Transmuting mistakes: how funders pivoted towards reconciliation after a social impact bond went wrong

Janine Manning believes there’s “no mistake so big that you can’t undo it or repair relations.”

Two years ago, the former chair of the Laidlaw Foundation and other changemakers tested that philosophy after a social impact bond aimed at keeping Indigenous youth out of correctional facilities was awarded to Winnipeg-based Marymound Inc., a non-Indigenous organization with historic ties to the Catholic Church.

Nine investors, including Laidlaw, the Reseau Compassion Network, the Northpine Foundation, the Congregation of the Sisters of St. Joseph in Canada, the Bealight Foundation and the Loretto Sisters backed the venture, but when the province’s Progressive Conservative government announced the program in late 2022, Indigenous leaders said they were “hurt and “blindsided.”

In response, the Winnipeg Indigenous Executive Circle (WIEC)—representing 32 Indigenous organizations—invited investors to Winnipeg to hear their concerns and speak with them directly.

All nine organizations accepted the invitation.

“I think it was an eye-opening experience for the funders,” said Circle CEO Dawn Olivence. 

The gathering, which was held at Thunderbird House and began with ceremony, ultimately led to two major developments: WIEC would join Marymound’s advisory circle, and program delivery would be subcontracted to Manitoba Keewatinowi Okimakanak or MKO, an Indigenous organization representing 26 First Nations.

“It took a little while to get there, and there were some really tough conversations that were had, but all in all, I thought it did end in a very positive way,” Olivence said.

Today, the program operates in Winnipeg and Thompson as Kakiskinawtahitonan, translating to “We will show you the way” in Anishinaabemowin.

“It was a very insightful, emotional experience that really allowed investors to see where the concern was,” said Manning, who now leads the Indigenous Peoples Resilience Fund’s executive team.

“We also learned a lot about the (impact bond) process,” she said.

Jehad Aliweiwi, executive director of the Laidlaw Foundation, said information received during the Winnipeg gathering led to policy changes that better define investment criteria with reconciliation in mind.

While the organization had extensive due diligence procedures, he said the Winnipeg meeting revealed “oversights” that created barriers for Indigenous organizations seeking funding.

“The generosity of the community was amazing,” he said. “And we learned important lessons and then put in place a process that fixes the oversights.”

Part of that fix includes addressing systemic, historic and deeply-rooted issues affecting Indigenous communities in its granting strategies, he said. 

Not only do Indigenous-led organizations face disproportionate needs in the communities they serve, but they also face systemic underfunding. A 2019 study found that Indigenous-led charities and non-profits receive about $1 for every $178 non-Indigenous organizations receive. 

It was also illegal for any individual or organization to donate money to Indigenous people in Canada between 1884 and 1951. The first Indigenous Foundation was only established in 1979. 

At the time the youth justice program was announced, Indigenous leaders stressed that systemic barriers often prevent Indigenous-led organizations from accessing “out-of-the-box” funding solutions.

“What you may not be aware of are the extreme challenges for Indigenous-led non-profit organizations to constantly and unfairly and inequitably compete with non-Indigenous organizations,” read a letter WIEC sent to funders following the province’s initial decision to award the contract to Marymound. 

“These actions only continue to perpetuate colonization of Indigenous people in Canada.”

It went on to say that, going forward, Indigenous-led organizations must lead the healing, growth and development of Indigenous youth.

Request for proposals

Marymound, which serves children and families through a wide range of initiatives, including educational programs, skills development, crisis stabilization, addictions treatment, maternal health and mental health services, developed the youth justice program in response to a request for proposals from the Manitoba government.

Shortcomings of that government process were later discussed during meetings between Marymound and WIEC.

The province said the program was intended to “provide culturally safe and supportive programming to help reduce the disproportionate number of Indigenous youth in custody and on probation.”

The bond’s return on investment is based on reducing the number of days in custody for a minimum of 45 Indigenous youth. If outcomes are met or exceeded, the provider receives $2.25 million from the Manitoba government.

However, Manitoba didn’t involve Indigenous organizations in the development process.

Kendall Joiner, co-chair of the Executive Circle and chief executive pathfinder of the Native Clan Organization, said his personal view is that social impact bonds like this one risk privatizing aspects of the justice system.

“In Canada, we don’t currently have private institutions, incarceration facilities, things along those lines,” he said. “But essentintally, a (social impact bond) is introducing that concept, where you can make profit off a gap in government services or from a social need.”

The government would be more effective in providing core funding to Indigenous organizations and allowing them to evaluate success using their own metrics, such as healthy living and re-entry into the community, he said.

“I think once everyone talked about the model in an open and honest way, there was not anyone on the Indigenous side of the house, or even on foundational teams, that agreed with it,” Joiner said.

Manitoba’s then premier Heather Stefanson and two cabinet ministers were invited to the Thunderbird House gathering, but did not attend. However, the province’s current NDP government appear to have moved away from the social impact bond model since being elected in 2023.

Marymound’s executive director, Nancy Parker, said meetings with WIEC included discussions about the government process that led to the proposal and the appropriateness of social impact bonds for justice programming.

“The feeling is these kinds of programs should just be government-funded; they shouldn’t be through the whole social impact bond framework,” she said.

While Marymound had worked with Indigenous advisors and elders to create the program presented to and approved by the Manitoba government, circle members asked them to step back and make room for an Indigenous-led provider.

“So that’s exactly what we did,” Parker said. “We listened really deeply. We had a lot of circles. We had further meetings.”

Many of those meetings were with the provincial government, determining the latitude of subcontracting the program. Once it became clear they could subcontract, Parker said Marymound began working with Indigenous governing bodies to find an organization that could deliver the program.

“We were really excited when MKO came on,” she said. “They were the right fit for this program.”

However, getting there took a lot of introspection. Parker said some difficult conversations and assumptions needed to be challenged along the way.

“We need to really just step back and lift up and empower Indigenous organizations to work with Indigenous populations,” she said, adding the process has shown how effective collaboration can be.

Bonds present learning curve

Impact investing is an emerging field, Aliweiwi said, adding more layers involved in investing than traditional grants, making it harder for funders to connect with communities that are supposed to be beneficiaries.

The foundation is now using this experience as a case study to help inform its future impacting investing.

“(Indigenous leaders) showed us how this was a harmful decision and provided us with a solution, which I think is probably the most profound, gentle and impactful learning experience and process one could have,” Aliweiwi said. 

He’d like to see other funders learn from their experience rather than be deterred by it.

“Funders and investors have to listen to the voices of the community … and demonstrate the ability to grow, which I think is what we did in Manitoba,” he said.

Joiner would have liked to have seen more transparency about how the program was transferred to MKO but was pleased that, ultimately, an Indigenous-Led organization took over service delivery.

“The Circle and Marymound came to a good closure spot … everyone kind of left in a good way,” he said.

It’s important that funders, investment advisors, and communities have a shared understanding of Indigenous-led investments before deciding where to invest, Manning said.

“What our investment managers might have thought as Indigenous-led was not how we would’ve thought of as Indigenous-led,” she said. 

“It’s not just Indigenous employees, but it’s Indigenous centred, it’s Indigenous informed and Indigenous-led.”

Manning said she’s noticed a hesitancy around reconciliation and social impact investing, adding that people and institutions sometimes fail to act because they fear getting things wrong.

“My advice is to just take the leap of faith and know what? You’ll be guided along your journey,” she said.