social finance 101
DESCRIPTION
Presentation at The Halifax Hub on June 10, 2013. The presentation covers social finance tools that will help social enterprises finance start-up and expansion. Topics include social enterprise, crowdfunding, microloans, CEDIFs, community bonds, and social impact bonds.TRANSCRIPT
Agenda
-Introduction
-Crowdfunding
-Community Bonds
-Microloans
-Social Impact Bonds
-Social Enterprise
-CEDIFs
Timothy Nash @timenash [email protected] June 10, 2013
Social Enterprise
-Any organization that earns revenue by selling a product or service and generates a positive social impact
Timothy Nash @timenash [email protected] June 10, 2013
Crowdfunding
-Raise money for specific projects
-Perks / rewards are given for donations - bigger donations get bigger rewards
-Tiny donations are made by large crowds
-These are donations, not investments
Timothy Nash @timenash [email protected] June 10, 2013
Crowdfunding
http://www.indiegogo.com/projects/handmade-products-hand-built-business-kid-icarus-needs-help-to-take-flight
Microloans
-Small loans to entrepreneurs who don’t have access to traditional loans
-Require a strong business plan, and often come with additional coaching, mentorship
-Creates meaningful employment by supporting the next generation of entrepreneurs
Timothy Nash @timenash [email protected] June 10, 2013
Social Enterprise Support
Community Economic Development Investment Funds (CEDIFs)
Raise capital by issuing shares
Used for startup or expansion
Build community support
35% tax credit
Locked-in for 5 years
Strengthen local economy
-Allows organizations to raise money by using shares to non-accredited investors
-Investors get a 35% tax credit and strengthen the local economy with their RRSP
-These investments can be very risky, and investors won’t be able to sell if it turns south
Community Economic Development Investment Funds (CEDIFs)
Timothy Nash @timenash [email protected] June 10, 2013
Community Economic Development Investment Funds (CEDIFs)
Community Bonds
$10,000 per bond
4% return for 5 years
Raised $2 million
Provides space for social enterprises
Protection against global ‘systemic’ risks
Community Bonds
-Allows non-profits to raise money for expansion
-Investors get a ‘blended return’ - a financial return plus a social return on investment
-Backing it with an asset (real estate) reduces risk, and lowers the expected return
http://communitybonds.ca/
Social Impact Bonds
SIBs are a way to leverage private money to invest in preventative programs that will lower
government expenditures in the long-term
Timothy Nash @timenash [email protected] June 10, 2013
Social Impact Bonds
Investors
Intermediary
Non Profit Government
1. Make Investment
2. Fund Prevention Program
3. Outcomes that Reduce Expenditures
4. Pay for Programs that Meet Targets
5. Repay Investment + Return
$
$
$
$
$
Timothy Nash @timenash [email protected] June 10, 2013
Social Impact Bonds
http://www.rockefellerfoundation.org/uploads/files/655fab01-83b9-49eb-b856-a1f61bc9e6ca-small.pdf
Social Impact Bonds
-Agree on social outcome metrics
-Define the scope
-Quantify saving to government
-Independent verification of results
Timothy Nash @timenash [email protected] June 10, 2013
THANK YOU
SustainableEconomist.com