Good afternoon, ladies and gentlemen.
On behalf of United Way Ottawa, I am delighted to contribute to your discussion on the role social finance plays in Canada.
As we view it, social finance is about drawing in new participants and new sources of capital and creating positive and meaningful change in our communities. We appreciate that there is much to be done to seed this ground and to create an enabling legislative environment.
United Way Ottawa is also considering the role that social finance may have, as are many others of our colleagues across North America, and for very good reasons. Traditional ways in which we have been funding social issues are experiencing tremendous transformation. Many factors will continue to pressure government funding in the area of social service spending.
Another dynamic at play is the significant shift presently reshaping philanthropy. Donors are becoming less and less motivated to give based on the notions of charity and duty. Increasingly, they want to know what impact their contributions make, and we believe that’s a good thing.
All those elements bring us to the painful realization that investors in the social services sector can no longer tighten their belts and wait for better times.
We are all under increasing scrutiny to report back to our stakeholders on the results of our funding directions and decisions. The reality we have not yet faced is that the system we have collectively built to deliver social services in this country was designed for a time that has long since passed.
The juxtaposition of these two dynamics makes it challenging for all of us to collectively do differently with the resources entrusted to us. We therefore have a responsibility to invest in the evolution of the social service sector so that it may be responsive to changing needs, capable of measuring results, and accountable to donors and funders.
Given those dynamics, we are all wondering—at United Way Ottawa, and more particularly across the entire movement—how we can continue to finance our communities and effect change in them. How can we exercise leadership while helping our sector prosper?
I will confess that we are not yet sure if social finance is “the” answer. We appreciate that it is early days and risk is inherent. At the same time, United Way Ottawa has committed itself to exploring its potential. Here's why.
First, we see social finance in its broadest expression attracting new sources of capital that our sector will need. When we hear the projections of RBC and others in terms of the appetite for this kind of investment, it would be a mistake to leave the money on the table only for it to go elsewhere in time.
We certainly view private capital investment as an opportunity for new conversations with our long-time donors, many of whom we already speak to in investment terms. The potential to attract new stakeholders to our work is there as well and will require greater engagement of all sectors. Social finance vehicles, such as social enterprise investing and some of the most basic elements of social impact bonds, are areas where we have already begun experimenting, with strong results that are appealing. This brings me to my next point.
I believe you’ve heard from a number of previous witnesses—I believe you've had 48 meetings—that the social service sector in particular is struggling to be investment ready, which puts us at a distinct disadvantage in this new world. I would not presume to say that it is easier to demonstrate results in the areas of environment or health, where social finance vehicles are being similarly explored, but I do believe it is safe to say there is a far stronger foundation of evidence-based practices within these sectors.
The social service sector is only recently arriving at this place, due in part to the fact that funders have only lately been investing in it as part of our financial contribution. Ask anyone in the fields of health or environmental sustainability, and you will hear that research, evaluation, and measurement are part and parcel of the investment cost. When United Way Ottawa adopted an impact mission almost 15 years ago, I am not sure we appreciated what it would take to help our sector consistently and effectively measure the outcomes of our collective work.
Few measurement tools were available, and they were certainly not well understood, utilized, or applied consistently. It was possible to tell you how many people were in any one program, how many were on a waiting list, but we found ourselves very hard pressed to know whether those programs were contributing to the social outcomes that we were looking for.
Over the last few years, our capacity to roll up program reports is allowing us to begin providing community-level results. The measurement field is only now emerging for the social service sector. We believe exploring social finance tools will provide yet another framework and impetus to hasten this evolution toward impact measurement.
Lastly, social finance pushes at the boundaries of our traditional silo approach to social change. It has been demonstrated time and time again that very few complex social issues will be solved by any one sector alone. Our work frequently calls upon us to engage the strengths, assets, and perspectives of government, business, and community. We make the greatest progress when we are aligned. We also believe social finance will bring new partners to the sector.
In closing, I leave you with three thoughts.
One, philanthropy and government funding will not be enough for us to meet the social challenges facing us. We need to widen the pool of resources and sharpen the responsibility for achieving better results. Social finance may not be perfect, but it is a path worth serious examination.
Two, the social service delivery system we currently work within was built for another time, and it is unsustainable. It is a system we built. Now, as funders, we must help to reshape it in a responsible and sustainable fashion.
Finally, while it is very likely that the social finance instruments we are looking at today may evolve over the next decade, they will evolve only by practice and testing. The learning we can derive is greatly needed.
In each of these three instances, we will do our part, but we will need government to do its part as well.
Thank you for your attention. I would now gladly answer any questions.