Five Ways to Catalyze Community Capital in Ontario

In Fall 2020, over 50 representatives from Ontario’s community of place-based funders, investors, and intermediaries gathered for three days at the Catalyst Ontario convening to discuss discuss community capital approaches for our province’s journey to recovery and resilience. This convening was supported by the Ontario Trillium Foundation (OTF) in collaboration with the Scaling Impact network and organized by the Pillar Nonprofit Network.

As policy makers and community leaders examine and implement solutions, we are seeking opportunities to act together in providing capital and capacity support to organizations and enterprises that can lead at a local level. This article summarizes five (5) key actions for the community capital movement to consider based on insights from the gathering:

1. Learn from active and emerging models for place-based investing in Ontario and across Canada.

There is a large and growing place-based impact investing movement across the country from coast-to-coast-to-coast and throughout Ontario in urban centres and rural regions. We heard from many community capital networks, institutions and partnerships, including:

Key insights from these case studies:

  • Common questions: We have similar questions about how to effectively scale and manage risk.

“It is exciting to think about the value of shared services and collaboratives to make this work sing.”

2. Harvest insights from US experience with the Community Development Financial Institution (CDFI) model

Leaders from the Nonprofit Finance Fund and Cutting Edge Capital provided the following insights and lessons:

  • The emergence of CDFIs is directly connected to the civil rights movement and social justice movements of the 60’s and 70’s

3. Leverage existing infrastructure like Community Futures Organizations.

In Ontario, Community Future Development Corporations (CFDCs) have an infrastructure with a strong track record. Since 1995, CFDCs have invested $2.13B in 27,196 businesses influencing 138,479 jobs at a cost per job of $15,381. These businesses leveraged an additional $2.09B in equity and third party financing (ratio $1.00 — $1.02).

In addition, 69,631 businesses received capacity support, here are some the model’s key success factors:

  • Governance based on a geographic community of interest

This is critical infrastructure to integrate into a more intentional community capital ecosystem in the province, alongside credit unions, co-operatives, and place-based impact investing funds.

“Hoarding wealth is a state of illness.”

4. Apply an equity lens to community capital, including both racial and gender equity.

Narinder Dhami from Marigold Capital, Victor Beausoleil from Social Economy through Social Inclusion and Jeff Cyr from Raven Capital clearly expressed guiding principles for an equitable approach to community capital:

  • Leadership in our institutions reflects the diversity of intersectional identities including gender, race, ability, and status

5. Leverage momentum in the movement to transition from scaling intention to scaling impact together.

Participants of Catalyst Ontario indicated a strong desire to move forward, and here are the leverage points for our next steps:

  • Forging partnerships: We will be reaching out to current and new partners to firm up and broaden the core community advancing this agenda.

We will not replicate the current financial system. This type of innovation must navigate key questions and challenges:

  • Scale: For this to be successful at a grassroots level, we need to be active in local economies and use accessible language.

The community capital system must be inclusive and regenerative — and we must be brave and bold. We look forward to sharing more about the next steps for Ontario’s Community Capital agenda in early 2021.

For more information about this work including how you can be a partner or collaborator, please contact Adam Spence, C/O Catalyst: Community Capital Initiative at adam.spence@svx.ca.