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Charity Bonds take off in the United Kingdom

By Learning from Abroad

Charity bonds, the UK equivalent of community bonds, have taken off rapidly in recent years. From 2012-2020, the charity bond market grew by a remarkable 62x! The size of the market is now estimated to be around £337 million – an astronomical leap from the mere £5.4 million in 2012. More than 30 organizations have seized the opportunity to issue charity bonds and raise capital from their communities of supporters. 

In this article, we explore the immense growth of charity bonds in the UK and what this could mean for community bonds in Canada. 

Let’s start off by understanding the similarities and differences between charity bonds in the UK and community bonds in Canada. 

Similarities
  • Interest-bearing loans, with a fixed interest rate and a fixed term
  • Used to finance socially and/or environmentally impactful projects
  • Organization issuing the bond must have a source of revenue that will enable them to repay investors
  • More flexible than bank financing because terms are set by issuers and funds are raised from supporters 
  • Engage a variety of investors (individuals, foundations, trusts, etc.) 
  • Can be held in tax-advantaged accounts 
Differences

The table below highlights key differences between charity bonds and community bonds: 

Charity Bonds Community Bonds 
Issued by charities and social enterprises  Issued by non-profits, charities, and co-operatives 
Usually unsecured loans (no asset to back investment) Usually secured loans (asset to back investment)
Tradable on the London Stock Exchange  Not tradable 
Typically unrestricted funds  Typically restricted funds 

 

A market to trade charity bonds

In 2014, the first charity bond was publicly listed on the London Stock Exchange, and many have since followed suit. Being able to list on a public market has provided charities and social enterprises with access to a bigger market, allowing them to reach their investment target more efficiently.

Organizations do not issue their charity bonds directly on the stock exchange. Rather, they go through a “special purpose vehicle” called the Retail Charity Bonds Plc. (RCB). RCB is governed by an independent board of directors who reviews applications from charities and social enterprises. Upon approval, RCB issues the charity bonds on the London Stock Exchange, and then investors can buy and trade the bonds in the secondary market just like any other bond or stock. Fun fact: most organizations can raise their required financing within 1-2 weeks after they launch an offer! 

Community bonds are not yet tradable in Canada, however, as the market continues to grow rapidly, we are hopeful of such initiatives. Based on the UK experience, it’s clearly a win-win for investors and social purpose organizations.

Building confidence has been critical

In 2014, Big Society Capital launched the Charity Bond Support Fund, in collaboration with Rathbones. The purpose of the fund was to co-invest in campaigns alongside retail and institutional investors when campaigns were not fully subscribed. This had a dual purpose – to give confidence to issuers that they would reach their targeted investment goal, but also to give confidence to investors. The initial fund was £30 million, but has since grown to £163 million with a diverse array of investors engaged.

The emergence of sales platforms has helped the community investment market to grow

Many community investment platforms have been developed in the UK to a) encourage organizations to use social finance tools and b) encourage individuals to invest in social finance tools. For example, Ethex is a non-profit community investment platform that connects social purpose organizations with investors. In 2020, Ethex and Energise Africa raised a total of £100 million of people-powered finance to benefit over 200 community-oriented projects. 

Such sales platforms have brought charity bonds into the mainstream by making the investment process simple yet professional. It is now easier than ever to invest with impact in the UK.

By learning from partners, both near and far, we at Tapestry continue to foster community bonds as a mainstream form of financing and an avenue to invest in society.

About this Blog Series

Hi, my name is Jasleen Bahia, and I was once an Intern at Tapestry Community Capital. I am now completing my degree in business with a focus on social finance, and I’m currently doing a semester abroad in Europe. While here, I am Tapestry’s Ambassador to the UK. This blog series documents my adventure abroad learning about the social finance ecosystem in the UK and connecting it to our growing community investment marketplace in Canada. I am eager to find out what we can learn, replicate and share!

Working with Tapestry

By News

For the past 5 months, the Tapestry team has had the pleasure of working with Suzanne Faiza. Suzanne, joined our team as a Researcher, supporting Tapestry’s involvement in the CMHC Housing Supply Challenge, as well as a clean energy project in Atlantic Canada. 

