At ACBN, our foundation is the proverb “I am because we are.” We believe in ecosystem mobilization—sharing knowledge, uncovering challenges, and building pathways to collective success.
We recently sat down with Heather Simpson, Founder of S4G and a consultant specializing in non-profits and social enterprise, to explore the opportunities and realities of social finance in Canada. Her insights shed light on how this emerging system could reshape access to capital for historically underserved communities and what business owners should keep in mind as the Social Finance Fund (SFF) rolls out.
Where Social Finance in Canada Shows the Most Promise
The Social Finance Fund was designed to drive investment into areas overlooked by traditional capital markets. According to Heather, two sectors stand out:
Affordable Housing and Social Purpose Real Estate
These are tangible, real assets lenders understand—essentially mortgage lending—and they meet urgent societal needs.The Environmental Sector and Net Zero Commitments
As Canada moves toward its Paris Agreement goals, the demand for environmental technologies and services will grow. The SFF could help de-risk these emerging markets where traditional investors hesitate.
Profitability and Earned Income: Facing Reality
Many non-profits and social enterprises dream of replacing grant dependency with earned income. Heather reminds us:
Margins are tight. Like most small businesses, social enterprises typically provide stability and jobs, but rarely massive profits.
Unrealistic expectations lead to disappointment. A social enterprise cannot be expected to outperform traditional businesses while also carrying social deliverables.
Philanthropic capital still matters. Social finance is a tool, not a full replacement for grants.
Key takeaway for entrepreneurs: Earned income is powerful, but it works best when combined with other funding streams.
Access Depends on Intermediaries
For social finance in Canada to reach marginalized entrepreneurs, the choice of intermediaries—those who distribute the funds—is critical.
Trust and localization matter. Without community-rooted lenders and loan funds, many racialized and immigrant-owned businesses won’t benefit.
Specialized programs are required. Tools like guarantee funds, loan loss pools, and operational subsidies are essential to support smaller, riskier, or unconventional borrowers.
What Must Be Clarified for Success
Heather points out that the SFF will only succeed if it:
Commits to disaggregated data to track who is receiving capital—and who is not.
Focuses on demand-side metrics like loan applications and decline reasons, not just money disbursed.
Builds sector capacity through grants and training so organizations can realistically prepare for financing.
Clarifies its main focus. If housing and real estate are priorities, this must be transparent so organizations don’t waste time chasing inaccessible funds.
Closing Thought: Building Equity Through Finance
The rollout of the Social Finance Fund is a once-in-a-generation opportunity. Done well, it could reshape how racialized communities, non-profits, and social purpose businesses access the capital needed to build equity and long-term sustainability. Done poorly, it risks reinforcing the same barriers it was designed to dismantle.
Watch the full interview with Heather Simpson here: Watch on YouTube
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