<ul><li>Social Finance   </li></ul><ul><li>Workshop presented to the </li></ul><ul><li>NZCOSS Conference, October 2006 </l...
What is Social Finance ? <ul><li>Money saved, earned, raised, used and/or invested by not-for-profit organisations or indi...
Social Finance Continuum Grants (Government, Philanthropic bodies,  and/or  Community Foundations   Pre-Commercial Grants ...
<ul><li>Promotes different approaches to the funding of NGOs </li></ul><ul><li>Provides a new model of dealing with capita...
How does Social Finance fit into traditional Community Funding Approaches? <ul><li>Traditional Methods  (Needs Approach – ...
Where is Social Finance Used? <ul><li>Developed World - United Kingdom, Ireland, Europe, Canada, USA and Australia </li></...
Types of Social Finance <ul><li>Loans – soft (CCT) and hard (Prometheus) </li></ul><ul><li>Loan guarantees (Community Foun...
Types of Social Finance cont. <ul><li>Dormant bank and insurance accounts (Ireland, NZ) </li></ul><ul><li>Social capital r...
Social Business
Social Enterprise
Community Sector Banking Australian model “ By joining together, the buying power of the Sector as a whole will be enhance...
Engaging the Sector
Community Sector Banking cont. <ul><li>Achievements: </li></ul><ul><li>Started 2002 – 21 Community partners and the Bendig...
Community Sector Buying <ul><li>Rent (Community Houses) </li></ul><ul><li>Utilities (power, phone etc – Joint Ventures) </...
Community Sector Savings & Super Fund <ul><li>Exist overseas through credit unions, social banks or specialist funds. </li...
Social Investments  <ul><li>Where are your funds invested currently? </li></ul><ul><li>Cash </li></ul><ul><li>Fixed Intere...
Social Investments <ul><li>Are they invested in? </li></ul><ul><li>Ethical Funds (NZ, Australian, or other countries)  </l...
Community Projects
Conclusions <ul><li>Social Finance will help not-for-profits to: </li></ul><ul><li>Gain control over our own capital </li>...
Next Steps <ul><li>Obtain support from the community sector for the four projects. </li></ul><ul><li>Gain funding from the...
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Social Finance

