Causeway: MEIA Orienatation - 070625

CAUSEWAY a national collaboration Social Finance Orientation MEIA Presentation June 27, 2007 Prepared by: Michael Lewkowitz, start-up coordinator [email_address] -:- 416.607.5643

The sustainable flow of financial capital from sources to public benefit uses:
Affordable Housing
Bottom of the Pyramid
Clean Technology
Community Development
Education
Fair Trade
Green Building
Health
Media
Microfinance
Social Enterprise
Technology
Disability Supports
What is “social finance”? Individuals Organizations Government

How does capital flow?
From the source
Into an organization
For use in either
Financial Entities - managing other’s money Government Organizations Individuals Operations Programs Assets INVEST TAX DIRECT

Collaborative approaches and blended returns
Growing social and environmental pressures + government and market failure = the conditions for innovation
Canadian non-profit income sources

Fields of innovation in social finance
Blended Returns
Spanning the continua of risk/return/focus
Includes MBI and PRI
Well developed in the United States
Social venture capital
A focus on the ‘hybrid’ universe
Well developed in the UK including ‘Community Interest Company’ legal structure and marketplace
Collaborative approaches
Complex requirements
Large asset classes
Affordable Housing
Community Energy and Efficiency

Provocative examples
Venture capital
Capital regional et coopérative Desjardins (CRCD ) is a $500 million venture capital fund created in 2001 by the Desjardins Movement with the help of a provincial tax credit . Individual investors can invest up to $3500 a year in shares with a 50% tax credit. Shares must be kept for a minimum of seven years. M ission : to provide capital, expertise and access to networks for businesses and cooperatives in all Québec’s regions
Local community development
The Columbus Foundation used $2 million to seed an $18 million low-cost housing fund to build 1,600 new units of affordable housing.
Startup or expansion capital in underserved communities
Deutsche Bank announced it will create an innovative $20 million investment fund to finance the expansion of eye care hospitals in developing countries. The Eye Fund I will provide loans and guarantees to support the development of affordable, sustainable and accessible eye care for the world's poor while providing a near-market return for investors
Debt mechanisms
Milestone achievement of $100m in loans to community finance institutions and social enterprises by Calvert Foundation’s Community Investment Note
Acquisition of assets
BC Pension Funds – 21 BC-based union and management pension funds pooled $27 M to form Concert Properties in 1989 (originally named VLC) with the objective of financing affordable rental housing in BC, and creating jobs in the unionized construction industry. Today the 100% pension plan owned real estate corporation has $800 million in assets , with a track record of creating 10 million hours of on-site employment for unionized construction workers.

The social finance conversation
Aligning interests to create innovative solutions
Risk Restrictions Requirements Return Source Perspective Use Perspective Constructive Dynamic Constrictive Dynamic

Exampl e: Great Bear Rainforest
$120 million private-public fund conservation fund
Requirements
Comprehensive ecosystem-based community perspective
Conservation + culture + commerce…
Restrictions
Brought parties together to develop the model
Included key stakeholders from the outset
Risk
Shared risk between private and public investors
Building community’s stewardship capacity
Return
Seeking a sustainable, blended return for the region
Exploring venture returns

Example : Disability Savings
Federal program including DS Plan, Grant, and Bond.
Requirements
Deeply understood the funding requirements and need to broaden the community of funders
Restrictions
Worked within the existing tax framework and familiar models
Expanded ability for people to participate
Risk
Reduced risk of the primary investor (government) by encouraging private individual investment
Return
Created a return incentive to encourage others to participate

Example: P roposed Vancouver Homelessness LP
from Vancouver Homelessness Funding Model Report

CAUSEWAY a national collaboration A national collaboration working on new pathways for financial investment in public benefit .

CAUSEWAY a national collaboration Michael Lewkowitz Start-up Coordinator Phone: (416) 607-5643 (778) 329-0021 Email: [email_address] Tim Draimin Chair, Steering Committee Phone: (604) 647-6611 x244 (416) 481-8652 Email: [email_address] CONTACT Volunteer Contributor Jenny Zhu: jennyzhu33@yahoo.com

Causeway: MEIA Orienatation - 070625

by Michael Lewkowitz on Jul 10, 2007

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Causeway: MEIA Orienatation - 070625 — Presentation Transcript