What is social finance? Why should charities and nonprofits pay attention to it?
Social finance is an investment that delivers a measurable social, cultural, and/or environmental impact as well as a financial return for the investor(s).
The funding landscape for the sector is becoming more precarious while demand for the services of these organizations grow. In the context of an increasingly precarious funding environment, social finance emerges as a source of capital that could allow charities to diversify their revenue and become more resilient.
Given this potential, an important question remains – are charities ready for social finance?
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Read the report to find out about:
- Charities' level of awareness of social finance and opinions about social finance;
- Charities' likelihood to take a social finance loan;
- How they would use a social finance loan and what barriers they might face if seeking a social finance loan;
- Organizational capacity in key social finance-related domains; and,
- Current financing needs
Why it matters
There is growing interest from policymakers in social finance as a tool to scale up socially-innovative solutions to complex and persistent social and environmental problems. The Government of Canada has also introduced an $50 million, two-year Investment Readiness Program (IRP) to help build the capacity of charities, nonprofits, cooperatives and for-profit social enterprises to take on investment, thereby supporting the development of a pipeline of investable organizations that are ready for Social Finance Fund and other social finance opportunities in Canada.
About this report
The report presents the results of a national survey undertaken to assess charities’ ability to successfully obtain and repay social finance investments – i.e., their investment readiness. Survey invitations were sent to 5,192 charities from across Canada. The results are based on 1,018 complete responses.
This project was made possible thanks to funding from the Government of Canada’s Investment Readiness Program.
The opinions and interpretations in this publication are those of the author and do not necessarily reflect those of the Government of Canada.