By Jonathan Wade, Centre for Innovative Social Enterprise Development (CISED)
There is a lot of talk about social enterprise as businesses that are designed specifically to address a social, cultural, or environmental need or problem in our society.
At the same time, there are philanthropists who are anxious to fund important social change and there are a growing number of investors who wish to see their money “do good” through responsible business activities.
The problem is that these two groups (the “doers” and the “financiers”) are not always speaking the same language, and in many cases they operate in different spheres of society. The notion that non-profit corporations and co-ops do the good work, while business (and corporate or personal profits from business) help fund that good work is so ingrained in our society that it is sometimes difficult to find the middle ground.
In recent years in Canada there have been some high profile efforts to close the gap between investor and social enterprise. Notable examples include the SVX and the Centre for Impact Investing at MaRS in Toronto, or the work of Bill Young and Social Capital Partners, or the Social venture capitalist movement, the informal investment circles, the work of the Canadian Alternative Investment Cooperative (CAIC) and their offshoot the Canadian Alternative Investment Foundation (CAIF) or even the work of small “micro-lending” or “micro-granting” organizations that dot the landscape are trying to refocus the wealth in our country into a robust system of social investing. However, all too often these initiatives are relevant for “late stage” investing in existing, proven, social enterprises, or are small “hobby” projects of forward thinking individuals.
The challenge is how to make it possible for the “average” middle class person to invest in business opportunities that will help make their community better. There are precious few opportunities unless you are an accredited investor, or are willing to make private loans to (or equity investments in) companies you believe in. The provincially regulated securities commissions exist to protect the investor, but they also prevent the social entrepreneur from accessing community based financing.
The good news is that there are some small opportunities that are emerging. For example, one can purchase community bonds through the courageous offerings from the Centre for Social Innovation, or the micro-lending Oikocredit, or the St. John Community Loan Fund. Furthermore, the Ontario Co-op legislation allows for the sale of Preference (par value) Shares, and there are several options for investors in biogas business through Zooshare and the West End Food Coop.
However, in Ottawa, there are two new social investment opportunities. Investors can support local social enterprise by investing in the Ottawa Renewable Energy Cooperative or the West End Well. A recent information session held at Invest Ottawa highlighted both the social and financial returns that will be realized by investing in these two social enterprises. With growing opportunities like these, it is hoped that more Ottawa residents who seek to make investments in our community will actively look to put their financial assets to work through social enterprises.
Jonathan Wade is a Social Enterprise Sector Developer working with the Centre for Innovative Social Enterprise Development (CISED) in Ottawa. Many of CISED’s clients seek investments and donations to support their social enterprise development and growth. Visit www.cised.ca to learn about social enterprises in the city, and contact CISED to learn more about opportunities to invest.