The document summarizes key takeaways from a UK social innovation policy tour organized by Social Innovation Generation (SiG). It discusses social finance, public policy, culture and enabling environment, and actions to support social innovation. The tour explored models of social finance, social enterprises, public programs and advocacy groups that have helped advance social innovation in the UK.

1. UK Social Innovation Policy Tour:
Social Finance
March 28th – April 2nd 2009
Key Takeaways
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2. Contents
1. Tour Overview
2. Social Finance
3. Public Policy
4. Culture and Enabling Environment
5. Actions
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3. Contents
1. Tour Overview
2. Social Finance
3. Public Policy
4. Culture and Enabling Environment
5. Actions
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4. Tour Organizers
The primary aim of SiG is to encourage effective methods of
addressing social problems on a national scale.
The activities of SiG serve to facilitate the exploration of structural,
institutional and systemic evolution in order to promote broad system
change.
A national collaboration to fast-track Canada’s adoption of social
finance.
Part broker, part incubator, part think-tank, part consultancy, Volans
works globally with entrepreneurs, businesses, investors and
governments to develop and scale innovative solutions to social and
environmental challenges..
Volans is based in London and Singapore. www.volans.com
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5. Canadian Participants
Nino Antadze Dr. Carin Holroyd
PhD candidate, School of Planning, University of Waterloo Department of Political Science, University of Waterloo
Richard Blickstead Jaqueline Koerner
CEO Wellesley Institute Chair, EcoTrust Canada
Tim Brodhead Bayla Kolk
President and CEO, J.W. McConnell Family Foundation Associate Assistant Deputy Minister, Income Security and Social
Development, HRSDC
Lee Davis Sean Moore
President and CEO VanCity Capital SiG Fellow
Tim Dramin Tony Nimeh, MD
Executive Director, SiG National Consultant
Patricia Else Joanna Reynolds
Director, Grant Operations, Ontario Trillium Foundation Program Coordinator, Causeway SiG National
Al Etmanski Judy Rogers
President and Co-Founder PLAN Chair, 2010 Legacies Now Board of Directors
Don Fairbairn Dr. Frances Westley
President, DCF Consulting Director,SiG Waterloo, J.W.McConnell Chair in Social Innovation
Lois Fine Andrew Wharton
Director of Finance, YWCA Special Advisor, Disability Services, BC
Gordon Floyd Faye Wightman
Executive Director and CEO, Children’s Mental Health Ontario President and CEO Vancouver Foundation
Allyson Hewitt Donna Thompson– tour observer
Director, Social Entrepreneurship, MaRS, SiG@MaRS Special Advisor, PLAN Institute 5

6. Connecting Ideas and Concepts
Culture of Social
Innovation
Social Finance Public Policy
Social
Social Enterprise
Entrepreneurship

7. Key Definitions
Social • An organization or venture (within an organization) that
advances a social mission through entrepreneurial, earned
Enterprise income strategies. ~Social Enterprise Alliance
• Social innovation is a complex process of introducing products,
Social processes or programs that profoundly change the basic
routines, resource and authority flows or beliefs of the social
Innovation
system in which they arise. Such successful social innovations
have durability and broad impact. ~ Dr. Frances Westley
• An entrepreneur who engages in business seeking
Social
both financial and social return ~ PFC (Philanthropic
Entrepreneurship
Foundations Canada)
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8. Key Definitions – Social Finance
Social Finance is the flow of financial capital
to human need uses:
Charity and
• Affordable Housing Non-profit
• Social Enterprise
• Support for working families
• Health & Home Care Hybrid
• Community Development Space
• Social Economy
• Clean Technology
• Microfinance Business Government
• Fair Trade
• Green Building
• Education
• Bottom of the Pyramid
source: market sector listing adapted from www.xigi.net)

