The Social Enterprise Fund (SEF) provides repayable financing tools to social entrepreneurs working to do good in community. So far, the fund has invested over $90 million in more than 110 projects to organizations of all corporate structures working in a wide variety of sectors across Alberta. More than $40 million has been paid back, with the capital ready to be reinvested into new projects.
SEF was established in 2008 through a unique collaboration between the Edmonton Community Foundation and the City of Edmonton. Other contributors have included the United Way, Alberta Real Estate Foundation and several private contributors. SEF also plays a role in the larger community of those interested in the concept of social enterprise and social finance. They work with partners and organizations across the province, country, and internationally to expand the practical understanding of how social enterprise works ‘on the ground’, as well as contributing to training opportunities available to social entrepreneurs.
Jane Bisbee is the Executive Director of SEF and, over the last thirteen years, has worked to build SEF’s portfolio. Jane has decided to resign as Executive Director to explore new ways to contribute to building the social finance community. As she transitions out of her role, we had a chance to catch up with her for an ‘exit interview’.
Q: Biggest lessons from her time at SEF?
“It’s maybe the false notion that there are two parallel universes in the economy. There’s the ‘real economy’ for-profit world, and the idea that the non-profit world is not the actual economy, which is foolishness on so many levels. This attitude is not helpful to us both in terms of what we want to get done and what we’re going to try to do in future to bring people to make social finance work for better community.
It really was emphasized for me after we came out of the pandemic, when there was a lot of concern on restarting small business and programs and not the same focus on the non-profits. In social finance, the whole point of it is to try to get social purpose organizations to actually focus on the use of business tools and best business practices to be able to deliver what they are doing. The fact that all of the levers that are used to drive the economy aren’t seen to be worthy to apply to the social purpose organizations was personally a huge ‘aha’ moment in all of my years here. And to realize that this was a two-part economy. We’ve got to stop doing that, especially if you want these really tough societal issues addressed, and the people we turn to address them are not actually given all the tools that they should have and could have, and so that infuriates me.”
Q: How we can bring those two together?
“There is a whole lot of education that has to happen now. This is a whole paradigm shift of thinking. I want non-profits to stop being terrified of the word ‘profit’. Rule number one is you have to have more money coming in than going out, or you don’t get to play. I hope that at some point there’s a better understanding about what earned revenue is. For example, grants aren’t gifts. Grants are the means by which a granting agency purchases a good or service from the organization they are giving the grant to. So the price had better be accurate, for both the purchaser and the buyer. The grant is either earned revenue for a good or service, or it might even act as an angel investment to scale operations.
For example, I have counseled non-profit organizations to turn down grants where they were only getting a portion of the cost of doing the project. Because why should it always be ‘Bay Days’ for the for governments and granting agencies? Why should they always expect something they are purchasing to be on sale? There needs to be a whole systemic change around how we think about different corporate structures and how they act in society, and what the responsibility is. We must make all opportunities and all of the tools available to everyone.”
Q: Her best advice to someone entering the space for the first time, first to a social entrepreneur seeking funding, and second to a social investor?
“Advice to social entrepreneurs, I would say, don’t be afraid of money. It is a tool that you need to get stuff done, but money behaves in different ways, in different circumstances, and is used in different ways. So understand what you mean by ‘I am looking for money’. In terms of the business world, how would that money be identified? Its semantics are very interesting and very important. It’s a matter of doing your research and understanding what they are talking about within the context of your operation. Understand what kind of money your revenue streams are. Understand what kind of money you looking for and investment capital that will actually scale your business, which can be scary words for non-profits.
Also, don’t be scared of the money, and don’t be afraid of debt, but understand it and respect it. You do have to understand what that money is supposed to do and how you’re supposed to use it. Do your homework but then temper it with your mission. If you’re going looking for cash from somebody, one of your many customers, do some research about them. They’re a human being. Why would they be interested in what you do if you’re not the least bit interested in what they do?
Advice for social investors, they need to get past their traditional ways of thinking about investing. Social finance is about making capital go where it doesn’t normally want to go, and investors are quite often profoundly risk adverse, which seems a bit odd, because their entire pursuit is gambling on investments. And so once again, do your homework and understand what you’re gambling on and where you are putting the money. Hiding behind traditional approaches to doing risk assessment isn’t going to help you.
The other thing is to be really, really, really patient, and really, really, really imaginative about what a deal structure might look like. It might not look like what you think and the securities might be quite different than what you think. But the good news at the end of all of that, is that in our experience, at least social entrepreneurs are good at managing money. We’ve done about $90 million in investments since we started. About 110 projects and counting and very few of those, about eight to half a dozen of those, didn’t work.”
Q: Favourite memories with Trico Charitable Foundation (TCF)?
“The way that TCF and Dan in particular challenged my thinking as he is always pushing for the next level. I have a real admiration for the thought leadership that’s coming out of Trico, and I think, frankly, it’s not well enough known or understood in the country. Keep doing it, because we need somebody sitting back and measuring and examining and pushing the assumptions that we have and making us think. One of the best things during Covid was the provincial government convened a group of us that got together every Thursday morning. We would talk for a couple of hours about this and that was hugely useful and hugely important. I knew a bit about what Trico was doing, but that got me a lot deeper and gave me a much better window.”
Q: If she could go back in time and redo anything in her career at SEF?
“This one’s hard, because we could spend weeks on individual decisions. I would say sometimes being able to explain to investors why we’re doing this, and to make a clear presentation to them about that. Most of the loans were reasonable guesses, even the ones that that ended up ultimately failing. When you are doing investing rather than granting, you’re making a decision over time in a way that you aren’t with a grant, because with a grant you measure the impact when the grants are made. You have to understand that it might be 10 or 12 or 13 or a 15-year relationship. We’ve got loans that were made in 2012 that are still on the books, and that is the nature of this kind of work. I think early on, everybody thought: ‘five years and they’ll be out.’ Now, if I see somebody proposing a five-year term, I usually laugh, because it means that they don’t truly understand the long term of what they are doing. It’s understanding the nature of a loan and what that kind of money looks like to build the relationships and the deal structure.
I probably shouldn’t have tried to break even as fast as we did. We have about 50 loans out at the minute. Pretty big portfolio. There’s always 20 conservatively in the pipeline that we’re working with, and we have a staff of two, me and one other person and that’s probably crazy. It’s tough to find people who have the right skill set to do this work and one of our marching orders was pay for yourself. We’re a business too, but that has implications on how we’re structured, and probably earlier on, I would have tried to expand the staff faster than I did, but we were moving pretty fast. Even to develop what the job description looks like and do the hiring process takes time.
I hope that someday we have a more coherent training system to develop people in professional development, to train people up in this work on the intermediary side, not just the social purpose organizations, but SEF and our counterparts, to try to get a stronger industry in place. There’s a very short list of people doing this in the country. Lots of people talking about wanting to do it, but very few of us are actually trained properly.”
Q: How is she looking to the future?
“I’m really interested in teaching other people how to do this work and we might as well share what I’ve learned so that other people can make all new mistakes, they don’t need to replicate mine. Let’s just learn from them, and then you move on and find other ways to develop this and grow. That’s part of what I’m really interested in, is the ecosystem, and how do we develop the social finance ecosystem? There is no one job where you could do that. It’s a matter of, how do I create the system or the network that can address that question? I currently sit on an advisory council to the federal government, so part of it’s being done through that. And there’s some other preliminary conversations I’ve had with groups.”