Navigating the Complexities of Social Impact Investing: Insights from Experts

Introduction

The recent panel discussion led by Stuart Reid, the Executive Director of Community Foundation Grey Bruce, on social finance and community investment brought together a diverse group of experts, offering valuable insights into this evolving field.

The event focused on the challenges and opportunities within social finance, particularly for not-for-profits and community organizations.

Challenges in Language and Terminology

One significant barrier highlighted during the discussion is the complex language and terminology of social finance. This specialized jargon can often be daunting, creating a gap between not-for-profits and potential investors or stakeholders. The panelists underscored the need for a more approachable language that demystifies social finance for wider accessibility.

The Importance of Education and Clarity

Education and clarity emerged as crucial themes. The experts advocated for the use of plain language and tangible examples to explain the intricacies of social finance. Case studies, they argued, could serve as effective tools to illustrate various investment models and returns, thereby enhancing understanding and engagement in the sector.

Case Study: Habitat for Humanity and Community Bonds

A noteworthy example discussed was Habitat for Humanity's use of community bonds to fund affordable housing projects. These bonds offer a return of 7.25% over two years, an attractive rate made possible by leveraging community wealth. This case study provides a clear illustration of how social finance can be practically implemented while offering tangible benefits to investors.

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RELATED: Affordable Housing Solutions in Ontario: Debrief from Ontario Chamber of Commerce & Grey County Reports

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Risk Management and Transparency

Addressing the risks associated with social finance investments, the panelists emphasized the importance of transparency and clear communication. While acknowledging these risks, they stressed the need for strategies to manage them effectively, ensuring investor confidence and project sustainability.

The Role of Collaboration and Learning

The panel unanimously agreed on the necessity of continued education and collaboration in the field of social finance. They suggested that organizations engage actively in knowledge sharing and networking to stay abreast of the latest developments and best practices in impact investing.

Dig Deeper!

For those eager to delve deeper into the world of social finance, we invite you to watch the full recording of the presentations and discussions below. You'll gain a more comprehensive understanding and key insights. In addition, for a quick reference or a more focused exploration of specific topics discussed during the event, we have prepared detailed summaries from presenters and key sessions. A lot was covered! Over 18,000 words were spoken!

These summaries provide concise overviews of the major points and themes addressed by our speakers, allowing for a targeted review of the subjects that most interest you.

Social Impact Investing for Community Building & Housing Solutions November 2023

Event Breakdown with Timestamps and Summary

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00:00 - 02:31 | Opening of the Social Impact Investing and Community Building Event

Stuart Reid, the Executive Director of Community Foundation Grape Bruce, initiated the event at the Harmony Center, focusing on social impact investing, community building, and housing solutions.

He emphasized the relevance of these topics to the region's interests and anticipated an engaging and inspiring discussion for the audience.

Carrie Lee, the Chair of the Board of Directors, followed by welcoming the attendees and delivering a heartfelt land acknowledgment. She paid respects to the history, spirituality, and culture of various Indigenous groups, including the Anishnabe, the People of the Three Fires (Ojibway, Odawa, Pottawatomie), the Chippewas of Saugeen and Nawash, the Saugeen Ojibway Nation, and the Six Nations of the Grand River.

Additionally, she acknowledged the Metis and Inuit peoples, reflecting on the broken covenants and the ongoing need for justice and respectful relations with all Indigenous peoples.

Lee also informed the audience about the live streaming and recording of the event, cautioning them about their potential appearance on YouTube and the impossibility of guaranteeing privacy during the broadcast. This housekeeping note underscored the event's outreach and digital footprint.

02:31 - 05:10 | Introduction to Social Impact Investing

Carrie Lee continued to address the audience, sharing her personal journey with the Community Foundation Grey Bruce. She described how joining the board five years ago introduced her to the concept of social impact investing, also known as social finance.

Lee highlighted that her most exciting experience on the board was learning about and preparing the foundation to start making social impact loans. She emphasized that social impact investing allows both large and small investors to use their assets to achieve positive social or environmental impacts while also earning a financial return, often in their own regions.

Lee explained that for social enterprises receiving these loans, it provides the necessary capital for growth and development, describing this as a mind-blowing concept. She noted that everyone continues to learn about this innovative approach to investment.

