Social Purchasing: Strategies to Galvanize and Facilitate Public and Private Sector Socially-impactful Purchasing in New York City
Semester
Final Report
NYCEDC’s Social Capital Desk has identified social purchasing - sourcing from socially impactful businesses (such as minority and/or women-owned businesses, local businesses, and social enterprises) - as a way to stimulate market demand for the social impact sector in NYC. The Capstone team was tasked with investigating the inputs to public and private organization’s decision-making around social purchasing and best practices for implementation, with a specific focus on anchor institutions, such as universities and hospitals. Finally, the team developed a programmatic recommendation for the potential role EDC could play in pivoting these institutions’ core business practices towards having multiple, positive social impacts.
The Capstone team began with an extensive literature review on successful social purchasing models in other municipalities around the country and the world. The team then conducted 19 in-depth interviews with anchor strategy experts, social enterprises, and procurement officers at anchor institutions themselves in order to better understand their purchasing strategies. They found that anchor institutions in NYC fell into two distinct groups: those with an interest in social purchasing and those without. Those with an interest in social purchasing described a mismatch between supply and demand, a decentralized procurement process, and a lack of impact metrics to be barriers to implementing social purchasing strategies at their organizations. Those without an interest in social purchasing had no capacity, or incentive to change procurement activities to focus on socially-impactful suppliers. Further, the lack of a single, legal definition for a “socially-impactful business” created a barrier to moving away from an input-driven social procurement model to one that was output-driven.
In order to facilitate social purchasing among more institutions in NYC, the team proposed a set of recommendations, including starting a social enterprise membership network, holding workshops for institutional procurement officers, developing a program to support supplier teaming programs, and building an online directory to match social buyers and sellers.