Leyne: And now, an idea that just might work

Les Leyne Victoria Times Colonist / Kamloops Daily News
April 25, 2012 01:00 AM

Amid the electioneering, showboating and the shouting, MLAs quietly took time last week to endorse a genuinely new idea.

It's a provision in a mundane financial-statutes bill that will allow for the creation of a unique new type of business arrangement for charities and non-profit agencies: a "community contribution company."

Surrey-White Rock Liberal MLA Gordon Hogg has been nurturing the concept for the last several years.

He's been rejected at several points along the way, but persuasion and persistence paid off when he got the idea incorporated into a bill that was introduced last month by Finance Minister Kevin Falcon.

And when it came up for debate last week, it got a fairly warm reception from the Opposition.

The bill is about an emerging sector of society known loosely as the social-enterprise or social-innovation sphere.

At present, it's a loose mesh of non-profit groups using government funding or donations, including those from business, to do things in different ways. The idea in the legislation is to set up a designation that formally recognizes the new entities and spells out how they will work.

A group will be able to choose, if it wishes, to incorporate as a designated community-contribution company.

Non-profit outfits now currently operate under certain restrictions in terms of how they function and what they are legally allowed to do. Opting to become a C3 would free up some groups to operate in a more businesslike fashion, but still with the goal of having a social purpose. Agencies operating as such would need at least three directors, and none of the business deals concluded would be allowed to benefit any of the directors. It would have a restricted ability to distribute profits to shareholders.

There will be a higher degree of accountability compared to other corporations when it comes to reporting activities. But they'd have more financial leeway than most current non-profits to operate in pursuit of their community goals.

Hogg started pushing the idea several years ago. He was interested in the potential for social enterprise, and when Partnerships B.C. was formed, urged it to make room for the idea. It didn't go anywhere.

He got a brief endorsement a few years later, when the 2005 throne speech included a vague reference to something called the Pacific Centre for Social Innovation. But that, too, fizzled out.

A more recent push finally put him over the top. The bill will be scrutinized later this month and passed.

Hogg has a hypothetical example of how it might work.

Health economists now know exactly how much it costs to treat something like Type 2 diabetes. So an agency can identify a population with that disease and propose a contract to serve, treat and help them for a period of years.

It could then borrow money on the strength of the contract and then commit with an agency or health authority to provide the service. One advantage is that it brings currently segregated interests in government, non-government and business together.

Another example offered this week was low-cost grocery-food exchange programs. They could enjoy advantages incorporating as C3s.

A disadvantage is that some people could view it as government downloading responsibilities to hybrid outfits that will have to face fewer controls on their activities. Hogg said regulations could curb that impression. Experts who were initially skeptical of the idea have become supporters over the years.

A related notion involves changing venture-capital law to allow flow-through tax credits for investors in such companies. You get them for investing in mining firms. Why not for a social agency?

It's new and different and will be watched closely to see how it develops.


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