Furthermore, Lee introduced Rosalyn Morrison from the Institute of Southern Georgian Bay as one of the co-presenters of the event. She lauded the Institute as a fantastic partner and collaborator with the foundation.

Morrison's background was highlighted, including her previous role as a senior advisor at the Toronto Foundation, her involvement in projects related to urbanization, globalization, and climate change, and her leadership roles in the arts and culture sector.

Currently, Morrison serves as the chair of the board of the Institute of Southern Georgian Bay and as a board member of the Blue Mountain Village Foundation.

05:10 - 07:39 | The Role of the Institute of Southern Georgian Bay in Addressing Affordable Housing

Rosalyn Morrison from the Institute of Southern Georgian Bay outlined the organization's mission and efforts in addressing affordable housing and social finance.

The Institute, described as a group of dedicated volunteers and a nonprofit organization, focuses on four priority areas to accelerate progress, with social finance and affordable housing being key among them.

A couple of years ago, the Institute created a learning group dedicated to this priority area, consisting of up to 25 people, including Marilyn Struthers, the evening's moderator, and Councillor Carol Merton.

The learning group, which also involves participation from several municipal representatives around the bay, has been active in educational efforts. After 18 months of collective learning, the group produced the Southern Georgian Bay Affordable Housing Toolkit.

This resource, available on their website and disseminated through events and newsletters, aims to educate the community about the affordable housing crisis and possible solutions.

Rosalyn emphasized the importance of collaboration among residents, businesses, government, nonprofits, and philanthropic leaders to address housing issues.

The evening's event was presented as part of this collaborative journey. She also invited attendees to a future event on November 17th titled "New Ways to Finance the Housing Affordability Gap," to be held at Meaford Hall.

This upcoming event, they noted, is crucial for the sustainability of local towns, and further information was available on their website.

07:39 - 11:01 | Habitat for Humanity’s Role in Addressing Affordable Housing

Stuart Reid introduced Greg Friar, Executive Director of Habitat for Humanity Grey Bruce, highlighting Friar's significant contributions. Under Friar's leadership since 2011, the organization has constructed 44 homes in Grey Bruce and 28 homes in First Nations territories.

Friar envisions expanding Habitat for Humanity's role in providing affordable housing solutions and using their projects as training opportunities for youth and those interested in the home building trade.

Greg Friar then took the stage, elaborating on Habitat for Humanity’s mission and operations. He emphasized that their goal is not just to provide shelter but to enable families to thrive through innovative housing solutions.

For Habitat for Humanity, thriving means more than having a roof overhead; it's about creating an environment where families can set higher goals and children can grow up safely.

Friar outlined five key needs for fulfilling their mission:

1. Identifying families in need of affordable housing, a growing concern amidst the current housing crisis.

2. Acquiring land to build on, essential for their construction projects.

3. Gathering skilled professionals and volunteers; over 700 volunteers are expected to assist in their builds this year.

4. Obtaining donated building materials and services.

5. Securing financial resources for aspects that cannot be donated.

He concluded by acknowledging the current housing crisis and Habitat for Humanity's commitment to being part of the solution through increased funding and capacity expansion.

11:01 - 15:27 | Introduction of Presentations and Co-Moderator for the Evening

Stuart Reid, after acknowledging the hard work put into his script, expressed gratitude to Greg Friar for his input and acknowledged the support of Bayshore Broadcasting, the foundation’s media partner. He noted their inability to attend but appreciated their ongoing support in broadcasting the foundation's message across the region.

Reid then outlined the agenda for the rest of the evening, including presentations from guests Julia Grady, Ryan Deska, and Randall Howard, followed by a moderated discussion led by Marilyn Struthers and himself. There would also be an opportunity for audience questions.

He then delved into the Community Foundation Grey Bruce involvement in social impact investing. Reid highlighted that in 2022, the board voted to establish a social impact investing fund, allocating 1% of total assets.

This fund aims to invest money locally for financial returns and community betterment. He mentioned how the United Nations’ 17 Sustainable Development Goals guide their decisions, linking local actions to global benefits.

Reid explained that social impact investing in the foundation is managed through two streams: Mission Related Investments and Program Related Investments, with a structured application process and guidance from community experts.