9. Contents
1. Tour Overview
2. Social Finance
3. Public Policy
4. Culture and Enabling Environment
5. Actions
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10. Creating Social Finance Solutions
Venturesome
Venturesome is not a bank, nor a granting organisation - it provides
underwriting/stand-by facilities, unsecured loans and equity and quasi-equity
3 models of social enterprise
1. Profit Generator – goal to get profit and give some (or all) away to charity (Patagonia)
2. Trade Off Financial and Social Returns - activity has social impact, but needs to trade off between
financial and social impact (ie, The Hoxton)
3. Lock-Step – no trade- off between social and financial impact - if one side goes down, the whole
organisation does (ie. community wind farms)
• Responding to issues in the third sector – charities are undercapitalized with weak balance sheets and a
‘donor’ culture rather than an ‘investor’ culture
• Provided £12m to 200 organisations, with a default rate of less than 5%
• Current fund is £10m with banks, foundations and HNW individual investors
• Exploring the ‘negative return’ spectrum
- 100% - 15% 0% + 8%
Grant-makers Capital-protected Market-rate return
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Courtesy of Paul Cheng at Venturesome

11. Social Venture Capital Models
Bridges Ventures
• Currently running 2 Community Venture Funds (Bridges CDV1 is a £40m fund
and Bridges CDV2 is a £75m fund) with investments focussed on delivering a
financial and social return.
• Investment focussed on under-invested inner city areas of London
• Reports to investors include the social impact as well as the financial and
economic progress of investments
• Exits are flexible – trade sale, float or manager buy-back
• November 2008 launched the £4.25m Social Entrepreneurs Fund – a charitable
trust which invests in scalable social enterprises delivering high social impact
Portfolio Company Example – THE GYM
• No-frills, clean gyms with good equipment, open 24 hr/day
•Located in lower income communities
• £14.99/month with no contracts
•Social benefit (providing health benefits to lower income communities) and
financial benefit to investors (company is expanding)
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12. The Role of Banks
Triodos Bank Opportunity Fund
• Triodos Bank only finances enterprises with which add social, environmental and
cultural value - using finance and capital to fuel social change
• €3.5 Bn with operations in 5 EU countries
• Involved in the Global Alliance for Banking on Values Banking
• Triodos’ Opportunity Fund looks to return a profit to LPs through investment in
social enterprises – providing both funding and support as they grow
The biggest problem is deal flow....
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13. Financing Social Businesses
Catalyst and ClearlySo
• Catalyst has 4 areas of activity; Fund Management, Information and Research,
Advisory Services and Events.
• ClearlySo is an online marketplace for social business, enterprise and
investment.
• In creating a legal structure for a social enterprise be critical of models such as
CICs and aware of what would work in Canada based on its unique culture
• Similar to mainstream VC – big. returns are needed in some investments to
offset the risk and inevitable losses in others
It's a business that integrates commercial objectives
(growth, profits) with a social, ethical or
environmental one
Looking for scale and high return – is this possible in Canada? 13

14. Social Finance Support Systems
The UK marketplace also contains many social finance INTERMEDIARIES
Investment Corporate
Bank Finance
Social Finance Ltd Catalyst
Research Legal
Guidestar
Structures
Ashoka Social CIC’s
Enterprise
Growth
What systems exist in Canada?
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15. Building & Applying Financial
Tools
Social Finance Ltd.
• Action- research projects focused on applying tools and
expertise of investment banking and other financial sectors
to social finance and the third sector
Projects include:
o Social Investment Bank - per recommendations from the
Commission on Unclaimed Assets (approx value of
Canadian unclaimed assets is $300m)
o Savings/loan Vehicle for those with disabilities (like the
RDSP in Canada)
o Social Impact Bond (financial derivative) ie. looking at ways
of reducing reoffender rates and calculating the value in
social and financial terms
Lessons from UK: Strategic conversations need to be nonpartisan to remain
relevant in the long term 15

