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Tim Draimin

Stories That Matter | Axiom News - 0 views

  • Finance Learn How Social Finance Can Work in Communities Newly-released guide to increase understanding of finance tools that generate social and monetary impact
  • There is a new resource available for people interested in learning about social finance in Canada, and beyond.
  • Aptly named Your Guide to Social Finance, the online publication spearheaded by Social Innovation Generation (Sig) offers people both quick and in-depth answers for how social finance works, who’s involved and who’s eligible.
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  • Joanna Reynolds, project lead and program director of the SiG division Causeway, says the guide is targeting social entrepreneurs and anyone interested in social ventures to explain how social finance can support the opening, operation and expansion of organizations pursuing social and environmental outcomes. According to Reynolds, it’s the first guide of its kind to provide these tools in a convenient format.  “There isn’t anything like it in the world, as far as we know, in terms of an accessible and hopefully easy-to-understand resource for people to learn about social finance,” Reynolds tells Axiom News. The project took nearly a year and a half to complete and involved a number of collaborators like SocialFinance.ca, Ashoka Canada and the B.C. Centre for Social Enterprise.  Bruce Mau Design was engaged in the creative process, and Reynolds credits the internationally-recognized design firm along with volunteer Helen Yeung for challenging the group to keep the content accessible to diverse readers. Reynolds says a major asset of the guide is the section featuring social finance stories, in video and article format, which can build greater awareness of the possibilities for social finance. “The purpose of the guide is to really tell stories of social finance at work. We feel that a great way to understand social finance is through examples and illustrations so people can see this is what it is, and it applies in these kinds of ways,” says Reynolds, who adds most people would be unaware of the organizations listed in the guide. Since launching the resource, Reynolds says they’re receiving great feedback, and people are excited the content is available. She’s encouraging people involved in social finance to submit their comments and any new projects they’re working on, as the guide will be updated. SiG is also planning to promote the resource to community organizations and networks that could benefit from the information. Reynolds adds this is part of SiG’s vision to move social finance from an innate and mostly uncoordinated sector to its next stage of growth — a co-ordinated and accessible system. To read Your Guide to Social Finance, click here. If you have feedback on this article please contact the newsroom at 800-294-0051 or e-mail camille(at)axiomnews.ca. Login or register to post comments Axiom News: Change is our product. News is our process. Click here to learn how. Front Page NewsStrengths Movement Cincinnati Summit Who We Are Our Services Our Clients Resources Contact
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    Axiom article explaining the new guide to social finance...
Tim Draimin

Mayor rolls out finance options for nonprofits | Crain's New York Business - 0 views

  • Mayor rolls out finance options for nonprofits A new bonding authority would extend low-cost, tax-exempt financing for nonprofits' expansion and facility upgrades.
  • Mayor Michael Bloomberg, who has long been considered a patron of nonprofits, took steps on Thursday to unleash the growth potential of that community by announcing the formation of a new entity committed to helping the city's 501(c) organizations gain access to low-cost, tax-exempt financing to expand or upgrade facilities.
  • The New York City Industrial Development Agency, which previously issued tax-exempt bond financing on behalf of nonprofits for various capital projects, has had its hands tied, unable to do that job since its authority was rescinded by the state Legislature in January 2008.
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  • In the interim, nonprofits seeking to grow their operations have been stuck in a state of arrested development.
  • Elizabeth Berger, president of the Downtown Alliance, which supports economic development in lower Manhattan, welcomed the mayor's announcement as a necessary step in enabling nonprofits to play their part in promoting the city's economic vitality.
  • According to the mayor's office, more than 13 organizations have gone to out-of-state funding sources for assistance in financing capital projects totaling more than $337 million since June 2009. The administration also estimates nonprofits have at least 20 shovel-ready capital projects stuck in the development pipeline with a combined price tag of more than $400 million.
  • While the city's nonprofits don't enjoy quite the same cachet in terms of revenue-generating potential as either financial services or leisure and hospitality, the group exceeds both sectors with respect to employment. While the other sectors employ approximately 434,000 and 320,000, respectively, the more than 42,000 health, human services and cultural nonprofit (HHSC) organizations throughout the five boroughs support approximately 470,000 employees, according to the mayor's office. That sector is the largest private employer in city—employing more than 15% of New York's non-governmental work force.
  • “New York City is home to tens of thousands of nonprofits that are looking to expand, create jobs or move into new facilities, but for the past few years they have faced more expensive financing costs, while some have had to forgo expansion altogether,” Mr. Bloomberg said, in a statement. “This new entity will make it easier and more inexpensive for our critical nonprofit sector to grow and expand.”
  • “At a time when many not-for-profits are struggling to make ends meet amid the nation's fiscal woes, this new issuer will serve to strengthen and support an increasingly important sector in our city's economy,” Ms. Berger said in the mayor's office statement. “In lower Manhattan, not-for-profits represent a vital and growing sector, and this action recognizes their value.”
  • Capital projects and investment in expansion and facilities upgrades have been curtailed as the volatile economy takes a toll on nonprofits struggling to make up for reductions in funding support. “For over three years, nonprofits like ours have faced far too many obstacles in obtaining financing to grow and expand,” Sisi Kamal, chief financial and operating officer at the Friends Seminary School, said in the statement. “The ability to locally access necessary financing in an efficient and cost-effective manner would be a significant investment in the future of our organization and that of many others serving the residents of New York City.”The administration said the new entity, a local development corporation, will open in the next four to six months and that financing requests will be based on board approval. The five borough presidents, in conjunction with the comptroller, will be charged with nominating directors to serve on the board.
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    Bloomberg simplifies non-profit access to financing with new entity to help orgs gain access to low-cost, tax-exempt financing.
adamspence

