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Stephanie Pinnington

Abbey Dawn SolarShare Project

What comes after the Raise? Investor Stewardship and why it’s Important

Par | Education

Community bonds can help you scale-up your non-profit, charity or co-op, and take ownership of important assets that you need to achieve your mission. They can also help you to strengthen and deepen meaningful ties to your community.

When a community member invests in your project, they are becoming part of your dream and vision. They are also putting trust in you to carry out your project efficiently and run your operations in a manner that will ensure that investors are repaid.  

You might think that a community bond campaign ends when all the funds are raised. But at Tapestry, we have seen that our most successful clients are those that steward their investors from their first interaction with the organization all the way through to when their bonds mature, and beyond.

So, what does Investor Stewardship mean?

Effective investor stewardship means managing your investors and caring for their needs. You can look after your investors by staying in regular contact with them, giving them news and information about your organization and the project they are supporting, and providing reassurance that your bond campaign and project are running according to plan. In our opinion, the key elements of investor stewardship are:

Investor onboarding: First impressions are everything. This may be an investor’s first transaction with the organization and if you want to instill trust, this is the most important starting point. Information about the investment and organization should be presented clearly and provided on time, someone should always be available to field questions via email or phone, and there should be immediate follow-up once the investment is received.

E-newsletter: A monthly e-newsletter is one the most effective ways to keep in touch with your investors. In your newsletter you can share details about your investment campaign, project updates and highlights, and even industry news.

Social media: Social media provides a more informal channel to give your investors updates about what is happening within your community. Social media also allows investors and influencers to engage with your news and content, and share within their own network.

Seek input: Community bond investors often want to go beyond putting their money in an organization. Occasionally seeking their guidance or input via surveys or at events can help strengthen your relationship by making them feel that they are a meaningful part of your mission.

Professional Investment Management: Ensuring that investors are paid interest or dividends on time and in a professional manner is critical. You will also want to ensure that they receive the necessary tax forms at the appropriate time of the year, and that you can give statements and updates on their investment whenever they request them.

CSI Founder Bricks

The Centre for Social Innovation (CSI) created Founders Bricks for their investors.

There are also many creative ways that you can acknowledge and thank your investors. Some organizations may choose to give investors naming rights of spaces which they are building, as is often done in a capital fundraising campaign, while others might choose to send a small gift.

SKETCH Working Arts recently completed a $1.4 million community bond raise, to purchase their admin and studio space. Over the holiday season, in order to thank investors, SKETCH distributed coffee and brownies to everyone that made an investment.

Small gestures like this don’t have to be costly. In the case of SKETCH, they had the coffee donated and the brownies were baked by volunteers in their community kitchen. This was a low cost but memorable acknowledgement of the role that their investors are playing in bringing their vision to life.

Why is investor stewardship so important?

Your investors will be powerful spokespeople for your project, your investment opportunity, and your mission. If they have a positive investment experience, are able to trust in you, and have access to investment and project details, they will share this opportunity with others in their network.

“Word of mouth is actually the single most important source of new investment,” shares Jennifer Bryan, our Senior Campaign Manager at Tapestry. “In addition to generating new investment, stewarding investors throughout the life of their bond can mean that when their bond matures, they choose to reinvest in any new investment opportunities the organization has.”

Abbey Dawn SolarShare Project

Investors touring SolarShare’s Abbey Dawn installation (pre-covid). This is their 37th project.

SolarShare is a community power co-operative that sells bonds to finance community-owned solar projects. “They have over a 70% reinvestment rate, meaning that when bonds mature, 70% of investors will choose to put their money back in,” says Jennifer. “This pool of dedicated investors meant that SolarShare could scale extremely rapidly.”

To give you an idea of just how quickly they scaled, from 2011 to 2015 they raised $10 million total in investment. Last year, in 2020 alone, they raised $16 million in 9 months. SolarShare started with just one solar project and now has 49 solar projects across Ontario.

The Centre for Social Innovation (CSI) also has a fantastic growth story,” says Jen. Their first bond campaign in 2010 raised $2 million to help them purchase their first building in downtown Toronto. Four years later, in 2014, they were able to turn around and re-approach investors to raise another $4.3 million to purchase a second building.

“What is truly incredible,” shares Jen, “is that in 2020, amidst a global pandemic, CSI was able to raise another $1.9 million in community bonds in just 41 days.” The speed at which their bonds sold out is a testament to the trust that investors have in CSI.

CSI Growth

How can Tapestry help?

