The third call in the Canada's Cities Reducing Poverty series features Edmonton's Social Enterprise Fund. This initiative combines business expertise with flexible financing to help not-for-profit organizations and cooperatives create or expand strong, sustainable social enterprises, or social or affordable housing projects. Jenny Kain, Director of Social Development, City of Edmonton, discusses the Social Enterprise Fund and the City's role in development, implementation and capitalization of the Fund.
To understand the role and current context of Canada’s cities in reducing poverty
Jenny Kain - Jenny Kain has worked with the City of Edmonton for over 20 years. She currently works as the Director of Social Development in the Community Services Department. Her previous work has included policy development and research, project management and community economic development (CED). She has been involved in the start up of a number of successful CED projects in the City of Edmonton including Women Building Futures, a women’s trades training and affordable housing initiative, the Nina Haggerty Centre for the Arts and the Edmonton Social Enterprise Fund.
- Liz Weaver, Lead Coach of the Vibrant Communities Canada team, provides coaching, leadership and support to Ontario community partners, including Opportunities Waterloo Region and the Hamilton Roundtable on Poverty Reduction. As lead coach, she helps initiatives develop their frameworks of change, supports and guides their projects and helps connect them to Vibrant Communities and other comprehensive community collaborations. Read more here.
Jenny explained that Edmonton has a history of involvement in community building in neighbourhoods and through community economic development (CED). She pointed out that poverty is about economic barriers, and that CED is an effective response to complex issues like poverty. The Social Enterprise Fund (SEF) was a way to respond to the needs of those trying to start or grow community economic development projects.
Edmonton continues to have community building workers across city departments, to work on neighbourhood revitalization through the Great Neighbourhood Initiative, and through a community safety initiative called REACH.
In this clip, Jenny gives examples of ways that Edmonton has worked to increase human, social and financial capital in the city.
Jenny said the City of Edmonton has been involved since 2003 in the development of the Social Enterprise Fund. They looked at several models, including the Community Economic Development Investment Fund from Nova Scotia (CEDIF). They eventually took advantage of provisions in the 2004 federal budget that focused on the social economy to access some resources and connect with key partners.
In 2007, they developed a survey of housing groups and nonprofits to determine the demand for financing. The survey demonstrated that nonprofit groups were interested in diversifying income, but they had trouble accessing capital and had few assets. The potential demand for financing totalled $70 million. With the assistance of the Edmonton Community Foundation, the Social Investment Fund was created.
The city continues to play an active role in the fund. They animate demand internally by providing learning opportunities for city staff and externally through promoting the fund and offering training on social enterprise. They also play a governance role: the fund’s board has three members, two from the city, and one from the community foundation.
Here, Jenny describes the dual purpose of a social enterprise: to generate income by selling a product or service in the marketplace , and to create a social, environmental or cultural value.
Jenny deems the Social Enterprise Fund a great success. They have had 100% pay back to date, with no defaults. All of the money available in the fund has been lent out once, revolved, and is now on its second round of circulation. Jenny called it “the fund that keeps on giving”. A percentage of the interest received goes to operating the fund, so the model is sustainable.
However, the fund has not yet been able to attract enough capital to meet the demand for financing or to completely cover its costs. Jenny spoke to the culture shift that is necessary for non profit organizations to embrace the risk involved in undertaking an enterprise, versus applying for grants. The Social Enterprise fund has financed more social housing projects than expected, as compared to social enterprises, perhaps because of the development time and skills required to move from an idea to actually creating a social enterprise.
In this clip, Jenny describes the challenges the fund has experienced: difficulty raising the amount of capital, and the limited capacity of groups to create the social enterprises.
Loans are the key product offered by the Social Enterprise Fund, but some of the services have evolved to respond to the needs of potential clients. They discovered that many projects benefit from initial support like technical assistance and mentoring. In addition, the fund provides:
Small “path to loan” grants to help clients research and explore their business plans
A three day Social Enterprise “Boot Camp”
Training in social return on investment (SROI) methodologies
Social return on investment tools help organizations tell their stories and talk about the social value they create in ways that a range of stakeholders can understand. The loans are offered with interest at market rates, but the benefit is access to financing and the individualized attention that clients receive.
Here, Jenny explains why and how the fund helps clients learn more about social return on investment.
The Way We Live: Edmonton’s People Plan is a 10 year plan that focuses on improving Edmonton’s livability. The plan has six interconnected goals and the Social Enterprise Fund plays a role in advancing all six of the goals, particularly the goals connected to Edmonton as a vibrant, connected, engaged and welcoming city and Edmonton as a caring, inclusive and affordable community. Because the Social Enterprise Fund is aligned with the City of Edmonton’s vision, Jenny said, it bodes well for the longevity of the fund.
Here, Jenny talks about the connections between the City of Edmonton’s plans and the Social Enterprise Fund.
Social Enterprise Fund - This site has examples of projects funded by Edmonton’s fund and more information on the services they provide, like Social Return on Investment (SROI) training. Access the site here.
Nova Scotia’s CEDIF - This provincial community investment fund was one of the models that Edmonton explored before launching the Social Enterprise Fund. Access the CEDIF website here.
Community Roles in Policy - This audio seminar with the Caledon Institute’s Sherri Torjman explores ways communities can participate in shaping government policies related to poverty. Access the seminar here.