Becoming the society we want
This is the first in a series by CECNB’s Executive Director, Wendy Keats, about her forty-year journey seeking the answer to the question of how to build the just, caring, inclusive, sustainable society we want.
Image credit: Lisa Kolbasa/Shutterstock
My mother once told me that I had always wanted to change the world and that I’d even written a paper about it in grade three. I just laughed and said she was exaggerating, but I should have known Mom. She dug into her box of keepsakes and pulled out three yellowed scribbler pages entitled “Why I Want to Change the World by Wendy Tower”. It said things like I wanted all the children in the world to have enough food to eat and a home to live in and for all people to be treated with kindness. Out of the mouths of babes, they say.
I can’t remember a time when I wasn’t involved in the community. Over the past four decades, I’ve worked in just about every social issue there is: poverty, crime, addiction, homelessness, violence against women, mental health, early childhood development, communicable disease…you name it and I’ve probably done it. Always in the not-for-profit sector because I believed that’s where the real difference was being made.
I also can’t remember a time when there was ever enough resources for non-profits to do their important work. Most of us in the sector felt like the little Dutch boy with his finger in the dike, holding back a tsunami of social issues. I spent many sleepless nights wondering how in the world we would ever make any kind of meaningful change if we didn’t have the resources, or the power, to do it.
Although I didn’t know it at the time, I was about to embark on a journey that would lead me increasingly closer to the answer to that question.
“In those days, it was common practice for government to provide core funding to non-profits.”
February 25, 1995
Back then, I was the Executive Director of a restorative justice agency working with victims and offenders. In those days, it was common practice of government to provide some sort of core funding to non-profits like ours. While it wasn’t much, it at least kept the lights on and subsidized a portion of the Executive Director’s salary, which meant we could spend the bulk of our time applying for other grants to actually deliver programs. Then, if we worked 60 hours a week, paid our employees low salaries, carried out a ton of fundraising, and relied on the help of volunteers, we could keep our heads above water. Remarkably, even with all those challenges, most non-profits were able to achieve some pretty impressive outcomes, like reductions in poverty, crime, addiction, suicide, and homelessness.
Then came February 25 and a group of us were called to a meeting with government. We were told point-blank that things were going to change.
“We cannot afford to continue funding all your non-profits, so grants are being cut across the board. From now on, you are going to have start acting more like business and compete for the resources available.”
We were flabbergasted! How in the world could we possibly act like businesses when we were providing programs and services to poor people? Who would pay us to provide food to the needy or to help people with mental health issues? For the life of us, we couldn’t see a way forward.
But complaining and advocating did nothing to change things. Over the next few years, I watched as dozens of non-profits collapsed and the rates of poverty, homelessness, and suicide went up. As did costs to taxpayers.
But the winds of change began to blow
It started in the UK and spread into Canada in the mid-to-late 1990s. It was called by different names – social economy, solidarity economy, green economy, new economy – but it all boiled down to the same thing. Since it is the economy that drives virtually everything related to the health and well-being of people and the planet, if we want to make any kind of real change, we need a new economic model.
“If we want to make any kind of real change, we need a new economic model. ”
Rather than an economy driven by profit and greed, where business success is defined by how much money can be amassed and hoarded by the fewest people possible, this new economy would measure business success based on the achievement of triple bottom lines – social, environmental and financial – and the wealth would be shared among as many people as possible.
Radical thinking for sure! When I first heard about it, I thought that, while it all sounded great in theory, it was hardly realistic. Neoliberal economics was at its peak and every day the 1% got richer while millions upon millions grew poorer. How could we possibly change an entire economic system when all the power to do so was in the very hands of the people with the most to lose?
Well, it turns out these “new economy” pioneers had an answer to that question. And I don’t know anyone who explains it better than plutocrat Nick Hanauer, a self-described capitalist who is “not only part of the 1% but part of the .01%”. In his most recent TED Talk, “The dirty secret of capitalism – and a new way forward”, Nick describes how he and a few of his friends captured the bulk of wealth in the United States by using neoliberal economics – and why this is system is so fundamentally flawed.
“Rich capitalists like me have never been richer. And here’s our dirty little secret. There was a time in which the economics profession worked in the public interest of everyone. But in the neoliberal era – today – they work only for big corporations and billionaires. As a consequence, over the last 30 years in the USA alone, the top 1% has grown $21 trillion richer while the bottom 50% have grown $900 billion poorer, a pattern of widening inequality that has largely repeated itself around the world.”
Financial meltdown, environmental disaster and even the rise of Donald Trump – neoliberalism has played its part in them all.
For those who may not be familiar with “neoliberalism”, it is the current economic system that we, and developed nations around the world, have been using for the past forty years to transfer control of the economy from the public to the private sector through the elimination of price controls, deregulation of capital markets, lowering of trade barriers, privatization and austerity.
Neoliberal economics is almost single-handedly responsible for bringing about the financial meltdown of 2008, the offshoring of wealth and power, increasing poverty, the slow demise of public health and education, the collapse of ecosystems, and even the rise of Donald Trump. It has endangered democracy, workers’ rights, and sovereign nations’ right to self-determination. In short, it is THE reason that the rich got richer while millions of people grew poorer.
So how does Nick Hanauer say we leave neoliberalism behind and build a more prosperous, sustainable and equitable society? Why, exactly the same way the new economy folks said – a new economic model built on social innovation, inclusion, and co-operation, where the purpose of business is to build the wealth of all stakeholders – customers, workers, community, and shareholders alike.