Building a community bond campaign means forging lasting relationships with your investors. Building these relationships takes time. “We often find that organizations don’t have the bandwidth to dedicate resources and time to stewarding investors, and this is why we are here to help,” says Jen.

“We see ourselves as a temporary part of your team, providing the additional resources to make sure that your investors receive the attention they need. We can provide advice, tools and templates to help you on your way. We don’t have to reinvent the wheel here,” says Jennifer, “we have done this so many times now that our process and methods are well formulated.”

Are you interested in using community bonds for your project? Get in touch.

Cathy Mann

How to raise donations and investments at the same time

Par | Education

Charities are one of three types of organizations in Canada that can make use of community bonds to raise investment from their supporters. What makes charities unique from the other two groups – co-ops and non-profits – is that they also have the ability to seek donations and offer tax-receipts to donors.

As community bonds and philanthropy are so different, yet both important types of financing, we are often asked if the two can work hand-in-hand for charities.

We sat down with Cathy Mann, founder of the Fundraising Lab, to tell you that yes, it can be done and there may be benefits to combining these two types of funding that you haven’t realized yet.

Cathy has over 20 years of experience teaching fundraising in college and university, and over 25 years of experience working as a front-line fundraiser and consultant. Cathy developed the Fundraising Lab to share fundraising skills and her best advice to help more charities achieve their mission.

Cathy Mann Fundraising Lab
Community bonds are an exciting tool for Charities

Community bonds are a social finance tool, similar in many ways to a traditional bond. They are an interest bearing loan from an investor, which has a set rate of return and a fixed term. The major difference is that in addition to offering a modest financial return, they also offer a social or environmental return.

What are community bonds

Most charities will be familiar with traditional fundraising and building relationships with donors. They will also be familiar with donor fatigue and the struggles that can come with trying to align capital fundraising with project timelines. What community bonds do is create a new vehicle for accessing funds that might not otherwise have been possible to tap in to. 

“Impact investing is such a hot topic right now,” shares Cathy, “there are a lot of institutional funders out there that don’t have a place to put the money they have earmarked for impact investment. Community bonds create a new avenue for these investors to make a return while also ensuring that money is doing good in the community.”

And it’s not just institutional investors who are searching for community bond investments. In fact, in a community bond campaign the majority of investors are your average retail investor interested in making an impact, or someone who is already a supporter of the issuing organization. 

“I think community bonds are a really interesting form of financing” says Cathy, “but that doesn’t mean they are for everyone.”

“I don’t want to be a Debby Downer,” she laughs, “but there is a checklist of conditions for charities interested in this tool.” Most importantly, the charity must have a revenue model that will allow them to repay investors over time. The second important condition is that the charity be raising the financing for the purchase or renovation of an asset, most likely real estate.

Community bond checklist
Financing to match project timelines 

One element of community bonds that is often appealing is that they allow charities to access a lump sum of financing upfront. “With a typical capital campaign, donations come in as pledges, and those pledges are paid out over the course of 3-5 years,” explains Cathy. “This is something that many charities engaging in a capital campaign for the first time don’t realize.” Adding bonds into the financing mix can potentially help with project rollout, as these funds are available upfront.

Are charities ready for social finance?

“Some charities are better positioned to take on debt than others, and feel more comfortable,” shares Cathy. “My clients haven’t had a lot of experience in this area solely because most don’t own property, and without property, there is nothing to secure a loan. So many charities just don’t have a lot of experience with taking on financing.”

But that may be changing now with the emergence of community bonds. Charities are becoming more and more inventive with social enterprise models, there is growing government support in this area, and with rising rents across Canada, the business case for owning vs. renting is often there.

“I hope this model of financing becomes more prevalent,” says Cathy. “I think seeing somebody else do it first is going to make a big difference.”

What if Donors only want to be Investors moving forward?

Most recently, Cathy has been working with a charity called SKETCH Working Arts on their capital campaign Project Home. This $1.52 million fundraising campaign happens to be running alongside a $1.4 million community bond campaign that we at Tapestry are supporting with.

In total, SKETCH will be raising $4 million to purchase their studio and admin space, where they support homeless and marginalized youth through mentoring and development in the arts.

SKETCH is a great example of a charity that has been successful in running these two types of campaigns in tandem, and managing both investors and donors at the same time.

“I think there is a legitimate fear that some donors may choose only to invest,” says Cathy, “and this may be the case for some, but what we have learned from SKETCH is that many donors just want to remain donors, or want to donate AND to invest.” 