Santander invests £1m in game-changing social enterprise | Social Enterprise - 1 views

  • A brace of £1m debt finance deals is just the beginning of a much bigger plan to take banking services to excluded communities, Faisel Rahman tells Chrisanthi Giotis The business case for social enterprises lending small amounts to the poorest people in the UK is about to be seriously tested as east end lender Fair Finance partners with global financial powerhouse Santander.
  • Santander is the latest big bank to invest in Fair Finance putting in £1m in debt finance, to follow the £1m debt finance Fair Finance raised from Societe Generale and BNP Paribas – this earlier deal last month was possibly the first commercial deal of its kind for a personal finance community lender in western Europe.
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    Debt financing deal for community lender in the UK.
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    Interesting article. Thanks Adam for sharing with the group.
Tim Draimin

Showing social investment works - Civil Society - Finance - In-depth - Interviews - pro... - 0 views

  • Showing social investment works
  • Finance | Vibeka Mair | 20 Jun 201
  • In August, Jonathan Lewis leaves social lender Social Investment Business to become chief executive of NHS spin-out Bromley Healthcare. Vibeka Mair interviews Lewis on his time with the UK’s largest social investor.
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  • It’s getting off to a slow start, but the Big Society Bank looks set to mark a new dawn for social investment, bringing a potential £400m into the market. But before this, in 2007, a new-style social lender entered the market with a relatively modest £15m, before growing into one of the largest social investors in the country.
  • The organisation started off as the Adventure Capital Fund, which then became known as Futurebuilders – generating the organisation's biggest fund to date, finally settling on Social Investment Business – a clear catchall to describe the organisation, and a nod to its ambitions to run the Big Society Bank, a concept known as the social investment wholesale bank under the Labour government.
  • Despite its positive effect in financing the charity world, some have criticised it for growing so large so quickly – it has managed a number of funds on behalf of the government and is worth around £400m. Lewis makes no apology:
  • Its outgoing and first chief executive, Jonathan Lewis, says he is most proud that Social Investment Business has shown that social investment works:
  • Lewis is also proud that the write-off rate of loans with Futurebuilders was so low, especially since it funds organisations which can’t access traditional finance.
  • “Through Futurebuilders, we lent £120m to organisations which couldn’t get bank finance, and the culminative write-off rate on that money over six years is less than 4 per cent. I’m extremely proud of this fact.”
  • “With Futurebuilders (the £215m fund managed by Social Investment Business on behalf of the Office for Civil Society) we were supposed to help charities win something like 300 contracts. In fact they won over 800, which shows that if you give them a bit of appropriate help they can win lots of contracts by providing innovative and transformative services.”
  • “Though it was slightly unpopular to grow this quickly, I think creating a large social investor moves the market on a little bit, and the market is going to be moved on again by the Big Society Bank.”
  • Lewis’ time at Social Investment Business could be viewed as the frontier of social investment. His new role follows a similar pattern. Lewis leaves to head the staff-run NHS social enterprise spin-off Bromley Healthcare, one of many public service providers deciding to become a mutual under minister for the Cabinet Office Francis Maude’s new "right to provide" agenda. Maude is leading a drive to support employees of public services to set up mutuals.  Bromley Healthcare is a staff-run healthcare provider organisation rather than a commissioning one. Lewis joins it as chief executive in August.
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    Retrospective observations on the role of Futurebuilders, the 215 million pound fund run by Social Investment Business on behalf of the Office for Civil Society
Peter Deitz

