Let's examine the spectrum of organizations in a little more detail:
There is an increasing need for the non-profit sector in Canada to seek new innovative ways of accessing capital to meet their goals. But before we go in-depth on the emerging world of social finance, it’s important to explore the different types of financing that exist for an organization.
Financing is the money acquired to run an organization and achieve its mission. All types of organizations must make decisions around financing with respect to their business objectives, ability to secure alternative investment, risk tolerance, and other related factors. Although, financing options vary based on the organization’s legal structure there are typically three types of financing options available to non-profits or social enterprises: Grant Funding, Debt, and Equity.
One definition of social finance is the sustainable approach to managing money that delivers social and/or environmental dividends and economic return through social enterprises operating in the non-profit or public benefit universe.
From the perspective of organizations operating within the nonprofit or public benefit realm, social finance is an approach to scale their earned revenue opportunities in an attempt to create a more resilient funding model. From the perspective of an investor, a social finance approach blends the social, environmental and financial objectives together to create a more holistic evaluation of the outcome or return on the investment. This approach creates a shift from relying solely on traditional financing for nonprofits and social enterprise, such as philanthropic grants and government funding, to capital financing options that best fit their needs, realities and structures.
This social finance blog series intends to engage people interested in the field of social finance to discuss its complexities, challenges and opportunities online.
The series will feature commentary from Ashoka Canada Fellows, social entrepreneurs and practitioners and key enablers of the Canadian non-profit sector including representatives of funding organizations.
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Your Guide helps social entrepreneurs learn how to attract financing for their social ventures.
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Your Guide to Social Finance
SocialFinance.ca hosts an online guide that helps social entrepreneurs learn how to attract financing for their social ventures.
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