There are some very positive things to say about the Impact Ontario Conference which took place at the MaRS Centre for Impact Investing in Toronto on March 18. It generated a sold-out crowd of more than 300 attendees from Canada and well beyond. There remained a full house for the day’s last two speakers at 5:30 pm. And, while we didn’t break the internet, like Ellen DeGeneres at the Oscars, the conference’s Twitter activity, under #ImpactOntario, was significant throughout the day and is still garnering Tweets.
On the flip side, while the theme of the event was, “from the margins to the mainstream”, what I heard from speakers throughout the day, is that impact investing is still pretty much operating at the margins when it comes to the world of global finance.
This is not a criticism of Impact Ontario. Nor is it a Canadian problem. It is a challenge that was echoed y speakers from Canada, the US and around the globe. One of the key reasons for this is, simply, that the field remains in its infancy. We’re still working on getting the right tools and products when it comes to the deals being offered.
Good steps forward but more work to be done
On the tool side, platforms like MaRS’ Social Venture Connection (SVX) is slowly picking up steam but we still have a long way to go in terms of the number of deals being brokered. When it comes to products, while there’s optimism for the future, according to one of the closing speakers, Investing for Good’s CEO, Geoff Burnard, things like Social Impact Bonds (SIBs) are unintelligible to mainstream investors.
As for the deals themselves, Joel Bryce from Deloitte, who spoke on the opening panel chaired by Ontario’s Helen Burstyn, had this to say, “The general problem is that the social enterprise deal size is still too small.” We’re talking about an average in the $2 million range. Meanwhile, as several speakers noted, most institutional investors are looking for a minimum investment of $100 million.
Two other issues that came up over the course of the day were the need to get more consistent in how we measure the success of social innovation projects and the need to get better at collaboration. On the collaboration front, Abigail Noble, head of Impact Investing Initiatives at the World Economic Forum, suggested that the great leap forward in impact investing won’t come from products but from our ability to be better collaborators.
In search of collaboration, measurement, partnerships
Minister Eric Hoskins, who spoke over the lunch break, talked about the important role government can play in bringing collaborators, like private investors, to the table. As an example he cited the Catapult Microloans launched in Ontario last year. On the measurement front, one of the key challenges holding us back we heard is that many projects require SE’s to self-report on data. No surprises here, but the result is often bad data, as there’s no incentive to be honest. In fact, the story told by expert panelists was quite the opposite.
Reporting poor results often leads to project funding being pulled. What is the way forward with respect to measurement? We heard a mixed bag of advice: get clear about what to measure first; take baby steps; and don’t punish SE’s for telling the truth. Ultimately, like impact investing itself, it’s about intentionality. The way forward is to be clear about what measurement and evaluation are for and what they aren’t.
As for moving from the “margins to the mainstream,” Solar Share’s Julie Leach raised a really good point during the morning’s first panel. She said that early investors in Solar Share’s value proposition have tended to be individual investors who are, generally speaking, willing to take greater risks. These early investors are critical to any project moving forward. However, no matter how good the venture – or the early investors – Leach talked about the importance of intermediary validation and getting the backing of respected sources for mainstream deal flow to happen. In the case of Solar Share, she cited the backing of Bullfrog Power as a catalyst.
Final takeaways
So what’s the take away from this busy day? Impact investing is clearly not in the mainstream yet. But, judging by the event’s large crowd and the excitement throughout the day about the projects being pitched, it is definitely picking up steam. And the mainstream is paying much more attention. On the other hand, what’s wrong with working at the margins for just a little while longer?
I helped pay my way through university working for the Body Shop, back in the days when Anita Roddick was still alive and our green paint had a lot more to do with limited budgets than some fancy branding strategy. Just like today’s social innovators, we felt like we were really building something important. Perhaps, equally important, we sure had a lot of fun trying to figure things out.
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Verity Dimock is a non-profit business leader and social entrepreneur. She is a graduate of Ontario’s School for Social Entrepreneurs and currently works as a fundraiser for Toronto’s new Black Creek Community Farm. In addition she is working on the development of a food based social enterprise that promotes healthy, sustainable food at the doorstep. In her spare time, Verity likes to write about social enterprise and is a fan of DIY and handmade projects that feature upcycling and recycling. You can find Verity on Twitter @thecraftstudioTO and @socentgirl. Verity holds an undergraduate degree in Politics and Economics from Trent University and a Master’s Degree in Instructional and Performance Technology from Boise State University.