Our Letter to Minister Hussen: Five key actions to bolster Canada’s social finance strategy
In April 2021, the federal government released its budget and featured landmark commitments to Canada's social innovation and social finance sector. We’ve written before about the federal budget and have been discussing it with our peers in the field, including sharing our thoughts with Future of Good.
On May 21, 2021, SVX, the Centre for Social Innovation, Upper Canada Equity Fund, Pillar Nonprofit Network, and 10C and Harvest Impact Fund, sent the following letter to the Hon. Ahmed D. Hussen. We made five recommendations to bolster the social innovation strategy and we hope to continue engaging the federal government on this critical policy area.
Please get in touch if you have any questions or comments, and if you would like to add your name to the letter, click here.
May 21, 2021
Hon. Ahmed D. Hussen
Minister of Families, Children and Social Development
MP, York-South Weston
House of Commons
Ottawa, ON K1A 0A6
RE: CANADA’S SOCIAL FINANCE AND SOCIAL INNOVATION STRATEGY
Dear Minister Hussen,
Thank you for your continued commitment in support of all Canadians through this incredibly challenging moment in time. In particular, thank you for your leadership and efforts to advance Canada’s Social Finance and Social Innovation Strategy as a means of advancing social, economic, and environmental justice.
We welcomed the federal government’s commitments in the most recent federal budget including: the deployment of up to $220 million over the next two years for the Social Finance Fund and $50 million over two years to renew the Investment Readiness Program (IRP) starting in 2021–22. We also welcomed your call for feedback and input on the next steps in implementing these policy priorities.
Summary of Recommendations
Accordingly, we wanted to offer the following recommendations related to the strategy:
- Engage and invest directly in community capital and skill-building intermediary organizations through the Investment Readiness Program (IRP);
- Support cohort-based investment readiness programming for SPOs through the Investment Readiness Program (IRP);
- Continue to advance the Social Finance Fund to ensure initial deployment by the fall in line with sector recommendations;
- Implement the recommendations of the Social Innovation and Social Finance Strategy Co-Creation Steering Group; and
- Advance and prioritize an equity lens in the roll out of Canada’s social innovation and social finance strategy.
Recommendation One: Engage and invest directly in community capital and skill-building intermediary organizations through the Investment Readiness Program (IRP).
The renewal of the Investment Readiness Program (IRP) is an important component of the national social innovation and social finance strategy. A key recommendation for the next phase of the IRP would be to intentionally engage and invest directly in capital and skill-building intermediary organizations. Capital intermediaries include place-based or sector specific funds, and skill-building intermediaries include a range of organizations from social innovation accelerator programs to social innovation co-working facilities offering training programs for SPOs.
The engagement of community capital and skill-building organizations in the next phase of the IRP is straightforward. These organizations already play a role in advising local program administrators, or participating in review panels. There may be further opportunities for deepened engagement as these organizations have relevant expertise, and they may provide capital or long-term capacity support to grant recipients. A practical means of engagement might be the recommended inclusion of these types of organizations as program advisors or grant reviewers in the next phase of the IRP.
Moreover, the ecosystem would be well served by expanding the IRP beyond an almost exclusive focus on direct funding of SPOs towards the allocation of a portion of the funding to support the start-up and scale-up of critical ecosystem infrastructure from place-based impact investing funds to venture support programs across the country. These organizations represent critical long-term infrastructure that can build capacity in rural and remote regions and provide access to capital to women or BIPOC-led or BIPOC-serving enterprises.
If the Social Finance Fund is to succeed, it is vital that we have a vibrant array of new and scaled up intermediaries across Canada that can capitalize and support SPOs. But we have underinvested in this infrastructure in the current social finance strategy, which has left a significant gap. We do have a strong foundation that allows us to scale-up, but many community capital institutions in Canada are under-resourced and undercapitalized. There are also significant geographic gaps in capital and capacity support for organizations, enterprises, and projects across the country, in urban centres, as well as rural and Northern regions. Moreover, many of these organizations have revenue opportunities and pathways to sustainability, but there are significant start-up and scale-up costs to design, market, and operate these kinds of intermediaries.
