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Social Finance Forum Orientation

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Presentation given by Tim Draimin at the Causeway Social Finance Forum

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Social Finance Forum Orientation

  1. 1. Social Finance Orientation Comments by: Tim Draimin Chair, Causeway; CEO, Tides Canada Foundation For: Causeway Social Finance Forum, October 15th, 2007; MaRS Discovery District - Toronto
  2. 2. Social finance is… <ul><li>finance with a social or environmental mission </li></ul><ul><li>Or, </li></ul><ul><li>Social finance is a sustainable approach to managing money that delivers social, environmental dividends and economic return through social enterprises operating in the non-profit or public benefit universe. </li></ul>
  3. 3. financial flow to public benefit <ul><li>The flow of financial capital to human need uses: </li></ul><ul><ul><li>Affordable Housing </li></ul></ul><ul><ul><li>Social Enterprise </li></ul></ul><ul><ul><li>Support for working families </li></ul></ul><ul><ul><li>Health & Home Care </li></ul></ul><ul><ul><li>Community Development </li></ul></ul><ul><ul><li>Social Economy </li></ul></ul><ul><ul><li>Clean Technology </li></ul></ul><ul><ul><li>Microfinance </li></ul></ul><ul><ul><li>Fair Trade </li></ul></ul><ul><ul><li>Green Building </li></ul></ul><ul><ul><li>Education </li></ul></ul><ul><ul><li>Bottom of the Pyramid </li></ul></ul><ul><ul><li>(source: market sector listing adapted from www.xigi.net ) </li></ul></ul>Sources Intermediaries Mechanisms Recipients Uses
  4. 4. Social finance’s most visible example is MICROFINANCE…
  5. 5. Canada’s nonprofit sector is low profile but economically significant and growing… <ul><li>$120 Billion annual expenditures </li></ul><ul><li>Economically bigger than either the retail trade or mining, oil & gas industry (2003) </li></ul><ul><li>Nearly 8% of Canada’s GDP </li></ul><ul><li>1.5 M workers + 0.5 M volunteers; 9.2 % of economically active population </li></ul><ul><li>NP Sector is 2nd largest in world per capita </li></ul><ul><li>Above average growth </li></ul>
  6. 6. Large Proportion of Nonprofit Funding is Earned Income
  7. 7. Social enterprise is… <ul><li>A business with primarily social (and or environmental) objectives whose surpluses are principally reinvested for that purpose in the business or in the community, rather than being driven by the need to maximise profit for shareholders and owners... </li></ul>
  8. 8. Social enterprise across Canada The challenge: Build robust capital market Aboriginal Financial Institutions Chantier de l’economie sociale FCES Social Capital Partners Ecotrust Canada Vancity ECF: Social Enterprise Fund Great Bear Rainforest Community Ownership Solutions Innercity Renovations CED Investment Funds
  9. 9. The good news is that… <ul><li>Many Canadian financial institutions are already involved with social finance type initiatives </li></ul><ul><li>Canada can accelerate the adoption of social finance by learning from and borrowing proven models from US and UK </li></ul><ul><li>We know what we require to make the transition to a robust social finance marketplace: </li></ul><ul><ul><li>New conversation among finance, government and nonprofits about the potential to scale up innovative social enterprise and social finance </li></ul></ul><ul><ul><li>New capital market instruments involving the range of financial institutions: banks, credit unions, pension funds, mutual funds, etc. </li></ul></ul><ul><ul><li>Public policy that a) creates incentives for capital to expand into social finance, b) borrows international best practices in charity regulations that enable nonprofits to operate successfully in the growing hybrid space </li></ul></ul><ul><ul><li>Strengthening the capacity of nonprofits and their social enterprises </li></ul></ul>
  10. 10. Blurring lines between sectors creates opportunities for partnerships … Charity & Non-profit Government Business Government Charity & Non-Profit Present Past Future Business Govt Charity & Non-profit Hybrid Space
  11. 11. CAUSEWAY a national collaboration A national collaboration working on new pathways for financial investment in public benefit .

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