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.