16. Mission Based Investment
Guidestar International and F. B. Heron Foundation
• F. B. Heron Foundation is a $350m foundation where the corpus is put into
action by deploying the endowment into mission related investment without
conceding returns
• Limitations exist in Canada on missions based investing
• Guidestar International is an online service which provides details reports
on CSOs (civil society organisations) to improve their visibility to those who
support their work
• Create competition for the philanthropic dollar (disappointing to see no
other foundations making a play for Buffet’s gift to the Gates Foundation)
• Business model involves partnering with foundations and other grant-makers
• Some of the leg-work completed in Canada and system uploaded with CRA
data – would cost $250K/yr to run it
Guidestar International is looking for partnerships
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17. Building Speciality Legal Structures
for Social Enterprises
BWB LLP
• Under British Law tax relief exists for charities, but not social enterprises
• Need new kind of company- Community Interest Company (CIC)
• 2,628 CICs established in 3.5 years
Key Elements of CIC legal structures
• Founder control of social enterprise
• Asset-Lock which prevents privatization
• Allows for financing through debt (secured or unsecured) or equity (share issuance
permitted with dividend cap with a maximum annual dividend, 5% above base rate,
total 35% net distributable profits)
• Allows for payment to directors
Issues that need to be addressed to improve CIC structures
• Explore tax break effects in to encouraging investment (charities and high growth companies
receive this consideration)
• Only CICs limited by shares can use debt AND equity – those limited by guarantee can only use
debt financing
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18. Legal Structure Basics
What is an appropriate legal structure?
What is CIC?
Community interest companies (CIC) are a type of limited company designed specifically for those
wishing to operate for the benefit of the community rather than for benefit of owners of the company..
CICs can be limited by shares, or by guarantee, and will have a statutory “Asset Lock” to prevent the
assets and profits being distributed, except as permitted by legislation. This ensures the assets and profits
are retained within the CIC for community purposes, or transferred to another asset-locked organisation,
such as another CIC or charity.
What is an L3C?
L3C'sare low-profit limited liability corporations, which function via a business modality that is a hybrid
legal structure combining the financial advantages of the limited liability company, an LLC, with the
social advantages of a non-profit entity. An L3C is run like a regular business and is profitable. However,
unlike a for-profit business, the primary focus of the L3C is not to make money, but to achieve socially
beneficial aims, with profit making as a secondary goal.
What is the Community Enterprise Act?
Sector leaders in Canada are exploring the creation of a legal structure, learning from CIC and L3C models.
Each model has its pros and cons...what is right for Canada? 18

19. Financial Stakeholders in Canada
Charitable
Foundations
Endowments
Mainstream Banks Private Companies
Financial Federal and Provincial
Pension Funds
Stakeholders Government
High Net Worth
Insurance Companies
Individuals
SIO & SRI Mutual
Credit Unions
Funds
How do we engage and connect the individuals in these stakeholder groups?
What is he role of crowd sourcing and micro-investors? 19

20. Contents
1. Tour Overview
2. Social Finance
3. Public Policy
4. Culture and Enabling Environment
5. Actions
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21. Enabling Public Policy
The UK civil society contains many successful ADVOCATES and ASSOCIATIONS
• Social Enterprise Coalition provides research and awareness programs and
is proactively developing relationships with both political parties
• The National Council for Voluntary Organisations (NCVO) provides the
support and voice for the voluntary and community sector
The UK has an OFFICE OF THE THIRD SECTOR
• Created in 2006
• Sits within Cabinet with its own minister, Kevin Brenn an
• Pros and Cons to placement in central government
The Third Sector includes voluntary and community groups, social
enterprises, charities, cooperatives and mutuals
Which government body, advocates and associations do we need in Canada?
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22. Public Policy in the UK
Office of the Third Sector
• The ‘Third Sector’ includes charities, social enterprises, voluntary organisations - there are
135,000 registered charities and 55,000 social enterprises
• Established in 2006, The Office of the Third Sector is located in Cabinet Office, has its own
minister, Kevin Brennan, and £550m spending review package
• Proximity to central government has its advantages (high profile, access to key players) and
disadvantages
• Right to Request’ program where public service professionals can start social enterprises
and guaranteed a 3-5 year government contract
Four key aims
1. Campaigning and Empowerment, especially those at risk of social exclusion
2. Strengthening Communities, providing funding and convening people
3. Transforming public service delivery, design, innovation and campaigning
4. Enabling the growth and development of social enterprises
Recommendation from the UK: be in central government, have a tie to treasury
and balance policy development with programme delivery 22