ALEX WOOD: Social Finance: a Conservative opportunity? | iPolitics - 0 views

  • For a new Conservative government looking to make a tangible and lasting mark on our society, there would seem to be no better alignment of values and opportunity than that represented by the burgeoning social finance movement. It represents a ready-made opportunity, rooted in values of community-building, support for small scale entrepreneurship, and the role of private investment in delivering public good, that the government would do well to seize.
  • At its core, social finance (or its semantic cousins: “impact investing”, “mission-based investing”, etc.) is about incenting innovation. Let’s face it, we all assume that the large challenges facing our society (things like child poverty, climate change, health care, etc.) can only be solved by government or big corporations.
  • The Task Force, in its report, identified a number of concrete steps that governments could take in this regard, primarily around the tax treatment of such investments. As an example, the report points out that Canadian foundations are specifically prohibited under the Income Tax Act from conducting any “unrelated business activity”, while similar provisions in the U.S. and U.K. tax codes have been removed in recent years. Canadian governments have indicated a growing level of interest in the potential that social finance holds. The federal government made a supportive statement for social finance in its 2010 Speech from the Throne, and provinces like Nova Scotia and Quebec have set up their own social finance funds. Ontario very recently inaugurated a Social Innovation Wiki, through which social entrepreneurs can share lessons on things like access to capital.But governments can and should do more, starting with the federal government. The upcoming Speech from the Throne would seem a perfect opportunity for a government looking to define its vision for the country to re-affirm the potential of social finance, and to lay out a roadmap for how Canada will move forward on this opportunity.
Tim Draimin

Government gives out £81m to charities from Transition Fund - Civil Society -... - 0 views

  • Government gives out £81m to charities from Transition Fund
  • Finance | Vibeka Mair | 13 Jun 2011
  • The government has paid out a further £81m from the £107m Transition Fund to around 727 charities which are most vulnerable to reductions in public spending.
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  • To date £97.5m has been committed from the Transition Fund to more than 900 charities. Final awards will be announced later this summer.
  • The Transition Fund aims to help charities make the most of more opportunities to deliver public services and new sources of finance, such as capital investment from the Big Society Bank
  • Nick Hurd, minister for civil society, said: “All the charities receiving transition funds have a plan to overcome current challenges and emerge stronger. We recognise the hugely important contribution charities make to our society and we are committed to supporting them."
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    "The Transition Fund aims to help charities make the most of more opportunities to deliver public services and new sources of finance, such as capital investment from the Big Society Bank."
Tim Draimin

