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Marc and Craig Kielburger: Global Voices — U.K. model fosters social entrepreneurs

In this era of chronically tight government budgets, consider this: Every year while Canadians spend billions of dollars on jails, courts and police to prevent convicted criminals from re-offending — with mixed results at best — a prison outside Lond
In this era of chronically tight government budgets, consider this: Every year while Canadians spend billions of dollars on jails, courts and police to prevent convicted criminals from re-offending — with mixed results at best — a prison outside London, England, has a strategic program to prevent recidivism that costs the government almost nothing.

And the seared duck breast with carrot and coriander risotto is decidedly more scrumptious.

You see, the Clink Restaurant in Banstead is run by convicts — or rather, staffed by the recently and currently incarcerated.

It’s the training centre for a social enterprise that provides inmates at High Down prison with training, certification, and links to full-time, post-release employment in the culinary and hospitality industries.

It was one of hundreds of social enterprises represented at the 2013 Skoll World Forum, where the growing movement of businesses making a profit — and a difference — was celebrated, and best practices were exchanged.

These so-called social entrepreneurs are unburdening governments and charities by tackling local and global issues from Middle East peace and clean water to education and sustainable fisheries.

But not so much in Canada. Although the forum and the pioneering foundation behind it were started by Canadian Jeff Skoll, there were noticeably few Canadian social entrepreneurs among the delegates two weeks ago.

That’s because Canada trails the U.K. and other countries in taking full advantage of this burgeoning, win-win movement that merges smart business sense and the pursuit of a better world. The ideas and the people are ready to go, but our governments hold us back.

In 2005, the United Kingdom created the legal structure for Community Interest Companies (CICs) to use business models for social objectives. CICs can raise capital and are taxed like regular businesses, but their assets and surpluses must be dedicated to their social purpose instead of maximizing profit.

In the U.S., nine states have similar legislation allowing Low-Profit Limited Liability Companies (L3Cs), but only two Canadian provinces — British Columbia and Nova Scotia — are developing the regulatory process to support social enterprises, expected to come into effect this year.

The main advantage of the CIC and L3C is public recognition that these businesses must operate for a social purpose. Consumers increasingly seek to make a difference outside traditional charitable giving, namely through everyday purchasing choices.

Setting up clear regulations tells consumers which companies are providing products or services —§or investing a portion of their profits —§toward solving societal problems.

Some companies make such claims — think “greenwashing” so common on alleged environmentally friendly products —§without having to provide any proof that they are providing a benefit.

But businesses legally required to provide a social benefit — and clearly identified or branded as such —§help consumers make ethical spending choices to maximize the greater good.

Social enterprise is not an unfamiliar concept in Canada. Institutions like the MaRS Discovery District in downtown Toronto, the Social Enterprise Council of Canada, and the B.C. Centre for Social Enterprise link and support social entrepreneurs across the country.

Businesses like Groupe Convex outside Ottawa and Winnipeg’s BUILD train and hire people with barriers to employment, and Vancouver’s Atira Property Management Inc. donates all its profit to its partner organization that works to end violence against women.

But the potential is much greater. There are 7,000 CICs in the U.K., and 700 L3Cs in the U.S. In addition to setting up a similar regulatory structure to those jurisdictions, the Canadian government could give preferential treatment for social enterprises that are tackling social ills, such as preferred bidding for government contracts or easier access to start-up capital or loans.

Our personal story is a telling tale. When we decided to start Me to We, a social enterprise in support of our charitable work, we found no credible guidelines.

So we cobbled together a structure that would enshrine a social benefit into our founding principles, creating a system of governance and giving consumers the certainty they need that the social enterprise’s products would go toward a social good.

Half of Me to We’s annual profits are donated to Free The Children and the other half are re-invested in the social enterprise to grow its mission.

Creating the structure for a social enterprise took the generous help of two of Canada’s best law firms and a retired Supreme Court justice, including an Oxford University-trained lawyer and an MBA grad.

But not every youngster with a good idea has such help.

A simple process such as the U.K. model and those under consideration in B.C. and Nova Scotia would make it easier for aspiring social entrepreneurs to get their projects started.

Canada can quickly become a world leader in the emerging social economy by making it possible to do good and do well at the same time.

Craig and Marc Kielburger are co-founders of international charity and educational partner Free The Children. Its youth empowerment event, We Day, is in 11 cities across North America this year, inspiring more than 160,000 attendees from over 4,000 schools. For more information, visit weday.com.