SKETCH donors and investors

At Tapestry, we’ve also seen that community bonds can re-engage lapsed donors. “Some may have stopped giving years back but are now interested in supporting the organization in a different way,” shares Jennifer Bryan, our Senior Campaign Manager.

The key according to Cathy, is that you need to make sure you have a good plan for both your fundraising campaign and community bond campaign before you begin on either element. “What is really critical is to speak to your donor base when you are in the planning phase to see what their reactions are and which way they will lean,” she says. 

“In our experience, community bonds have actually extended the reach of our community,” says Dale Roy, Marketing and Resource Development Associate at SKETCH. “Community bonds allowed us to tap into a new group of people we never realized were out there. We hope that our investors will continue to support our work even once this project is complete.”

The Giving Bond

“The SKETCH creation of the Giving Bond has been amazing,” says Cathy. SKETCH is the first organization in Canada to utilize this form of a community bond. How it works: an investor purchases the bond, they receive their full principal back at the end of the term and the interest is donated to SKETCH. The investor then receives a tax receipt for the donation.

Charity giving bond

In a sense, the Giving Bond allows investors to make a donation, and gives the charity an interest free loan. “Lots of organizations just get tripped up by the notion of making the interest payments. So for many organizations, it might be easier for them to consider if it can be viewed as an interest free loan,” says Cathy.

The keys to success

One of the main reasons that SKETCH has succeeded, in Cathy’s opinion, is that they had a donor base that would support this kind of initiative. “They have great relationships with their supporters and a sizable group of people that they could reach out to from the get go.”

They also had experience with major gift fundraising, which was a great starting point for them. This meant that they already had a lot of the necessary infrastructure in place. They were able to take these existing tools and knowledge and pivot to effectively communicate with investors, whom require different messaging from donors. 

“The other thing is that people love Rudy,” Cathy says with a big smile. Rudy Ruttimann is the Executive Director of SKETCH and the lead on Project Home. “She is a force to be reckoned with.”

“She was just so determined that this was going to succeed, that people got caught up with that enthusiasm, and believed in it because she believed in it so strongly.” Of course, Rudy also has an amazing team supporting her, to whom Cathy gives her kudos. It was SKETCH’s volunteer financial consultant, Michael Sacke, who initially put forward the idea of alternative financing, and he was a champion for the idea of community bonds from the start.

Some advice to charities interested in Community Bonds

“Prepare for some nail biting,” she says with a grin. “It’s not for the faint of heart. There will certainly be moments of doubt, and ups and downs, but in the end it can really pay off. This is something really cutting edge and exciting, and people want to be part of that.”

Are you interested in using community bonds to raise investment for your charity? Get in touch at info@tapestrycapital.ca.

Join our Board of Directors

Par | News

In a time of exciting growth, our parent organization – TREC Renewable Energy Cooperative – is looking to expand its Board of Directors.

TREC has incubated and launched several organizations that solve environmental challenges and advance the power of community economic development in Canada, including WindShare, SolarShare, and Relay Education.

TREC’s most recent venture is Tapestry Community Capital. At Tapestry, we support social purpose organizations across Canada to raise and manage community investment. Our clients are cooperatives, not-for-profits, and charities engaged in developing renewable energy, and social purpose real estate such as: housing, arts venues, recreation facilities, community hubs, co-working spaces, and innovation centres.

We know that more diverse, equitable and inclusive leadership will lead to greater innovation and amplified impact. This is why TREC is actively seeking to improve the diversity of our Board of Directors. We are particularly seeking representation from people of colour, rural communities, Indigenous groups, and those that identify as
LGBTQ2S++, and encourage applicants from equity seeking groups.

In our most recent episode of Café Tapestry, we had the opportunity to speak to Rebecca Black, long standing TREC Board Member, Co-Founder of Women in Renewable Energy (WiRE) and Designer & Communicator at Black Current Marketing. Rebecca shared her experience of being a Member of the Board, what she has learned over the years, and how this opportunity has helped her to develop new skills and shape her career.

Watch the full episode below to learn more about what it is like to be a Member of the TREC Board.

For those interested in applying, please read the full description here.

Can Community Bonds be held in Tax-Advantaged Accounts? 

Par | Education, Policy and Advocacy

Community bonds are a social finance tool that allow non-profits, charities and co-operatives to raise investment from their community of supporters. Like a regular bond, they are an interest bearing loan that is repaid at maturity. Similarly, they have a fixed term and a set interest rate.

