WATCH: Social Finance 101 – A Video Series
Social finance has been top of mind for me since being appointed Senator. For the past few years I have been working closely with representatives from Canada’s philanthropic and private financial sectors to promote innovative ways of financing projects that stand to create both a profit and a substantial social good. I see it as a creative new way – an additional tool – to address some of this country’s most wicked problems.
In February 2018, I participated in the Senate’s Social Affairs, Science and Technology Committee’s two-day study on the creation of a social finance fund in Canada. As the proponent for this study, I felt it would be of value to create an introductory resource for Canadians that unpacks some of the concepts we examined and answers some of the fundamental questions. With the study now complete and the final report coming soon, I’m pleased to offer you a series of YouTube videos highlighting some of the learned testimony we garnered from practitioners and global experts in this field.
(#1) What is social finance?
Explaining exactly what social finance is can be challenging. A simple Google search demonstrates just how inaccessible some of the research and expertise can be on this file. Nevertheless, understanding concepts like a “fund of funds” and a “social finance wholesaler” are key to seeing the potential of social finance in this country. In this first video, I highlight the testimony of Stephen Huddart of the McConnell Family Foundation. Here, he tells the story of the Huron Wendake First Nation outside of Quebec City and its efforts to secure housing for its people – a plain and simple take that is truly inspiring.
(#2) How does social finance attract investment?
There’s a great deal of idealism associated with social finance, but can it really generate a profit? This question was on the minds of of my honourable colleagues throughout this study. This second video puts the business model of social finance under the spotlight and identifies where current players in this sector are finding opportunity. Jane Bisbee of the Social Enterprise Fund and Derek Ballantyne of New Market Funds do a great job explaining why investors seeking a profit turn to their organizations and how their shops have demonstrated success in their partnership with community organizations and social enterprises.
(#3) Why should Canada create a social finance fund?
There are a number of people who are skeptical about government spending. Far too often everyday people are not feeling the effects of public investments in their lives, no matter how well the economy is performing or how well-intended a particular policy or program is. Social finance is all about finding the most effective way to make an impact at individual and local levels. James Tansey of the Centre for Social Innovation and Impact Investing makes a great case for why Canada ought to create a social finance fund, connecting social investment opportunities with a new way of employing individuals who have been historically excluded from the workforce.
(#4) What should this fund look like?
There appears to be an agreement among experts that social finance can only be successful if it is targeted and focused on creating the changes it seeks to create. Fortunately, we have a great deal to learn from other countries that have made similar investments in social finance such as the United Kingdom. Duncan Farthing-Nichol of the MaRS Discovery District, Derek Ballantyne of New Market Funds, and Christine Bergeron of VanCity offered some important tips on how government ought to structure a social finance fund of its own.
(#5) Why does social finance require government support?
Knowing what we now know about the potential for social finance in Canada, it’s important to understand the unique role our federal government could play. We have a real opportunity to congregate some of this country’s sharpest minds around new ideas to address issues such as poverty and inequality, a lack of affordable housing, and climate change. The witnesses we heard from talked a great deal about how government can alleviate perceived risks, set targets for the sector, and connecting private sector organizations with social enterprises and communities in need of investment. We also learned just how important it is that this social finance fund be left independent of government and free from politics while still being accountable to the public. Here are some final thoughts from Marie Bouchard of UQAM, Derek Ballantyne of New Market Funds, and James Tansey of the Centre for Social Innovation and Impact Investing on why social finance requires support from our federal government.
For more information about the Senate’s Social Affairs, Science and Technology Committee and its study on the creation of a social finance fund, please go to the Committee’s website: https://sencanada.ca/en/committees/soci/