Impact Capital is the New Venture Capital | Entrepreneur the Arts - 1 views

  • Impact Capital is the New Venture Capital
  • By Sir Ronald Cohen
  • Broadly speaking, capitalism does not deal with its social consequences. Even as communities grow richer on average, so the gap between the “haves” and the “have-nots” increases. For example, since the mid-1970s, both the USA and UK have actually become less equal rather than more equal. In the long post-war boom many governments did make significant headway in ameliorating the consequences of social inequality. This can be seen in levels of investment in areas such as health and in critical performance measures such as life expectancy. Nevertheless, governments, despite their best efforts and even in the best of times, have not been able to resolve all social problems.
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  • Commentators on one side of the political spectrum attribute this failure to the lack of resources available to the state and to the state’s reluctance or inability to act appropriately. Commentators on the other side attribute government’s shortcomings to the inherent inefficiency of the state itself. The truth is that the political process, which focuses on short-term gains, does not favor long-term, preventative investment of the type required to address major social problems.
  • The social sector, which is also called the voluntary, non-profit or third sector, has done its best, with the support of philanthropic donations and government, to address the social problems that fall through the gaps in government provision.
  • Some argue that the social sector’s problem is that it is significantly under-resourced. Others argue that the insufficiency of resources is in part a consequence of the sector’s reliance upon philanthropy — from foundations and from individual donors — that can be unpredictable. Both critiques may be correct: the social sector has a problem in accessing capital, often because of a lack of a reliable revenue stream, and, as a consequence, it is inefficient, especially in respect of building sustainable organizations, securing funding and utilizing assets to support large-scale activity.
  • Recent moves to make the social sector more efficient, by focusing on improvements to the management of both the donors and the recipients of grants, are an important development. The Bill & Melinda Gates Foundation applies rigorous criteria to the assessment of the performance of organizations in receipt of its grant funding. Michael Dell’s philanthropic work is similarly rigorous. Their goal, according to Harvard professors Robert Kaplan and Allen Grossman, is, essentially, “to find and fund the Microsofts and Dells of the non-profit sector.”
  • In fact, such moves are more necessary than ever, as deficit-ridden governments seek to pass greater responsibility onto the shoulders of the social sector. An example of this is the UK Coalition Government’s strategic objective to foster the “Big Society.” In essence, the Big Society agenda seeks to pass a significant portion of responsibility for social cohesion back to the community via the voluntary sector, and, at the same time, to confer greater legitimacy upon such community work and to provide incentives and support for it. However, the social sector as currently constituted is unlikely to be able to address the scale of the social need; or, to put it another way, to meet the scale of the social challenge.
  • This is where social entrepreneurs come in. We know that entrepreneurs create jobs and foster innovation. In that sense, they already make a substantial social contribution. But entrepreneurs have special qualities that could make a significant beneficial impact were they to be applied to social issues. The entrepreneurial mindset embraces leadership, vision, the ability to attract talented people, drive, focus, perseverance, self-confidence, optimism, competitiveness and ambition. To these one might add an appetite for taking informed risks, an unwavering focus on results, a willingness to take responsibility, a grounded sense of realism, astute judgment of opportunities and people, and a fascination with the field of enterprise in question. The engagement of entrepreneurs in the social sector, bringing in their wake high expectations of performance, accountability and innovation, could lead to significantly increased social impact.
  • Could the social sector be transformed to allow the emergence of entrepreneurs from within its own ranks and attract social entrepreneurs and capital on a large scale? The answer is yes, provided that we can create an effective system to support social entrepreneurship, by linking the social sector to the capital markets and introducing new financial instruments that enable entrepreneurs to make beneficial social impact while also making adequate financial returns for investors. Given these conditions, it is possible that social entrepreneurs and impact investors will significantly fill the gap between social need and current government and social-sector provision. Indeed, were social enterprise to achieve significant scale, it would transform the social sector and lead to a new contract between government, the capital markets and citizens.
  • In this process, charitable, institutional and private investors, attracted by the combination of social as well as financial returns, would bring into being a new asset class: impact investment. In a recent report, JP Morgan came to the conclusion that impact investments already constitute an emerging asset class: “In a world where government resources and charitable donations are insufficient to address the world’s social problems, impact investing offers a new alternative for channeling large-scale private capital for social benefit. With increasing numbers of investors rejecting the notion that they face a binary choice between investing for maximum risk-adjusted returns or donating for social purpose, the impact investment market is now at a significant turning point as it enters the mainstream… We argue that impact investments are emerging as an alternative asset class.”
  • This new asset class requires a specific set of investment and risk-management skills; it demands organizational structures to accommodate these skills; it must be serviced by industry organizations and associations; and it must encourage the development of standardized metrics, benchmarks and even ratings. As has been observed by the impact-investment firm Bridges Ventures in the UK, such an asset class should provide welcome diversification for capital markets: at times of economic stress, price-sensitive business models appropriate to lower income neighborhoods can prove more resilient and also find wider applications in the mainstream market as both margins and consumer spending power are squeezed.
  • Not surprisingly, politicians as well as academics, entrepreneurs and investors are paying increasingly close attention to these developments. In the US and in the UK, and now also in Canada and Australia, steps are being taken to provide social entrepreneurs with access to the same kinds of resources as business entrepreneurs. The USA’s Social Innovation Fund ($173 million) and the Investing in Innovation Fund ($644 million) are notable examples; as is the proposed creation of the UK’s Big Society Bank. In Canada, the Federal Government recently received the report of the Canadian Task Force on Social Finance, whose recommendations include requiring public and private foundations to devote a proportion of their funds to mission-related investments; clarifying fiduciary obligations so that pension funds and others can invest in social programs; introducing new financial instruments for social enterprise; and marshalling government support for social enterprise, directly through seed investment and business support services and indirectly through fiscal engineering.
  • How likely is it that such steps will succeed? In answering this question, we would do well to consider that the global economy faced a similar moment of challenge and opportunity in the 1970s and 1980s, when many of the most familiar names in the post-war corporate world started to decline and shed jobs, among them General Motors, American Motors, Courtaulds, ICI, Smith Corona, Olivetti, US Steel, Bethlehem Steel, Kodak and International Harvester. The question then was: what would take their place?
  • What took their place was a new wave of business enterprise helped by venture investing, mostly focused on high-tech industries. This is the wave that brought us Intel, Cisco, Oracle, Microsoft, Apple, Sun Microsystems and Genentech. The hi-tech wave has since swept the world, taking us into the embrace of Google, Wikipedia and Facebook and ushering in a communications and information revolution based on global access to information from multiple sources. It has thereby profoundly changed global culture.
  • Just as hi-tech business enterprise and venture capital, working in tandem, have attracted increasing numbers of talented risk-takers since the 1970s, so social enterprise and impact investment are now attracting a new generation of talented and committed innovators seeking to combine new approaches to achieving social returns. Social enterprise and impact investing, in short, look like the wave of the future.
  • About Sir Ronald Cohen Sir Ronald Cohen is chairman of Bridges Ventures and The Portland Trust. He chaired the UK’s Social Investment Task Force and the Commission on Unclaimed Assets and he is a founder-director of Social Finance. Until 2005, he was executive chairman of Apax Partners Worldwide LLP, which he co-founded in 1972.
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    Sir Ronald Cohen's overview of the emergence of the impact investing space, including references to Canada the Canadian Task Force on Social Finance.
Tim Draimin

