Starting point: Impact investing for not-for-profits

How can I determine if social finance is right for my organization?

HOW NON-PROFITS USE SOCIAL FINANCE

As we work towards a more formalized and navigable social finance landscape in Canada, many trailblazing organizations are using the tools of social finance to support their mission. The ways in which enterprising non-profits finance their ventures are often improvised and resourceful.

To determine if social finance is right for your organization, the very first step would be to determine your financing needs.

  • Include your stakeholders right from the start so they can provide their input. This will help you see how to create value for them and to check your assumptions of potential for income generation.
  • Are you considering operating or expanding a social enterprise?
  • Are you considering purchasing or expanding a real-estate opportunity?
  • Is there a partnership opportunity with other service providers or a private-sector partner to utilize an asset for investment?
  • Is your organization considering making an offering statement such as a community bond, or, if you are a co-operative, are you considering a share offering?
  • Understand what kind of impact your organization hopes to make. How does this financing opportunity fit with your organization’s mission, values and capacity?

Other considerations include:

  • Who needs to be involved in the decision to pursue financing (e.g., the board of directors, funders, members, community, staff)?
  • What special skills does your organization need (legal, business, finance)?
  • One of the most exciting aspects of a solid social finance deal is the “fit” between the enterprise and investor.
  • What are your time constraints for making an investment decision?
  • Do you need an organizational assessment to determine the financial health of your organization?
  • You will need a strategic plan to make sure you have considered the risks as well as your options and opportunities; how does seeking financing fit into the strategic plan of your organization as a whole?

Suggested resources:

What are some examples of social finance at work in the not-for-profit sector?

There are many examples of not-for-profits who have used social finance to advance their public benefit mission. A good resource is the Guide to Social Finance, found in the knowledge hub of this website.