Canada’s opportunity: Mobilizing private capital for public good

Today marks the launch of a seminal report entitled, Mobilizing Private Capital for Public Good from the Canadian Task Force on Social Finance. The report calls on institutional investors, corporations, philanthropists, foundations and governments to work together to build a robust impact investing marketplace in Canada.

The Task Force, which was conceived by the national partnership Social Innovation Generation (SiG) and builds on two years of background work, is comprised of social finance pioneers and leaders from business, finance as well as the community sector across Canada.

Members of the Task Force include:

• Me, Ilse Treurnicht – Task Force Chair, CEO of MaRS Discovery District
• Tim Brodhead, President and CEO of J.W. McConnell Family Foundation
• Sam Duboc, Chairman of Pathways to Education Canada and Founder of Edgestone Capital Partners
• Stanley Hartt, Chairman of Macquarie Capital Markets Canada
• Tim Jackson, CEO of Accelerator Centre and Partner in Tech Capital
• Paul Martin, Former Prime Minister and Minister of Finance, and founder of the Cape Fund
• Nancy Neamtan, President and ED of the Chantier de l’économie sociale
• Reeta Roy, President and CEO of The MasterCard Foundation
• Tamara Vrooman, CEO of Vancity Credit Union
• Bill Young, President of Social Capital Partners

The Task Force set out to identify and document national and international best practices and relevant experiences in social finance, which then formed the foundation for a suite of evidence based, catalytic recommendations that will forge a new partnership between the public, private and community sectors.

The report sets out seven key actions that Canada needs to undertake, in parallel, to mobilize new sources of capital, develop an enabling tax and regulatory environment and provide social entrepreneurs with the needed business support to launch, operate and scale their innovative ideas.

The report recommendations include:

• Strong encouragement of Canadian public and private foundations to invest at least 10% of their capital (totalling $34 billion) in mission-related investments (MRI) by 2020, potentially unlocking $3.4 billion for social enterprise
• Establishment of a federal partnership with private, institutional and philanthropic investors to create the Canada Impact Investment Fund that will support existing and new regional funds using a range of instruments (debt, equity, quasi-equity)
• Increasing the engagement of Canadian pension funds in impact investing through clarification of fiduciary duty and annual disclosure of impact investing allocations

The work of the Task Force is raising awareness of the tremendous momentum building globally in this arena of “blended value” investing. There is growing recognition, both here and abroad, that we need to rethink the binary model in which businesses focus on generating profits (making money), while charities, non-profits and governments are responsible for delivering social services (doing good).

Governments are cash constrained and will be for some years to come. At the same time, we are facing escalating challenges in our communities and as custodians of the environment. These challenges demand a new approach – one in which our investments deliver more than financial returns, precisely because we select these investments thoughtfully and deliberately to also make a positive contribution to society or to the health of our planet.

Mobilizing Private Capital for Public Good reflects the input of many leading practitioners and experts from across Canada and around the world. Over the past few months, our work has been met with keen interest and enthusiasm from all the relevant players – from governments across the country, to investors of all types and social enterprises hungry to make a bigger difference.

However, the launch of this report is only the first stop on a much longer journey. We hope that it will not only inform our national conversation about the way we invest in our collective future, but will also galvanize collective action to build that future.