Community bonds are interest-bearing bonds intended for small scale, non-accredited investors and can only be issued by a non-profit organization. But are they right for you?
The path forward for so-called social finance tools—falling under the umbrella of “impact investing”—is encouraging and could play a growing role in funding clean energy projects and products.
There is much discussion and excitement about Social Impact Bonds currently. There are also several Canadian examples of community bonds used as financing tools for social enterprise. How do these two social finance instruments differ?
Community bonds offer a new asset class for investors, but what are the pros and cons of this social investment option?
“We’re a very hopeful organization,” says Heather McGregor, CEO of the YWCA, as she shows me around the organization’s impressive new Elm Centre complex. “We’d like to be seen as trailblazers.” It’s hard to argue with that. At a time when little affordable housing is being built, under McGregor’s leadership the YWCA opened the Bergamot Apartments in 2007.
As a futurist, it’s my business to understand that the convergence or intersection of trends represents true opportunities for innovation. Here’s one interesting real estate investment example – also the subject of a new ebook – that rates as an innovative “perfect storm” since it addresses more than one trend intersection: community bonds.
Matt Galllway spoke with Tonya Surman. She is the co-author of, “The Community Bond: An Innovation in Social Finance” . The book launch happens this afternoon at the Centre for Social Innovation building near Bathurst and Bloor.
In an economic downturn marked by a rise in government austerity measures, non-profits focused on sustainability are finding it more difficult than ever to raise capital for projects designed to better their communities. Most rely on funding from government agencies, grants from corporations or donations from members to support specific programs and projects. It’s a time-consuming and unreliable process that can distract groups from their core mission. As Businessweek reporter Amy Feldman once wrote, “Non-profits are held back by the time and effort it takes to raise funds in dribs and drabs.”
What if right around now a solid hunk of global finance grew out of its devilishly anti-social phase and over the next few years got a social life, fell in love and got engaged?