Funded by the Government of Canada, the Investment Readiness Program (IRP) supports social purpose organizations as they contribute to solving pressing social, cultural and environmental challenges across Canada.
Its goal is to help social purpose organizations prepare them to be ready for investments and participate in Canada’s growing social finance market.
The latest IRP round was overseen in Alberta by the Banff Canmore Community Foundation (BCCF) in partnership with Red Deer Community Foundation (RDCF). BCCF and RDCF utilized a jury of 14 community members to deliberate on the applications and Dan Overall, Executive Director of the Trico Foundation, was honoured to be part of that jury.
Recently, BCCF sent Dan five questions about IRP. Some of his answers formed the basis of a BCCF blog that is available here. You can see the entirety of the questions and answers below.
- What stood out to you about the applications for 2023 IRP projects?
“For all the IRP rounds over the years I have either been on the juries or followed the results, and I have to say, as a group, this last batch was the most diverse and exciting IRP group I have seen. To me it was a fantastic sign that Alberta’s social impact space is evolving. But with progress there is always new challenges and I think some jury members struggled with the boundary-pushing applicants we had. For example, some jurors seemed really uncomfortable with the idea of for-profits getting grants. Still others struggled with investment readiness. For example: just because you could get an investment doesn’t mean you are ready for investment. Another example: just because you have had funding in the past doesn’t mean you couldn’t use a grant to get investment ready. Multiple rounds of funding happen a lot in the mainstream start-up world and it’s something the social impact space needs to wrap its head around. I am not saying as an ecosystem of supports we all need to agree on these issues but it would have been highly useful to have had those conversations prior to a jury deliberation.”
- For the selected projects, why is investment-readiness so important?
“Investment-readiness is important because it is the third leg of the funding stool, joining self-generated revenue and grants. That said; the social impact space needs to do a better job of seeing how those three legs can combine. For example, there is a wonderful new report (“What’s in it for the Entrepreneur? An entrepreneurial perspective of catalytic capital and blended finance”) showing that social impact organizations receive social investment and then, while that obligation is still outstanding, use grants when they encounter challenges and uncertainty. It supports the growing consensus that grants are great for experimenting/figuring things out and investments are great when you have things figured out and want to build on that knowledge. Think of what we can accomplish if we perfect using that potent one-two punch not only chronologically but concurrently.
One more thing. Most people think investment-readiness is important because it gets social impact organizations in a position to receive investment. While that is obviously true, an equally important aspect of investment-readiness is getting social impact organizations in a position to make sure any investment they can get is a good fit for them. Cathy Clark of Duke does a wonderful job of noting the three ways a funder mismatch can lead to problems for a social impact organization: they lose control of their organization because they are not growing big enough for the funder, they lose control of their social mission because the funder feels the social mission is limiting profitability, or they lose control of timing because they aren’t growing fast enough for the funder.”
- What do you see on the landscape for the merging of civil society/social purpose/social enterprise?
“There are many things on the landscape for the merging of civil society/social purpose/social enterprise, but first and foremost is a Robert Frost fork in the road. One road before us, well-travelled, perhaps over-travelled, is the path of profit maximization. Whenever I hear someone justify social purpose/social enterprise because it yields better profits than traditional profit maximization, because it will help hire youth who are now more purposes conscious, or because it’s good for a brand, I fear we could be perpetuating the very system we are trying to overcome. Putting old wine in new bottles as the Pope says. The other road, the one less travelled, the one that will make all the difference in the world, pushes social enterprise to reveal just how far we can go in using business models to solve social problems. Down that road we can kick profit maximization to the curb and move capitalism from extractive to regenerative and from being self-centered to enhancing our interconnectedness. By the way, and this is crucial, that less-travelled road isn’t communism or socialism, it embraces the essence of capitalism. Taking that road is the most entrepreneurial thing we could do.”
- How is the IRP program supporting social enterprise system in Alberta?
“IRP is well-intended and no doubt does a lot of good. Indeed, it’s our Federal Government adopting one of the recommendations of the Social Innovation and Social Finance Strategy Co-Creation Steering Group. But it’s still just a cash boost into the system, an artificial stimulant like an energy drink. What happens is social impact organizations scramble on artificial timelines. Some have great ideas and some momentum but have been struggling and need help getting over the hump (the ideal target for IRP), and some come up with an idea just because there is new money available. Then the ecosystem has to struggle over those artificial timelines to sort one from the other. And believe me, as someone who has been a member of IRP juries this is hard because you are trying to guess at the meaning behind answers to applications where the applications tried to guess at the right questions to ask and then the applicants are trying to guess at the meaning of those questions or worse, what the jury would like to hear (not in a lying way but in a ‘wanting to put forward the best version of you’ way). Add it all up and the effort, as well-intended as it is, will always perform sub-optimally. It’s a transaction when what is needed is a relationship.
What should be done, and this is on the ecosystem of supports (funders and capacity builders) as much as the Federal Government, is the ecosystem of supports work as a team on an ongoing basis with social impact organizations so that when government funding becomes available we know where and when it will have the most impact, and can provide ongoing support. Rosanne Haggerty of Community Solutions has been taking this systems approach for the homeless. It’s early days in my learning about her work, but so far her wisdom and results are jaw-dropping! For example, she says part of the problem was programs for the homeless lasted 30-days but the homeless don’t have 30-day problems and “Solving complex social problems requires systems designed to move as fast as the problem.” If we can apply that wisdom to helping social purpose organizations and social enterprises, look out.”