In the fall of 2018, the Government of Canada announced that it would be committing $755 million dollars towards the creation of a Social Finance Fund and $50 million dollars towards an associated Investment Readiness Program.
This is a significant step by the federal government towards catalyzing Canada’s emerging social finance market. And it’s a big opportunity for organizations that have a mission to advance social, cultural, or environmental aims.
But what does this all mean for your charity?
First, what is social finance?
Social finance is a type of lending or investment that delivers a positive social, cultural, or environmental impact as well as a financial return for creditors / investors. Social finance could potentially provide a new source of income for charities who typically rely on more traditional sources of income, such as grants and donations.
Second, what is the Social Finance Fund?
The Social Finance Fund is a pool of money that will increase the amount of affordable, repayable capital available for charities, non-profits, co-operatives, and private businesses advancing a social or environmental mission. The money that will be available through this fund is intended to help these “social purpose organizations” create and grow innovative programs and initiatives aimed at solving the most persistent and complex social, cultural, and environmental challenges in our society.
Third, what is the Investment Readiness Program?
To help organizations access money that will be made available through the Social Finance Fund, the Investment Readiness Program will provide up to $100,000 in funding for eligible social purpose organizations. With this funding, these organizations will be able to access supports to build their capacity to accept investment and participate in Canada’s growing social finance market. Some examples of how this funding can be used include:
- Explore a new business idea or develop a business plan to test your idea
- Create a marketing plan to reach new audiences
- Plan new products or services to grow revenue
- Prepare documentation to approach potential investors
The Investment Readiness Program is currently underway and will run until March 31, 2021.
Fourth, how is Imagine Canada involved?
As a partner in the Investment Readiness Program, Imagine Canada will be conducting a survey of registered charities to better understand the current readiness of charities to accept social finance. This survey, which will be launched in January 2020, will also help us better understand the barriers that hinder charities from participating in Canada’s growing social finance market and potential points of intervention.
Imagine Canada will be sharing survey findings to help charities make informed decisions about social finance and to help other actors in the social finance ecosystem engage charities more effectively. This effort will be supplemented by additional sense-making activities that will help charities understand key social finance-related concepts and terms and key characteristics of the social finance market.
Fifth, what do you need to know moving forward?
Community Foundations of Canada, a funding delivery partner in the Investment Readiness Program, has opened its application portal for social purpose organizations to apply for funding available through the Program. Organizations can apply for the current round of funding by February 10, 2020. You can visit communityfoundations.ca and irp-ppi.ca to learn whether your organization is eligible for funding and how to apply for it. Applications for organizations in Quebec are also now open through Chantier de l'économie sociale.
There are three other partners in the Investment Readiness Program that will be making funding available to social purpose organizations: Canadian Women’s Foundation; National Aboriginal Capital Corporations Association; and the National Association of Friendship Centres. Please enquire with these organizations to learn more.
Imagine Canada will be providing regular communications to help inform charities of the latest developments and opportunities with the Investment Readiness Program and Social Finance Fund. Imagine Canada will also be providing informational resources to help charities better understand what social finance is and what it may mean for their organization. To stay up-to-date, follow us on our social media channels and subscribe to the Early Alert newsletter.