Interesting to see how a Canadian identifies education as the biggest problem, not regulation in expanding community financing…
A lawyer who helped set up the first social impact bond in the country says the biggest barrier to expanding the community financing initiative in Canada is lack of knowledge, not regulatory hurdles.
Susan Manwaring, who specializes in the emerging area of social finance, says the strategy could help expand the use of social impact bonds — private investors underwriting social programs such as job skills training, in hopes of realizing a return on their investment by way of a government payment.
Not every project or program is a good candidate for a social impact bond, Manwaring said.
Nor is it easy for groups to set realistic, measurable outcomes that will define whether the program is a success and, by extension, whether investors get paid, she added.
That’s where the education aspect comes in; Manwarning wants to see it considered in the government’s overall strategy.
The federal government has been pushing its way into the nascent social finance marketplace since 2011, believing that it could reduce government costs and spur innovation in how programs are delivered.
Motoko Aizawa – Open Democracy
In 2007, the Rockefeller Foundation devised the term “impact investing”, officially inaugurating a new era in finance and development. This form of investing channel funds privately to vulnerable segments of the population in need, and it complements welfare and social protection programs by the public sector, as well as other innovations in financing development, such as community banking, microfinance, and mobile banking.
The Global Impact Investing Network (GIIN) estimates the impact investing market at USD $77.4 billion and defines impact investing as “investments made into companies, organizations, and funds with the intention to generate social and environmental impact alongside a financial return.” The intent to generate positive social or environmental impacts through investments is what differentiates this approach from ethical or responsible investment, and this type of investment now has the support of several political and religious leaders. For example, in 2014 the Social Investment Taskforce—established by the UK Presidency of the G8—published Impact Investment: The Invisible Heart of Markets. This report predicted a “paradigm shift in capital markets thinking”, from two-dimensions (risk, return) to three (risk, return, impacts).