Canadian Task Force on Social Finance: A Year Later

Canadian Task Force on Social Finance: A Year Later

An update on the seven recommendations to mobilize private capital for public good

TORONTO – A year after the Canadian Task Force on Social Finance launched its report and seven recommendations to mobilize private capital for public good, chair Ilse Treurnicht provided an update to 400 people gathered for its anniversary event Dec. 13.

Attendees also received a task force update report entitled Mobilizing Private Capital for Public Good: Measuring Progress During Year One.

The first recommendation is for Canada’s public and private foundations to invest at least 10 per cent of their capital in mission-related investments by 2020.

“In terms of mobilizing capital, the foundations, both public and private have really stepped up into a strong leadership role,” said Treurnicht, who is also CEO of the MaRS Discovery District, where the event was held.

The report states there has been significant progress made on this recommendation, with some early adopter foundations engaging their boards and investment committees on mission-related investment opportunities.  

The Edmonton Community Foundation is the first foundation in Canada to formally commit 10 per cent of its assets to mission-related investment, which totals $27.5 million. More initiatives are expected to be announced in 2012, said Treurnicht.

The second recommendation is that the federal government partners with private, institutional and philanthropic investors to establish the Canada Impact Investment Fund.

A year later, support for the national fund is developing, and meanwhile a variety of firms, funds and individuals are “filling market gaps and providing capital to a range of for-profit and non-profit social enterprises,” the report states.

Examples of investors filling market gaps include the Community Forward Fund, Vancity’s Resilient Capital Program, TBC Capital and Grand Challenges Canada.

The third recommendation, to develop new bond and bond-like instruments to channel the private capital, has seen a number of non-profit organizations exploring strategies to raise capital through community bonds.

Trailblazers include ZooShare, YWCA Canada, SolarShare and the Centre for Social Innovation.

“Social impact bonds are high on the agenda for governments in Canada and elsewhere and we should expect to see the first pilots in 2012,” said Treurnicht.

Exploring the mobilization of assets for pension funds to support impact investing was the fourth recommendation.

The update report states three major Canadian pension funds are committed to signing the United-Nations-backed Principles for Responsible Investment Initiative, indicating a move within the community to incorporate environmental, social and governance considerations.  

The fifth recommendation is to modernize regulatory and policy frameworks to ensure charities and non-profits can support their missions through revenue generation activities and explore new hybrid forms for social enterprises.

The Canadian Revenue Agency rulings suggest non-profits generating intentional profits could lose their tax exemption, and charities with unrelated business must put these activities into taxable corporations.

In November, B.C. Premier Christy Clark signaled the province will introduce legislation for a new hybrid structure to support social enterprise activity in 2012, through amending the B.C. Business Corporations Act and introducing a Community Contribution Company.

More Canadian companies are becoming B Corps, and the MaRS Centre for Impact Investing is a designated B Corp hub in Canada.

The sixth recommendation calls for the establishment of a federal-provincial, private-public Tax Working Group to develop and adapt proven tax-incentive models.

There are early steps being taken by provincial governments and policy think tanks, the report states, to explore how to leverage private investment through public investment and tax incentives.

The last recommendation is to expand eligibility criteria of government-sponsored business development programs for small and medium enterprises to include the range of social enterprises.

An Enterprising Non-Profits study on access to government-funded services for small and medium-sized enterprises showed the opportunity for social enterprises and the need for clarity around the process to access existing programs.

MaRS formally launched its Centre for Impact Investing during the event, which will work with people across the country to strengthen the impact investing field, said Treurnicht, and do the “nitty gritty” work of mobilizing capital for new products.

“We certainly look forward to continuing this journey, which tends to put the concept of collaboration into a bit of an extreme sport, and it’s exciting for all of us watching this emerging field to see it now become a reality,” she said.

Related Story:
Reflecting on the Social Finance Landscape in 2011

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Jennifer Neutel

Jennifer Neutel is a Story Advocate and Generative Journalist at Axiom News. She completed her Bachelor of Journalism at Carleton University in Ottawa in 2006, and joined Axiom News in 2007. She has taken on a variety of roles at Axiom including new social media intiatives and has a passion for creating strengths-based questions that can lead to positive change.

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