The knowledge bank

A social finance tool that can be used by charities, non-profits and co-operatives to finance socially and environmentally impactful projects.

Similar in many ways to a traditional bond, a community bond is an interest bearing loan from an investor, which has a set interest rate and a fixed maturity date.

An organization that creates and offers securities—like community bonds—for sale to investors to raise capital.

A community bond issuer is any charity, nonprofit, or cooperative that offers community bonds for purchase to investors.

Investments sold without a public prospectus. A prospectus is a formal legal document meant for potential investors to read before investing. The prospectus is reviewed by applicable securities legislators, and the costs to the issuer are high—legal fees for drafting, filing fees paid to the regulator, and more—often in the hundreds of thousands.

Community bonds, instead, are exempt market securities operating under National Instrument 45-106—a set of rules coordinated by all Canada’s provincial and territorial securities regulators that outline when an organization can issue investment products without a prospectus.

Under National Instrument 45-106, most community bond issuers use the Nonprofit Exemption, which is available to issuers that are organized and operated exclusively for social, educational, benevolent, religious, fraternal, charitable, or recreational purposes, or for more than one of these purposes.

At Tapestry, we talk about the power of engaging community investors often. But what does it mean?

We use the term to describe anyone who invests in your project because they believe in its potential to improve your community. A community investor may be someone who lives locally and wants their neighbourhood to be more inclusive and welcoming. They may be someone living across the country who heard about your project and believes in its mission—this investor is part of your broader community of values. Maybe a local business or charity knows firsthand how people will be positively impacted by your work, so they invest some of their reserve funds.

Capital from community investors is never just money—it’s solidarity and community-building in action.