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
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Agenda
-Introduction
-Crowdfunding
-Community Bonds
-Microloans
-Social Impact Bonds
-Social Enterprise
-CEDIFs
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Timothy Nash @timenash [email protected] June 10, 2013
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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
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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
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Crowdfunding
http://www.indiegogo.com/projects/handmade-products-hand-built-business-kid-icarus-needs-help-to-take-flight
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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
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Social Enterprise Support
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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
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-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
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Community Economic Development Investment Funds (CEDIFs)
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Community Bonds
$10,000 per bond
4% return for 5 years
Raised $2 million
Provides space for social enterprises
Protection against global ‘systemic’ risks
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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/
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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
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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
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Social Impact Bonds
http://www.rockefellerfoundation.org/uploads/files/655fab01-83b9-49eb-b856-a1f61bc9e6ca-small.pdf
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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
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THANK YOU
SustainableEconomist.com