How it Works

Social entrepreneurs, investors, lenders and grant makers all use the tools of social finance to open, operate and scale their social and/or environmental missions.

Social finance tools are ones we are all familiar with.

Debt includes loans for working capital, loan guarantees, bridge financing and mortgage agreements.

A venture philanthropy grant does not require re-payment and can be used as a charitable donation or a gift to help get your business or initiative off the ground and get going.

Examples of Social Finance at Work

A Venture Philanthropy Grant can be provided to any type of enterprise. One example is that of Inner City Renovations, a Winnipeg based social enterprise that blended social and financial return.

Equity or quasi equity refers to a percentage of ownership of a company. In this slide, Investeco explains how it made an equity investment into Organic Meadow, Canada’s oldest and largest organic dairy brand.

Community Housing Bond. The YWCA Elm Centre used a community housing bond to establish affordable housing for low-income mothers with mental health or addiction issues. The organization that bought the $1 million bond was the Muttart Foundation, which made a mission-related investment (link to Starting Point on KH).

A loan guarantee to start your business. In this video ACCESS Community Capital Fund explains how a loan guarantee works with entrepreneurs.

A loan guarantee to start your business. In this video ACCESS Community Capital Fund explains how a loan guarantee works with entrepreneurs.

A loan guarantee to start your business. In this video ACCESS Community Capital Fund explains how a loan guarantee works with entrepreneurs.

Lending to a not-for-profit social enterprise. The Community Forward Fund Assistance Corporation is a Canadian nonprofit that makes loan and arranges financing for nonprofits and charities. In this example video, CFF provides a bridge loan (short term loan used till permanent financing is secured) to help Centre 3, a not-for-profit charitable organization to expand operations.

Lending to a business. In this video, the Toronto Atmospheric fund showcases how social investment has allowed innovative companies to work towards environmental solutions.

A Community Bond is offered by a not-for-profit or charitable organization for purchase by individuals or organizations. It is an interest bearing term loan that must be repaid to investors. In this video, Tonya Surman from the Centre for Social Innovation in Toronto explains how a community bond offering worked to help them renovate a building.

Co-operative Shares. There are many examples of co-operatives raising share capital. In this video, Solar Share describes a social finance investment opportunity.

A mortgage agreement is used to purchase a building. In this video a community loan fund, Canadian Alternative Investment Cooperative (CAIC) provides mortgage financing to a not-for-profit organization to purchase its own building.