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Social Finance

  1. 1. <ul><li>Social Finance </li></ul><ul><li>Workshop presented to the </li></ul><ul><li>NZCOSS Conference, October 2006 </li></ul><ul><li>Presented by </li></ul><ul><li>Lindsay Jeffs </li></ul><ul><li>Lecturer, Unitec, Graduate Dip. Not-for-Profit Mgt. </li></ul><ul><li>Manager, Christchurch Small Business Enterprise Centre </li></ul><ul><li>Board Member, Economic Development Assn of NZ </li></ul><ul><li>Director, Socrates Investment Fund. </li></ul>
  2. 2. What is Social Finance ? <ul><li>Money saved, earned, raised, used and/or invested by not-for-profit organisations or individuals for social purposes. </li></ul>
  3. 3. Social Finance Continuum Grants (Government, Philanthropic bodies, and/or Community Foundations Pre-Commercial Grants (Govt, Venture Capitalists and/or philanthropic bodies) Social Loan Finance (Specialist banks, credit unions, CDFI’s, Comm. Trusts/ Foundations Commercial Loans (Banks, Finance companies) Equity Finance (Asset transfer, Investors and/or the organisation’s own funds) Dependence Autonomy
  4. 4. <ul><li>Promotes different approaches to the funding of NGOs </li></ul><ul><li>Provides a new model of dealing with capital </li></ul><ul><li>Ensures the Community Sector is part of the solution </li></ul><ul><li>Allows the Sector to be proactive </li></ul><ul><li>Means of overcoming issues of funder capture </li></ul><ul><li>Traditional approaches to overcoming financial exclusion and poverty relied on grants/donations (normally repairing, cultural, creators of dependency) whereas social finance (credit) is normally developmental, entrepreneurial and a builder of autonomy. </li></ul><ul><li>Stresses self-help, mutuality and sustainability. </li></ul>Why is Social Finance Important?
  5. 5. How does Social Finance fit into traditional Community Funding Approaches? <ul><li>Traditional Methods (Needs Approach – deficit emphasis) </li></ul><ul><li>Memberships, voluntary input & fund-raising (We raise it ourselves – self-help model) </li></ul><ul><li>Grants, donations, sponsorship, bequests, special events (We are given it – charity and/or private, state and community philanthropy model) </li></ul><ul><li>Contracts of service, trading activities (We earn it – self-help and state delivery model) </li></ul><ul><li>Social Finance Methods (Resource Approach – assets) </li></ul><ul><li>Social investment, collective buying & collective banking, (We use our own – cooperative and mutuality model) </li></ul>
  6. 6. Where is Social Finance Used? <ul><li>Developed World - United Kingdom, Ireland, Europe, Canada, USA and Australia </li></ul><ul><li>Developing world – Asia, South East Asia, India, Africa, South and Central America. </li></ul><ul><li>3. New Zealand?? </li></ul>
  7. 7. Types of Social Finance <ul><li>Loans – soft (CCT) and hard (Prometheus) </li></ul><ul><li>Loan guarantees (Community Foundations) </li></ul><ul><li>Social banks (Charity, Southbank & Triodos), Community Loan Funds (CDFIs) and in some countries credit unions (VanCity). A developed world model. </li></ul><ul><li>Micro-credit and micro-finance institutions (Grameen Bank). A developing world model. </li></ul><ul><li>Faith based funds (Clann Credo) </li></ul><ul><li>Public, private & community partnerships (Invest South) </li></ul>
  8. 8. Types of Social Finance cont. <ul><li>Dormant bank and insurance accounts (Ireland, NZ) </li></ul><ul><li>Social capital raising instruments (Canadian Development Bonds) </li></ul><ul><li>Community Sector Banking (CSB) </li></ul><ul><li>Community Sector buying (Community Houses, Skillshare) </li></ul><ul><li>Social investments (Australian Ethical) </li></ul><ul><li>Users of Source Finance </li></ul><ul><li>Social businesses (wind-farms, community facilities) </li></ul><ul><li>Social enterprises (Whalewatch, BCDC) </li></ul><ul><li>Not-for-profits that trade (Save the Children, Trade Aid) </li></ul>
  9. 9. Social Business
  10. 10. Social Enterprise
  11. 11. Community Sector Banking Australian model “ By joining together, the buying power of the Sector as a whole will be enhanced, along with the ability to better negotiate the provision of products and services. As a result of the development of the Community Sector Enterprises Model, Community Organisations will be better placed to respond strategically to their future .” ( Extract from Community 21 Information Memorandum )
  12. 12. Engaging the Sector
  13. 13. Community Sector Banking cont. <ul><li>Achievements: </li></ul><ul><li>Started 2002 – 21 Community partners and the Bendigo Bank </li></ul><ul><li>Profitable within two years </li></ul><ul><li>Balance Sheet 2004 A$200 million </li></ul><ul><li>September 2004 - 2259 deposit accounts, 211 loan accounts, 1696 employee expense payment accounts, 50 micro finance loans </li></ul><ul><li>Supporting social housing, indigenous enterprise, community infrastructure, community facilities. </li></ul>
  14. 14. Community Sector Buying <ul><li>Rent (Community Houses) </li></ul><ul><li>Utilities (power, phone etc – Joint Ventures) </li></ul><ul><li>Office products (GSB) </li></ul><ul><li>Insurance (Skillshare) </li></ul><ul><li>Property (Ethical Property Company) </li></ul><ul><li>Community Super Funds </li></ul><ul><li>Community Sector to build capacity needs to: </li></ul><ul><li>Exercise its ability to aggregate demand (Aust. 6.8% employ., 3.3% GDP, bigger commun. = agric. sector) </li></ul><ul><li>Enter into partnership with the other two sectors as an equal </li></ul>
  15. 15. Community Sector Savings & Super Fund <ul><li>Exist overseas through credit unions, social banks or specialist funds. </li></ul><ul><li>New Zealand Opportunity </li></ul><ul><li>Establishment of a community sector owned savings and super fund that invests its funds in the community sector </li></ul><ul><li>Creates a saving mentality in people working in the sector </li></ul><ul><li>Links to the government’s KiwiSaver scheme (July 2007) </li></ul>
  16. 16. Social Investments <ul><li>Where are your funds invested currently? </li></ul><ul><li>Cash </li></ul><ul><li>Fixed Interest - Term Deposits </li></ul><ul><li>Bonds </li></ul><ul><li>Property </li></ul><ul><li>Shares – Equities </li></ul><ul><li>Alternative Investment Classes </li></ul><ul><li>New Zealand or Overseas or mix? </li></ul>
  17. 17. Social Investments <ul><li>Are they invested in? </li></ul><ul><li>Ethical Funds (NZ, Australian, or other countries) </li></ul><ul><li>Community Infrastructure and Community Facilities </li></ul><ul><li>Community projects – social housing, renewable energy, recycling, broadband, aged care etc </li></ul><ul><li>Public/private and community partnerships </li></ul>
  18. 18. Community Projects
  19. 19. Conclusions <ul><li>Social Finance will help not-for-profits to: </li></ul><ul><li>Gain control over our own capital </li></ul><ul><li>Build the capacity of the community sector </li></ul><ul><li>Stop the need to seek permission from others to fulfill our social missions </li></ul><ul><li>Allow more creative ways to approach social, environmental and economic issues. </li></ul><ul><li>Achieve not-for-profit “happiness” by becoming increasingly self-sufficient. </li></ul>
  20. 20. Next Steps <ul><li>Obtain support from the community sector for the four projects. </li></ul><ul><li>Gain funding from the public, private and community sectors to research and implement the projects </li></ul><ul><li>Establish an Ethical Social Investment Fund </li></ul><ul><li>Continue to promote Community Sector Buying Ideas </li></ul><ul><li>Launch the Community Sector Savings & Super Fund </li></ul><ul><li>Develop Community Sector Banking proposal (Stage 1) </li></ul><ul><li>Lobby government to create an Enabling Environment for social finance organisations and users. </li></ul>

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