Discovering the world of Social Finance

This article was originally published on the Re-Code website. Click here to see the original version. 
By Alexandra Reda, International Business Graduate, Concordia University

The world of social finance and impact investing was new to me.

This past summer, I had the opportunity to intern with the Social Finance team at the J.W. McConnell Family Foundation—an experience unlike any I’ve had elsewhere. Prior to this internship, I had a very traditional finance banking background and had worked at a portfolio management company for the last three years.
All this quickly changed, as the team taught me about the Foundation’s current portfolio and their strategy for the coming years.
Currently, the portfolio is made up of diverse risk-return profiles, which are directed to charities, nonprofit, for-profit social ventures, for-profit start-ups and even corporations. Despite the variety in the portfolio, all investments follow the Foundation’s impact investing objectives and deliver impact on one or more levels of society and societal change. This tactic can lead to a ripple effect as other foundations and institutions (for example schools) begin to think of innovative ways to allocate their endowments.

One of the Foundation’s investments—$5M with the Canadian venture capital firm Real Ventures—caught my attention. Its mission is to “serve entrepreneurs and nurture the communities in which they thrive”. Researching the companies that are part of Real Ventures portfolio, I was pleased to discover an abundance of innovative ideas serving a social purpose. For example, Causemo aims to make charitable giving social and mobile. The company intends to launch its own app enabling cause discovery, donations, tracking and social features. The Real Ventures fund has allowed them to reach 15,000 donors in 2015. Another example is a company called Varage Sale. This startup aims to make the process of finding, buying or selling used goods safer and more convenient than mainstream options such as Craigslist, eBay or classified ads, while also creating bonds between neighbours. Discovering funds like Real Ventures that support social entrepreneurs inspired me to start asking myself: How can I help people in an innovative way?
I have always told my told myself that one day I would be an entrepreneur. I am simply looking for the right opportunity, along with so many other people out there. The more I learn about social problems, the more I think about innovative ways that these problems can be solved and ideas to generate social impact.
While social finance may be a fairly new branch of finance, it is gaining more and more attention. Increasing activity in impact investing by educating existing investor networks and filling in financing gaps is one way to truly catalyze impact investing across Canada.
And what about the role of universities and colleges? Building entrepreneurial communities within higher education is key to encouraging students to participate in innovative social movements. This is how we create long-term impact in Canada. Having returned to my life as a student, I am now more informed of the tools that can be of service to budding student entrepreneurs and innovators—from CHNGR at Concordia, which connects social entrepreneurs with resources, to UBC’s Impact Investing Fund.
Working in the world of social finance, I’ve thrown away past assumptions. I’ve learned that it is possible to have a social impact without compromising return. The more I learn, the more I want to learn, and I wonder—will social finance practice will ever become mainstream investing? Maybe one day we won’t need to call it impact investing, it will simply be investing.