The CSI Community Bond 2020 SDG 4
The CSI Community Bond 2020 SDG 4
The challenges facing humanity in the 21st century, such as climate change, economic disparity, social inequity, global health issues, or ecological collapse require new forms of learning that can prepare leaders to address the complex and systemic challenges facing us today. New solutions require new leadership and in order to develop leaders who are able to create new economic, social, and ecological models we need new approaches to learning. Therefore, our capacity building and education strategy aims to serve the needs and deepen the practice of social innovators, entrepreneurs, and community change makers who want to be part of the solution.
With the help of the Community Bond, The Centre for Social Innovation is dedicated to catalyzing, inspiring and supporting social innovators to turn ideas into impact and fuel movements that put people and planet first. The Social Innovation Institute, CSI’s affiliated charity, is committed to helping Canadians make lasting change in their communities by providing accessible social innovation education and training. Together we are developing an integrated learning strategy to deliver experiential and applied learning in order to build capacity in Toronto, regionally, and across Canada through SII’s emerging national network Social Innovation Canada. Our goal is to support leaders in creating domain-specific and evidenced-based impact while aligning for action to address the grand challenges of our time.
Throughout our engagement and development work thus far, there are two high leverage capacity building approaches we aim to advance moving forward with the help of your investment: 1) live and online programs, communities of practice, and knowledge exchanges that foster competencies that prepare leaders to create systems level solutions in self-directed and context relevant ways. And, 2) domain-specific practice opportunities through innovation challenges, issues specific collaborations and initiatives, and demonstration projects. The best practices and learning that comes out of both of these approaches will then be featured as knowledge products disseminated across the national network, fostering impact oriented shared learning. Furthermore, we recognize that the field of Canadian social innovation needs to become more inclusive and diverse, while also remaining broadly accessible to institutional innovators. To grow capacity and broaden the spectrum of practitioners and providers in the field, we seek to engage and activate in and with diverse communities across Canada. Our work will include meaningfully engaging underserved communities, prioritizing the engagement of BIPOC communities and practitioners, while also building relationships with business, government, and multi-stakeholder groups.
Innovators, entrepreneurs, and change agents have asked for more accessible, more distributed, and more practical resources for learning and impact that reflect diverse voices, are open sources and decentralized, and build the field of social innovation and systems change. The Social Innovation curriculum project has been co-created with practitioners across Canada using participatory, iterative, and crowdsourcing approaches to identify best practices and experiential resources to help practitioners accelerate their work and learning. Moving forward, our work will focus on integrating curriculum and capacity building across our programs. We plan to feature the great work of CSI members, as well as movement makers from across Canada and around the world.
There are high leverage capacity building approaches that we can deploy with the help of new
- Live and online programs, communities of practice, and knowledge exchanges. These will foster
competencies and prepare leaders to create relevant, systems level solutions.
- Domain-specific practice opportunities through innovation challenges, collaborations and
demonstration projects. The best practices and learning that emerges will then be disseminated
across the national network.
- Diverse community engagement, including underserved communities. This means prioritizing the
engagement of BIPOC communities and practitioners, while also building relationships with
business, government, and multi-stakeholder groups.
What else will the 2020 CSI Community Bond do?
Go back to the overview here.
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Frequently Asked Questions
I’m new to impact investing, what is a Community Bond?
Our friends at Tapestry have a great description:
Community Bonds are a proven social finance tool, used by not-for-profits and co-operatives, that generate both a social and financial return. This tool allows an established organization to leverage their community of supporters to help finance the purchase of a fixed-asset, like a new space or major equipment.
Community Bonds are:
- Issued exclusively by non-profits, charities and co-operatives
- Issued in the name of the local organization
- An interest-bearing loan which must be repaid with interest
How does a Community Bond work?
Some things are different from bond to bond, but what usually happens is this:
- An organization, like CSI, identifies a large capital need that would be best financed over several years rather than paid out all at once from cash flow.
- The organization will then create a Community Bond; essentially a loan agreement that specifies the amount of money they are seeking from their community, a term (how long they would like to borrow it for) and an interest rate (the amount of money the organization will pay the investors in order to borrow the money).
- A community investor will then provide the organization with funds, and receive a bond certificate detailing the agreement in exchange. This certificate entitles the bond holder to a return of their money at the end of the term, as well as interest. Interest can be paid monthly, annually, or all at once at the end of the term, depending on the bond offer.
- At the end of the term, the community investor either receives their investment back from the organization, or the organization can offer the investor a new bond which the investor can either accept, and reinvest in, or refuse.
What is the difference between a Community Bond and a donation?
In essence, a donation is a gift: something you give away and don’t expect to get back.
A Community Bond is an investment. It is a 100% repayable loan, which earns interest, that you lend to a non-profit organization so they can create impact. But unlike a donation, at the end of your term you get your money back.
Is a Community Bond a safe investment?
Safe, in investment terms, is a relative concept. On one side of the spectrum the value stored in a Canadian $20 bill is only as safe as the existence of Canada, which most people consider to be pretty safe. But of course, because of inflation, paper money actually shrinks in buying power every year. Paper money also doesn’t accomplish much of anything sitting in your wallet.
After that, you’d probably count federally insured deposits at Canadian banks as pretty safe, and because they’re so safe banks pay very little interest on money they hold for you; often less than inflation too. And, they can use your money to invest in all kinds of things you don’t know about.
Community Bonds are all different, so it’s not possible to describe their general safety in an FAQ, but CSI Community Bonds have a few things going for them: they have a long track record, they’re secured to real estate with lots of equity, and they make a BIG social impact, providing essential infrastructure and services to thousands of social innovators.
Who invests in Community Bonds?
By the numbers: people. Most of our bonds are held by CSI members, staff, volunteers, neighbourhood supporters, and board directors. Community Bonds are primarily a way for our existing community to buy-in and be part of the solution.
That said: CSI Bonds, especially now that they have been proven and replicated all over the word, are in demand by all kinds of community investors. From supportive foundations seeking a safe haven that does no harm, to local impact investors seeking a dual return, the CSI Community Bond has become the impact investment to beat.
Are Community Bonds regulated by the government?
The short answer is no: Community Bonds are exempt market, and can only be issued by non-profits and charities, which face a myriad of other financial regulations private corporations do not, including annual third-party financial audits.
But here’s part of the innovation: the Community Bond is structured to meet or exceed all of the standards and regulations that govern provincially regulated co-op bonds. In practice, that means the Community Bond has opted-in to the standards mandated by regulation to play on the same field as other investments.
Are Community Bonds RRSP eligible?
Legally YES! Practically…maybe.
Here’s the deal: CSI Community Bonds are mortgage backed, and mortgaged backed investments can be legally held in RRSPs. So step one check.
Step two is more complicated. If you take your CSI Community Bond into your local bank branch and try to deposit it, you will likely be met with a blank stare. They’re not used to people trying to deposit paper securities anymore, especially ones issued by a local non-profit. Step two is just getting them to listen to you.
Step three, and this happens after you’ve directed them to this great MaRS paper on Community Bonds, so they now can wrap their heads around what a Community Bond is, is convincing them they have a reason to hold a Community Bond for you. Unlike their own mutual funds, or exchange traded securities, banks cannot earn a commision on Community Bonds, and therefore aren’t generally interested in pursuing ways to accept them. In our experience, exceptions are made for wealthy investors as a customer service concession, and not many others.
But all is not lost. As Community Bonds rise in popularity, we’re seeing more and more interest from banks and other financial institutions in them as a way to meet their social goals. And look, just 10 years ago these things were just a glimmer in a small, local, non-profit’s eye. The story of the Community Bond has just begun…