected benefits, too.

An example is our recent work with Sisa Lleses, a newcomer and the founder of Design off the Boat, a company with global reach that designs products and brands. In hiring Lleses to help us create an amazing new online incubator for feminists in business, we also saw her company expose our magazine to feminist communities as far afield as the Philippines. We are even starting to receive story proposals about feminist entrepreneurship from journalists in that part of the world. Purposely seeking out, in this case, a company led by a woman of colour, had the welcome side effect of growing our readership and brand reputation within a new community for us.

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4. Don’t check your biases
Occasionally, I meet people who believe it’s illegal to advertise for suppliers representing a particular demographic. Cassandra Dorrington, president of the Canadian Aboriginal and Minority Supplier Council (CAMSC) makes clear that “It is not against the law to have a supplier diversity program as long as it is aligned to your policy statement.” To ensure fairness, Dorrington adds, “Once you have a policy statement in place, it is imperative to have created a process to facilitate your ability to deliver on this statement and openly communicate this process both internally and externally.”

5. Phase in your plan
If ripping up your old supplier list seems a little too radical, make changes incrementally, as needs arise. Nancy Wilson, founder and director of the Canadian Women’s Chamber of Commerce says you can start small by “evaluating the diversity of your current supplier list, and then add a step in your usual procurement process to ensure you receive bids from a wider variety of business owners going forward.”

6. Get specific in your goals
What does success mean to you? If you’re going to make a real difference, it’s important to articulate and communicate your goals. The City of Toronto’s social procurement program is a good example of a well-defined plan. It spells out clearly what communities it prioritizes, the eligibility criteria, how to apply as a diverse supplier and whom to call if there are any questions.

In drawing up a plan for your business, you should identify which equity-seeking groups you aim to advance. You could also choose one or two spending areas to work on (say, catering or office supplies) or articulate a percentage target. Buy Social Canada considers spending 20 percent of your total procurement budget to benefit social groups or causes a respectable effort.

7. Make your mission known to the people who matter
How will you let your target group know you have an opportunity available? Outreach may include signing up for or joining various social procurement networks, such as Buy Social Canada, which brings buyers and sellers together via its directory. If you’d like to focus on Indigenous-owned and -operated businesses, a great first point of contact is CAMSC. Or to ensure your business dollars support LGBTQ+-founded or -hiring enterprises, start with Canada’s LGBT+ Chamber of Commerce.

8. Stop making excuses not to create a social procurement plan
Toronto has an estimated 200,000+ entrepreneurs and small business owners. Its startup ecosystem was ranked #15 out of 1,000 cities in 2019 by Startup Blink’s rankings report, and the city is host to more than 60 business incubators and a plethora of co-working spaces that support solopreneurs, social enterprises and small business owners alike. Yet, at the same time, the Toronto Foundation’s Toronto’s Vital Signs Report 2017/2018 shows that Toronto is “the child poverty capital of Canada”; racialized children are twice as likely to be living in poverty than non-racialized children; and the use of shelters and food banks in the GTA is on the rise. The report also highlights that the users of these services are disproportionately women, people with disabilities or serious illnesses, and increasingly, people over 45.

Social procurement policies can help level the playing field. Imagine the impact if all of Toronto’s 200,000+ entrepreneurs and small business owners stepped up with their social goals. They could make an enormous and vital difference to the quality of life for everyone in the GTA, by providing new income opportunities for systemically marginalized individuals. It’s time to get our business dollars working for our whole community.

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