This fall Suzanne will be returning to her Masters of Planning program at the University of Toronto, equipped with new experience and expertise in social finance and community economic development. 

Suzanne, who originally trained and worked as an architect, contributed a wealth of understanding of the affordable housing sector to our growing team. Beyond her knowledge, she brought incredible enthusiasm and excitement to every aspect of work she engaged in. 

“Working on the Housing Supply Challenge was an incredible experience,” she shares, “It gave me an amazing opportunity to understand the affordable housing landscape in Ontario, learn first hand from those actively trying to solve what is one of our country’s greatest challenges, and see the role that social finance can play in increasing Canada’s affordable housing supply.” 

One of Suzanne’s key responsibilities was coordinating and leading stakeholder research. Engaging with co-ops, government bodies, non-profits, and investors, Suzanne always came prepared with creative questions and eagerness to learn from those we consulted with. 

“Attempting to find out what people need is really the bread and butter of being a planner, so it was great to put my facilitation skills to use.”

Contributing to a clean energy project was something new and exciting for Suzanne.

“I’ll be honest, at the beginning it was a little daunting for me because I had to play catch up and learn so many new terms and acronyms!” Suzanne admits. “I really appreciated that the team gave me the opportunity to just absorb information when I needed to,” she said, “In our housing work, I was building off previous experience, but in our clean energy project, a lot of it was completely new to me, so it was very rewarding.”

Reflecting on her experience with the Tapestry team, Suzanne shared that she appreciated the lack of hierarchy in sharing and contributing ideas, the strong commitment of the organization to work-life balance, and the support which she received to grow in her role. 

“Easily the best place I’ve ever worked at!” Suzanne concludes with a big smile. 

We are eager to see where Suzanne’s next year of her Masters program takes her and know that we will be collaborating again in the near future! 

Are you interested in social finance and the work that we do at Tapestry? Keep an eye on our Careers page for new opportunities and sign up to our newsletter for the most current updates on open positions.

Three years after the raise: an update from the Argonaut Rowing Club

By Client Stories, News

It’s been three years since the Argonaut Rowing Club successfully completed their community bond raise of $1.2 million. The funds from their 90 investors were put to use to revitalize their facilities after a flood caused by the high waters of Lake Ontario resulted in severe damage, and today the Club is looking better than ever! “The renovations have changed everything,” shares Jason van Ravenswaay, President of the Club. “Members are proud of the facility, they are referring others to join, and we have so much dock space for our rowers. We have a real community feeling now, because we have this amazing space where people want to be and catch up.” 

In the wake of the flood, the Board knew they needed to make major repairs but they chose to view the renovations as an opportunity rather than a burden. They saw the opportunity to make the Club fully accessible to their para-athletes and all guests, create new gym space for erging and weightlifting, build new and much needed dock space, and give a facelift to their event space – an important source of revenue for the non-profit organization. And they chose to make this a reality by allowing their supporters to become investors.

 

 

The last few years have not been without hurdles but the Club weathered the storm that Covid-19 brought on, due in large part to the strong cohesion of their community. “Covid was a scary time because there were so many unknowns,” shares Jason. “We had no clue if it was going to continue for 2 weeks, 2 months or two years!”

The Club was closed for short periods in 2020/21 due to province and city-wide restrictions and faced challenges to run two of their most important programs as a result – Camp Argo and Learn to Row. Fortunately, through the perseverance and creativity of their leadership team, the Club was able to reopen through a pilot program launched with Rowing Canada. “The idea was that we could do a test run of how rowing Clubs across Canada could reopen safely,” Jason explains. 

The Club invested in a new fleet of single boats – a necessity with regulations on social distancing and maintaining bubbles. They also got creative with new equipment like oar boards (a quasi paddle board/rowing boat). “The great thing is that this ingenuity has led to some great new developments for the Club. The oar boards have been wildly popular and it’s a fun new offering for us,” says Jason with a smile. 

