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Although it says nowhere that social impact businesses must be small, the reality is that most social enterprises and responsible businesses in the room at the Social Impact Purchasing Summit in Vancouver on November 8th were small. Sadly, what prevents many social enterprises from growing is, along with the communication and expectations challenges I introduced in my previous post, a lack of congruity with the processes involved in winning contracts of significant size.

The challenge arose on Wednesday evening of helping social enterprises do business with the federal government, or access companies winning big contracts with secondary contracts. This theme foreshadowed much of the next day’s conversation in LOCO BC’s afternoon panel, “How to buy Local and Social,” and much of the subsequent concluding discussion. The RFP application process is a huge investment of time and energy. According to Eclipse Awards’ Toby Barazzuol, and many others, considering the scale requirements of orders, time pressures for production, and frequent inside jobs and foregone decisions, it is rarely worth that investment for small social enterprises.

Is requirement the way forward?

Larry Berglund introduced an idea to require that 30% of a company’s sourcing come from local suppliers and social enterprises, allowing the remaining 70% to go to large contracts and RFPs. This may be a starting point, although it does not address the interesting door that could be opened if those small local businesses had access to secondary needs associated with these large contracts. It also raises the legitimate concern brought up by Mickey McLeod of Salt Spring Coffee, in an industry steeped in challenges of legitimate certifications, that certification and real values aren’t necessarily congruent. This means following regulations and requirements may not be the best decision, or best precedent to establish.

On another note, a more fundamental one, this requirement does not address the price point and production logistics challenges that are also at the core of many consumer-scale barriers to purchase from these enterprises. The bottom line again became the resolution that somebody has to pay more to transition to socially responsible purchasing. But does a requirement for local purchasing do anything to transform that discussion into one about fiscal terms versus “total cost” terms?

Effectively addressing this challenge requires overcoming hesitations and a history of unreliability on all sides of the equation. The panelists on Thursday were comfortable agreeing that the most important thing small businesses needed from purchasers for large and small scale relationships to work is forethought. The scale of production of many social enterprises can’t handle big orders, or rush orders. And the scale of communication and delivery varies; it is certainly not always worse working with social enterprises, but the reality exists that many social enterprises have less supply expertise and capacity for communication staffing. No one was making excuses, but these issues contribute to the perceived lower quality of products and services from socially responsible businesses, a challenge that needs to be addressed from many sides.

Social enterprises probably won’t be winning dozens of government RFPs in the next few years, nor does it seem like most of them would be up to the challenge of such a massive increase in the scale of production, sourcing, and logistics. However, a closing comment from the audience revealed one of those pieces of “low hanging fruit” that bridges one of the gaps between large and small-scale enterprises. Most small businesses at the summit would be thrilled for contracts of a size that qualify for large business’ “discretional spending” but which would provide significant stability, revenue, and resonance throughout their supply and value chains.

Want to learn more about social impact purchasing? Read Social Impact Purchasing: Buyer be aware

Annie is an MBA Candidate at UBC, where she also serves as president of UBC Net Impact’s Graduate Chapter. She grew up in North Carolina and has lived in Turkey and France, moving to Vancouver from Chicago, where she managed an independent grocery store and kept her hands dirty as a bike mechanic and yogurt-making advocate. She looks forward to continuing to develop an impactful career that inspires innovative collaboration and builds sustainable communities around equitable, enjoyable food distribution.

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