Remember when you were in college and you and your friends all went in on a case of beer? You may have been on the cutting edge of social finance without even realizing it. Sharing costs in return for a share of the rewards is the essence of community bonds, a new way to finance good things (besides beer) that serve a wider social purpose.
The idea behind community bonds is that instead of seeking one large block of cash from a single source like a bank, you build the financial structure for your initiative brick-by-brick with small investments from dozens or even hundreds of community members. These folks, in turn, often have a dual motivation: they are interested in earning a reasonable financial return while doing some good in their own community.
The Centre for Social Innovation (CSI) was the first to successfully deploy this model in Ontario, raising a couple of million bucks from community minded investors to purchase the building that is now the CSI Annex. So who better to explain how to use community bonds to advance community infrastructure and green projects? With a grant from TAF, CSI has developed a Community Bonds Guidebook to help organizations “turn social capital into financial capital,” in the words of CSI director Tonya Surman.
This is an idea whose time has really come, with a number of other organizations using or considering social bonds, including SolarShare, which lets you buy a piece of one of several large solar installations, and ZooShare, which is developing a facility at the Toronto Zoo that will turn “zoo poo” and other organic waste into biogas. TAF, of course, is also backing both of these ventures because we are attracted to their innovative finance models and emissions reduction potential.
So what can community bonds do for your project and your community? Check out Tonya Surman’s excellent TEDxToronto and get inspired.