Accessing capital to purchase an asset, launch a new initiative, scale up, or better manage financials.
Social finance enables community organizations to access new money to enhance their impact. Organizations can complement grants, contracts, and other forms of earned income with repayable debt and equity investments to fund future work. These investments can be used to generate savings or income to repay investors. In many cases, repayment terms are negotiated to meet the needs of the organization.
Foundations, credit unions, and other social finance investors are excited by new ways to use their capital to generate a social return as well as a financial return. Many are looking for opportunities to make repayable investments in community organizations.
Social finance tools can help diversify sources of cash. As investors require repayment, these tools do not replace revenue. They are intended to complement grants, government contracts and contribution agreements, donations, and earned income.
In determining whether and how to use social finance tools, community organizations should consider:
- What they need financing for, or how they would use the money
- How the money will be paid back at a later date
- How the financing opportunity fits with their mission, values, and capacity
The Innoweave Social Finance Workshop helps leadership teams of community organizations assess how social finance tools can work for them. Leadership teams will leave with an understanding of how to:
- clarify how they might use financing;
- develop and assess options to access financing;
- and take the next steps towards implementation.
Content for this module has been developed by: