New finance for Canada’s social enterprise sector

Convened by Social Innovation Generation (SiG), the Canadian Task Force on Social Finance was formed to determine how best to catalyse the creation of a social finance marketplace serving social enterprises in the non-profit and for-profit realms. Comprising business, public policy and philanthropic leaders, essentially the task force examined how private equity could join with existing philanthropic and government pools of capital to invest in innovative ways to address pressing social needs.

Social finance is about investing money in businesses, organizations or funds that generate both a social/ environmental and a financial return. This is also referred to as blended value investing or impact investing.

capital reportThe report released by the task force in December 2010, Mobilizing Private Capital for Public Good, offers an integrated national strategy for building Canada’s social finance marketplace. It comprises seven recommendations that Canada needs to undertake, in parallel, to mobilize new sources of capital, create an enabling tax and regulatory environment, and build a pipeline of investment-ready social enterprises.

Worldwide, governments are fiscally constrained and charities and non-profits typically insufficiently resourced to meet the scale of the challenges we face. In Canada, too, the government’s capacity to ensure the wellbeing of its citizens is limited because of lagging economic productivity and the rising costs of healthcare, support for seniors, education and environmental protection. The result is a growing number of enterprising charities and non-profits, as well as social purpose businesses looking for capital to grow and scale their operations, that lack both financing options and business advisory and technical support.

These challenges require a renewed commitment to innovation, not just in business but also in government and the community sector. They also require a new way of working together. That’s why investors, entrepreneurs and governments are challenging the notion that business exists to generate private wealth while non-profits and governments are responsible for effecting social change.

‘Mobilizing private capital to generate not just economic value but also social and environmental value represents our best strategy for moving forward,’ said task force chair Dr Ilse Treurnich.

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