In a groundbreaking initiative aimed at bolstering rural Newfoundland and Labrador’s economy, the Community Sector Council Newfoundland and Labrador (CSCNL) and the Newfoundland & Labrador Federation of Co-operatives (NLFC) announced an investment of $750,000 from the Northpine Foundation to facilitate the transformation of essential private businesses into sustainable social purpose organizations (SPOs).
This project addresses a pressing concern identified by research from the Canadian Federation of Independent Businesses and the Atlantic Community Business Development Corporations. The study revealed that a staggering 55% of small and medium-sized enterprises (SMEs) with 1-4 employees in the province are projected to exit within the next five years, largely due to retirement.
Colin Corcoran, CEO of the Community Sector Council Newfoundland and Labrador, emphasizes the significance of this endeavor, stating, “Our goal is to provide a lifeline for communities facing economic uncertainty by safeguarding employment through the conversion of local businesses into social purpose organizations. This will create opportunities for revenue diversification for these organizations, building a stronger community sector.”
The initiative leverages an intelligent matching program, alongside a comprehensive support program, to identify potential private businesses, match them with suitable opportunities, access social finance capital and help them convert to SPOs with legal and governance models tailored to ensure long-term sustainability. The program’s goal is to maintain employment and bolster community services, helping to counteract potential economic decline.
Mark Lane, Impact Director — Rural Newfoundland & Labrador at the Northpine Foundation, shared his insights, “This collaborative effort between CSCNL, the NLFC, and other partners will create a resilient model that will help preserve the independence and essence of Newfoundland and Labrador’s unique communities.”
To address potential risk factors, the project plans to engage strategic partners, including credit unions, business development corporations, and national social finance funds, to ensure the availability of social finance capital. Additionally, meticulous due diligence will be conducted to evaluate the viability of businesses for conversion.
“The NLFC is thrilled with the announcement of this project funding and believe that we can help rural communities retain integral services by providing opportunity for business transition to community-lead co-operatives,” said Dave Walsh, Managing Director, Newfoundland & Labrador Federation of Co-operatives.
The impact of this initiative goes beyond just economic terms, and will aim to improve community vitality, increase the financial capacity and appetite for social enterprise among community organizations, and increase overall well-being in the benefiting communities. CSCNL anticipates that their approach could generate around $7 million over the next 10 years in new revenue for a community sector struggling with employee retention, rising inflation and a lack of growth capital.
The partners strongly believe the success of this initiative inspires other potential partners to reach out to help amplify the project’s impact. CSCNL welcomes participation by interested entities from the public, private, community and academic sectors in helping to scale the model in other parts of the province and across the country.
Through strategic collaborations and targeted investments, this initiative holds the potential to redefine the future of Newfoundland and Labrador’s rural communities.