Social Finance Forum 2016

“At the end of the day it really is all about outcomes.”

Over the last two days, more than 400 impact investors, entrepreneurs and businesses congregated at the 2016 Social Finance Forum in Toronto. Being an outsider to this forum, what has impressed me the most is the excitement around social financing. I believe that part of this enthusiasm stems from the fact that individuals attending the event are convinced of the impact that can be made through social financing. In particular, the method in which financing is distributed can make it more impactful. Alexandra Snelgrove tweets,

“I love it when funders talk about paying for outcomes not activities. Need more of that. & help for orgs to measure outcomes. #SFF2016”

When Snelgrove speaks to measuring outcomes she is referring to the model ‘pay for success’. Health Minister, Jane Philpott announced today that Canada would be funding its first ever social impact bond in public health, that amounts to $4M invested over the next three years in hypertension prevention.

The way in which they are providing this impact bond is through the ‘pay for success’ approach. With this approach investors will need to pay up front and the government will reimburse investors once results are shown. This approach links payment to successful outcomes! I can’t think of a better way to incent stakeholders on the project to ensure powerful outcomes.

If this model proves to be successful, we can look forward to the government considering their involvement in other social impact bond initiatives. Remember that it is all about the outcomes!

Check out the 2016 Canadian Impact Investing Trends report from the Responsible Investment Association. Did you know?

— $9.2 billion in assets under management as impact investments in 2015. This total represents an increase of 123% over 2013

— Canadian impact capital is invested in a wide variety of sectors, with housing/real estate, clean technology and energy topping the list

— 96% of investors who target competitive returns at or above market rate said their impact investment’s performance either met or exceeded their expectations

— Contributing to local community development was the top motivation for seeking investments with environmental or social impact

Written by: Christian Murphy

VERGE Intern & Ivey Business School HBA Candidate