As a consultant to the non-profit sector in Toronto, I have seen an increasing number of financial challenges faced by non-profit organizations over the past year.  I believe these challenges will encourage more organizations to rethink their financing models and encourage them to look for new options. 

Now is the time for the social finance movement to put forth its value proposition to established sector leaders and some of the largest and most influential nonprofits in Canada - the YMCAs, Community Living organizations, United Ways, as well as community foundations and government funders.  Many of these organizations are not as involved in the dialogue on future of innovative financing models as they could be.

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Microphilathropy is an approach to philanthropy based on smaller, more direct interaction between those who are in need and those who can give. Platforms such as Kiva, DonorsChoose and Facebook Causes have the ability to aggregate thousands of relatively small donations to make a big difference.

I had the honour of presenting at Social Venture Partners Toronto's panel discussion on, "How Microphilanthropy Is Changing Giving".

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This white paper was prepared by MaRS and Ogilvy Renault LLP with the primary objective to increase capital directed at the community for delivering social and/or environmental benefits and two secondary objectives, to simplify and clarify the legal structures and permitted activities by creating a new form of legal vehicle and to provide a brand for social enterprise, social finance and community benefit, thus providing legitimacy and enhanced profile for such activities.

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For many of you who read this blog, the Social Capital Partners story will be familiar to you. On Wednesday, I had the opportunity to hear Bill Young speak, and once again I was inspired, and I thought - this is a story worth repeating.

Bill Young came into a lot of money at the time of the technology stock frenzy, and he used it to found Social Capital Partners in 2001. He wanted to figure out the answer to the question “is there a way to harness market forces to do social good?”

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Matthew Bishop and Michael Green have recently written an excellent article for the Innovations Journal titled "The Capital Curve for a Better World". The article is part of a volume prepared for the Tech4Society hosted in Hyderabad, India and offers compelling insights on social entrepreneurship and technology from leaders in the field (view the table of contents or full publication). Bishop and Green are also the authors of the recently-penned Philanthrocapitalist Manifesto, which proposes a number of 'radical' policy changes for the UK.

I recommend reading the entire article, as it spans important issues and opportunities around financing social innovation. There are several examples that illustrate the essential building blocks of a social capital market, and how they have - or can - be implemented successfully. A key theme is linking finance to the right kind of organization structure at the right time - and that this requires a more sophisticated understanding of social impact and metrics. On a related note, intermediary organizations can and should play a vital role in connecting demand and supply for social investment, but there is more work needed to build the right incentives and funding to establish and sustain these intermediaries.

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