4. SOURCES OF FUNDING DIFFER
ACCORDING TO TYPE OF CHARITY
From โNot Letting a Crisis Go to Wasteโ (pg.19)
5. NEW CONTEXT FOR VOLUNTARY
SECTOR / NOT FOR PROFIT ACTIVITY
o Slow growth economy
o Aging population, inadequate provision for pensions
o More competitive environment
o New attitudes / expectations among donors
o Stagnating donor base
o Changed terms for federal Gs & Cs: performance-
based, leverage private funding, more โaccountabilityโ
o Many provinces dealing with deficits
6. EVOLVING
MOTIVATIONS / EXPECTATIONS
Old New Social Innovation
Government โcontracting outโ / project-based pay-for performance
delivery of public accountability Leverage private Funds
services (core and social impact bonds
for results
program costs)
strategic โshared valueโ โ social
Corporate PR linked to and economic returns
โโgiving backโ
corporate
CSR
Objectives
Individual charity cause-based direct, by-passing
organizational loyalty Intermediaries
Episodic
Foundations legacy, perpetuity, hands-on impact-mobilizing
project funding all assets
strategic
responsive collaborative
venture
โfunding plusโ
philanthropy
7. TRENDS IN GRANTING FROM A
SOCIAL INNOVATION PERSPECTIVE
o Social Innovation: any product, process, design
, program or initiative that profoundly changes
the defining routines and laws, resource and
authority flows, cultural beliefs and practices of a
given social system. Social innovations transform
intractable problem domains.
- Slide referenced from Dr. Frances Westley
8. Social Innovation Spectrum โ Canada
Local Impact System-Wide
Social innovations grouped along the spectrum
- Slide referenced from Tim Draimin
9. NEW FUNDING MODELS
FUNDING FINANCING
Problem Problem
Solution Solution
Funding (grants) Business model (for-profit,
n-f-p, charity)
Business model (charity)
Financing
(loans, equity, subsidy)
11. so๏cial fi๏nance
so๏cial fi๏nance
[soh-shuhl fi-nans, fahy-nans], n.;
synonym: impact investing
Social finance is an investment
approach to solve social or
environmental challenges while
generating financial return. This
includes investments that range
from only producing a return of
principal capital, to offering
market-rate or even market-
beating financial returns. Social
finance encourages positive
social or environmental
solutions at a scale that neither
purely philanthropic supports
nor traditional investment alone
can reach.
- Slide referenced from Tim Draimin
12. โCanadians have long relied on
governments and community
organizations to meet evolving social
needs, while leaving markets, private
capital and the business sector to seek
and deliver financial returns.
However, this binary system is breaking
down as profound societal challenges
require us to find new ways to fully
mobilize our ingenuity and resources in
the search for effective, long-term
solutions.
Mobilizing private capital to
generate, not just economic value, but
also social and environmental
value, represents our best strategy for
moving forward.โ
Dr. Ilse Treurnicht
Task Force Chair
CEO MaRS
December 2010
13. Social & Financial Return Continuum
Social finance approaches support a spectrum
of organizational business models
Non-profit For-profit
- Slide referenced from Tim Draimin
14. Social Impact Bond 101
Payments based
Returns dependant
3 on defined 1 4
on outcomes
outcomes
Public Social Impact Bond
Investors
Sector Delivery Agency
Service Providers
2 Services
Funds
Target population Information
The Model โTโ
15. TRENDS FOR GOVERNMENT FUNDING
โข Reduced capacity due to deficit cutting
โข Performance-based
โข Leveraging private resources
โข Focus on accountability
โข Need to cut transaction costs
โข Open to innovative approaches (social
finance, social impact bonds...)
16. TRENDS FOR CORPORATE PHILANTHROPY
โข Highly competitive
โข Linked to corporate objectives
โข Moving beyond corporate social responsibility
17. TRENDS FOR INDIVIDUAL DONORS
โข Levels of giving not growing: fewer giving more
โข Donor base aging
โข Less attachment to organizations rather than
'causesโ
โข More concerned with 'results' and 'solutionsโ
โข By-passing intermediaries to be more 'hands-onโ
โข Using IT and non-traditional ways of giving
18. TRENDS FOR GRANT-MAKERS/FOUNDATIONS
โข Less capacity due to low market returns
โข More competitive environment for funders
โข Higher visibility may increase risk aversion
โข Having a strategic focus - fewer responsive grants
โข Greater emphasis on results
โข Continued reluctance to supply operating support
โข Importance of learning and knowledge development
โข Use of evaluation to improve practice
โข More willing to collaborate, including across sectors
โข Funding + (going beyond grants)
โข Growing willingness to leverage assets (eg impact investing)
19. CONCLUSIONS : GENERAL
FROM TO
Status quo Present situation not sustainable
โDoing goodโ is worthwhile in itself Demonstrate value
The โcauseโ motivates people to give Results motivate people to give
Philanthropy is purely voluntary Social change is needed; we all have a
(and dependant on emotional appeals) responsibility to engage
20. CONCLUSIONS
1. The present business model is not
sustainable
2. Funding strategy must be based on
organizational needs, mission, capacity.
3. There is a need to diversify, adapt and
innovate
4. This is as much a challenge for funders as for
grant-seekers.
Editor's Notes
Please donโt take this as definitive, merely examples of grouping social innovations by their characteristics regarding scale, number of sectors involved, and their disruptive potentialHelps us think about what is the theory of change we are using in developing and applying our social innovation approach and ideas
In the US, also calling this model โPay for success bondโBenefits:-Incentives down the chain -Investors act as quality control -Government appropriates risk-Providers have clarity of purpose โ trying to hit outcome targets and can alter program to do so