A special edition of the Making Waves magazine has been launched, titled "Capital for Communities". This edition explores the the central question of access to finance for community-based initiatives. Most nonprofits, social enterprises, and co-operatives identify capital as their key constraint, and when it is available, it if often not in the right form to meet the needs of these organizations. These organizations, and the respective sectors that they represent, continue to be undercapitalized related to the needs and pressures being placed on them, particularly in this economic environment.

This issue draws on perspectives from across the country in understanding and addressing the issue of access to finance. The articles range from a mapping of the financial ecosystem of the social economy, the challenges of financing social ventures, the importance of intermediaries, examples of how institutional investors can be engaged in social finance, and lessons from Quebec's experience with developing innovative social finance instruments. Collectively, these articles provide an excellent, multi-dimensional understanding of the key issues and opportunities around delivering more capital to communities.

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One of the signs that there’s more activity around social finance in the last few months is that there are more jobs available in this line of work.

Three great organizations – the MasterCard Foundation, the Community Power Fund, and the Centre for Sustainability and Social Innovation at UBC – are all hiring for a number of exciting positions.

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At the BC Centre for Social Enterprise, we interface with many community-based organizations seeking to start social enterprises. At our organization’s infancy in 2004, social enterprise was the ‘hammer’ for every ‘nail’ connected to social and environmental inequity. We were so in love with the potential of the social enterprise approach, that we failed to understand its limits. We also failed to recognize that many non-profits and charities are simply not cut out for social enterprise.

One red flag that signals to me that social enterprise is perhaps not the best fit for clients, is when they expect that the enterprise is entitled to be supported entirely by non-repayable grants. My colleague Stacey Crawford undertook some graduate level research that fully shone a spotlight on the tendency for many in the third sector to expect free money for their ventures. In my days as a business counselor for traditional enterprise, this expectation on the part of traditional self-employed folks usually prompted me to suggest that perhaps business wasn’t the best path for them.

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I am interested in social finance because it levers existing and new funds to improve society's ability to tackle social, economic and environmental challenges. Social finance is a creative response to the dominant challenge of the social sector - access to capital - a challenge that will only get worse.

Social finance is the financial architecture emerging in Canada and elsewhere to service the financial requirements of social enterprises, social purpose businesses, entrepreneurial non profits; and their granters, investors and lenders. This involves providers of capital as well as intermediary organizations who broker funds; manage risk; measure impact and results; create financial products, services and new pools of capital designed with our financial and mission interests.

PLAN the organization I co-founded 20 years ago does not accept government funding for our operation. That has led me on an exciting journey to discover new approaches to thrive financially. As a social worker it took me a long time to appreciate and learn how money works. I'm glad I did. Social finance uses existing revenue far more efficiently than I ever imagined. It also taps into new sources of capital using methods adapted from the private sector.

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