The key difference is that they produce both a financial and social return for investors.

Community bonds are most often used to raise capital financing for the purchase or renovation of a fixed asset, such as real estate or major equipment. At Tapestry, we’ve worked on community bond raises for everything from solar energy projects, to co-working spaces, to schools, and we are learning about new and exciting projects every week. 

As community bonds become more commonplace, their demand has increased significantly. In 2020, Tapestry supported issuers in raising $18.3 million in investment. 

One of the questions which we are frequently asked is, “Can community bonds be held in tax-advantaged accounts?” 

To answer that question, we spoke to Erica Glueck, our Senior Manager of Investments at Tapestry. 

 

What are tax-advantaged accounts?

Tax Free Savings Accounts (TFSAs) and Registered Retirement Savings Plans (RRSPs) are two types of tax-advantaged accounts that were created by the Canadian Government as a means to support Canadians in saving for their retirement. 

“You can think of TFSAs and RRSPs as a basket”, says Erica. “You can pick what to put in that basket from an array of financial products – guaranteed investment certificates (GICs), cash, stocks and bonds.”

 

So if bonds are allowed in tax-advantages accounts, are community bonds as well?

Headshot

Erica Glueck, Senior Manager of Investments at Tapestry Community Capital

“The short answer is, ‘it depends’”, says Erica. “The organization that is issuing the bonds will have to meet certain conditions in order to make this a possibility for their investors.” 

First, the organization must be raising bonds that are secured against a traditional mortgage loan or a capital asset. “So if the organization is purchasing a building, or renovating a building they already own, this is a first great step,” she explains. 

The second step is finding willing financial institutions to be custodians for these bonds in a registered plan. 

Community bonds are what we call exempt market securities – or in plain English – they cannot be bought and sold on the public market.

The exemptions that allow for non-profits, charities and co-ops to raise investment in this way also make clear that they cannot have ‘dealers’ who are being paid to sell bonds on behalf of the issuing organization.

“This can sometimes be a challenge,” says Erica, “because there is no incentive for a brokerage or financial institution to support investors in getting their bonds held in a tax-advantaged account.”

But fear not, there are several great financial institutions who are already custodians for community bonds. Questrade, Caldwell Securities and Concentra are a few that we are aware of. 

In order to get these financial institutions on board, the issuing organization will need an Opinion Letter from a tax lawyer or an accountant. 

Erica explains, “The Canada Revenue Agency (CRA) decides what can be deemed a qualified investment for these accounts. Bond debt that is secured against a mortgaged property is one way they can meet the necessary criteria. The safest way though, is to have a chartered accountant or lawyer interpret the Income Tax Act as it pertains to your project and investment opportunity.”

It’s important to know that ultimately the decision is at the discretion of financial institutions, and that this is something that Tapestry and the Issuer can’t control.

 

What are the benefits of having community bonds eligible for tax-advantaged accounts?

Lots of Canadians max out their contributions to their RRSPs and TFSA’s not only to save for retirement, but to reduce the taxes that they need to pay on those funds. This means that a lot of wealth within Canada is in these accounts.

An individual might not have a lot of cash available, but may have a significant amount saved in one of these accounts. 

Retirement savings“Because there are restrictions on withdrawals from these types of accounts,” says Erica, “most of the money remains locked in place there – making it difficult, for say Bob Smith, to withdraw $2,000 to invest in a community bond.”

“If Bob can suddenly hold that bond in his TFSA or RRSP,” she explains, “there is no need to withdraw that capital.” Enabling community bonds to be held in these accounts unlocks more potential investment. 

“It’s a good way to leverage someone’s savings plan, rather than making them go through the extra effort of drumming up additional savings to invest in an organization they believe in.”

How important is it that community bonds are TFSA and RRSP eligible?

“It’s definitely worthwhile to explore,” says Erica, “but I don’t think it’s a make-or-break situation if the Issuer’s bonds are not a qualified investment.”

Of Tapestry’s clients, only around 10 percent of investments are held in these accounts. “Especially if clients have a lower minimum entry point – say $500 or $1,000 – the need for this vehicle is definitely less.”

Community bonds are great because they can be priced to be so widely accessible, democratizing the impact investment arena,” she says emphatically.

“We are seeing a growing number of younger investors with community bonds, and many investors are at a point in their lives where they aren’t taking advantage of these tax-advantaged accounts yet, but are in a financial situation where they can invest $1,000 in an organization they believe in.”

