Our current assumption is that traditional funding mechanisms and current program models do not suffice in delivering long term sustainable employment strategies for disadvantaged populations nor do they address the current, systemic financing issues in the Canadian social sector. We also realize that the original venture philanthropy principles we had hoped to use are not the answer. To overcome these challenges, we started to look for new ways in which to apply the venture philanthropy approach in Canada. It was this exploration that led us to the social enterprise model - otherwise known as social purpose or community businesses.

Social enterprises are businesses that use market-oriented production of goods or services to pursue their social mission. We are interested in social enterprises that help people develop sustainable livelihoods and develop paths towards self-sufficiency. The social enterprise model can be used to strategically create employment for disadvantaged groups in a “friendlier” business environment. Every “target employee” has a paid wage or salary appropriate to their work productivity capacity. Depending on the needs of target employees, additional skill development training is often provided and/or access to other services such as counseling, language training or help with finding stable housing. Some social enterprises will strategically keep wages low in order to reinforce to target employees that this is a steppingstone to better jobs down the road.

We decided to bet on this model and set up a process to work with organizations utilizing this approach. Instead of investing in programs and services intended to prepare people for the workplace, why not invest in those enterprises that hire disadvantaged groups while providing relevant social support services? Our hypothesis is that if you can create viable businesses that balance a financial bottom line while providing support services and employment opportunities for a marginalized or at-risk population, the opportunity would exist for social organizations to maintain more control over their destiny while continuing to achieve their social goals.