Thank you, Michael.
Mr. Chairman,
Thank you for the opportunity to offer my perspective to the standing committee. I'm very pleased to support CCEDNet, ONN, and other witnesses from the social services sector.
Mike has asked me to spend a few minutes providing successful examples of social finance and to update you on Ontario's social enterprise demonstration fund.
I anticipate that this committee is already familiar with the Canadian task force on social finance hosted at MaRS and their reports from December 2010 and December 2011. I'll merely state my broad support for their recommendations such as: dealing with mission-related investments by foundations; that the federal government, with partners including provinces, should establish the Canada impact investment fund; recommendations dealing with the establishment of a tax working group; and that social enterprise, as Mike has already stated, be made eligible for government-sponsored business development programs for small and medium enterprises.
Using Wikipedia:
Social finance is an approach to managing money which delivers a social dividend and an economic return.... Social finance includes community investing, microfinance—
such as what my organization has done for 15 years,
social impact bonds—
and we provided submissions to the Ontario Securities Commission, to HRSDC, and others.
It also deals with “sustainable business, and social enterprise lending” that we're about to become leaders in.
Social finance also includes:
Outcome-based philanthropic grantmaking and program-related investments, sometimes referred to as venture philanthropy....
My first example of social finance is the dozen or more community loan funds across Canada, including OCLF-FECO, Fonds d'emprunt communautaire d'Ottawa, which I have led since fall 2011 after I retired from the private sector. Established in 2000, OCLF has arranged almost 300 loans and almost $3 million in accessible loan capital to borrowers who cannot secure bank financing but have the character and aspiration that merits our support. With our help, our borrowers have improved their lives, reduced their dependence on social services and the public purse, are employing themselves and others, or have secured improved employment.
These social benefits and others have been measured by the Carleton Centre for Community Innovation, among others.
As a second example, OCLF received an impact investment of $57,000 in 2012 through Community Foundation Ottawa. With leveraged funding from Citizenship and Immigration Canada and the Ontario Trillium Foundation, we launched a new program called immigrant partner programs. We created new credit in Canada workshops, thus contributing to financial literacy in Ottawa. We have delivered the workshop in 13 months to over 700 immigrants. Of those surveyed, 45% have taken one or more tangible steps to improve their credit score and credit behaviour such as paying credit card bills on time, avoiding payday loans, reducing the number of credit cards, and in some cases starting to use a credit card which, when properly used, will establish a credit score to enable a bank loan in the future for an apartment or a home or a car or a business investment.
Already, 26 immigrants have taken loans from OCLF in the last year, and we forecast another 50 such loans in 2015. That $57,000 impact investment is bringing significant social benefits and more and better jobs. It is liberating immigrant talent to address skills shortages, and is improving service levels for our community while reducing the strain on social services. And all of that can be measured.
My third example is one that we're developing under the working title of social finance sustainable capital fund. We envision impact and other investments to build a capital pool of $1 million, with annual injections of $100,000 to fund operations, including occasional loan losses. We have already attracted community investment from Community Foundation of Ottawa, United Way Ottawa and others, matched by the Ontario Office for Social Enterprise, to provide services and financing to startup and early-stage social enterprise.
Due to the success of our immigrant partner programs, we forecast needing additional capital by mid-2015, which a new task force of our board is actively pursuing. One option is a community bond that would reward training partners for enhanced levels of job creation for immigrants and other marginalized residents of Canada and of Ottawa, and federal support would be most welcomed.
The other topic I was asked to speak on is the social enterprise demonstration fund, hosted by the Ontario government's office for social enterprise in the Ministry of Economic Development, Employment and Infrastructure.