The tribulations brought on by Covid never affected the Argonaut Rowing Club community bond investors. “We were concerned about the bond holders and adhering to our repayment schedule,” Jason shares. “We considered a number of different options, including the potential to defer interest payments by a year, but we never needed to do that because we got creative with new sources of revenue and really cut costs – all while keeping our employees on board.”

The Argonaut Rowing Club has a close relationship with their investors and believe in always keeping an open and transparent channel of communication. “Our investors were very supportive, they applauded our leadership, offered to help, and many even chose to donate their interest payments back to us,” says Jason. “Through it all, the Club really came together.”

The future is looking very bright for the Argonaut Rowing Club. They are seeing great demand for their event space now that restrictions are being lifted, the rowers are eager to get back out onto the water (in some of the Club’s beautiful crew boats this summer!) and members are gearing up to celebrate the Club’s 150th anniversary this June. The Club has also established a diversity and inclusion committee and allocated 10 free memberships to remove barriers to youth in the local community. 

ARC recently made a momentous announcement that they will become the official rowing center of the University of Toronto (U of T). “A partnership with a university is something we have wanted for a long time now,” says Jason, who is clearly excited about this new development. “We have this brilliant juniors program and so many talented young athletes. We have watched so many of them graduate and leave the Club to pursue rowing at universities outside Toronto.” The hope of the Club is that they can support the university with their recruitment and create continuity to keep their former Junior Argos at the Club. “We are confident that we can help U of T transition into that brand of being a rowing school.”

The Argonaut Rowing Club has a track record to back this up. They have seen their Argo rowers off to a multitude of national and international competitions. Three Argo alumni (Gavin Stone Men’s 4-, Sydney Payne Women’s 8 and Vicky Nolan in the PR3Mix 4+) competed at the 2020 Tokyo Olympic and Paralympic Games this past summer. “We hope with this new partnership with U of T, we will see more amazing young athletes sticking around to become the next leaders of the Club.”

When asked if there are future projects on the horizon for the Club, Jason said “I’m the type of person that is always thinking of what I can do next, but to be honest, the Club is looking great and there aren’t many items on my to-do list anymore.” For the time being, ARC is focused on growing their membership, developing its staffing model and continuing to provide the high quality programming that they are so well known for.

EcoCharge Trottier Family Foundation Investment

Earth Day Canada receives large investment from the Trottier Family Foundation

By Client Stories, News

Earth Day Canada’s community bond campaign has surpassed the $1 million mark with a $300,000 investment from the Trottier Family Foundation. “Not only is this the first community bond campaign to fund the clean transportation transition in Canada, but it is also now the largest community financing project to date in Quebec,” says Tapestry’s Co-Executive Director, Ryan Collin-Swartz. 

The campaign, which will raise a total of $2 million in community investment, will finance the construction of a network of 100 electric vehicle (EV) fast-charging stations that will stretch across New Brunswick and Quebec. 

“We are actively working to develop new ways for mobility because we acknowledge that at the center of the climate change issue is the way our society moves. We want to be part of getting EVs to the masses and democratizing the needed infrastructure,” says Pierre Lussier, President of Earth Day Canada.

In addition to the environmental return of the project, community bonds will offer investors 4% interest per year for a period of 7 years or 3.5% per year for a period of 5 years. Investors will also receive free recharging time at EcoCharge stations.

“We are proud to take part in this social project, which is consistent with our mission,” says Éric St-Pierre, the Executive Director of Trottier Family Foundation. The foundation has also said they will extend the impact of their investment by committing their earned interest to other environmental initiatives. “We will put out a call for projects every year for five years and invite applicants to propose environmental initiatives for grants of up to $20,000,” Éric St-Pierre shares. 

The investment campaign is open to all Canadians interested in investing with impact. To learn more about the campaign, visit Earth Day Canada’s EcoCharge website here

 

 

 

Images courtesy of Earth Day Canada

A Summer of Social Finance Fun

By News

This summer, Tapestry had the opportunity to hire a Summer Associate with the support of the Canada Summer Jobs Grant and the Loran Scholars Foundation.

