It's a BIG world; Go Get It !

Sunday, July 31, 2011

Community Bonds and Social Enterprise

Community Bonds and Social Enterprise -where no one loses


There is an increasing interest in the use of Community Bonds to help non-profits achieve their financial goals. They can be used to finance program development or for capital build projects where the 'first-in' dollars are hard to find. For people in the non-profit sector, they are a form of investment that clearly shows what the investor is in interested in - you. And this is the most marked difference between community bonds and regular financial bonds; there is a direct link between what you want to do and how your investor wants you to succeed.

Community bonds differ from donations in that the money is eventually returned with interest. In talking with various organizations using community bonds, the construction of the bonds are as individual as the organizations themselves. Creating a bond requires careful financial analysis and the non-profits must understand themselves and their 'business' in order to achieve. Considering the relationship to the investor - direct, connected, local (usually) and of average income, the organizations carry a significant emotional commitment to taking care of and managing that investment and this too, makes community bonds different from other financial products.

The history of community bonds shows they are not a recent invention but one that is being used more broadly than before. Perhaps it is the donor fatigue that non-profits are experiencing or just the fact that there is less 'free money' around to be donated; whatever the case, community bonds offer an alternative that moderate income donors favour and this has captured the attention of social enterprises.

While recent community bond success stories like that of the Centre for Social Innovation clearly show the interest and ability of investors to direct funds to what they care about, smaller groups particularly co-ops, have long histories and rich stories of achieving their organizational goals through investor support as well.

Listen today to hear about the West End Food Coop and their discussion of successful community bonds  on So Fine Canada. They 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 but more importantly, open a community store. All non-profits should give themselves and their 'investors' the chance to expand and succeed with no loss to anyone.

Monday, July 4, 2011

Worlds Colliding - Social Finance and Modern Life

Worlds Colliding

Interesting plural on Worlds; we don't usually think of more than one but this past weekend showed how surprising co-existing 'worlds' can be when using divergent economic systems.

On LinkedIn this weekend, I read about Ecomodo - Trade and Borrow. A new bartering system facilitated by technology and run as a social enterprise. You can lend (or sell) skills, tools, assets to a broad community or a trusted lending circle. If there is concern about the return of the item being exchanged, you can buy insurance. If you want to help charities, you can charge a price for the 'rental' and then donate the fee. Nice, uplifting, alternative economies stuff that starts at the grassroots and grows. Who wouldn't buy into this type of system, creating a way for friends and neighbours to stop over-consuming and reduce over-production of goods? Since my neighbourhood is about to introduce its own 'dollar' for community specific retail, I can imagine Ecomodo doing very well in this part of Canada.

On Facebook, by contrast, was a posting about the US Treasury Board defaulting on purpose  Treasury Board Just Strategically (Intentionally) Default. According to the source, this creates instant stock market panic and shows the US government is fudging its numbers to stay afloat. Others comment that it will just be a 'technical' situation and investors weren't making much money on their Treasury Bills anyway, so the outcome will be minor. Something like the Canadian Government not being able to pay out on the Canada Savings Bonds - but have very many Canadians ever imagined it? Let alone have the government actually do it?

So how do these two disparate news items 'collide'? They both exist, here and now, within the financial frameworks that we live in. Both 'types' of economies are present and operating but are as unlike as any that could be imagined. One is predicated on community, exchange and zero growth - using what we have. The other is predicated on a demand for growth, the requirement for profit and guaranteed return (however false that may be) and making new.

Between these two worlds sits social finance and I suddenly feel the precariousness of what I thought of as our 'perch'. The old economic system is obviously in decline (they would only default if things were bad) and this new economic system, hailed as a return to the better world of before, was, alas, also something that went into decline. And although the barter system would seem an easy add to sf, investing and business creation are the cornerstones of social finance too.

All of the positiveness, vigour and creativity of social finance could not exist if we had not had the time to sit upon our 'perch', just slightly away from the fray and with the time to consider our options. No surprise that our time of intellectual consideration has come to an end.

I find the momentum of social finance invigorating but challenging to keep up with, never mind the dismantling of present economic systems and the full-scale replacement of governments' treasuries with local community 'dollars'. I don't have the 'chops' to sit here and figure this out and I no longer have the time anyway - none of us have.

Over the weekend, I felt the squeeze of where social finance sits and the reality of our work. We're being shaken from our perch: Like shifting tectonic plates, the world's economies, accepted and alternate, are colliding and creating a new base - social finance. Interesting place to stand or sit but also very shaky; let's hope for tremors and not 9-point earthquakes; I have no idea how to put together what's required for this kind of Emergency Preparedness Kit.

Comments

HTML Comment Box is loading comments...