Canada’s So­cial Fi­nance Fund

Policy - - Before The Bell | From The Editor - TA­NIA CARNEGIE

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.

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