Jasleen Bahia sought us out online during her job search, knowing that she was interested in working in social impact and eager to put her university business courses to use. And how lucky for us, because she was an amazing addition to our team!

She brought a passion for community engagement and a keen interest in learning about social finance. Learn more about Jasleen’s background here.

Over the course of the past few months, Jasleen has supported with everything from the implementation of new human resources policies, to marketing, to working directly with our clients. In the video below, she wraps up her summer with some reflections on her experience.

Are you interested in social finance and the work that we do at Tapestry? Keep an eye on our Careers page for new opportunities and sign up to our newsletter for the most current updates on open positions.

 

Jasleen Bahia Joins Tapestry

By News

Meet Jasleen Bahia, Tapestry’s newest team member and Summer Associate. 

Jasleen’s interest in social enterprise and social impact began with her own lived experiences. Growing up, Jasleen relied heavily on community programs and benefited greatly from the work of local non-profits. “Around the age of 14, I realized that I wanted to start giving back. These organizations and programs helped to raise me, and I wanted to make sure they could continue to reach as many kids as possible,” says Jasleen.

Jasleen has worked with BGC Canada, Girls Who LEAP, and ShEvalesco, and took on progressive responsibility within these organizations as she progressed through high school. She still cares deeply about supporting her local community, and continues to volunteer in her free time.

Through this experience and her studies, Jasleen has come to realize that she is not just passionate about social impact, but really curious about it’s intersection with business and finance. “I only learned about social enterprise a few years back,” she says, “but I knew right away that this was something I wanted to focus my energy on. I see the space changing so rapidly, and see so much potential for growth.”

Jasleen is currently studying Business at Western University, and is hoping that she can focus her time in the Richard Ivey Business School to expand her knowledge of social enterprise. 

Jasleen is excited about working with Tapestry because she is eager to learn more about the nonprofit sector, and all it’s diverse players. “I’ve done a lot of work with youth, so that’s what is familiar to me, but I love the fact that through Tapestry I will get to learn about organizations working in so many different fields, from education to long-term care, all of whom share the underlying desire to better their communities.”

With Tapestry’s transition to a remote working environment, we have benefitted from the fact that our new employees can be based anywhere in Canada. In Jasleen’s case, she’s based out of her hometown, Vancouver, BC. Jasleen is excited about extending the reach of Tapestry and introducing the local non-profits that she works with to the concept of community bonds. “There is a huge population of untapped community-minded impact investors out West, and I think this model will gain a lot of traction in BC.”

“What excites me most about this opportunity with Tapestry is that it aligns so closely with my personal values – community is really at the core of everything I do,” says Jasleen. “Knowing that the work I am doing is going to have an impact in the community really drives me and motivates me to put in extra energy.”

In her free time, Jasleen loves to do anything outdoors – be it hiking, running or camping. She hopes to spend a lot of her summer in the beautiful Rockies, and will also be running her third marathon this summer, as a participant in the BMO Virtual Marathon. 

We welcome Jasleen to our growing team and hope that our clients and community will have the chance to meet her.

Interested in chatting with Jasleen? Reach out to her at Jasleen@tapestrycapital.ca

What is the Investment Readiness Program?

By News, Policy and Advocacy

At Tapestry, we speak with many non-profit organizations on a weekly basis. With Budget 2021 announcements, the Investment Readiness Program (IRP) has been a common thread of conversation. When we bring up IRP, we tend to get a variety of responses ranging from excitement to confusion. What is the Investment Readiness Program? How can it benefit non-profit organizations? What does investment readiness even mean?

The idea of private capital being invested in the nonprofit sector is a new sort of conversation in Canada. In past blog posts, we’ve discussed the investment continuum and where community bonds sit in reference to traditional philanthropic tools. IRP is another piece in this financing conversation.