23. Government Programs
Funding services
Rosemary Mitchell – Futurebuilders
Futurebuilders provides loans and grants to the Third Sector £250m fund
• Set up by Home Office with funds sitting partially in this office and
partially in the treasury – commercial agreement with a fund manager
3 investment KPIs
1. # of public service delivery contracts
2. funding dispersal within 2 years
3. customer satisfaction (2008 rating 85%)
• +300 investments, mostly healthcare, education and children
• In addition to funding, also provides professional support (finances,
contracts...)
• Recently awarded £100m DOH fund contract in consortium with
Partnerships UK
What role should government play in creating social capital markets? 23

24. Success Snapshot- Homelessness
Community and Local Government (CLG)
• Government's Housing initiatives include help
with home ownership, reducing homelessness
and tackling anti-social behaviour
• Key is PREVENTION - from which ideas and
initiatives emerge
• Success measured against targets set in 2003
Metric 2003 2008
Statutory homeless (new cases/yr) 137,000 57,000
Temporary accommodation backlog 100,000 67,000
Rough sleepers 1500 499
What kind of initiatives drive these kind of results?
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25. Contents
1. Tour Overview
2. Social Finance
3. Public Policy
4. Culture and Enabling Environment
5. Actions
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26. Culture and Enabling Environment
Program Type UK examples CAN examples
Teaching social School for Social ENP , MaRS
entrepreneurship Entrepreneurs (SSE) Entrepreneurship 101,
Supporting entrepreneurs Unltd. MaRS, George Brown
Galvanizing social Challenge fund McConnell, CSI, SiG
innovative thinking members
Public awareness Social Enterprise Coalition Social Entrepreneurship
(SEC) Ambassadors Summit
Celebrations Social Enterprise Week SES, ENP Awards
Youth engagement Make your Mark with a Canadian Youth
Tenner Business Foundation
Support and networks The Hub, SEC Causeway
Mentorship SSE MaRS
Paired research and The Young Foundation Waterloo, Carleton 3Ci,
network support LaunchPad UBS CSSI,
What programs are needed in Canada? 26

27. Advocacy and Awareness Programs
Uniting the networks to form a coalition
Social Enterprise Coalition
• Language of social enterprise still contested – golden thread
is that an organisation trades for a social/environmental
purpose
• Formed in 2003, today 20 staff and £2m turnover
Ambassadors and ‘Voice’ Conference
Social Enterprise Coalition has 3 key activities
1. Awareness/Promotion: media, events and ambassador program
2. Best Practice Research: case studies, ‘how to’ guides and training materials
3. Inform Policy Agenda: advocating for a strong culture for social enterprise
• Key programmes include Social Enterprise
IDEA! Evolve current social enterprise networks into a structured coalition
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28. Social Innovation
Public services for public benefit
NESTA
• NESTA (National Endowment for Science Technology
and the Arts) – endowment of £300m focussed on
‘radical’ innovation (rather than ‘incremental’
innovation)
• Looking at the incentives that can motivate radical
change – ie challenge grants
• New initiative is ‘The Lab’ which fosters innovation in
public service by bringing together people from the
public, private and third sectors to collaborate on
practical projects
What programs from NESTA work and should be replicated in Canada?
What opportunities exist? 28