He encouraged interested organizations to contact the foundation for more information.

Finally, Reid introduced Marilyn Struthers as the co-moderator of the evening’s discussion. He highlighted her extensive career in engaging people and shaping communities, including her work at the Ontario Trillium Foundation, her role in social enterprise and social finance, and her involvement with the Institute of Southern Georgian Bay Social Finance Learning group.

Struthers’ current focus on affordable housing financing and community response to climate change was noted, along with her position on the board of Social Innovation Canada.

15:27 - 19:30 | Discussing Social Finance and Social Enterprise in Community Development

Marilyn Struthers, from the Institute of Southern Georgian Bay engaged the audience with questions about their understanding of social enterprise and social finance, as well as their beliefs about community wealth.

She aimed to gauge the audience’s familiarity with these concepts, which are integral to the evening's discussions.Marilyn elaborated on how social finance and social enterprise are related to broader economic concepts like the circular economy, donut economy, and community economies.

The focus was on leveraging community assets for the common good, particularly in addressing local issues. She encouraged the audience to consider the impact of their investments, whether in local businesses, retirement savings, or other assets, and the potential of these investments to benefit the community, especially in terms of affordable housing.

She highlighted the economic and sustainability challenges faced by communities, particularly noting that those struggling with affordable housing are often essential workers in healthcare, retail, and tourism.

And, stressed the importance of addressing these challenges as a community issue, especially in light of the revelations from the pandemic about the critical roles these workers play.

The discussion then moved towards the upcoming event on the 17th, which would delve deeper into these topics. She emphasized the opportunity for the audience to learn and engage in the conversation, both through the upcoming presentations and the Q&A session.

Finally, Marilyn introduced Julia Grady, the executive director and co-founder of 10 C (or 10 Carden) in Guelph. Julia’s organization was described as specializing in change-making, place-building, collaborating for community benefit, and demonstrating how social finance and community wealth can be shared within a community.

19:30 - 28:27 | 10 C’s Journey in Social Finance and Community Engagement

Julia Grady, representing 10 C, shared the story of her organization, a small not-for-profit that began in a modest 500 square foot space on Cardin Street. Their mission was to create a community hub for connection, collaboration, and building.

Realizing the need for accessibility and expansion, 10 C explored purchasing real estate using social financing. Since 2016, they have raised $2.5 million in social lending, with 140 community investors, including contributions from universities.

Julia emphasized that such endeavors are feasible for not-for-profits and transferable to other sectors, including housing. She advocated for community-driven solutions to housing issues, underscoring that it’s not solely a finance sector challenge but one that requires innovative approaches from various community entities.

10 C’s accomplishments include transforming a landmark property in the heart of the city into a modern, fully renovated 15,000 square foot commercial space. This project, initially daunting, has yielded significant community engagement and development. Their work spans placemaking, sustainable food systems with a commercial kitchen serving entrepreneurs, community engagement, and support for social enterprises.

Julia also introduced the concept of community bonds as a financing tool. These bonds, backed by property assets, offer community members investment opportunities with interest returns. This approach not only finances their projects but also circulates financial benefits within the community.

Finally, she touched on the diversity of their revenue model and the importance of building an enterprising spirit within not-for-profits. This approach enables organizations like 10 C to engage the community creatively and sustainably.

28:27 - 39:00 | Ryan Deska’s Insights on Community Bonds and Affordable Housing

Stuart Reid introduced Ryan Deska, a community development professional working with Habitat for Humanity Wealth Wellington. Reid emphasized Deska's expertise in rural Ontario issues and his role in structuring their community bonds program, which supports affordable housing projects in Guelph and Wellington County.

Ryan began by acknowledging Julia's mentorship in helping Habitat develop their community bonds program. He highlighted the importance of collaboration and learning from each other in community development.

Deska mentioned Habitat’s belief in housing as a platform for future success, emphasizing affordable home ownership as a means for families to build wealth through equity and home appreciation.

He stated that Habitat for Humanity does not claim to be the sole solution to housing challenges but serves an essential part of the housing continuum. Their work supports other housing providers and aims at facilitating balanced community designs with affordability as a central component.

