Canada is taking another leap forward in its mission to build a robust social finance marketplace.
Volans was pleased to act as a research partner on the recently launched report ‘Mobilizing Private Capital for Public Good’. This document introduces The Task Force on Social Finance chaired by Ilse Treurnicht, with members including Canada’s Former Prime Minster and Minister of Finance Rt. Hon. Paul Martin, and sets out seven key recommendations for the country in mobilizing private capital to generate economic, social and environmental value.
The process of designing and developing this Task Force was modeled on the pioneering efforts of Sir Ronald Cohen’s Task Force on Social Investment in the UK.
For more information and to download the full report, please visit www.socialfinance.ca
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The Canadian Task Force on Social Finance’s recommendations are:
Recommendation #1
To maximize their impact in fulfilling their mission, Canada’s public and private foundations should invest at least 10% of their capital in mission-related investments (MRI) by 2020 and report annually to the public on their activity.
Recommendation #2
To mobilize new capital for impact investing in Canada, the federal government should partner with private, institutional and philanthropic investors to establish the Canada Impact Investment Fund. This fund would support existing regional funds to reach scale and catalyze the formation of new funds. Provincial governments should also create Impact Investment Funds where these do not currently exist.
Recommendation #3
To channel private capital into effective social and environmental interventions, investors, inter- mediaries, social enterprises and policy makers should work together to develop new bond and bond-like instruments. This could require regulatory change to allow the issuing of certain new instruments and government incentives to kick-start the flow of private capital.
Recommendation #4
To explore the opportunity of mobilizing the assets of pension funds in support of impact investing, Canada’s federal and provincial governments are encouraged to mandate pension funds to disclose responsible investing practices, clarify fiduciary duty in this respect and provide incentives to mitigate perceived investment risk.
Recommendation #5
To ensure charities and non-profits are positioned to undertake revenue generating activities in support of their missions, regulators and policy makers need to modernize their frameworks. Policy makers should also explore the need for new hybrid corporate forms for social enterprises.
Recommendation #6
To encourage private investors to provide lower-cost and patient capital that social enterprises need to maximize their social and environmental impact, a Tax Working Group should be established. This federal-provincial, private-public Working Group should develop and adapt proven tax-incentive models, including the three identified by this Task Force. This initiative should be accomplished for inclusion in 2012 federal and provincial budgets.
Recommendation #7
To strengthen the business capabilities of charities, non-profits and other forms of social enterprises, the eligibility criteria of government sponsored business development programs targeting small and medium enterprises should be expanded to explicitly include the range of social enterprises.
