Youth Catalyst Fund – Background Information

The Youth Catalyst Fund was established as part of a new multi-sector partnership brought together to address the youth employment issues raised in Community Foundations of Canada’s landmark #GenerationFlux report.

The first phase of the Youth Catalyst Fund will support early-stage social enterprises that focus on creating employment opportunities for young people facing job barriers, as well as social enterprises that are youth led. The Fund also includes a pan-Canadian grant program that will be unveiled at a later date.

Approximately $900,000 in investment capital will be available to fund at least 12 social enterprises across Ontario, through an application process that will be rolled out later in 2015. Successful applicants will be determined by a committee and will receive not only funding but program administration and technical support services from an experienced group of partners. The fund will provide various financing types, as well as an investment de-risking strategy.

Social enterprise has the potential to be a particularly effective youth employment strategy because it is youth-led and speaks to the important connection that young people place on doing work that also contributes to social good.

Conversations leading up to the creation of the Youth Catalyst Fund have been ongoing for more than two years, starting with the release of Community Foundations of Canada’s #GenerationFlux report in October, 2012.

#GenerationFlux

#GenerationFlux collected and collated important research about the trajectory of Canadian youth from education to the workplace. The report revealed how Canada’s most educated generation was struggling to gain a foothold in the workplace and how students with disadvantages were even more at risk of falling behind.

The report was generated as part of Canada’s Vital Signs program, which links data, stories and expert insight from across the country to provide communities with a sense of key issues and opportunities.

Among the findings of #GenerationFlux:

  • Young people are delaying the start of post-secondary education to improve high-school grades, or save for tuition, which has risen up to 200% in some provinces in the past 20 years
  • One out of three 25-to-29-year-olds with a post-secondary diploma moved into low-skilled occupations after graduation
  • After graduation, youth are saddled with debt that can take 14 years to pay off
  • 3.2 million Canadian 12- to 19-year olds are at risk for developing depression. Yet, 3 out of 4 children and youth who need specialized treatment services do not receive them

Acting on #GenerationFlux

After the publication of #GenerationFlux, CFC’s President began an exhaustive speaking tour, meeting with government, foundations, businesses and national change agents to discuss the findings and consider ways to respond.

Community Foundations of Canada recognized the need for a collaborative, innovative and highly integrated response to the issues highlighted in #GenerationFlux – one that would move the organization and its partners from knowledge to planning to action.

At the same time, CFC’s network of 191 community foundations were searching for new opportunities to explore impact investing so they could leverage their endowed assets and support even more community initiatives. Community foundations in large centres such as Edmonton and Hamilton were active in the social finance space, but the road for smaller foundations was more challenging. In designing the Youth Catalyst Fund, CFC saw an opportunity to support a social good while activating its network, its assets and its community knowledge to even greater effect.

With the support of Deloitte and the MARs Centre for Impact Investing, the Youth Catalyst Fund will also support community foundations that want to invest in the fund and identify potential social enterprises across the province.

Youth Catalyst Fund Partners

Community Foundations of Canada is the national network for Canada’s 191 community foundations, which help Canadians invest in building strong and resilient places to live, work, and play. Together community foundations hold more than $4 billion in assets and were identified in the Canadian Task Force on Social Finance as being key drivers of change in the arena of impact investing.

Community foundations in a number of communities have been leaders in mission-related and impact investing. For example:

  • Community Foundation of Ottawa has been a leader in investment screening and endorsed the United Nations Principles of Responsible Investing (UNPRI).
  • The London Community Foundation has established a Social Loan Fund focused on affordable housing solutions.
  • The Hamilton Community Foundation has an impact investing portfolio of $12M.

Community foundations across the country will be invited to deepen their role as impact investors by investing in the Youth Catalyst Fund, and to use their community knowledge to identify worthy social enterprise projects in their regions. CFC is the leader of the Youth Catalyst Fund and will be overseeing the project, ensuring its alignment with impact objectives, raising the necessary investment capital, and driving evaluation and communications.

Other partners in this phase of the Youth Catalyst Fund include:

Ontario’s $4-million Social Enterprise Demonstration Fund (SEDF) supports innovative social finance pilot projects across the province. The fund is partnering with private sector impact investors to unlock much-needed capital for early-stage, high-potential social enterprises. Community Foundations of Canada is receiving a $450,000 grant from the SEDF. We will be using some of that support to administer our program and effectively deploy and monitor our investments, and to provide business support to social enterprises. Importantly, we will also be using some of the grant to make investments, in a way that de-risks investments by other partners.

The TK Foundation is a private grantmaking foundation supporting youth development programs, based in Nassau, Bahamas. The foundation has partnered with CFC on a broader response to the findings of #GenerationFlux. The Foundation is providing $400,000 of investment capital to the social enterprise aspect of the Fund.

The Betsy Martin Fund is an endowment fund established by Community Foundations of Canada in memory of our friend and colleague, Betsy Martin. Betsy was a pioneer in impact investing who tirelessly promoted the field long before it became popular. The capital in her fund is dedicated to impact investing. The Youth Catalyst Fund will draw in $100,000 from the Betsy Martin Fund and will be the first time it is used to generate impact.

Deloitte is one of Canada’s leading professional services firms. They are also thought leaders in the area of issues affecting youth and were partners in the publication of #GenerationFlux. The firm’s social finance experts will be playing a role in detailed Fund design, the evaluation of opportunities and structuring of investments, monitoring and reporting.

The MaRS Centre for Impact Investing is a social finance hub and project incubator that acts as a neutral collaboration space for all sectors – government, community and private – to strengthen our collective ability to mobilize private capital for public good. The Centre will be playing a role in detailed program design including financial modeling, governance and investment criteria, as well as pipeline development.

For more news & updates, subscribe to our mailing list, visit us on Facebook, or follow us on Twitter