Causeway: Report from Canada's First Social Finance Summit

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Link: http://www.tidescanada.org/files/pdf/causeway2.pdf
Org: Tides Canada Foundation

Canada's first national conversation on social finance with the mainstream financial industry was held in Toronto on October 15, 2007. This report is a summary of the day's presentations and discussions.

Background

Canada's social and environmental sectors are dramatically underfinanced. To scale up their programs and increase impact, they need access to new forms of capital. Social finance covers community investing, social enterprise finance, micro-lending, sustainable business, and philanthropic program-related investments. Tides Canada hosts Causeway, a new national collaboration to accelerate the growth of social finance options for charities and community organizations.

The increased scale and impact of social finance in Canada will generate significant long-term benefits to Canadian society. Tides Canada seeks to map an accelerated growth plan for the financial infrastructure urgently needed to support Canada's charitable sector.

This report on Causeway's first national Social Finance Forum profiles important US and UK social finance experiences and provides directions for moving this field ahead in Canada.

Summary of the Forum

The Issue: The social sector in Canada needs adequate resources to effectively address entrenched social problems. The two traditional sources of revenue, government grants and private donations, will not by themselves meet the need.

The Solution: New sources of capital, often called "social finance", are being created by international financial institutions. This emerging field of investment blends economic and social returns and is located on the continuum between high financial and no social return (traditional investment vehicles) and no financial but high social returns (grants or donations). Examples range from affordable housing and micro-finance to social enterprises and clean technology.

Canada's first national conversation on social finance with the mainstream financial industry was held in Toronto on October 15, 2007, building upon a number of successful forums held from 2004 - 2006 in Vancouver on innovations in social finance. Over 80 participants from the traditional finance and social finance sectors, academia, federal and provincial governments, funders, credit unions and co-operatives attended the Forum hosted by “Causeway”, a national collaborative working on effective pathways for financial investment in public benefit. They came to learn about Canadian and global best practices and success stores in social finance and the challenges and opportunities for scaling up social finance nationally. Participants were asked to consider how the flow of capital to address growing social and environmental challenges could be increased and what role they could play in the effort.

Canadian social finance practitioner panelists commented that there is a need for a creative non-profit investment bank, a need to build social entrepreneurship, a role for federal and provincial policy to support social finance, and a need for recognition that high risk capital investments in underserved markets can be profitable.

Participants were asked to identify highlights of the day and suggestions for next steps to be included in planning future phases of the Causeway initiative. Groups reported that there is a need for more collaborative structures, there is an opportunity to build a social capital marketplace based on the experience of others, the perception of risk is higher than actual risk, there is a role for government to advance the sector, Canadian institutional investments should be mobilized and the opportunity exists to leverage up good Canadian practice.

Further resources on social finance can be found on the Tides Canada Foundation website.