There is an increasing interest in the use of community bonds to help nonprofits achieve their financial goals. Community bonds can be used to finance a range of projects, from program development to capital expansion projects where the ‘first-in’ dollars are hard to find. For people in the nonprofit sector, they are a form of investment that clearly shows what the investor is interested in – you.
The history of community bonds shows they are not a recent invention, but rather one that is being used more broadly than before. Perhaps it is the donor fatigue that nonprofits are experiencing or just the fact that there is less ‘free money’ around for donations. Whatever the case, community bonds offer an alternative that moderate income donors favour and this has captured the attention of nonprofits and social enterprises looking for funds.
The construction of community bonds can be as individual as the organization itself, but creating a bond requires careful financial analysis. A nonprofit must understand itself and its ‘business’ in order to be successful. To help with that, the Centre for Social Innovation (CSI) – a recent community bond success story – will be holding a ‘How-to’ workshop on community bonds in Toronto on Friday, May 11th. If you’re interested, you can register at the ONN website.
Smaller groups, such as co-ops, also have long histories and rich stories of achieving their organizational goals through community bonds. As 2012 is the UN International Year of Cooperatives, you can find great information from all over the world. Closer to home, we have the West End Food Coop. West End Food Coop sold out their first issue in 2009 and have created a new bond which is also selling well in the west end of Toronto. Their local community support has created the opportunity to start new programs, expand their farmer’s market, and, more importantly, open a community store.
Considering the resources available and the success stories to date, all nonprofits should give themselves and their ‘investors’ the chance to expand and succeed with no loss to anyone. A community bond brings together ‘community’ and ‘dollars’ to make the world we want to see – a fine example of the new world of social finance.
Photo credit: http://www.flickr.com/photos/gammaman/6242457085/