Social finance can be complicated, and it’s easy to get overwhelmed with
information online. Here is a glossary of important terms relevant to the
Investment Readiness Program. You can also download a version of it here.
Social purpose organization
A social purpose organization can be a charity, nonprofit, social enterprise, co-operative, or for profit social enterprise. In all cases, a social purpose organization is advancing a social, cultural or environmental mission.
A nonprofit is an organization that seeks to advance a social goal or shared stance on issues and does not earn profits for its owners, but reinvests all of its profits back into itself to continue carrying out its mission. Nonprofits are tax-exempt.
A charity is a nonprofit organization that uses its resources for charitable activities that benefit the community, such as poverty relief, the advancement of education or other types of social, cultural or environmental causes. Charities must be registered with the Canada Revenue Agency to issue official donation receipts and be tax-exempt.
A co-op is a cooperative society, business, or enterprise, owned and operated by and for the benefit of its members. Co-ops address a community’s unmet needs and can change accordingly. They help promote the interests of those who can accomplish more collectively than they could individually.
Investment Readiness Continuum
There are many stages along the path to becoming investment-ready. The continuum begins with early ideation, design, entreprise development and culminates in a social purpose organization being primed to receive investment.
Social finance is an investment that has a positive social, cultural or environmental impact that also generates some return for investors. Through loans and investments, social finance can give new actors the opportunity to make a difference.
A social enterprise is an organization or program that is mission-driven, aiming to sell goods or services to earn a revenue, while also helping achieve positive social, cultural or environmental objectives.
Social innovation supports new solutions to pressing social cultural and environmental concerns.
The Investment Readiness Program will provide non-repayable capital to social purpose organizations for their social enterprises, enabling them to access various services and supports to support them becoming investment ready. Unlike an investment, non-repayable capital is one-time funding that must not be repaid.