 

What types of organizations should consider making their bonds RRSP and TFSA eligible?

“We always recommend to clients that they consider this option if they feel their community would have significant funds saved in tax-advantaged accounts”, says Erica. “The best way to assess this is through simply speaking to your potential investors before you launch your bond campaign.”

 

“It can be a bit of a process to establish, but if investors are really keen on having this option, it can pay off in the long run,” Erica advises. 

It is important to note that there are some additional costs with going this route, so issuers should be prepared for this. For example, it’s necessary to obtain a new opinion letter for every year that the bond is held.

 

Any last thoughts on the subject?

“I’d just say that financial markets need to start paying attention to these investors.”

“More and more, we are seeing that people are not just interested in making a financial return, but want to know that their money is doing something good. Just because financial institutions aren’t as familiar with these investment products, it doesn’t mean they are necessarily bad or risky investments to be making.”

“The more people want to buy and hold these investments in registered accounts, the more the industry will need to pay attention to investor needs and streamline the process to make it possible.”

SKETCH Project Home

SKETCH’s Project Home: Changing the face of financing for the arts

Par | Client Stories, Success Story

For 24 years, SKETCH has been a stronghold for community arts in Toronto.

Their free programming – which includes everything from culinary arts, to dance, to digital media – targets youth ages 16-29 who live homeless or on the margins and navigate poverty. SKETCH is driven by the strong belief that if young people create and develop in the arts, they will build leadership skills and self-sufficiency.

When talking to SKETCH artists, it’s clear the impact they have had on their community and the radical change they have inspired. The video below features Joel Zola, an alumnae, who experienced homelessness for 7 years. He is now the Executive Director of Street Voices, and says that SKETCH had a transformative impact on his life.

Through the years, SKETCH was forced to move their programming location many times.

As renters, they were always at the whim of their landlords and victim to rising rents in the city. They finally found a home in 2014, in a community hub and former public school building owned by ArtScape. It was everything they had hoped for – 9,000 sqft that includes a commercial kitchen, a recording studio, a ceramic studio, an office space to meet their needs, and so much more.

In 2018, an amazing opportunity presented itself.

SKETCH was given the opportunity to purchase their space to turn their home into a permanent home. They knew that under their current lease, they were looking at a 4.5% rent increase every year and that meant that if they didn’t buy, they would need to relocate in just 5 years. They also knew that to maintain their impact, they needed to stay in a downtown, accessible location.

Graph showing cost of renting versus owning

SKETCH had a vision, a bold champion in Rudy Ruttimann, their Executive Director, and a strong and supportive community behind them.

This is when SKETCH met Tapestry. We launched a feasibility study, and together came to the realization that Community Bonds could be a very sustainable solution to creating a permanent and lasting space for their programming. Not only this, but it could also be a chance to build even stronger connections with their community of supporters.

Enter the SKETCH Project Home Bond.

SKETCH secured a mortgage for $1.1 million with Alterna Savings and committed to raising $1.52 in capital fundraising. To reach their total goal of $4.02 million, they made the decision to raise $1.4 million in Community Bonds, finally allowing them to buy their studio and admin space.

Their campaign has been designed to allow a wide array of people to invest, with an entry point as low as $500.

They are also selling a Giving Bond – which is a first in Canada. The Giving Bond allows an investor to purchase a bond and then donate the interest that is earned on it. They will then receive a tax credit for the donation, and receive their initial principal back in full.

Sketch bond offering
How is it going so far?

Their community has already invested $926,000 to date – that’s 66% of their target investment!

If you want to learn more about the Project Home campaign, you can visit their campaign page or register for their upcoming info session of Feb. 5th, 2021. If you are unable to join, watch a recording here.

Join us for Café Tapestry

Par | News

With pandemic restrictions and working from home, we are really missing our morning coffee chats about the social finance work that’s inspiring us. Grab a cup of coffee and join us for Café Tapestry! We will be meeting exciting minds working in community finance and hearing their amazing stories about communities rallying to finance social and environmental change.

This episode features our Co-Executive Directors at Tapestry, Mary Warner and Ryan Collins-Swartz. Mary and Ryan share how community bonds have performed over the past year (2020) and their outlook for making social finance more inclusive and more impactful.

 

Have an idea for the next episode of Café Tapestry? Get in touch with us.

