Last year, in an effort to accelerate Canadian organizations’ capacity to tackle deep-rooted, complex challenges, the federal government announced the creation of a $755 million Social Finance Fund, an announcement that was met with applause from those in the social impact and innovation field.
Last week, we started to see the first steps of this funding fall into place when the government announced the funding partners slated to begin carrying out its $50 million Investment Readiness Program this fall.
To understand the purpose of the Investment Readiness Program and how it’ll work, we first need to dive into the Social Finance Fund, which aims to open up charities, nonprofits, and social enterprises to higher amounts of financing from non-government investors in order to streamline innovation. The fund will give organizations the financial means to work on their initiatives over the long term, and it’s expected to have a measurable impact in communities, with predictions that it will produce up to $2 billion in economic activity in Canada and generate up to 100,000 jobs over the next decade.
In order to ready organizations for these social finance models and funding at scale, the Investment Readiness Program will distribute $50 million in funding to key partners — including Community Foundations of Canada, the National Aboriginal Capital Corporations Association, Chantier de l’économie sociale, and the Canadian Women’s Foundation — to help organizations prepare.
Engaging Diverse Organizations Across the Country
Over the next two years, the IRP will be carried out by delivery partner organizations that will provide funding and specialized knowledge to organizations on the ground.
The program will be executed through three types of delivery partner organizations:
Readiness support partners, which will provide funds and support to diverse organizations across the country.
Expert service providers who have specialized knowledge of social impact organizations and can prepare them for the funding.
Ecosystem mobilization initiatives that will address key systems gaps by encouraging impact measurement, knowledge mobilization, and the growth of social finance intermediaries.
This process was created to accommodate the learning curve many organizations face in employing social finance. Currently, in the charitable world, organizations are accustomed to receiving permission from the Canadian Revenue Agency to act on their mission and goals, and must then follow a set of actions to execute them, says Andrew Chunilall, CEO of Community Foundations of Canada, a key readiness support partner that will leverage $22 million in funding from the program to support organizations across Canada.
Given that social purpose organizations will now be required to operate differently, they must first prepare their governance structure, board of directors, leadership, business models, and processes so that they are “robust and resilient in the new environment,” he says.
Readiness will vary across the country due to geographical and regional differences, Chunilall adds, so delivery partners will take a diverse approach to ensure they’re not offering cookie-cutter solutions.
What’s Next for the Social Finance Fund and Investment Readiness Program?
Delivery partner organizations will start making headway on implementing the IRP this fall, Chunilall says. The Social Finance Fund, on the other hand, is set to launch sometime in 2020.
In the meantime, the government has announced a call for applications to join the Social Innovation Advisory Council, which will provide advice and expertise on Canada’s social innovation and finance strategy and the growth of social purpose organizations. The council will be made up of 12 to 15 members in non-government positions. The call for applications is open from June 12 to September 2.