Friday 11 June 2010

Hello CED supporter,

Through the many conversations I have participated in over the last month about next steps for CED in New Zealand, it has been increasingly clear to me that we are continually being hampered by limited access to social finance.

In Scotland I was impressed by the way that Senscot has helped to develop a "pipeline" of support for social entrepreneurs and social enterprises......from small amounts of seed funding for individual social entrepreneurs to develop a good idea, to start -up funding for social enterprises, to more significant funding to enable established social enterprises to grow to the next level. As well as finance available from social investors, the Scottish government provides a mix of grants and loans through its Social Investment Fund to develop the sector. Any readers from the New Zealand government please take note!

A number of CED conference delegates have told me that they understand social enterprise as a concept, but that social finance is harder to get a grip on... So what is this new "thing" that we are calling social finance?

I am learning that social finance includes social investment, social lending, microcredit, asset transfer initiatives, credit unions, community sector banking, community development finance institutions, time banking, local currencies, community foundations ,,,and more.

This is a major learning curve for most of us community sector folk and I am not going to attempt to define the above concepts. But I do suggest that if this is an area that interests you that you revisit the CED Conference website, go to proceedings, and check out some of the presentations there. For example:

Lindsay Jeff's presentation "Potential New Zealand approaches to social finance" provides an excellent overview and definitions of some key terms.

John Prendergast from the Community Trust of Southland told us a tale of grants and loans made to support community economic development in the Southland region. Seems to me those south islanders really know a thing or two about social finance!

Glen Saunders' presentation on his report that was commissioned by Tindalls and the ASB Trust "A New Funding Paradigm" - about the status of social lending in New Zealand - is well worth a look. Commenting on the current state of play, Glen says about social lending that "No one is asking for it, so no one is providing it; no one is providing it, so no one is asking for it"! So how about we start asking for it and see what we can manifest!

Ingrid Burkett brought an Australian model, Forresters Community Finance, that enables the flow of new capital into community enterprise, to our attention. Forresters have an innovation and education arm that ensures ongoing development of best practice in terms of social investment. Ingrid's presentation stressed the need for a balance between viability and sustainability.

Margaret Jeffries' presentation about time banking is also good stuff. Margaret says that time banking is "a way of trading skills in a community. It uses time, rather than money, as the measurement tool. Members of a Time Bank share their skills with other members within the community and are given time credits for the work they do. With the credits they gain, each member can buy‟ someone else‟s time, and get the service they need."

David Marra and Christopher Hensch co -presented about the Pegasus Exchange that " is creating a local complementary currency which will enable individuals, not-for-profit organisations and businesses to be more involved and have greater participation in the economy. The currency is set up as a membership organisation with a focus on small business activity and to support the not-for-profit community organisations in Canterbury's urban and rural areas.

On the international front:

I am continuing to be in touch with Annemarie Naylor from the Development Trusts Association in the UK who got us excited at the CED conference about asset transfer possibilities (do check out this website - some wonderful resources and case studies available). Annemarie has been telling me about the development of the Community Shares project in the UK. Community shares are a way of raising money from communities through the sale of shares or bonds in order to finance enterprises serving a community purpose. Unlike charitable fundraising, community investors can get their money back, and many also receive interest or dividends on the money they invest. It is not a new idea. Community investment underpinned the birth, growth and development of consumer co-operatives in the nineteenth and twentieth centuries. In the last ten years there has been a resurgence of interest in using community investment to finance a range of community initiatives.

I was interested to note that a book called "Slow Money" by Woody Tasch has been published that explores community investment in local food economies.

In the UK, the Young Foundation has carried out some emergent work on Social Impact Bonds and Social Value. Social Impact Bonds are a financial tool being developed to provide a new way to invest money in social outcomes. Their key innovation is to link investments (by commercial investors or foundations) to a programme of actions to improve the prospects of a group (for example 14-16 year olds in a particular area at risk of crime or unemployment) and commitments by national government to make payments linked to outcomes achieved in improving the lives of the group (for example, lower numbers in prison, and lower benefits payments). Its early days - this is still at the concept phase and yet to be piloted, but such an interesting idea. If governments get that investing in the social economy actually saves them money in the long term - now that would be something!

In Sweden around 2000 social entrepreneurs are currently gathering to "Rework the World" . It is the 5th Global Summit and they are really getting down to it - 100 concrete and investible initiatives and ventures from all over the world have been selected for discussion that fall within five areas: Energy, Water, Land, Cities and People. This site is giving me some great ideas for our next CED Conference.

A social enterprise online course is currently available. There is still time to enrol in the University of Waikato Post Graduate Social Enterprise papers for B semester 2010. The core paper taught this coming semester will be SCEN 502 Management and Social Enterprise, one of the two compulsory papers in the Social enterprise certificate and diploma programmes. This paper examines some of the issues which may arise for managers of an organisation engaged in social enterprise, community development or not for profit activity. This programme is taught entirely online, so there are no classes to attend. All you need is internet access and the motivation to study. If you feel a little isolated in your region, the 'virtual-classroom' generates a creative learning community. Classes start 12 July, so if you are interested in enrolling it is really important you get the process started NOW! Enrolment needs to be completed by the third week in June. For enrolment queries, contact Kim Barclay Kerr, This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

I'd like to leave you with some wise words from one of my Scottish community heroes, Lawrence Demarco. In this week's Senscot bulletin, he says....

"Among community development workers (I'm one) there's a clear distinction between those of us who believe that we should be employed by local people (my view) and those who believe that community empowerment should be an activity of local councils (the majority view). This encroachment by the state into the workings of civil society is confusing, intrusive and needs to be resisted. The alternative, of communities taking responsibility for themselves, is best exemplified by the likes of Development Trusts and Community Housing Associations which flourish in Scotland. These organisations are owned by the community they serve - often as the anchor organisation for a whole area - coordinating multiple activities. I believe that this model will increasingly become accepted as mainstream Policy."

Wishing you the very best in your enterprising adventures,

Warm Regards,

Di

Di Jennings
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