This particular recommendation could be achieved through the existing IRP program framework. A specialized partner with the capabilities and experience working with intermediaries like the Ontario Trillium Foundation (OTF) could administer funding and support focused on intermediaries and ecosystem infrastructure.
Recommendation Two: Support cohort-based investment readiness programming for SPOs through the Investment Readiness Program (IRP)
In Canada and around the world, cohort-based programming is one of the most impactful and successful means of building investment readiness for social purpose organizations. From Vancouver to Fogo Island, there are dozens of capacity-building organizations across the country that have developed outstanding programming that could be scaled and deployed in support of the federal government’s social finance and social innovation strategy. This would leverage and support ecosystem infrastructure, allow SPOs to get high quality education from leading experts and facilitate critical peer learning opportunities. These skill-building organizations are often well-connected with capital intermediaries, which could create a greater connection and pipeline for IRP programs to the Social Finance Fund strategy.
Recommendation Three: Continue to advance the Social Finance Fund to ensure initial deployment by the fall in line with sector recommendations
This recommendation represents the endorsement of the unified national proposal of the Table of Impact Investment Practitioners (TIIP) and CAP Finance to accelerate the deployment of the Social Finance Fund.
Recommendation Four: Implement the recommendations of the Social Innovation and Social Finance Strategy Co-Creation Steering Group
The fourth recommendation represents the endorsement of the recommendation of a wide range of stakeholders, particularly our colleagues and partners at CCEDNet. This comprehensive report contains 12 key recommendations that would help communities tackle their toughest social and environmental challenges through skill development, unlocking private capital, increasing market access, and regulatory changes.
Recommendation Five: Advance and prioritize an equity lens in the roll out of Canada’s social innovation and social finance strategy
Alongside sector partners, we also wish to emphasize the importance of taking an intersectional lens to the needs of the most vulnerable Canadians and note that together we can enhance gender-based and racialized equity. Our organizations also recognize the role the federal government has in accelerating nation-to-nation dialogue with First Nations, Métis, and Inuit governments to identify investment priorities for their communities as part of a strong and inclusive recovery.
Investment into the ecosystem of organizations that build capacity and skills will bolster Canada’s inclusive recovery, support economic development in communities across the country, and unlock the potential of many SPOs. This will provide a strong recovery that builds back to a better Canada that is inclusive of diverse peoples and an economy that meets Canada’s Action on Climate.
We look forward to your feedback on our recommendations. If you have any questions or if you wish to discuss these recommendations, we welcome a conversation with you to discuss this in further detail.
Best wishes for continued good health,
CEO, Centre for Social Innovation
Executive Director, Upper Canada Equity Fund
Executive Director, 10C and Harvest Impact Fund
Executive Director, Pillar Nonprofit Network
Brett Hudson Matthews
Executive Director, My Oral Village Inc.
Co-Executive Director, Tapestry Community Capital
Social Finance Specialist, Fair Finance Fund
Directeur général / General Manager, Esplanade
Lauren Goostrey, Jesse Maione, Ida Farneman, Faith Thomson, Cassie Connor
Warrior Yoga Network
Co-Founding Director, Mader Thrive Impact Fund / Scale Collaborative
President, Prince Edward County Community Foundation
Director, Business Development, B Lab
Project Manager, Fair Finance Fund
Co-founder, Kingston Social Value Fund
Principal, Lyn Brooks & Associates- dHub Group
Co-founding Partner, Renewal Funds
Director, RADIUS SFU
President, The Helderleigh Foundation
Executive Director, ZooShare Biogas Co-operative Inc.
CEO, London Community Foundation
Executive Director, Impact Bridges Group
Board Member, SVX
Founder, Anona Wellness
Co-CEO, Dragonfly Ventures
Founding and Managing Partner, PATHFINDER for Global Development Consulting
Executive Director, Cornwall & The Counties Community Futures Development Corp.
Founder, Beetree Capital
GraceWins Peer Support