Nesta proposes new regulatory framework for social finance - Third Sector - 0 views

  • Nesta proposes new regulatory framework for social finance
  • By David Ainsworth, Third Sector Online, 23 June 2011
  • With the law firm Bates Wells & Braithwaite, it wants to get rid of 'onerous' restrictions and make it easier to lend money to charities and social enterprises
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  • They would be overseen by a social finance regulator that would operate within the proposed Financial Conduct Authority, the successor to the Financial Services Authority.
  • The framework would create new legal categories of 'social investment' and 'social investor'. The two organisations hope to persuade the government to make it into law.
  • The National Endowment for Science, Technology and the Arts and the law firm Bates Wells & Braithwaite have proposed a new regulatory framework for social finance aimed at making it easier to invest in voluntary sector organisations.
  • "At the moment, it's easier to give £100 to charity than to lend £100 to charity," said Luke Fletcher, an associate at Bates Wells & Braithwaite and author of the report.
  • The new framework, he said, would make it easy for charities and social enterprises to create a financial prospectus for a bond or share offer, without the need to offer the tight protections for investors that are currently required.
  • "The main target for this would be the mass affluent, who are not currently considered sophisticated investors," Fletcher said. "Charities would like to create offers targeting these people, but they find the legal restrictions too onerous."
  • Fletcher said there were already exemptions for community benefit societies, formerly known as industrial and provident societies, and he wanted to extend these to all third sector organisations. "I think there's a chance of getting this into law now," he said. "There's a real window of opportunity. The reform of the Financial Services Authority is already under way, there's big interest from government in social investment and there's a drive to reduce red tape for the sector." The Cabinet Office has expressed support for the idea of a new regulatory framework in its strategy paper Growing the Social Investment Market, in which it said it would "seek further evidence on the impact of the regulatory framework on social and community investment to assess whether it is proportionate". One of the six key recommendations in Lord Hodgson's report on red tape in the third sector, Unshackling Good Neighbours, was the creation of a class of "social investors" who could invest under less strict guidelines because they understood they were receiving both a social and financial return.
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    NESTA report on new initiative to simplify how charities and public benefit organizations put together a prospectus for raising money through a bond. The proposal also ties into a previous report on reducing red tape for charities (Lord Hodgson's "Unshackling Good Neighbours") that recommended the creation of a class of "social investors" who could invest under less strict guidelines because they understood they were receiving both a social and a financial return.
Peter Deitz