In this blog post, we’ll seek to:

  • Provide clarity about the program
  • Give some insight into the idea of investment readiness
  • Point you in the right direction for learning more about the program

Social Finance Fund

With the release of Budget 2021, the federal government confirmed the establishment of a $755 million Social Finance Fund, and plans to disperse up to $220 million in the next two year. The objective of the Fund is to provide social purpose organizations (which include charities, non-profits, co-ops and social enterprises, both non-profit and for-profit) with access to capital to carry out activities which will have a positive social or environmental impact. The Fund was first announced in the 2018 Fall Economic Statement and the federal government re-affirmed its commitment to the Fund in the 2019 Federal Budget.

In recognition of the fact that private investments and social finance are new concepts for many social purpose organizations, Budget 2021 also proposes to renew the Investment Readiness Program for $50 million over two years.  This program aims to assist these organizations with building capacity to allow them to participate in Canada’s social finance market, and to prepare them to participate in the Social Investment Fund.

Investment Readiness Program

The Investment Readiness Program will be administered through several readiness support partners. A full list of partners can be found here.

Starting this year, these readiness support partners will put a call out to social purpose organizations (both for profit and not for profit), that are interested in becoming investment ready.

In practice, investment readiness refers to an organizations ability to successfully participate in the social finance market. This means generating revenue through a new social enterprise, or scaling existing social enterprise activities. The capital earned through investment will allow organizations to increase their social impact, and being “investment ready” means the organizations will have the capacity to repay that investment.

There are different financial vehicles that allow organizations to accept financing, including community bonds. What is common amongst these social finance vehicles, is the expectation of a financial return in addition to a social or environmental return.

How can Non-profit Organizations benefit from the program?

For not for profit organizations that have only ever relied on grants and fundraising, the Investment Readiness Program presents an amazing opportunity to think differently about financing. In leveraging this opportunity to establish a social enterprise, or grow existing revenue generating activities, organizations can both position themselves for social investment, and create long-term sustainability that could come in the form of:

  • Investing in social purpose real estate
  • Addressing food insecurity and clean energy generation
  • Providing equitable jobs and training opportunities
Argonaut Rowing Club President - Investment Readiness Post

The Argonaut Rowing Club leveraged community bonds to raise $1.2 Million for their club revitalization project.

 

Organizations that we have worked with, like the Argonaut Rowing Club (ARC), are a great example of how private capital can enable a greater social impact. By leveraging community bonds, ARC was able to increase their clubs membership capacity, make the club accessible, and make essential improvements to the revenue generating events space. To learn more about how the Argonaut Rowing Club leveraged social finance, click here.

What’s Next?

We are still waiting on further information on the Investment Readiness Program. As we learn about funds being released through the different Investment Readiness Partners, we’ll be sure to let you know through the Tapestry Community Capital newsletter, on our Twitter account, or through LinkedIn.

The Argonaut Rowing Club: Case Study

By Client Stories, Success Story

Filled with pride, Jason van Ravenswaay, president of the not for profit Argonaut Rowing Club had just finished giving us a tour of the club’s completely renovated facilities. It certainly didn’t look like this 2 years ago he laughed.

The Argonaut Rowing Club President, Jason Van Ravensway

In 2018, following catastrophic flooding in 2017, the Argonaut Rowing Club (ARC) set out on a 2-year journey to rebuild and revitalize their club.

The ARC team was motivated to go beyond just repairing the damage and saw an opportunity to work together with their community to build a club for the future. Working with Tapestry Community Capital, ARC was able to finance their dream project on their terms.

We’re proud to have guided their team through this successful raise and excited to share their story with you. If you are interested in learning more about what it took for the team to raise $1.2 Million in six months, download the case study for free.


If you want to get started with your own community bond project or know of any interesting community bond projects that you think we should profile, get in touch to book a private Community Bonds Accelerator Workshop for your team.

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Woman working on a laptop

The Best Tool to Manage your Community Investors

By Education

In the age of Google, there are many manual-entry methods available for calculating interest payments. Whether it’s spreadsheets or giant accounting books, you know as well as we do that they aren’t sustainable, cost a lot of human-power (and with that, the potential for human error!), and aren’t scalable. That’s why at Tapestry, our Investment Management Services are backed by a powerful little engine we adoringly call Atticus.

Why Atticus?

