1. Impact Investment: A New Asset Class?
That's what JP Morgan calls it
Social Finance, Impact Investment, and
Finance for Social Enterprise
A Conversation
Hub Lunch @ Islington
24 May 2011

2. Vancity Community Capital (“VCC”)
● Born out of a division of Vancity, Canada's largest credit union,
provides growth capital to high impact enterprises
● Vancity's objectives explicitly include improving community well-being,
supporting high social and environmental impact businesses, and
redefining wealth – has over Cdn$15 billion of assets under management
● VCC manages a portfolio of subordinated and structured loans of
around Cdn$45 million – with a further Cdn$25 million available to lend
● VCC launched the Resilient Capital Program in May this year to
invest in high impact opportunities that may feature higher risk or
require more patient capital – raised around Cdn$4 million and aiming to raise
a total of Cdn$10-15 million
● VCC works alongside other divisions and partners of Vancity, such as
Vancity Community Foundation and Vancity Community
Investment, which provide grants and technical assistance – ranging
from business planning to strategic grants to help social enterprises
through various stages of development

3. Impact

4. Impact Investment

5. Impact Investment
Impact investments are investments intended to
create positive impact beyond financial return. They
require the management of social and
environmental performance in addition to financial
risk and return.
JP Morgan/ Rockefeller Foundation

6. Social

7. Social Finance

8. Social Finance
Social finance is an approach to managing money
that delivers a social and/or environmental
dividend as well as an economic return.
SiG, Causeway, Volans - Building the Case for Social Finance in Canada
21 August 2009
Sustainable finance with a social or environmental goal.
Tim Draimin, TIDES Canada - 29 May 2007
Leveraging multiple sources of financing to achieve long term,
accountable social impact and economic return.
Al Etmanski, President, PLAN, Partner, Social Innovation Generation (SiG)

9. Social Finance & Impact Investment
Social impact bonds, Big Society Bank, Big Issue Invest – a specialised
provider of finance to social enterprises or trading arms of charities that are finding
business solutions that create social and environmental transformation, Bridges
Ventures – a sustainable growth investor, Microfinance, Kiva, Community
Development Finance Institutions, Credit Unions & Financial Co-ops,
Transform Capital Management – a global impact investment bank
Socially responsible investment, Philanthropy & Philanthrocapitalism,
Patient Capital, UnLtd, UnLtd Big Venture Challenge, NESTA, Young
Foundation, RSF Social Finance – founded as the Rudolf Steiner Foundation,
Nonprofit Finance Fund – Where money meets mission, Renewal Partners –
funding change through investments, grants, and collaboration, Vancity Community
Capital
Some frequently recurring phrases: mission-based, change, social and
environmental performance/ return/ benefits/ dividend, investment,
grants, finance, sustainable, growth, global

10. Challenges
● Gaps in language and terminology used amongst investors,
entrepreneurs, and social purpose business people
● Many professionals working at impact investment firms are from the
conventional investment sector (note: based on personal observation,
not empirical evidence)
● Lack of innovation, creativity, and openness in the impact investment
sector – does not mirror the organisations they seek to finance and
support – Slow to embrace co-design of finance, neither side seeing each other
truly as a partner, attempts to innovate with financial instruments rather than
addressing behaviours or culture of social finance
● Risk of value extraction and exploitation of social enterprises rather
than true capacity building
● Frequent use of terminology such as “fast growth”, “scale”,
“replicable”, which are not necessarily appropriate for social
enterprises

11. Challenges
What other challenges do you see or have you experienced?
Solutions & Opportunities
What are the solutions and opportunities to bridge the gap
between social financiers and the enterprises they want to
support?
Let's open up the conversation...

12. Ideas
● Impact investors and social financiers must look at their own business
model and strategy – Consider co-operative, open-source, and other
unconventional ways of doing things and ask themselves how they could apply those
models
● They should walk a mile in the shoes of their investee companies –
secondments to social enterprises, sit on the Board – and learn their
language, experience their issues first hand
● Invite social enterprises to shadow impact investors or conduct peer
reviews of business models and business plans – so that they can
understand better the investment process, improve transparency
● Impact investors and social financiers need to move out of their
comfort zone – step away from the numbers, examine behavioural
and intuitive aspects of investment in social enterprises – consider non-
financial incentives, measures, resources, and services (the importance of advice,
strong management teams and operational experience, training and continuing
education)

13. Stay in Contact
Bonnie Wong
At work: bonnie_wong@vancity.com or +1 604 877 8284
All the time: bonnie.o.wong@gmail.com
On Twitter: @BonnieOWong
Blog: http://beopenionated.wordpress.com (mainly about
impact investment and social finance, with links to my other
writing)