Announcing our new Co-Executive Directors: Mary Warner & Ryan Collins-Swartz

Par | News

We’re proud to announce Mary Warner and Ryan Collins-Swartz as the new Co-Executive Directors of Tapestry & our parent organization TREC

Mary and Ryan are stepping into their new roles as veterans of the organization, both having a deep understanding of social finance and its impact on communities across Canada. They played a central role in founding Tapestry and growing the organization from an idea to an incredible reality – an organization that has now raised over 70 million dollars in community investment for community owned assets. Mary, Ryan, and the entire team, imagine a future with clean energy, housing for all, inspiring spaces for the arts, and social services brought to life with community bonds.

Mary Warner is the longest serving member of our organization and a pioneer in the world of social finance. She joined TREC 11 years ago and supported the growth of leading bond issuers like SolarShare, ZooShare, the Centre for Social Innovation. As Co-Executive Director, Mary will oversee operations and finance. 

I bring the spirit of facing new challenges by working collaboratively in my new role. It is not a leap I take lightly or alone, and with the support of my Co-Executive Director, Ryan, and with deep confidence in our entire team, I am eager to continue our tradition of thinking big and finding ways to further the social and environmental causes that are fundamental to our mission and values.”  – Mary Warner

Ryan Collins-Swartz has been an instrumental force in our organization and a champion for community bonds.. Since joining TREC to launch Tapestry 3.5 years ago, he’s built out our services, expanded our reach to new sectors and geographies, and worked closely with organizations to develop their bond campaigns for success. As Co-Executive Director, Ryan will lead the growth of Tapestry by working with partners, clients, and stakeholders. 

“It’s inspiring to support organizations to engage their community, increase their impact and empower everyday investors and institutions to align their investments with their values. I believe in the power of community bonds to change not only our relationship to finance, but prove that together, we can create the communities we want to live in.” – Ryan Collins-Swartz

Deb Doncaster, one of TREC’s founding staff and now a Director at the Greenbelt Foundation, shared the Board’s perspective on co-leadership:

“Our Board was thrilled to unanimously approve Mary and Ryan as our new Co-Executive Directors. Co-leadership provides stability for the organization as a whole as well as for the co-leaders themselves. Together, they can support each other in this pivotal role and model a more inclusive, co-operative and rewarding form of leadership. We’re excited for our organization to continue to evolve and grow under their leadership”  – Deb Doncaster, Board Member

2020 has proved the resilience of our communities and we are excited to support new ideas with the power of community bonds in 2021. We look forward to the year ahead with confidence in our team, energized to dream even bigger.

If you have any questions about Tapestry or community bonds, please get in touch! We’d love to hear from you.

What is the Investment Readiness Program?

Par | News, Policy and Advocacy

At Tapestry, we speak with many not for profit organizations on a weekly basis. Over the last few months, the Investment Readiness Program (IRP) has been a part of that 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 nonprofit 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

On November 22, 2018, the federal government announced the establishment of a $755 million Social Finance Fund. The Community Foundations of Canada CEO, Andrew Chunilall suggests that the goal of the fund is to “attract increased investment to help vulnerable people and to solve pressing challenges like climate change, housing affordability, technological disruption of jobs, and other national and local priorities.”

Full details about the fund are still forthcoming, however, it is expected that the $755 million will be distributed in the form of a matching investment over the next 10 years, starting in 2021. In other words, like the funds from private investors, the social finance fund be a repayable investment into social purpose organizations.

In recognition of the fact that private investments and social finance are new concepts for many social purpose organizations, there has been $50 million earmarked to help get organizations ready for the planned release of the Social Finance Fund. These funds are being distributed as the Investment Readiness Program.

Investment Readiness Program

The Investment Readiness Program was launched in July 2019. The funds are being distributed in the form of grants through readiness support partners. These partners include:

Starting in 2020, 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 fact, the Canadian Women’s Foundation has already put out its first call out for applicants.

In practice, investment readiness refers 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 return.

How can Nonprofit 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 work 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 will be working with Innoweave to host an Investment Readiness and Ideation session on Thursday, December 18 at 1:30pm. The session will be hosted by Tapestry at the Foundation House (Foundation House Board Room, #300-2 St Clair Ave East, Toronto, ON) and facilitated by Wayne Miranda the Social Finance Investment Readiness Lead.

If you’re interested in participating, signup through the link below:

In addition, before the end of the year, the Community Foundations of Canada will be announcing more information on the Investment Readiness Program. They will be one of the best resources to stay up to date on program developments, and gain access to program funds through community foundations. And, 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.

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