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					Community Economic Development:
What Is It, and Why Should it Matter
       to Corporate Canada?



           Edward T. Jackson
           Carleton University
1
       Community Economic Development:
                 What is It?


A field of practice in which community-based non-profits:

n   blend business and social techniques
n   mobilize both local and external resources
n   to reduce poverty and unemployment
n   and revitalize geographic communities (rural and remote
    areas, urban neighbourhoods)
n   or communities of interest




                                                              2
          What Does CED Look Like?

n   Community development corporations
n   Community Futures Corporations
n   Co-operatives (consumer, producer, worker,
    multi-stakeholder)
n   Businesses owned by social-service non-profits
    or charities
n   Aboriginal development corporations
n   Community land trusts
n   Community loan funds
n   Micro-finance programs
n   Social venture philanthropy

                                                     3
Why Should CED Matter to Corporate Canada?


n   CED contributes to solving social problems
n   Stronger communities have healthier economies
n   Local heroes need allies
n   CED is good for the corporate bottom line




                                                    4
             The Business Case for
            Corporate Support of CED

CED is a tool for corporate social responsibility that
  generates benefits to corporate partners,
  including:

n   Reputational gains among investors and the
    public
n   Open policy and regulatory relations with
    government
n   Brand differentiation
n   Customer loyalty
n   Employee recruitment and retention
n   Procurement savings
n   A “social license to operate”
                                                         5
Corporate Social Responsibility through Social
     Community Economic Development


n   Strategies:

    Ø   Grantmaking to CED projects

    Ø   Venture philanthropy

    Ø   Joint ventures

    Ø   Procurement from community enterprises

    Ø   Employee volunteer engagement




                                                 6
“Hot-Button” Policy Issues and CED
            Initiatives




                                     7
“Hot-Button” Policy Issues and CED
            Initiatives




                                     8
       Capital Markets for Community Economic
                    Development

                                 Grants
0   $10K $50K $100K $250K $500K $1M    $2M   $3M $4M     $5M   $6M   $7M

•Governments            •Governments
•Development Agencies   •Regional Agencies
•Foundations            •Corporations
•Corporations




                             Loans / Equity
0   $10K $50K $100K $250K $500K $1M $2M $3M $4M          $5M   $6M   $7M
•Community
                 •Corporations      •Corporations
  Futures
                 •Credit Unions     •Credit Unions
•Community Loan
                 •Business          •Targeted Pension
  Funds
                  Development Bank   Investments
•Credit Unions
                 •Regional Agencies •Regional Agencies
•Social Venture
                 •Labour Funds      •Labour Funds
  Capital
                 •Banks
•Banks

                                                                           9
          Intermediaries Optimize
               CED Success
n   Forms: Community development corporation, non-profit
    umbrella, foundation, program, network, consortium
n   Functions: Technical assistance (consulting, training,
    business planning, market studies); financing (grants,
    loans, equity); management support; political support
    (promotion, lobbying, regulatory change)
n   Funding: Foundation, corporate and government grants;
    loans and other program-related investments; contracts;
    enterprise surplus; asset appreciation; private
    philanthropy; donations and gifts; volunteer time
n   Factors of Intermediary Success: Leadership (skills,
    vision continuity, succession); structure (flexible,
    evolving); strategy (growth opportunities, backward and
    forward linkages, first-mover advantage); management;
    human resources; innovation; replication and scaling up;
    financing (diversification of revenues); accountability

                                                               10
  Case Study – New Dawn Enterprises
                                        Government                 Corporate
                                      Grants/Contracts            Partnerships
                                                               • Home Depot


 Cape Breton                                    New Dawn            BCA Holdings
                       New Dawn                                   • Venture Fund
Association for                                  Holdings
                        Enterprises                                 (Equity, Loans)
    Co-op       1973 (Non-Profit CDC)          • Investment
 Development                                     Firm



Cape Breton      Cape Care                 Highland              New Dawn Guest
 Association    Services Ltd.            Resources Ltd.            Home Ltd.
 for Housing •Home Care Services        § Private career       • 30-bed residential
                                          college                care facility
Development
•Real estate
  company for
 affordable housing
                         Credo      Sydney Senior             Pine Tree Park Estates
                      •Business       Care Home            • revitalized military base
                       processes       Living Ltd
                       outsourcer   •37-bed program
                                                               David Realties
                                                              • Commercial
    Source: newdawn.ca
                                                                landlord              11
   Case Study – Social Capital Partners
Bill Young/ Bealight
                                     Social Capital Partners
     Foundation

  Research on SROI/                         Social Venture             Sector and Policy
      Evaluation                               Portfolio                 Engagement
                                         Grants, Loans, Equity



  Renaissance,           Inner City Renovations,                   Social         Social
    Montreal                    Winnipeg                         Enterprise     Enterprise
•$100K equity              •$50 K grant and board
•$100K loan                 involvement
•Used to test new ideas in                                          Investment-Decision Steps
 marketing, merchandizing and                                •    Concept Review
 pricing                                                     •    Business Plan Review
                   Challenges                                •    Due Diligence
   • “Dearth of great social entrepreneurs”                  •    Alignment and Deal structure
   • Lack of sophisticated business models                   •    Investment and Ongoing Working
   • Limited sources of social capital                            Relationship
                                                             •    Monitoring and Reinvestment

Sean VanDoorselaer, “Venture Capital for Social Enterprise,” Making
Waves, 15(3), 2004, 10-13
                                                                                             12
           Evaluation of Community
            Economic Development
Evaluation Defined: Assessment of social,
environmental and commercial results, lessons learned and
accountability systems by key stakeholders.
Promising Methods:
 n Return on Taxpayer Investment (ROTI) – Input-output
   modeling of direct, indirect and induced effects of
   government-supported interventions
 n Social Return on Investment (SROI) – Method for
   assessing the social costs associated with the individual
   employees and the community enterprise itself (Social
   Capital Partners, Roberts Enterprise Development Fund)
 n Enhanced Value-Added Statement (EVAS) – Quantifies
   the value of social impacts and volunteer contributions
   of a non-profit or cooperative (Quarter et al, OISE/UT)
 n Return on CSR investment in CED to the corporate
   bottom line (surveys, focus groups on stakeholder
                                                             13
   perceptions and decisions)
Questions




            14
Useful Websites




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