Social Finance Orientation

Comments by:

Tim Draimin

Chair, Causeway; CEO, Tides Canada Foundation

For:

Causeway Social Finance Forum, October 15th, 2007; MaRS Discovery District - Toronto

CAUSEWAY: a national collaboration

Social finance is…

finance with a social or environmental mission

Or,

Social finance is a sustainable approach to managing money that

delivers social, environmental dividends and economic return through social

enterprises operating in the non-profit or public benefit universe.

CAUSEWAY: a national collaboration

financial flow to public benefit• The flow of financial capital

to human need uses:– Affordable Housing– Social Enterprise– Support for working families– Health & Home Care– Community Development– Social Economy– Clean Technology– Microfinance– Fair Trade– Green Building– Education– Bottom of the Pyramid(source: market sector listing adapted

from www.xigi.net)

Sources

Intermediaries

Mechanisms

Recipients

Uses

CAUSEWAY: a national collaboration

Social finance’s most visible example is MICROFINANCE…

CAUSEWAY: a national collaboration

Canada’s nonprofit sector is low profile but economically significant and

growing…

• $120 Billion annual expenditures

• Economically bigger than either the retail trade or mining, oil & gas industry (2003)

• Nearly 8% of Canada’s GDP

• 1.5 M workers + 0.5 M volunteers; 9.2 % of economically active population

• NP Sector is 2nd largest in world per capita

• Above average growth

CAUSEWAY: a national collaboration

Large Proportion of Nonprofit Funding is Earned Income

CAUSEWAY: a national collaboration

Social enterprise is…

A business with primarily social (and or environmental) objectives whose surpluses are principally reinvested for that purpose in the business or in the community, rather than being driven by the need to maximise profit for shareholders and owners...

CAUSEWAY: a national collaboration

Social enterprise across CanadaThe

challenge: Build robust

capital market

Aboriginal Financial

Institutions

Chantier de l’economie

sociale

FCES

Social Capital

Partners

Ecotrust Canada

Vancity

ECF: Social

Enterprise Fund

Great Bear Rainforest

Community Ownership Solutions

Innercity Renovations

CED Investment

Funds

CAUSEWAY: a national collaboration

The good news is that… Many Canadian financial institutions are already involved with

social finance type initiatives Canada can accelerate the adoption of social finance by

learning from and borrowing proven models from US and UK We know what we require to make the transition to a robust

social finance marketplace:New conversation among finance, government and nonprofits about the potential to scale up innovative social enterprise and social financeNew capital market instruments involving the range of financial institutions: banks, credit unions, pension funds, mutual funds, etc.Public policy that a) creates incentives for capital to expand into social finance, b) borrows international best practices in charity regulations that enable nonprofits to operate successfully in the growing hybrid spaceStrengthening the capacity of nonprofits and their social enterprises

CAUSEWAY: a national collaboration

Charity & Non-profit

Government Business

Blurring lines between sectors creates opportunities for partnerships…

GovernmentCharity & Non-Profit

Present

Past

Future

BusinessGovt

Charity & Non-profit

Hybrid

Space

CAUSEWAY: a national collaboration

CAUSEWAY a national collaboration

A national collaboration

working on new pathways

for financial investment

in public benefit.