Here's who received $2.5 million in McConnell Foundation's inaugural social finance accelerator
Why It Matters
Innovative financing programs are working to meet the growing demand for capital in Canadian social impact organizations. Releasing an initial commitment of $2.5 million, the McConnell Foundation is placing funds in the hands of some of the most innovative and entrepreneurial social finance leaders.
The McConnell Foundation is giving $2.5 million to a cohort of 9 social finance leaders in Canada. The foundation – which supports innovative solutions to socio-cultural, economic, and environmental challenges through investments and grants – has identified a need for increased funding in the growing field of social finance.
The foundation’s new Solutions Finance Accelerator looks to unlock the enormous potential of the social finance marketplace. Recipients are social finance organizations funding a variety of causes, including sustainable food systems, Indigenous enterprise, and other impact-driven businesses.
The accelerator is helping to fill a gap in social finance. “As people innovate, it becomes harder for them to access capital because the parameters for loans from conventional financial institutions just haven’t changed as rapidly,” explains Sally Miller, Project Manager for the Fair Finance Fund, a non-profit providing loans and mentorship for Ontario food and farm enterprises. “Co-ops, which are twice as likely to succeed to their 10th birthday, are not well understood, in the conventional finance world,” Miller says. “And one of the first things you’re asked in social financing is who the owner is, and the owner in a co-op is thousands of people.” For the Fair Finance Fund and the food systems workers they partner with, bypassing some of the outdated and unfit restrictions allows for capital to reach those who need it most critically.
“As people innovate, it becomes harder for them to access capital because the parameters for loans from conventional financial institutions just haven’t changed as rapidly.”
Lana Selbee, Executive Director of the Yukonstruct Society, is excited to bring new tools like social finance to her community. The non-profit society, which fosters innovative business and community in the Yukon, recognizes the need for more funding opportunities for businesses in northern Canada. And local investors want in, too: ”Individuals and local companies also want to leverage their assets to help the local economy” says Selbee. The Yukonstruct Society’s accelerator program, the Northern Impact Investment Fund, works with universities and other social finance intermediaries to provide a range of financial solutions for the Yukon’s Indigenous entrepreneurs and tech companies.
Yukonstruct is exemplary of the kind of unique solutions still needed in Canada where rural areas are often underserved by more mainstream investment circles. “Investors want their money in their own communities and benefits,” explains Brian Smith, CEO of Rhiza Capital. Programs like the Solutions Finance Accelerator help to decentralize that otherwise might be centred around mostly urban needs. “There are social entrepreneurs everywhere and they don’t need to migrate to do the good work,” says Smith.
However, the field of social finance is still not well-understood by many Canadians and Canadian organizations. Garth Davis, Managing Director at New Market Funds, says there’s a learning curve that may accompany new models of financing as many non-profit organizations are unfamiliar with and hesitant to use new tools, such as loan agreements.
For the participants, being part of the cohort offers more than just financial support – a cornerstone of the accelerator is also bringing together a community of peers and experienced leaders in the field of social finance. Mentors for the program include experts in a range of related fields, such as investment banking, real estate, and climate change. “We’re starting from scratch – and now we can tap into this incredible network,” says Selbee. “It just makes all the difference, for us to recreate this [network of peers] on our own, we feel like that would be an insurmountable challenge, but now with the right support, it’s going to be a lot more doable.”
With the first cohort meeting taking place in March of 2020, and more planned over the next 18 months, knowledge-sharing between the broad range of peers is an invaluable asset as these funds begin to take shape. Moreover, programs like the Solutions Finance Accelerator signal a more responsive and dynamic field of funding opportunities – catching up to the ambitious and tenacious work being done by Canadian social enterprises and non-profits.
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