29. Supporting Entrepreneurs
Encouraging social entrepreneurship
Unltd.
• Unltd. is a support program from social entrepreneurs (not enterprises) and founded
with a £100m endowment fund from Millennium Awards Trust
• Works with 1000+ social entrepreneurs and spend £7.5m per year
• 3I’s : INVEST in INDIVIDUALS with IDEA
Provides 3 different levels of awards:
• L1: £500 - £5K – focuses on first steps building entrepreneurial capacity
• L2: up to £15K - focuses on freeing up individuals’ time to develop project
• L3: up to £20K - focuses on replication and scaling up
• Partnership with Bridges Ventures connected to investment readiness
• Youth programs include Unltd. Sport Relief (funding young people to develop ideas to
reduce social conflict) which work because of freedom & structure, trust the people and
run by young people for young people
• Unltd. World –www.unltdworld.com - 9000 members (3/4 active) includes real-time data
mapping, community building and marketplace
Unltd. is rolling out globally – is Canada interested in a partnership?
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30. Innovation Foundation
Applied Research and Incubation
The Young Foundation
• Focussed on building the field of social innovation –
systematically encouraging it by developing ideas, working
with local agencies and developing scale strategies
• Founded by Mel Young ‘success rate of social enterprises is
1/10’
• Programs include:
• Health Launchpad – provides funding and support for
health related innovation (in partnership with NESTA)
• Language Line – providing translation services for
public service
• Plan my Care – provides help to the elderly in
accessing programs designed specially for them
What programs can be replicated in Canada?
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31. Teaching Social Entrepreneurship
School for Social Entrepreneurs
• School for Social Entrepreneurs provides training to social
entrepreneurs – currently approx 40 students with another 7
schools in the UK
• Focus on small group action-learning and runs once a week
for a year with courses including ‘expert witness’, ‘project
visit’ and ‘peer learning’
• Cost is £8500 with bursaries and subsidies available
Charles Takawira Max Graef
www.healthcarelink.org www.radioactive.org.uk
A not-for-profit, community investment organisation which RadioActive provides complete technical services,
recovers and redistributes surplus medical supplies and equipment and training to communities and NGOs
equipment ,with a dedication to a three-fold mission of around the world, to help them build and run
environmental stewardship, job opportunity creation for the community radio stations and recording studios
marginalised, and improving health in Africa.
Entrepreneurs have the ability to see opportunity and drive change
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32. Contents
1. Tour Overview
2. Social Finance
3. Public Policy
4. Culture and Enabling Environment
5. Actions
32

33. Outreach Engagement Strategy
What kind of Outreach is necessary?
Financial Stakeholder
Causeway Strategy
Public Policy
ON
Strategy
All Policy
Tour
Participants Program
BC
Strategy
Overall Communication
Research
Strategy
Through outreach we can educate investors & policy makers on national and
regional levels 33

34. Study Tour Actions - Finance
Resilient Capital BC
Social Capital Pilot Fund
OSVC, ON
Capital Market Instruments Causeway and Other
Social Impact Bonds
Regional Actors
Social Capital Funds
Enabling Infrastructure Policy Tour
Funder Communities
Feasibility Studies Participants
finance services, back office for funds and SiG
Legal Structure Working Grp BC Centre for social
exploring CIC and L3C models enterprise
Regulatory Reform Working Grp Casuseway Working
foundation reforms, tax policy Group
Key Step: Getting tour participants involved in ACTION
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35. Structure and Reform
Two big issues for working groups to tackle
Issues to Address:
Legal Structure
• Designing and advocating for a legal structure for Canada
• Pros and cons of CIC and LC3
• Provincial and Federal actions need to be activated
Regulatory Reform (Foundations and Taxes)
•Revising and advocating for improvement of regulations for foundations
• CRA and PRI guidelines for foundations
• Exploring how tax levers might support investment in social innovation
and social enterprises
Key Step: Convene a high profile working group
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36. Study Tour Actions – Policy
Finding the right innovation policy catalyst
Social Innovation Public Policy Sean Moore, SiG National
Catalyst Working Group (Tim Draimin), Al
Etmanski
Federal: Sean Moore and
Causeway
Self Organized - Policy coalitions Provincial: BC (Al)
targeted by ON and BC ON (Allyson Hewitt)
Interested Tour Delegates
Key Step: Getting tour delegates involved in ACTION
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37. Policy Catalyst Working Group
Reflecting public benefit through government
Key Issues to Address
What is an appropriate policy catalyst?
•Creation of a social innovation ministry (Office of the Third Sector)?
•Creation of a social innovation endowment (NESTA)?
What should a ‘government body’ cover?
• How should public benefit services be reflected in government
•Focus Innovation and not cost-cutting
What should a ‘NESTA-like’ organisation do?
•Canada-wide knowledge management and research
• Funding for social innovation projects
•Challenge Grant Programs
Should the catalyst be provincial, federal or both?
Is there a role for municipal leadership? 37

38. Study Tour Action - Culture and
Enabling Environment
Supporting Enabling Activities in
Ontario Trillium Foundation
Ontario
SSE Feasibility Study SiG@MaRS
Unltd. Canada Feasibility Study TBD
Challenge Grants TBD
Uniting the Networks TBD
Key Step: Getting tour delegates involved in ACTION
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39. UK Social Innovation Policy Tour
For more information on Volans Social
Innovation Tours, please contact
Charmian Love
charmian@volans.com
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