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InformOntario : U nderstanding Social Enterprise for Your Organization June 20, 2014

InformOntario : U nderstanding Social Enterprise for Your Organization June 20, 2014. PRESENTED BY Sean Geobey PhD Candidate, Research Manager. Social Enterprise. Awareness Practice Concerns. General Investments. Production. Consumption. +. Returns. Savings. For-profit Investments.

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InformOntario : U nderstanding Social Enterprise for Your Organization June 20, 2014

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  1. InformOntario:Understanding Social Enterprise for Your OrganizationJune 20, 2014 PRESENTED BY Sean Geobey PhD Candidate, Research Manager

  2. Social Enterprise • Awareness • Practice • Concerns

  3. General Investments Production Consumption + Returns Savings

  4. For-profit Investments Production Investment + Return on Investment

  5. Social Investments Production Social Investment + Impact

  6. Financing and Investment Investments in real productivity-enhancing capital • Retained earnings • Direct sales • Third-party sales • Debt • Equity • Grants/Donations

  7. Retained Earnings: Direct Sales • Selling goods and services • Beneficiary pays • Savings used to invest • Slow expansion

  8. Retained Earnings: Third-Party Sales • Beneficiary does not pay • Government, foundation, etc. • Pay-for-performance contracts • Risk of non-performance • Verification • Measurement • Legal restrictions

  9. Debt • Loans repaid with interest • Risk of default • Credit: • Character, capacity, capital, collateral, conditions • “Don’t foreclose on God”

  10. Equity • Purchase of ownership • Risk of bankruptcy • Exit strategies • Legal restrictions • Co-op • Nonprofit

  11. Grants • No repayment required • Crowd-out with debt • Risk of non-performance • Reputation • Third-party sales?

  12. Legal forms • Why does legal form matter? • Formalize stakeholder relationships • Restrict action • For-profit • Corporation (public/private) • Sole proprietorship, partnership • Co-operative • Consumer, worker, other producer, multi-stakeholder • Non-profit • Charitable • Subset of non-profit • Social enterprise?

  13. Access to Capital

  14. Questions? Sean Geobey PhD Candidate, Environment and Resource Studies Research Manager SiG@Waterloo sgeobey@uwaterloo.ca

  15. What is Social Finance? • Finance with a social and/or environmental return +

  16. Social Finance • [Investments] made into companies, organizations and funds with the intention to generate measurable social and environmental impact alongside a financial return (Global Impact Investment Network 2012) • $4.5 billion in Canada (Bragg 2010) • Comparison: • Canadian assets under management is approximately $3 trillion (source Mobilizing Private Capital for Public Good 2010) • Total credit union / caissespopulaires assets $304 billion (Credit Union Central 2011; Desjardins 2010) • Donations to charity total $10.6 billion (Turcotte 2012)

  17. Microfinance • Small loans • 2006 Nobel Peace Prize • MuhammedYunus & Grameen Bank • Supports self-employment activities • Profitable in developing world • Coupled with other assistance in Canada

  18. Example: PARO Centre For Women’s Enterprise • Northern Ontario • Up to $5,000 loans • Multistage microfinance projects • Business coaching and mentorship • Two uses: • As recipient • As funder

  19. Community Bonds • Debt funding to organization • Can be asset-backed • Price accessible to community • Market or below-market interest • Issued by bank or credit union

  20. Example: Centre for Social Innovation • Centre for Social Innovation (Toronto) • Funding new building • CSI had a city-backed loan guarantee

  21. Social Impact Bonds • Not a bond • Government pay-for-performance • Private financing • Handoff from philanthropy to public funding • Focus on scaling proven interventions • “Bet” between finance and government

  22. Example: Peterborough (UK) • 2010 UK pilot – Peterborough Prison recidivism • Case management oriented • If reoffending drops 7.5% then payout is 7.5% • If more can increase up to 13.5% • If 7.5% not achieved, no payout • SIB is not finished yet

  23. Crowdsourcing • Raising small amount from many people online • Five models • Donation • Reward or perk • Pre-purchase • Peer-to-peer lending • Equity investment • Regulatory status is challenge

  24. Example: Pebble Watch • Customizable wristwatch • Electronic watch faces • University of Waterloo / Palo Alto, CA • $100,000 goal • $10,266,845 raised • Pledges of $99+ will receive a Pebble watch • Largest Kickstarter campaign to date

  25. Questions? Sean Geobey PhD Candidate, Environment and Resource Studies McConnell Fellow SiG@Waterloo sgeobey@uwaterloo.ca

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