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Community Contribution Companies and Access to Social Finance

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  • Bridget M Horel
  • Kevin McKague

Abstract

There is widespread agreement that innovative funding solutions are necessary to address capital requirements of social enterprises, social purpose businesses and not-for-profits in the social economy. The community contribution company (C3) is a legal organizational form for social enterprise, introduced in British Columbia, Canada, in 2013. In creating this legal form, the British Columbia government intended to provide social entrepreneurs with a recognized legal structure designed, in part, to assist social enterprises in gaining access to investment capital. Drawing on interviews from 14 of the 35 registered C3s and a review of filing data, this study provides information to help understand what attracted organizational founders to the C3 model, what challenges are experienced by C3s engaging with investors and financial institutions, and what opportunities there are for improvement to the C3 legal form. This study found that reasons outside a motivation to access investment capital are key driving factors for incorporating as a C3; there is currently a low level of engagement from impact investors; financial incentives may have a role in increasing investment in C3s; and there is an expressed need and opportunity to enhance education about the model to further support C3s. While the consensus from interview respondents was that benefits of incorporating as a C3 outweighed disadvantages, we found that the model has not helped organizations attract social finance and investment. As this model is in relatively early stages of implementation, the lessons learned in this study can inform investors, social finance intermediaries, entrepreneurs, and policy makers.

Suggested Citation

  • Bridget M Horel & Kevin McKague, 2018. "Community Contribution Companies and Access to Social Finance," Journal of Sustainable Development, Canadian Center of Science and Education, vol. 11(5), pages 126-126, September.
    • Handle: RePEc:ibn:jsd123:v:11:y:2018:i:5:p:126
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    References listed on IDEAS

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    1. Antony Bugg-Levine & John Goldstein, 2009. "Impact investing: harnessing capital markets to solve problems at scale," Community Development Innovation Review, Federal Reserve Bank of San Francisco, issue 2, pages 30-41.
    2. Sean Geobey & Frances R. Westley & Olaf Weber, 2012. "Enabling Social Innovation through Developmental Social Finance," Journal of Social Entrepreneurship, Taylor & Francis Journals, vol. 3(2), pages 151-165, October.
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    More about this item

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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