Issue 1 of the “Canadian Chronicles of Charitable Innovation” series
New Research on Enablers and Barriers to Social Finance and a $755 million investment into the Social Finance Eco-System
JN Clarke Consulting was the content creator of the “Building Equity: Mobilization for Impact” training series, an initiative of the Spur Change Program, that ran between March to June of this year. This past April, the third online unit of the training was launched, titled ‘Exploring Innovations,’ which provided participants with an introduction to the state of the social finance market in Canada. The unit explored different funding sources and models, including within the context of legally registered charities and the pursuit of earned revenue, to the range of regulated social enterprise models across Canada, and finally, the innovative finance market within the international development sector; the leveraging of Official Development Assistance (ODA) to catalyze private sector financing for sustainable development.
One of the resources that was consulted as part of the Unit’s development was Imagine Canada’s 2020 research report, “Are Charities Ready for Social Finance?, developed in support of the Government of Canada’s Investment Readiness Program.
Social finance, as defined by Imagine Canada, is “an investment that seeks a measurable social, cultural, and/or environmental impact as well as a financial return for the investor(s),” and is positioned in the report as a promising potential source of capital for charitable organizations, that could provide more financial resiliency in a funding environment that is largely grants-based. Findings from the report showed that the majority of charities have a low awareness of social finance, and many perceive there to be a number of barriers to its uptake, including risk-averse Boards.
As a follow-up to the 2020 study, Imagine Canada recently completed a second study, that sought to dig deeper into these perceived barriers as well as enablers to social finance adoption by the charitable sector, and presented initial findings in an online webinar last month. 22 case studies were developed, 9 of which included Investment Readiness Program participants. Enablers that came out in the research included an interest or need for scalability and sustainability; measuring and reporting impact; legal and regulatory compliance and maturity; and a growth strategy and business model to name a few. Barriers that were highlighted included having a limited financial track record; legal and regulatory constraints; high transaction costs; and limited capacity and resources.
The announcement on May 29th, 2023 by the Government of Canada of a 16 year, $755 million investment into the Social Finance Fund, a foundational element of the Social Innovation and Social Finance Strategy and the Investment Readiness Program, opens up new, potential funding opportunities for charitable organizations across Canada. As the latest research from Imagine Canada shows however, there are still a number of challenges and opportunities charitable organizations need to grapple with before being able to take advantage of this significant funding opportunity. Support in policy and advocacy, impact measurement and evaluation, as well as market research and analysis are some of the capabilities charitable organizations would need to invest their time and energy in, but few charitable organizations have the time and human capital to spare. JN Clarke Consulting can support you in this endeavour, and offer services in organizational strategy development, research, monitoring and evaluation, grant application development and much more.
At JN Clarke Consulting, we are happy to support you by conducting this search, analysing the results and presenting it to you in a readable and clear format.
Would you or your team benefit from having our support to improve your government relationships? We offer strategic assessments, monthly support, workshops and training, depending on your needs.