Deska described Habitat's vision of expanding impact and growing exponentially, with ambitions to build hundreds of homes annually. He explained the role of community bonds in achieving this vision, offering competitive rates to investors while saving costs compared to other financing sources.

Habitat has raised about $4 million in just over a year through this initiative.

The community bonds program has attracted a diverse range of investors, from local residents to large corporations. This broad-based community investment has been instrumental in advancing Habitat’s projects, demonstrating strong community backing and facilitating partnerships for land procurement and building.

Deska concluded by discussing the tangible nature of investing in housing, where investors can see the direct impact of their contributions. He also highlighted the response to their program from across Canada and emphasized the potential of different models to support various organizations in addressing housing challenges.

39:00 - 49:24 | Randall Howard on the Expanding Role of Social Finance

Stuart Reid introduced Randall Howard, the chair of the board of Center Wellington Community Foundation. Howard, a tech visionary and philanthropist, has a notable career in building and funding global innovation firms and is a leader in the Canadian Angel Investment Network.

Randall Howard began his talk by emphasizing the collaborative culture among community foundations, charities, and social enterprises. He provided insight into the evolution of the charitable sector through social innovation, a movement that resonated with him due to its potential to create sustainable, impactful organizations.

Howard noted the shift in language and mindset from traditional charity to social enterprise and from philanthropy to active giving. Highlighting the rapid growth of social finance, Howard pointed out its increasing adoption among community foundations.

He attributed this growth to the realization that traditional approaches were insufficient in addressing the amplified social issues brought to light by COVID-19, especially in the area of housing.

Howard also discussed the potential of social finance to involve a wide range of participants, from individuals to corporations and pension funds. He touched on the Canadian government's recent investments in social finance and predicted significant expansion in this sector.

He then shared his experience with the Center Wellington Community Foundation, noting their significant allocation of assets to social finance and their involvement in Habitat for Humanity's community bonds.

Howard stressed the importance of generating local investment opportunities and noted that social finance is not limited to community bonds but includes other forms like equity and angel investing.

Finally, Howard encouraged those involved in community organizations and foundations to drive change and adopt innovative approaches to magnify their impact.

He concluded by emphasizing the importance of sharing knowledge and experiences to collectively advance in the field of social finance and innovation.

49:24 - 1:34:01 | Panel Discussion and Audience Q&A

The panel discussion, moderated by Stuart Reid and Marilyn Struthers, engaged the panelists in a conversation about the intricacies and challenges of social finance and community investing. They discussed ways to make the sector's language more accessible and shared insights on various models and strategies used in their respective organizations.

Julia from 10 C emphasized the importance of tangible community projects and passionate individuals for initiating change. She also highlighted the availability of open-source models for community bonds and the need for legal and accounting expertise.

Ryan Deska from Habitat for Humanity discussed the organization's approach to blending market sales with Habitat sales to create viable projects. He talked about Habitat's unique position in the housing continuum and their exploration of innovative financing models.

Randall Howard added his perspective on the evolution of the charitable sector through social innovation. He stressed the importance of a mentorship model and the need for strategic creativity in layering different funding strategies.

Audience engagement brought forth questions about the Housing Accelerator Fund, with a local government representative explaining its limited applicability in rural areas.

Another attendee inquired about Habitat for Humanity's potential collaborations with the Canadian Building Association, highlighting the potential synergies in sustainable building practices.

In conclusion, the panelists agreed on the complexity of social finance and the need for ongoing education and collaboration. They recognized the critical role of housing in driving the social finance ecosystem and the importance of being ready to leverage new funding opportunities.

Conclusion

This event and panel discussion shed light on the intricate world of social finance, highlighting the need for simpler language, education, and collaborative efforts. As the sector continues to grow, these insights are invaluable for organizations looking to navigate its complexities successfully.

About the Author

Chris Herbert spearheads Mi6 Agency, emphasizing small business growth and entrepreneurship. On the agency's blog, he offers practical marketing insights and solutions to unique challenges faced by businesses. Herbert advocates for sustainable and responsible growth. His "Rural Entrepreneur Podcast" extends this mission, providing essential advice and experiences for entrepreneurs. He adopts a comprehensive approach, focusing on building sustainable businesses, community engagement, and active participation in entrepreneurial ventures.