Social Finance Workshop
Michael Lewkowitz
Karim Harji
Andrew Dilts

Why?

This
Growth is
biggering is
Great!
buggering
us!

We’ve got issues
• Aging population
• Environmental degredation
• Resource depletion
• Economic and systemic collapse

Why Money?

“Money plays the
largest part in
determining the course
of history.\"
- Karl Marx

“Money is only a tool. It
will take you wherever
you wish, but it will not
replace you as the driver.”
- Ayn Rand
CAUSEWAY: a national collaboration

\"Money.
It's a gas.\"
- Pink Floyd

Social Finance

SOCIAL FINANCE
Includes intermediaries,
funds, mechanisms...
and the marketplace
that makes it work.
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So

Social Social “PRI” Commercial Public
Grants
Angels VC Debt Debt Market SRI
Capital
Domini Social
RSF Social Finance
Underdog
New Schools Investments
Transactional Calvert Special Equities - CF CI Notes - Calvert Mutual Funds
Good Capital
(e.g. Funds)
Patient Capital NFF SouthShore Bank Generation
Acumen Fund Collaborative
NFF Lending
Investments
Capital Deutsche Eye Fund
Partners
Calvert UK Social
Philanthropic Stock Exchange
BOVESPA Assets/DAF
Exchange
Social Local Exchange
Platform Stock Exchange
Infrastructure
Investors’ Chicago Climate
Circle Exchange
Origo
Evaluation/
B Lab GRI
Certification
AA1000
Ashoka
Fourth Sector Network
Generation
Foundation
Aspen Institute
Landscape
Definition
Xigi.net
More intermediaries a sign
of new money in the Blended Value Market © Jay Coen Gilbert, Don Shaffer and John Katovich
Source: GoodCaptial Story Index Presentation and Jay Coen Gilbert, Don Shaffer and John Katovich

Capital Flow TAX INVEST
Individuals
Government Organizations
Financial Entities
SOURCE -> - managing other’s money
DIRECT
ORGANIZATION ->
USE -> Operations
Programs
Assets

It begins with a conversation…
• Aligning interests to create innovative solutions
Constructive Dynamic
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eq
Source Perspective
n
Use Perspective
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en
ts
ns
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ic
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es
k
R
Constrictive Dynamic
CAUSEWAY: a national collaboration

… results in specific products
• 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. Mission: 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.
CAUSEWAY: a national collaboration

… and can change whole systems.
• Coming together of the great catalysts
– capital + community
• Great Bear Rainforest (2 million hectares)
– Start: environmentalists + lumber companies get together
– 2001: private foundations + BC premier’s office -> 1st nat.
– 2002/3: determination of ecological value and economic pot.
– 2007 Outcomes:
• $120 M across 2 funds: $30 M fed, $30 M prov., $60 M private
• Provincial government actions
– New ‘ecosystem based’ land management regime (3x PEI)
– New park designation for ecological protection
• Collaborations
– Collective land-use agreement among prov. gov’t and first nations
– North coast first nations collaborating (e.g. joint marketing and distribution of fish)
– Shared governance between private, first nations, government
CAUSEWAY: a national collaboration

http://www.conservative.ca/EN/1091/105904
Could mobilize > $100B

Micro Finance

The Future of
Social Capital Markets
Katherine Fulton
October 2008
MONITOR INSTITUTE 21

How Big Could it Be?
U.S. Philanthropy
$0.31 Trillion
Impact Investing in 5–10 years?
Negatively Screened Funds + Impact Investing
$2.71 Trillion
All Investing
$61.90 Trillion
Impact Investing has the potential to grow to ~1% of total
managed assets, which could result in ~$600B of capital
channeled towards social and environmental impact
MONITOR INSTITUTE 22

A convergence of actions
Create industry defining funds as a
beacon for how to address specific
social issue(s)
THAT’S
Place substantial catalytic, risk-taking
capital in mezzanine finance structures
HOW IT
Coordinated
COULD
Leadership
Develop impact investing network
TAKE
OFF
Set the industry standards for social
measurement
Lobby for specific policy / regulatory
change
MONITOR INSTITUTE 23

Canadian Context
• Limiting regulatory framework
• Income Tax Act and charity law
significantly constrain flow of capital
• Strong non-profit sector
• $120 B annual expenditures
• >7% of Canada’s GDP
• Non-profit income sources
Above average growth
• 1.5 M workers + 0.5 M volunteers
•
Corporation
Gifts
Individual
2nd largest in world per capita s
5%
Donations
3%
8%
• Internationally significant
• Resourcesenergy, forests
Government
49%
Earned
•Examples
Water, Income
• Great Bear Rainforest
35%
•

Design Breakouts
Approach
• A change in conversation
• A change in flow
Application
• Investments
• Products
• Systems

Get Involved
www.SocialFinance.ca

Social Finance Workshop
Michael Lewkowitz
Karim Harji
Andrew Dilts