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September 2023

Five big lessons on reconciliation and community finance

By Education

I’ve spent the past couple of days immersed in the world of economic reconciliation at Forward Summit East, in beautiful Orillia. The Forward Summits (there is both an East and a West Summit) are national gatherings of Indigenous and non-Indigenous business leaders committed to building Indigenous prosperity through Truth and Reconciliation. This was the first Forward Summit East, and it was a privilege to be there and learn. This Forward Summit took place on the territory of the Chippewas of Rama First Nation, and I was grateful to be welcomed onto their land and reserve.

It’s been a whirlwind, as all conferences are, of meeting new people, learning new things, and trying to take it all in — but in honour of the National Day for Truth and Reconciliation, September 30, I spent some time reflecting on what economic reconciliation might mean to the social finance world, and, more specifically, in my work as Knowledge Lead at Tapestry. 

Nothing I’ve learned is 100 percent true, all the time 

There are more than 600 First Nation communities across Canada, not to mention the many Métis and Inuit communities. Across Turtle Island, more than 1,000 Indigenous languages are spoken. That’s a ton of diversity in worldview, resources, priorities, and values — something I knew on an intellectual level, but being among a group of diverse Indigenous leaders and thinkers at this conference has driven home this point.

I came to Forward Summit looking for insights on meaningfully engaging with Indigenous communities in the finance space — but I’m leaving with the reminder that there will never be (and should never be) one universal way to do this work.

Economic reconciliation should touch every part of our financial systems

Forward Summit is all about economic reconciliation, which, from my perspective, necessarily sits at the intersection between the concepts of Truth and Reconciliation and economic justice. The Truth and Reconciliation Commission’s call on corporate Canada to implement the United Nations Declaration on the Rights of Indigenous Peoples into all corporate policies and operations. Of course, there is no reconciliation without truth, and this means first acknowledging and learning about the material and/or financial dispossession of the Peoples of Turtle Island, especially through land. It’s only through embodying this historical knowledge that we can begin the process of building and maintaining mutually respectful trade relationships with Indigenous Peoples that empowers their sovereignty. Economic justice calls for a fairer economy — where all have the opportunity to succeed and thrive and it is clear that we will never establish economic justice if Indigenous Peoples economic activities are not supported, valued, and considered a key part of financial and trade systems.

From an immigrant settler’s perspective, this week has deepened my understanding of what that looks like in practice, and offered reflection on how Tapestry’s work might contribute. One key gap, I’ve learned, is access to affordable capital — the same access non-Indigenous business leaders have. And at Tapestry, we believe in affordable, patient, community-led capital for all. 

How much do you (and I) know about Indigenous economics?

But before community bonds can contribute to the work of economic reconciliation, we should ask ourselves: how much do we really know about the existing economic systems and financial tools in Indigenous communities? Are we assuming our economic tools will be useful and relevant? Are we assuming that all Indigenous businesses (and there’s no clear legal definition of what an Indigenous business is) are by default social purpose businesses? Are we assuming that for-profit Indigenous businesses lack a social purpose?

Indigenous communities have unique histories of pre-colonisation economic systems, and for many, these values and customs still exist today. This was highlighted in the Canadian Council for Aboriginal Business’ report from 2017 on Indigenous Perspectives on Social Innovation and Finance, which highlighted the need for non-Indigenous lenders and intermediaries to improve their knowledge base on the barriers faced by Indigenous SPOs and to fill gaps in the existing research on Indigenous social finance. The CCAB identified this as a need that they could use support on. This week, I’ve reflected on how rarely the social finance community acknowledges these Indigenous economies, and the deep learning there is for us at Tapestry to embark on here. Nevertheless, I have hope that these are aspects that can be remedied for us to embark on true economic reconciliation!

What about the Indian Act?

And furthermore, how much do we know about colonisation’s impact on how Indigenous communities’ are able to participate in economies? Many speakers and people I’ve met this week have asked this question of settler-led organisations looking to work with Indigenous communities. I’ll give you an example: the Indian Act prohibits many Indigenous communities on reserve (there are urban Indigenous communities and 120 urban reserves) from using their property as collateral on a loan — the very thing many of our non-Indigenous clients working on affordable housing projects do. That’s just one way the Indian Act interacts with our financial systems; there are countless others, and it’s on settler social finance actors to make sure we’re informed and ready to work around these limitations (and Indigenous Peoples have been routinely doing this!).

We must move at the pace of relationships and Indigenous self-determination

We know that reciprocal, meaningful relationships are a core value to many Indigenous communities, and any work we do toward economic reconciliation must make space for building trust, connection, and reciprocity. 

There were some great examples of settler-led organisations, such as HydroOne, who seemed to have gotten the relationship building right. Penny Favel from HydroOne, spoke to how her organisation rethought their equity model by building more transparent negotiating processes. And also by building relationships with Nations well in advance (think a year or two) through boots-on-the-ground research and listening. They didn’t bring a direct solution to communities, but talked and listened to what communities actually needed, all without the guarantee of a contract in hand.

A caveat here: one thing I’m reminded of this week is that some Indigenous communities (again, they’re not a monolith!) simply want access to the same economic tools settler communities have, even if they’re transactional and not based on deep, involved relationships, as long as those tools can help empower their sovereignty and self-determination. That’s important to fight for, too. 

Regardless, the priorities will always be set by Indigenous leaders in economic reconciliation — and I’m ready to follow their lead.