“Unlike the laws of physics, the laws of economics are a choice. Neoliberal economic theory has sold itself to you as unchangeable, natural law. When in fact, it’s social norms and constructed narratives. If we truly want a more equitable, more prosperous, more sustainable economy…if we truly want high functioning democracies and civil society, then we must have a new economics. And here’s the good news – if we want it, all we have to do is choose it.”
And the tides began to shift
As the new millennium approached, the public became increasingly aware of greedy corporate practices, shameful CEO bonuses, and the insidious damage being done to the environment in the name of progress. And they began to demand change.
It started with Generation X-ers making more socially conscious purchases based on values like climate change, poverty reduction, social justice, inclusion, and diversity, and it spread like wildfire to the millennial population, a group with unprecedented buying power. According to Forbes,
We are currently witnessing the largest inter-generational transfer of wealth ever seen, with some US$24 trillion expected to be under the control of the millennial population by 2020. Nearly 80% are loyal to companies that care about their effect on society and believe that corporate social responsibility is key to alleviating poverty and improving life outcomes.”
However it wasn’t only changes to consumer spending that were shaking things up, investment markets were feeling the pinch.
In 2010, the student-led Fossil Fuel Divestment Movement started petitioning university administrations to divest their endowment funds from fossil fuels to clean energy or other “impact investments”. By 2015, it was the fastest growing divestment movement in history and by 2019, over $12 trillion had been divested from fossil fuels worldwide.
Other investment markets were also seeing the writing on the wall as the traditional “60% stock/40% bond portfolio” started going the way of the dodo bird. Institutional investors like Goldman Sachs, BlackRock, Bain Capital, TPG and many others began taking significant steps to integrate “impact investing” into their offerings. Between 2012-2017, socially responsible Mutual Funds and Exchange Traded Funds grew by 142%.
But what does the investment market have to do with non-profits?
Ah, now we get to the crux of it. You see, back on February 25, 1995, I didn’t understand the answer to that question either. But I see it much more clearly now. Those new economy pioneers hit it right on the head - if we want true and meaningful change, we need an economic system that is based on social innovation, inclusion, diversity, co-operation, and prosperity for all.
Everyone who has ever felt powerless to change things needs to jump on this bandwagon. Because collectively we do have power – it’s in our dollars, even when they’re few – and in the tremendous drive that we humans have for a caring and just society.
It also means a significant shift for the not-for-profit sector. In the past, if a group of people wanted to solve a social or environmental issue, they formed a non-profit and hunkered down to write grants and put in long volunteer hours.
“Each year that a person who has been chronically homeless is kept off the streets is worth $50,000 to government. Each avoided case of diabetes, $20,000 and each person kept out of prison, $80,000. Non-profits have been giving away our outcomes forever, but that is about to change.”
That is no longer a sustainable option. Today, we must approach this from the perspective that solving social and environmental issues is not only the right thing to do – it has economic value. It saves taxpayers a ton of money and creates incredible opportunities for social innovation. The new way forward is in valuing the social and environmental outcomes produced, whether that be done by a for-profit or non-profit enterprise.
My good friend and social entrepreneur extraordinaire, Shaun Loney, author of The Beautiful Bailout: How Social Innovation Scale-up Will Solve Government’s Costliest Problems says,
“Each year that a person who has been chronically homeless is kept off the streets is worth $50,000 to government. Each avoided case of diabetes is worth $20,000 per year and each person kept out of prison is worth $80,000 per year. Non-profits have been giving away our outcomes forever, but that is about to change.”
A social tsunami at our shores
There are now thousands of social enterprises across the country that employ, train, and provide critical services to vulnerable people and who are using innovation and creativity to address climate change, health and wellness, inclusion, and diversity. They are working together collaboratively, using democratic principles to run successful co-operatives and other for-profit and non-profit enterprises that sell goods and services in the market, then use the bulk of their profits to make positive change for society.
There are over 700 examples in New Brunswick in sectors ranging from agriculture and forestry to health care, education, housing, technology, retail, manufacturing, construction and everything in between. The Co-operative Enterprise Council has been inundated with hundreds of requests for information and assistance as people have become increasingly aware of the co-op and social enterprise business model.
Impact investing and social finance initiatives are also gaining tremendous momentum as can be seen by the federal government’s recent announcement of an $805 million Social Innovation and Social Finance Strategy. Provincial governments have come on board with programs like New Brunswick’s Community Economic Development Investor Tax Credit Program, Nova Scotia’s CEDIF and Prince Edward Island’s CEDB that are enabling communities to raise millions of dollars in local investment to start or expand co-ops and social enterprises.
“For me personally, after forty years of working for social change, I’m actually beginning to believe that my grade three dream of a caring, inclusive, equitable society is not only possible, its waiting just around the corner. ”
Foundations and philanthropists have also been paying much more attention and in some cases showing significant leadership. The J.W. McConnell Family Foundation, one of Canada’s largest foundations and ranked among the 25 biggest in the world, now focuses a significant portion of its resources on social innovation, social finance, and impact investing.
This new economy is taking root across the globe and it refuses to be shook off. It’s size and strength grows with each passing day and with it comes hope for a better future.
It Won’t Take Long by Ferron
For me personally, after forty years of working for social change, I’m actually beginning to believe that my grade three dream of a caring, inclusive, equitable society is not only possible, it’s waiting just around the corner.
And as Canadian singer-songwriter and poet Ferron tells it so beautifully, “it won’t take long”.