MIT TechTV - Legatum Lecture : Sir Ronald Cohen, Chairman, The Portland Trust and Bridg... - 0 views

  • Cohen, Sir Ronald Chairman, The Portland Trust and Bridges Ventures Director of Social Finance Sir Ronald Cohen is Chairman of The Portland Trust and Bridges Ventures and a Director of Social Finance. He was the founding partner and former chairman of Apax Partners. Founded in 1972, Apax Partners is one of the world’s leading private equity investment groups, operating in nine countries across Europe, the USA, Israel and Japan. Apax advises and manages funds of over $35 billion. Sir Ronald is member of the Harvard Board of Overseers, on the Board of Dean’s Advisers at Harvard Business School, a Vice-Chairman of Ben Gurion University and a member of the University of Oxford Investment Committee. He is also a Trustee of the British Museum. He was a founder director and past chairman of the British Venture Capital Association and a founder director of the European Venture Capital Association. He was also a founder and former Vice-Chairman of EASDAQ and former director of NASDAQ Europe. He was Chairman of the Social Investment Taskforce and the Commission on Unclaimed Assets. He has recently published “The Second Bounce of the Ball – Turning Risk into Opportunity” about entrepreneurship. He is a graduate of Oxford University, where he was president of the Oxford Union, an Honorary Fellow of Exeter College, and has an MBA from Harvard Business School, to which he was awarded a Henry Fellowship. Recipient of the HBS Alumni Achievement Award.
Tim Draimin

Banking on the 'big society' | Social enterprise network | Guardian Professional - 0 views

  • With the plans for the development of a "big society bank" endorsed on Monday, government has never put social enterprises so squarely at the heart of its policy-making. This year alone, the big society bank will receive an unprecedented £260m to invest in intermediary organisations, compared to the £360m that was injected into the social investment market by the Labour government over 13 years. Despite this, growing a social enterprise that covers its costs and genuinely helps vulnerable people remains an almighty challenge.
  • The Big Society Bank is clearly good news but obstacles still remain and social enterprises will need to pick fights judiciously if they are to respond to the tough problems facing society. The bank will enable intermediaries to offer cash as capital investment not revenue.
  • While the Big Society Bank offers investment for growing larger social enterprises, it does not help those organisations become investable. Other investors looking to scale social enterprises have already struggled to find organisations that are ready for investment. Ethical bank Triodos had to close a large fund for social enterprises last year after only being able to make one investment. Investors report that only 16% of the social enterprises that approach them are investable.
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  • While the Big Society Bank will offer capital to help social enterprises scale, it may not provide the right kind of capital for new, potentially ground breaking, ideas. Ambitious start-up ventures require investment to test their models and start paying their way. The Big Society Bank will not be issuing grants so it looks unlikely that intermediaries will, in turn, be able to offer the kind of "soft capital" required to new social enterprises. Largely avoiding the world of social investment, the successful graduate teaching programme, Teach First, secured its founding investments from businesses, government agencies and charitable foundations. This diverse range of sympathetic supporters sacrificed financial return to give the untested vision of Teach First a chance. Other successful start-ups continue to cobble together the finance they need rather than waiting for social investors to meet their needs.
  • To attract investment to scale, an enterprise needs a clear strategy, a robust model for generating revenue, and economics that scale (or, as the enterprise grows it will simply become bigger, and not better). This is tough; entrepreneurs often need support from some of the 100-plus organisations – identified in the NESTA-commissioned report, Growing Social Ventures – that are dedicated to supporting Britain's 65,000 social enterprises improve, expand or become more resilient. For example, Scottish social enterprise Working Rite was supported by the Young Foundation to develop a financially sustainable business model before it could attract capital to its apprenticeship-style work preparation programme, even though it had achieved better results for youngsters from tough backgrounds than its larger, commercial competitors.
  • While we welcome the Big Society Bank, the government needs to level the playing field in the ever-tighter fight for government contacts. Shrewd social entrepreneurs – like those behind Enabling Enterprise, Teach First and Working Rite – will need to continue to scrape around for risk capital, and scramble to build robust business models under innovative services. From on high the government declares that social enterprise is critical to the success of the big society, yet on the ground it can feel like "soft privatisation".
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    Article places new Big Society Bank finance offering in context of the range of support new ventures need...
Tim Draimin

