Emerging Social Finance Education Values by Peter Scott Submitted to OCAD University, in partial fulfillment of the requirements for the degree of Master of Design in Strategic Foresight Innovation Toronto Ontario, Canada, April 2015 © Peter Scott 2015 DECLARATION I hereby declare that I am the author of this MRP (Major Research Project). This is a true copy of the MRP, including any required final revisions, as accepted by my examiners. I authorize OCAD University to lend this MRP to other institutions or individuals for the purpose scholarly research. I understand that my MRP may be made electronically available to the public. I further authorize OCAD University to reproduce this MRP by photocopying or by other means, in total or in part, at the request of other institutions or individuals for the purpose of scholarly research. ii ABSTRACT Over the past decade, there has been increasing discussion on the role of social finance to help assist with the redistribution of capital for social purpose businesses. Concepts such as triple bottom line (environment, social, financial) and SIB (Social Impact Bonds) have become commonplace. The sector is largely known as impact investing with a growing market potential. Its three key components are: supply of capital, demand for capital and intermediaries. Governments by default are chief intermediaries. Non-profit and for-profit businesses exist across a “blended returns” spectrum that are aligned well with traditional financing - when understood. This research project addresses the emerging social finance education challenges and opportunity gaps. It reviews the history (e.g. social economy) where social finance emerged from and observed traditional market shifts to hybrid models consideration. More importantly, it also looks through a social finance education and training lens of shared-value proposition. iii TABLE OF CONTENTS 1. INTRODUCTION ........................................................................................................... 1 Definition of Social Finance ................................................................................... 2 Thesis Statements ................................................................................................. 5 2. RESEARCH METHODOLOGY ..................................................................................... 7 Research Questions .............................................................................................. 8 3. LITERATURE REVIEW .............................................................................................. 10 Historical Context of Social Finance .................................................................... 10 Key Components of Social Finance Market ........................................................ 12 Impact: a Social Enterprise Strategy for Ontario ................................................. 17 MaRS Centre: A Contemporary Social Finance Force ........................................ 18 Summary: Literature Review Problem Finding (Education Gap) ......................... 21 4. CASE EXAMPLES ...................................................................................................... 25 One: Instructing for Impact: the State of Social Finance Education In Canada . 25 Two: Canada’s top five Private Sector Banks ..................................................... 32 Summary: Linking Knowledge and Economic Value Measurements .................. 38 5. FIELD STUDY ............................................................................................................. 40 Interview ............................................................................................................. 40 Primary Data ...................................................................................................... 41 Summary: Observation of Primary Data ............................................................. 47 Interview Questions and Percentage Response ................................................ 49 Summary: Percentage Response ....................................................................... 49 Knowledge Needs Evaluation and Indicators ..................................................... 51 Summary: Training implications .......................................................................... 52 6. SYSTEMS DESIGN THINKING APPRAOCH ............................................................. 54 Foresight ............................................................................................................ 54 (A) Systems Design Thinking: Social Finance Education Opportunity Gap ....... 55 (B) Mapping: Organization Market Shifts and Knowledge Usage ...................... 63 (C) Persona: Insights into Social Finance Profession’s Profile .......................... 70 (D) STEEPV: Focus on Technology, Economic and Value Trends .................... 73 (E) The Three Horizons: Emerging Social Finance Education Values ............... 78 7. DISCUSSION ............................................................................................................. 85 SROI: Social Return On Investment ................................................................... 84 Outcomes ............................................................................................................ 88 iv 8. CONCLUSION ........................................................................................................... 89 9. FINDINGS .................................................................................................................. 91 10. RECOMMENDATIONS ............................................................................................ 94 11. POTENTIAL INNOVATIONS ................................................................................... 96 BIBLIOGRAPHY ............................................................................................................. 99 APPENDICES .............................................................................................................. 109 A: Interview Questions ...................................................................................... 109 B: Interview Categories and Job Types ............................................................. 110 C: 2010 Canada’s Task Force on Social Finance ............................................ 112 D: 2013 National Advisory Board to the Social Impact Investment Taskforce .. 113 E: 2010 Canada’s Task Force Seven Recommendations ................................. 115 F: Alterna Savings Credit Union Seven Cooperate Principles .......................... 116 G: TD 2013 Corporate Responsibility ................................................................ 117 H: MBO’s Environmental, Social and Governance Report and Public Accountability Statement, 2013 Social Impact Data .......................................... 121 I: CIBC’s Corporate Responsibility Report and Public Accountability Statement, 2013 .................................................................................................................. 123 J: RBC, Public Accountability Statement, 2013 ................................................. 124 K: Human Resources and skills Development Canada (HRSDC) .................... 125 L: The Seven SROI (Social Return on Investment) Principles ......................... 126 M: Case Example – YMCA Elm Street Community Housing Bond .................. 127 N: Microfinance History in Canada ................................................................... 128 v TABLES 1: Summary: Social Economy Relations to Traditional Economy ................................... 11 2: Summary: Policy Framework of Government as Intermediaries ................................. 16 3: Instructing for Impact: The State of Social Finance Education In Canada .................. 27 4: Canada’s Top Five Private Sector Banks ................................................................... 33 5: Primary Data (Interview Questions and Summary) ..................................................... 41 6: Interview Questions and Percentage Response ......................................................... 49 7: Knowledge Needs, Evaluation and Indicators ............................................................ 51 8: STEEPV with Signals, Trends and Drivers ................................................................ 73 9: Barriers and Sector Signal and Trends (Three Horizons) .......................................... 82 10: SROI: Theory of Change (Impact Map) ................................................................... 85 vi FIGURES 1: Social Finance Terms .................................................................................................. 2 2: Research Design Methodology (Synthesis) .................................................................. 7 3: Key Components of Social Economy Ecosystems ..................................................... 22 4: System Dynamics of Economic and Social Values ..................................................... 56 5: System Dynamics of Economic and Social Values ..................................................... 57 6: System Dynamics of Economic and Social Values ..................................................... 58 7: System Dynamics of Economic and Social Values ..................................................... 59 8: Alterna Savings Credit Union Microfinance Program Learning Loop .......................... 62 9: Organization Shift Value Proposition Map ................................................................