Backgrounder: Investment Readiness Program Backgrounder

The Social Innovation and Social Finance (SI/SF) Strategy is a comprehensive strategy that provides access to financial opportunities for social purpose organizations (SPOs), using private capital for public good and finding innovative solutions to complex social issues.

In its Fall Economic Statement 2018 and Budget 2019, the Government announced commitments to start to implement elements of the SI/SF Strategy, including:

• Investment Readiness Program: Government committed to invest $50 million over two years starting in 2019–2020 in an Investment Readiness Program pilot for SPOs to improve their ability to successfully participate in the social finance market.
• Social Finance Fund: Government committed to establish a Social Finance Fund by making available up to $755 million on a cash basis over 10 years.

In Budget 2021, the Government announced that it would build on the foundational elements of its SI/SF Strategy to support SPOs and their contributions to an inclusive recovery. It also committed to the renewal of the Investment Readiness Program for $50 million over two years, starting in 2021–22, and the acceleration of the Social Finance Fund. 

The Renewed Investment Readiness Program (2021–2023)

Building on the success of the IRP pilot, the renewed IRP will continue to advance SI/SF in Canada. It will support SPOs to build their capacity to access social finance, such as through the Social Finance Fund and a strengthened SI/SF ecosystem.

The renewed IRP will be delivered under two streams:

• Readiness Support Partners will provide funding to SPOs to build skills and capacity to access social finance investment. SPOs will use the funding to get help to do market analyses, develop new products and services, build business plans and acquire technical expertise.
• Ecosystem Builders will invest in projects that help grow and strengthen the SI/SF ecosystem. This will provide another layer of support to SPOs.

Criteria for Solicited Organizations

Organizations solicited to be Readiness Support Partners must:

• have experience delivering grants outside of their organization to eligible SPOs in order to build investment readiness; 
• have capacity to use inclusive and transparent selection processes; 
• be engaged in activities linked to SI/SF in Canada; 
• have the ability to build relationships and work with other organizations to achieve project goals; and
• have the ability to ensure diversity and inclusion are built into their project activities.

Organizations solicited to be Ecosystem Builders must:

• be engaged in activities linked to SI/SF in Canada;
• have the ability to build relationships and work with other organizations to achieve project goals;
• ensure diversity and inclusion are built into their project activities; and
• have expertise in at least one of the ecosystem builder activity areas:
  • investing in inclusive innovation
  • strengthening networks of expertise
  • conducting research and disseminating tools and knowledge
  • building SPO social procurement capacity, and
  • connecting IRP recipients to each other and the broader SI/SF ecosystem

Solicited Organizations

The fourteen organizations that have been solicited to submit a proposal to deliver the renewed IRP are:

• Buy Social Canada Supplier Council
• Canadian Women’s Foundation
• Carleton University – Common Approach to Impact Measurement
• CCEDNet-RCDEC Association
• Chantier de l’économie sociale
• Community Foundations of Canada
• Congress of Aboriginal Peoples
• Cooperatives and Mutuals Canada
• Imagine Canada
• Inuit Tapiriit Kanatami
• National Association of Friendship Centers
• Native Women’s Association of Canada
• Social Economy Through Social Inclusion
• Startup Canada

Investment Readiness Program (2019-2021)

The IRP pilot was initially launched in 2019 as a 2-year pilot. The goal of the program was to improve the ability of SPOs to participate in the social finance market. Through the IRP, SPOs could develop their capacities from early stage innovation to being investor-ready in preparation for the Social Finance Fund or other finance opportunities. Examples of activities that develop SPOs include consulting legal services, strengthening organizational structure or developing fiscal management skills.

The IRP pilot was delivered in three streams:

• Readiness Support Partners made available funding and supports to diverse SPOs from across Canada;
• Expert Service Providers offered specialized knowledge to SPOs to support their movement along the readiness continuum; 
• Ecosystem Mobilization Initiatives addressed key systems gaps (e.g. strengthening impact measurement, supporting knowledge mobilization, growth of social finance intermediaries, tools for social research and development and Indigenous systems mobilization) and conducted awareness building activities for the program.

Key Definitions/Terms

Social Finance:  investments whose purpose it is to create social or environmental impact alongside financial returns. Social finance differs from traditional finance because returns or profits are not the only motivation. Social finance is the type of financial support that developing social purpose organizations need to advance their missions.

Social innovation: a response to a social or environmental problem (including everything from a program or a service to different ways of structuring organizations) which, once adopted, results in better outcomes than existing approaches. Social innovations have a transformative impact, delivering improvements across organizations, communities, regions, or systems. Social innovation often takes place when social purpose organizations are enabled to invest resources in social research and development, helping them to grow the impact of their work.

Social purpose organizations: SPOs are organizations with a social or environmental mission. SPOs straddle the charitable and non-profit sector and the private sector (including registered charities, incorporated non-profit organizations and non-profit co-operatives), the private sector (including market sector co-operatives and private businesses advancing a social or environmental mission) and hybrid entities such as Community Contribution Companies and Community Interest Companies, found in British Columbia and Nova Scotia respectively.