FT.com / UK - Crisis and disasters boost zeal for reform - 1 views

  • Crisis and disasters boost zeal for reformBy Patrick Jenkins, Banking Editor Published: June 15 2011 16:43 | Last updated: June 15 2011 16:43
  • All this has given the concept of sustainable finance momentum over the past year. The values of sustainability – a longer-term horizon and a greater focus on the counterparties with which banks do business – are becoming mainstream.
  • A minority in the banking world has long specialised in “ethical” behaviour, restricting investments to a “whitelist” of companies deemed to act responsibly. But the environmental disasters in particular have been a spur to such institutions, says Joachim Straehle, chief executive of Bank Sarasin, whose predecessors turned the Swiss institution into a “sustainable bank” after a domestic chemical disaster 25 years ago.
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  • “We have a sustainable matrix system that allows us to invest in high-impact sectors like oil only if the company is exceptionally sustainable,” Mr Straehle says.
  • It remains to be seen how permanent that caution is, but the political shift away from nuclear in Europe, particularly in Germany, could restrain European banks from funding such projects further afield.
  • This may just be current pragmatism, but it reflects homegrown changes in business strategies by banks with international reach.
  • For example, in recent months mainstream British banks have been drawn, sometimes screaming, into doing more to assist the broader society. The so-called Project Merlin agreement between the big UK banks was centred on government lending targets, but it also bound the banks into several other do-good projects that are more ambitious in their scope than standard government-sponsored financing initiatives.
  • The biggest idea is the creation of a £2.5bn ($4.1bn) private equity-style Business Growth Fund to kick-start small business investment, while a further £200m has been committed to the Big Society Bank, a project conceived by David Cameron, UK prime minister, to support regional development ventures.
  • There is a theoretical promise of commercial returns for the banks, but few expect them to be generous.
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    Financial Times reporting on pressure building on banks post crisis
Nabeel Ahmed

Could SIBs lead to better health outcomes? | Social Finance - 1 views

  • Social Finance is exploring how Social Impact Bonds could be used to improve patients’ health at the same time as reducing expenditure on health services. In this webinar Ben Jupp and Eleanor Stringer will discuss the need for Social Impact Bonds in the health field, and suggest the ways social investment could be used to improve outcomes.
  • 23 June 4.00 - 5.00pm GMT Ben Jupp and Eleanor Stringer, “Could SIBs lead to better health outcomes?
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    Webinar coming up, June 23: SIBs and health outcomes.
Peter Deitz

Viddler.com - Attracting Social Finance Investors: Five Hot Tips for Start-ups - Upload... - 0 views

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    Hot tips video on Attracting Social Finance Investors. Featuring Adam Spence, Valerie Lemieux, and Julia Langer.
Joanna Reynolds

Environmental Finance | Welcome - 0 views

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    Green Bonds
adamspence

Big Society relaunch: the risks, by John Tizard - Public Finance Opinion - 0 views

  • As the prime minister re-launches his big idea – the Big Society – it seems an appropriate time to ask ‘what is the Big Society and what it could it be?’ To the government it would seem to have several key elements ranging from individuals and families taking more responsibility for their lives to opening the public service provision up to social enterprise and the community and voluntary sector.  To some ministers and others the term ‘Big Society’ seems to be a useful badge for a new policy or initiative.  For some it does appear to be a camouflage for a deliberate pursuit of a ‘smaller state’, less regulation, fewer public sector employees and public expenditure cuts.
Tim Draimin

Hamilton: Green, RRSP-eligible community bonds coming soon - thestar.com - 0 views

