Canada’s Social Finance Fund
The announcement of Canada’s first Social Finance Fund is a significant and exciting step forward in addressing some of the complex and persistent social problems faced by Canadians. Created with input from public and private stakeholders across multiple fields, its’ ultimate success will also require collaboration across sectors.
Creating the Fund was one of twelve recommendations of the Social Innovation & Social Finance Strategy Co-Creation Steering Group in its’ August 2018 report Inclusive innovation: New Ideas and New Partnerships for Stronger Communities, and later made official in the Federal Government’s Fall Economic Statement.
The Fund aims to provide charitable, non-profit, and social purpose organizations with access to new financing opportunities for projects that drive positive social change. It will make up to $755 million in financing available over the next decade, as well as earmark $50 million over two years to develop an Investment and Readiness stream to support the ability of these organizations to participate in the social finance market.
Social finance (investments intended to create social or environmental impact and generate financial return) is not new in Canada. This new Fund will help expand and strengthen the existing social finance market, and provide communities with new tools and funds to innovate and solve the challenges they are facing. In addition, it is estimated that the Fund could generate up to $2 billion in economic activity, and create and sustain up to 100,000 jobs over the next 10 years.
All of the recommendations in the Steering Group’s report were informed by an extensive and collaborative engagement process. Over a twelve-month period, I was proud to work with my fellow Steering Committee members to consult with Canadians through a series of in-person and online engagements. Their insights and experience, and the ensuing discussions and debates, helped ensure that our recommendations reflected the challenges and opportunities facing charities, non-profits, and social purpose organizations. In developing the recommendation for the Fund, we also examined best practices and lessons from similar Social Finance Funds in other countries. The result is a truly progressive “made in Canada” approach to help our communities prosper.
The creation of a Social Finance Fund sends a strong signal about the important role of investment capital, not just philanthropic capital, to foster stronger communities. By catalyzing partnerships between private investors and social purpose organizations, the Fund will help fuel innovative approaches to overcome social challenges that make it difficult for some Canadians to prosper.
Further details will take shape in early 2019, but the legacy of the Social Finance Fund will be defined by the people and ideas that take shape around it.
Tania created and leads the Impact Ventures practice at KPMG. She was a member of the Social Innovation and Social Finance Strategy Co-Creation Steering Group.