We could tell you that our software was inspired by the literary character Atticus Finch from To Kill a Mockingbird. He certainly represents all that we believe in – justice, morality, fairness. But to tell you that would be a small fib.

…because Atticus is really named after a dog. And not just any dog, but the pride and joy of Tapestry’s former Community Investment Manager, Greg Goubko.

Our software, which Greg customized, refined and improved over the years became something of a child to him. Like his dog, Atticus became his loyal, intelligent and reliable companion. And so, it seems fitting that he leave a mark of his legacy with this special name.

And now, why use Atticus?

Forget Your Spreadsheets and Calculators

Atticus is a powerful database and accounting system at its core. It was custom-designed and built to aid in raising and managing community bonds. Atticus’ brain has the ability to calculate complex or simple bond configurations. We don’t waste time scrolling through sheets of data in Excel. And you shouldn’t either.

Trust in Data

Your data is safe with Atticus. Our system is secure and reliable. Our data is encrypted and stored right here in Canada. Our data is backed up nightly, weekly, and monthly all throughout the year. We comply with internal policies when accessing data and we never, ever transmit information unless necessitated by law.

Atticus Tracks Our Progress and Workflows

Raising a bond is exciting; it’s where the magical moments for your community happen. Managing a bond is where the practical deliverables need to be met. Atticus helps us keep on top of the thousands of bonds we currently manage. The system was designed to align with our workflows and ensure we don’t ever miss a step in the care of investments.

Reports

We’re able to create customized reports to do some hard analysis work. Whether it is a big-picture overview of an organization and its investors, or its getting to the granular details of daily transactions and calculations – if you ask Atticus about a number, it can answer it pretty quickly.

Communication

Atticus built with the ability to integrate seamlessly with third-party email services. It allows us to work in things like transactional emails to investors with the click of a button. Investors are alerted automatically when they purchase a community bond.

Argonaut Rowing Club completes $1.2 million community bond raise

By News

Media Advisory

Historic Argonaut Rowing Club completes $1.2 million community bond raise to fund the ARC Next club revitalization

Toronto, ON, September 16 – The Argonaut Rowing Club, announced that their $1.2 million-dollar community bond campaign goal has been achieved. As a part of the club’s 5-year revitalization project called ARC Next, the club’s volunteer board of directors worked with Tapestry Community Capital to launch the bond campaign in March 2019, with a goal of raising the funds by September 15, 2019. The bond raise was well received by potential investors, with interest in purchasing bonds, exceeding the amount of bonds available. The bond raise goal was reached on September 13, 2o19.

When complete, the ARC Next club revitalization will support the next generation of rowers by offering a fully accessible space with a renovated event venue, new elevator, extended docks, new change rooms, enlarged weight room and an increased capacity for both membership and youth programming.

A celebration for club members and investors is being planned for early October.

About the Argonaut Rowing Club (ARC)

Founded in 1872 and located on the Western Beaches of Toronto, the Argonaut Rowing Club (ARC) is one of Canada’s oldest and largest clubs with a history of supporting Olympic and Paralympic champions. ARC provides programs for athletes, coaches, umpires and volunteers based on the Canadian Sport for Life (CS4L)/Long-Term Athlete Development (LTAD) model. Members at ARC include rowers of all ages, skill levels and abilities. They are supported by the ARC vision to inspire lifelong passions for the sport and to help their members achieve their personal level of excellence. For more information about the Argonaut Rowing Club, please visit www.argonautrowingclub.com.

About Tapestry Capital

Tapestry Community Capital is a not-for-profit co-op that supports other co-ops and non-profits in raising and managing community investment. Since 1998, the Tapestry team has supported some of Canada’s largest organizations across multiple sectors in successfully raising and managing $61 million from over 3,900 community investors. From investment structure, to branding and back-office support, Tapestry ensures each campaign and investment is managed reliably and professionally. Tapestry, and each one of their clients, strive to leave the world a better place. For more information about Tapestry Community Capital, please visit www.tapestrycapital.ca.

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Interviews, photos or more information:

Judy Sutcliffe
arcnext@argonautrowingclub.com
Argonaut Rowing Club

 

 

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