Social finance’s “debutante ball” set for Vancouver

Investors, social entrepreneurs gather to share expertise as city to host forum on innovative financing structure
By Jenny Wagler
Business in Vancouver

Across the country, social finance – the concept of matching business-minded social entrepreneurs with socially minded financiers – is gaining momentum.

Last month, a national social finance task force of philanthropists and venture capitalists, including former prime minister Paul Martin, released a report entitled “Mobilizing Private Capital for Public Good.”

Also last month, B.C.’s Ministry of Finance wrapped up consultations regarding an amendment to the Business Corporations Act that would create a community interest company. The new hybrid enterprise would marry community benefits with a profit-making model – an idea that fits nicely into the social finance sphere.

This week, Vancouver’s own discussions about social finance are poised to gain new energy and direction as the city hosts a three-day social innovation and finance tour organized by social entrepreneur organization Ashoka Canada and other partners. And Ashoka Canada’s director Celia Cruz said the choice of city for the inaugural social finance tour was hardly accidental.

“One of the reasons we started with Vancouver is because all of the partners were seeing a lot of innovation from B.C. from both sides – from social entrepreneurs with their social enterprises and, at the same time, venture capitalist foundations really innovating in the area of investing.”

The tour will round up big local names in the social finance world, including Joel Solomon of Renewal Partners, whose Renewal2 social venture capital fund targets both financial and sustainability ends, and Al Etmanski, the social entrepreneur behind the development of the registered disability savings plan. Tour organizers are looking to pool local expertise, build on the momentum generated last month with the release of the task force report and its recommendations to advance social finance in Canada and stimulate discussion about an arena that can be tricky to pin down, even for those at its heart.

Derek Gent, executive director of the Vancity Community Foundation, noted, for example, that it’s hard to identify when social finance emerged as an idea in Vancouver.

“This is where we run into the definitional problem. From my sense of it, [Vancity Savings Credit Union has] been doing it since inception in the ’40s in terms of finding those opportunities and valuing where [social] impact is made. But I think particularly in the last 10 years or so is where we’ve seen a fairly significant amount of growth.”

Gent added that in the last few years the momentum has picked up even further.

He said that a key social finance development that Vancity ’s capital arm, Vancity Community Capital, is working on for 2011 is a new socially oriented venture capital fund.

“We’re looking at higher-risk investment dollars available for ventures that can make a difference,” he said. “Traditionally, we’ve used the assets of the credit union [for social finance]. But the idea of going forward with an actual product for investors is a new leap for us.”

Vancouver-based social entrepreneur Nicole Rycroft, executive director of environmental non-profit organization Canopy, said she’ll be attending the social finance tour to further explore social finance opportunities for Canopy, which works with publishers to green their practices. It’s best known as the force behind the greening of the Harry Potter series internationally.

But while Canopy has grown to work with 700 companies, Rycroft noted that its success, ironically, brings with it new financial burdens as the organization’s staff expands.

As a result, Rycroft said she’s looking at developing an enterprising arm of Canopy to develop a steady revenue stream. That arm, she said, would look to develop a missing sector in Canada’s paper-making realm and help preserve forests: mills that can turn straw into paper-making pulp.

“It’s a new industry in Canada,” she said. “There are no mills at this stage that can turn Canadian wheat straw and flax straw into pulp, which can just be fed into any paper machine everywhere.”

Rycroft said she hopes the conference will allow her to explore her ideas more fully and that it will help raise the profile of social finance efforts in Vancouver.

“Obviously there’s been a lot of dialogue, a lot of people have been doing a lot of thinking over the last number of years around it,” she said. “But it feels like next week is almost the debutante ball of [social finance] as it really kind of steps out more formally into Vancouver.” •

This article from Business in Vancouver January 18-24, 2011; issue 1108

Business in Vancouver ( has been publishing in-depth local business news, analysis and commentary since 1989. The newspaper also produces a weekly ranked list of the biggest companies and players in a wide range of B.C. industries and commercial sectors, monthly features and industry-focused sections that arm its subscribers with a complete package of local business intelligence each week.