Suzanne Faiza is the Knowledge Lead at Tapestry Community Capital.

Meet three community bond buyers — here’s why they invested

By Affordable Housing, Education

Investors are an essential piece of the community bond puzzle. But who are they? What’s important to them? What do they value? What do they need to know about you and your project to make the decision to invest?

The answers to these questions are unique to each organisation and project — and Tapestry clients find those answers through stage two of our process working together — but to give you a glimpse into the minds and motivations of community bond supporters, we sat down with three different investors and asked an important question: Why did you buy? 

Here’s what they told us. 

The community development organisation looking to publicly support affordable housing

When Haliburton County, Ont.-based affordable housing provider Places for People launched a community bond raise earlier this summer, one of the very first investors snapped up $50,000 worth of bonds — a pretty significant chunk of the $850,000 goal. That investor was the Haliburton County Development Corporation (HCDC), and executive director Patti Tallman says it was HCDC’s longtime faith in Places for People’s work that made investing a no-brainer. “Knowing the affiliation with Tapestry…we felt very comfortable in that investment,” Patti adds. 

After working with Places for People for many years — HCDC has loaned the organization money in the past for its affordable housing work — Patti says the community bond campaign was a welcome opportunity to publicly support Places for People’s work. “We wanted to be able to show that HCDC is a huge supporter of the concept of what Places for People is and what they do,” says Patti. “To be able to help launch the program right from the get go, it’s maybe going to [encourage] more people to think, Yeah, I can make an investment here.”

HCDC typically invests in businesses in Haliburton, so an investment in a non-profit is “unique and different” from their other work, Patti says. It was a new concept for others, too: Patti says in some of the local media coverage, reporters called the investment a donation, which is not the case. All community bond investors receive their principal investment back, with interest.

The interest HCDC earns from their investment will go back into its programs supporting economic development in the county, like its Local Initiatives Program — the only program of its kind hosted by a community development corporation — which provides non-repayable grants to nonprofits contributing to Haliburton County’s resiliency and vibrancy. Community bonds are meant to build community wealth, and HCDC’s relationship with Places for People is a great example. 

The individual investor who believes in helping her neighbours out

After Deb Alore retired from her job in public health, she began to get more involved in community advocacy in Kamloops, B.C., which she’s called home since 1987. When she started going to general meetings and potlucks hosted by the Kamloops Food Policy Council, she met Lindsay Harris, the council’s food policy implementation lead. She’d also heard of Myles Pruden’s work in the community on net-zero, affordable housing construction.

So when Lindsay and Myles came together to start another organisation, Propolis Housing Cooperative, to build new affordable housing in the community, Deb took note. And when Propolis launched a community bond raise, she was in. “I respect them very much. I think those folks have done great things with other projects,” Deb says. “I just wanted to be a part of something positive and solution-based. And given that I felt the people involved were really reputable, I just thought, I can’t not support this. I need to do this.

As a longtime Kamloops resident, Deb can see firsthand how challenging the housing market is. “We’ve had our share of financial challenges too, but I’ve never felt like I was in danger of losing my shelter because of the cost,” she says. As someone with the means to help her Kamloops neighbours, Deb feels a responsibility to do so. 

Deb invested in the Worker Bee bond, a minimum $1,000 bond with 2.5 per cent interest paid at the end of a three-year term. This is the first community bond Deb has invested in, but she doesn’t think it will be the last. One factor that limited the size of her investment this time around, though, was that it couldn’t be held in an RRSP (some community bonds can be held in RRSPs and TFSAs, but for Propolis’s first raise, their bonds are not eligible). “I’m retired and a lot of my savings are in RRSPs,” she says. “I had to [use] non registered money that I didn’t need for other things.” 

But Deb says she’s not overly concerned with the returns. “For me,” she says, “the investment piece of it was just sort of incidental. It was all about being a part of something positive, a positive change. The fact that I may earn a little bit of interest by loaning the Propolis group a bit of money over the next three years, that’s a bonus. But that is certainly not what drove me to be involved.”

The foundation with a national scope and a commitment to impact investment

Toronto-based Inspirit Foundation has invested in a number of community bond campaigns, among them SolarShare, a cooperative that owns 52 commercial-scale solar power projects across Ontario.

Jory says Inspirit is attracted to the “clean and simple” nature of community bonds: investors buy a bond, and their principal investment is repaid with interest after a predetermined term, usually a few years. “Comparing that to private equity deals, comparing that to social impact bonds, it’s just simpler. I think that’s certainly an advantage of it,” Jory says. 

Inspirit isn’t necessarily deterred by more complicated investments — Jory looks for good investments in solid ideas and projects, and focuses less on the format, he says. But Inspirit does tend to invest in projects and organisations with measurable or tangible outcomes. “Most of the stuff that we look at is pretty concrete, and we were able to see or even interact with end users,” he says.

Part of why Jory is a connoisseur of impact investment formats is Inspirit’s commitment to a 100 per cent impact investment portfolio — whereas some foundations make more traditional investments without ESG considerations in order to earn returns for their granting programs. “Since Inspirit exists to create a more inclusive and pluralist society, our investments need to generate returns that transcend financial outcomes for our foundation and maximize stakeholder value,” reads Inspirit’s investment policy statement.

Jory predicts Inspirit will continue to invest in community bonds, and that he’ll have more and more to choose from. “I get the sense that more and more nonprofits are looking at the model and wondering if it’s workable [for them].”