  • Last October a young entrepreneur named Daniel Bida got together with a group of like-minded individuals and approached the management of the Toronto Zoo with an innovative idea.
  • They knew the zoo was interested in building a biogas facility that could turn manure from elephants, giraffes and other animals into renewable electricity and heat. They also knew that after several years of trying the zoo, despite its good intentions, couldn’t make it happen. The project it envisioned was simply too complex and risky for commercial investors.
  • Bida proposed a new approach: build a smaller, more manageable facility and open up investment to the broader community through the issuance of bonds.
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  • He was inspired after watching Toronto’s Centre for Social Innovation (CSI) purchase and retrofit a building using $2 million it had raised selling community bonds at $10,000 apiece. The bonds, which could be purchased by anyone, offered a 4 per cent annual rate of return over five years and were RRSP-eligible.
  • If the banks wouldn’t lend the money to a not-for-profit organization like CSI, then individuals who support the organization’s mandate just might. Tapping into CSI’s “social asset” proved a good gamble, as the community was quick to scoop up the bonds.
  • “This told me that the whole community bond thing was for real,” say Bida, convinced he could adapt the approach to support renewable-energy projects.
  • Their approach represents a low-risk investment for people who want to support “green” community projects and make some money, but who don’t want to spend thousands of dollars putting solar PV systems on their own rooftops.
  • Electricity from the plant will be sold into the grid under the province’s feed-in-tariff program, while waste heat could end up being pumped into a nearby greenhouse, potentially used to grow bamboo for the new pandas expected to arrive in 2014.
  • About 70 per cent of the project, or roughly $3.5 million, will be funded through the sale of community bonds that, like the CSI bonds, could be purchased through a self-directed RRSP. ZooShare hopes to offer bonds with a seven-year term and up to a 7 per cent annual return on investment.
  • For existing zoo members and those living within one kilometre of the zoo, the bonds will be sold in $500 units. Everyone else can pick them up for $5,000 each, unless they want to purchase a zoo membership. “We’re hoping this will sell more memberships for the zoo as a result,” says Bida, whose company ReGenerate Biogas is managing the project.
  • ZooShare is just one of several co-op ventures going the community bond route to raise capital for renewably-energy projects. Others include Options for Green Energy, SolarShare and WaterShare.
  • The zoo executives liked the idea and several months later Bida helped form the ZooShare Biogas Co-operative, a not-for-profit community co-op that plans to build a 500-kilowatt biogas plant at the zoo for about $5 million
  • t also offers a way for those without property, such as renters, or without the proper land or rooftop exposure, to participate in the feed-in-tariff program. Community bonds, in essence, make the FIT program more inclusive and get the broader population directly invested in their energy future, be it solar, wind, biogas or hydro.
  • “This idea of massive public involvement in the ownership and economic benefit of these projects is what we’ve all been working towards for the past 15 years,” says Deb Doncaster, executive director of the Community Power Fund, which supports community co-op projects with grants and low-interest bridge financing.
  • “All it will take is for one or two of these projects to be successful and the approach will take off.” Social media will certainly play a role. Facebook, Twitter and other social networking applications make it much easier for community co-ops to reach out to supporters. Spreading the word to the right people has become almost effortless. Still, a couple of barriers need to be overcome before you or I can purchase such bonds. For one, RRSP-eligible community bonds must be approved and registered with the Financial Services Commission of Ontario before they can be sold. Some say the commission is dragging it feet. SolarShare, for example, wants to issue community bonds in $1,000 increments that would offer a 5-per-cent return annually and be redeemable after five years. The funds raised from the bond issue will support construction of solar PV projects across southern Ontario. It’s all new territory for the financial services commission, which has proved a major bottleneck. “They’re tight on the resources needed to deal with this new landscape,” says Matt Zipchen, who as project manager for the Toronto Renewable Energy Co-operative is overseeing development of SolarShare. Zipchen says another roadblock is the banks. “These community bonds may be RRSP-eligible, but whether or not your bank will let you hold them is another question,” he says. “Banks are finicky about them. We’re just starting the process with the banks to see which ones will hold these bonds and which won’t.” It will all get sorted out over time. Indeed, all it will likely take is for one big bank to break from the pack before others start to follow. If demand for community bonds is high enough, that will likely happen. That’s what SolarShare, ZooShare and others are counting on. Tyler Hamilton, author of the upcoming book Mad Like Tesla, writes weekly about green energy and clean technologies. Reach him at tyler@cleanbreak.ca
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    Toronto Star shows how the idea of community bonds is taking off!
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