Canada is making waves around the world with the recent Government of Canada’s $755 million over 10-years announcement of a Social Finance Fund. It’s a huge win for Canada’s ecosystem that has largely remained under the radar — but how do you keep the fund relevant in a fast-changing finance industry?
The Social Innovation and Social Finance Strategy Co-creation Steering Group set up by the Government of Canada, comprising 16 leaders, recently delivered its recommendations.
One of them is the establishment of a Social Finance Fund “to accelerate the development of social finance ecosystems across Canada.” The idea being investments from the fund into intermediaries, “would result in improved access to capital for social purpose organizations working to address persistent social or environmental challenges.”
It’s a hugely positive signal that has implications for support organizations across Canada.
What We See
While investments into community loan funds, credit unions, community foundations, chartered banks, or private equity funds might seem like obvious choices, there have also been approximately nine million crowdfunding campaigns globally in 2018 alone, up 35 percent from 2017, lending, payment, and cryptocurrency fintech companies have seen the most growth in Canada in the last 12 months, artificial intelligence research in Canada has seen more than $300 million in funding, and more than $260 million was raised by Canadian AI startups last year.
What are the possibilities with social finance? Together, they have the potential to radically enhance well-being, down to the last mile, but only if we intentionally align and engage.
Blind Spots to Overcome
It’s not surprising that a number of leaders in the ecosystem have been waiting for something like this from the federal government.
Many leaders indicate that this was almost a decade in the making, pointing to the first-of-its-kind Mobilizing Private Capital for Public Good report by the Canadian Social Finance Task Force in 2010.
That was eight years ago, before crowdfunding went mainstream, before fintech and cryptocurrency garnered traction, and before IBM’s Watson beat Ken Jenningsand Brad Rutter at Jeopardy. The future cannot be a blind spot. If the fund must yield positive results 10 years from now, then we must engage with what’s emerging today.
What to Watch
The Government of Canada has two choices: Engage with social finance actors that self-identify as such and they typically engage with, or in addition, make a worthwhile leap to engage emerging finance actors. This includes networks like the National Crowdfunding and Fintech Association of Canada, research centres like Element AI, Vector Institute, and Amii, local currency projects, and corporate venturing arms of high-growth companies in disruptive industries.