Module 2
Preparing the Organization
Who should be involved in a social procurement initiative and what should they do? In this module, we describe a governance and implementation model that anchor institutions can adopt to help identify, plan and implement social procurement initiatives in a sustainable way.
checklist:
- Establish a cross-functional group to plan and prepare
- Understand what you are already doing and conduct a social audit
1. Establish a cross-functional team to plan and implement social procurement initiatives.
Social procurement is a whole-organization initiative. It requires intentional and regular collaboration from multiple parts of the anchor institution. Because of this, anchor institutions should strive to establish a cross-functional team dedicated, at least in part, to planning and implementing the institution's social procurement activities.
This team can be an ad hoc team, or it can form a more formal part of the organization. Many organizations embed this work in existing cross-functional sustainability committees.
The following figure illustrates the different components of this group:
Illustration of the cross-functional social procurement team.
| Role | Purpose | Responsibilities |
|---|---|---|
| Executive sponsor | Provides leadership | Approves straetegic direction |
| Community engagement | Provides leadership | Approves straetegic direction |
| Procurement/Finance | Provides leadership | Approves straetegic direction |
| Operations | Provides leadership | Approves straetegic direction |
| Capital | Provides leadership | Approves straetegic direction |
Case Example: City of Toronto
The City of Toronto's social procurement meets on a regular basis. The team jointly empowered by the the Executive Director of the Social Development, Finance and Administration Division, and the City Treasurer. It consists of social policy staff, the social procurement coordinator, and workforce development staff.
Anchor institutions are large, often but not exclusively, public sector institutions that have significant economic power in the communities they serve. Often, these institutions referred to as the "MASH" sector (municipal, academic, school boards, hospitals), or the "Meds and Eds" sector. No matter what they are called, these anchor institutions have purchase significant amounts of goods and services, develop major capital infrastructure projects, and often have substantial real estate assets. Most importantly, anchor institutions are rooted in place. Because of their unique role in the community, or the nature of their operations, anchor institutions are unlikely to leave a community, regardless of the broader economic environment.
Senior Executive Leadership
The Context
2. Conduct a "social audit" and identify what the institution is already doing.
One of the goals of the social procurement team is to highlight and enhance social procurement work that is already taking place. The team should conduct a survey, informal or formal asking the following questions:
- Do you consider social sustainability or social purpose in any of the purchasing that you do?
- Have you ever purchased goods or services from a social enterprise or community-run business?
- Do any of your programs, initiatives, or projects provide training or work experience to people who have had difficulty accessing work?
- Do any of your programs, initiatives, or projects support entrepreneurship of business incubation?
- Have you ever considered environmental sustainability when carrying out a program, initiative, or project?
- Are any of your programs, initiatives, or projects focussed on helping people to find work?
- Are any of your programs, initiatives, or projects focussed on helping people to start and/or maintain a business?
- Do any of your programs, initiatives, or projects contain eligibility requirements focussed on people with low-income, from minority or equity-seeking groups, or experience other systemic barriers?
The programs and inititiatives identified through this survey should be catalogued. These intiatives and programs can then be included in any future procurement solicitations.
The team should then work with community representatives and anchor institution partners to identify gaps in services or...
WHAT to Do:
- Identify your community mission
- Develop and release a statement outlining the institution's community commitment
- Develop an anchor institution framework or strategy
[link to anchorTO survey form]
3. Share upcoming opportunities to strategically plan.
Ultimately, the social procurement team is meant to avoid last-minute planning and additopns to projects.
Social procurement is about aligning community engagement and community development goals with operational goals. There are four components of work that most anchor institutions engage in that would be relevant to a social procurement initiative:
- Operations and capital projects
- Community engagement and outreach
- Workforce development and business incubation
- Procurement and vendor relations
, there are four broad categories of wor
4. Champion and support staff in implementing social procurement.
In the AnchorTO Blueprint, the anchor mission is achieved through the practice of social procurement. At the most basic level, social procurement is a way to use everyday purchasing activities and large capital infrastructure development projects to "generate economic and social value, well-being or benefits across regions or in specific communities" (Dragicevic and Ditta, 2016).
This can include:
- Purchasing from small community businesses that are qualified to do the work and also contribute to the neighbourhood economy.
- Asking vendors to hire graduates of local employment programs.
Why would an organization do this? Traditionally, when organizations purchase goods and services, cost and quality are the primary considerations. Over the past few decades, organizations have included environmental sustainability in their considerations. This recognizes that environmentally sustainable goods and services can not only reduce the long-term costs of harm to the environment, but can also lead to more innovative solutions. Social procurement adds a new third consideration as part of the triple-bottom line: social impact.
Private and public sector organizations in Toronto and around the world are already incorporating these three considerations in their procurement activities. In fact, the International Organization for Standardization (ISO) has adopted guidance which defines sustainable procurement as "making sure that the good and services an organisation acquires have the lowest negative and the most positive environmental, social and economic impacts feasible" (ISO 20400:2017).
Get concrete examples of social procurement projects in Toronto in the AnchorTO Showcase.
Get even more examples from around the world on community-wealth.org.
“It won’t be long before the most progressive companies designate specific team members to develop and implement social procurement strategies, establishing partnerships and working hand-in-hand with local non-profit agencies to build community capital.”
Where does social procurement Apply?
Social procurement can apply whenever the anchor institution purchases goods or services or develops capital infrastructure, from small-scale, low-dollar value contracts to multi-million dollar construction and service contracts. In practice, certain categories of purchasing are more likely to produce positive social procurement outcomes (see Module 4 on Planing your Procurement). It is completely appropriate to take a targeted approach.
Case Examples:
- As part of its social procurement program, the City of Toronto includes employment and skills training requirements in some of its larger service and construction contracts. It does not, however, include these requirements in all contacts. Instead, it selects procurements over $5M in value and at least 2-years in length that have the best likelihood of achieving results.
- As part of its Social Enterprise Strategy, the Government of Ontario has established a Social Enterprise Hospitality Community of Practice. This group focuses on encouraging officials to procure catering, and other hospitality goods and services from social enterprise.
Make a Commitment and Empower Staff
Adopting social procurement is a change management exercise. It requires staff who are not traditionally involved in community engagement and social development initiatives to become familiar with these goals. It involves a cultural shift away from traditional public procurement practices. It also involves a level of trust building to reassure staff concerned with risk management and risk mitigation that social procurement can be done with minimal risk to the organization.
As with any change management process, leadership at the top is essential to success. It is important for senior leadership, including those in finance and operations roles to proactively and explicitly allow staff to develop and adopt social procurement practices in the institution.
Things to Do:
- Learn about social procurement initiatives that have already taken place in the Toronto region.
- Ensure senior finance, operations and communications executives are familiar and accepting of social procurement practices.
- Include social procurement in your organization's broader sustainability or community engagement agenda.
- Develop a formal communication or statement to the entire organization that indicates the anchor institution's commitment to social procurement practices.
UTSC
- As part of its social procurement program, the City of Toronto includes employment and skills training requirements in some of its larger service and construction contracts. It does not, however, include these requirements in all contacts. Instead, it selects procurements over $5M in value and at least 2-years in length that have the best likelihood of achieving results.
- As part of its Social Enterprise Strategy, the Government of Ontario has established a Social Enterprise Hospitality Community of Practice. This group focuses on encouraging officials to procure catering, and other hospitality goods and services from social enterprise.