Atlantic Canada Social Purpose Investment Fund

Social Finance as a Tool for the Creation of Community Impact in Atlantic Canada

Challenge: The Atlantic Region is the most rural in southern Canada. Our Foundations and Charities have the least amount of capital and as a result, the ecosystem for investing in social, cultural, and environmental outcomes is considerably less than the rest of southern Canada. Our traditional financing and investing tools are relatively well developed and deployed.

Challenge: The twin stalkers of death on the planet are poverty and climate change. It is hard to imagine that nonprofit social purpose organizations will solve those problems alone in the current scarcity of investment environment faced by Atlantic Canada. We need to change that as well as engage the power of business in solving these social and environmental problems.

Opportunity: Build an Atlantic Canadian Social Purpose Investment Fund that will provide strategic, first-in investment that leverages traditional methods of finance and investment to step in and play their part. There are three parts to this solution.

Principles

  • There must be a well defined and measurable social, cultural, or environmental impact in each investment.

  • Capital preservation is a critical component of every transaction.

  • Growing the fund through returns must be an achievable goal.

Operations

  • Create an Atlantic Canadian Social Purpose Investment Fund to attract donations from the business community and other engaged organizations and individuals. Provide tax receipts for investors who qualify. Match donated funds with federal and provincial dollars and create new impact sector investment ranging from $5,000,000 leading to $10,000,000.

  • Establish a mechanism to manage the due diligence and support on the loans and investments being considered to ensure they are managed professionally.

  • Only put in the first money and be prepared to be the last out and never put in more than the first 30% on a single investment.

  • Variable interest rate based on social outcome achievement.

Marketing

  • Encourage organizations to participate by offering attractive interest rates that are below market and contingent on the realization of predetermined, measurable impactful outcomes.

  • Encourage business donors to participate in the advisory group to support the organizations (non-profits, co-operatives, social enterprises, businesses) that apply for funds and given loans.

  • Promoting these organizations and their impact will help us to build the kind of world we all want. Business consumers and private consumers would much prefer to purchase from organizations who they feel share their values.

  • Differentiate between grants and investments/loans which are repayable.