1. Social Capital Partners: Strategies and Experience to Date Presentation to Policy Forum on Social Enterprise Toronto, Ontario October 11, 2006

2. 1. Social Capital Partners – Introduction 2. Social Enterprise Investment – Current Portfolio 3. Private Sector Engagement  Franchise Strategy  Fresh Start Market 4. Collaborative Partnerships – Current Focus Presentation Overview

3. Our Mission Invest in and support revenue-generating social enterprises that employ at-risk populations Help these organizations to gain scale and eventually exist without external funding Help these organizations provide improved social outcomes and financial self sufficiency for the individuals they employ Be a catalyst for encouraging other innovative funding approaches in the nonprofit sector

4. Using Venture Capital Principles Revenue Generating Social Enterprises National Network of Socially Branded Enterprises To Invest in... With a Vision of... Our Method

5. What Social Enterprise Offers for Canada  Finding suitable employment  Maintaining employment  Disconnect between job training programs and actual jobs available in “real world”  Coping with life issues (i.e., housing, counseling, etc.)  Discovering and working towards career options  Stability and consistency of programming  Specific focus on hiring at-risk populations  Business is sensitive to employee challenges  Business provides “real world” challenges and outcomes  Network of external social service partnerships to assist employees  Business can provide professional development opportunities  Business helps create economic development in the entire community  Revenue generation not only acts as primary driver of social mission but also as the financing mechanism Challenges of Assisting Individuals with Employment Barriers Social Enterprise Benefits

6. All of SCP’s work is guided by the sustainable livelihoods framework www.livelihoods.org SCP’s Approach Social Capital Human Capital Natural Capital Financial Capital Physical Capital Employability Skills and Health Support network and contacts Shelter and infrastructure services Financial resources and regular inflows of money Safe and Healthy Environment

8. Financing Alternatives Provided under relatively limited circumstances Purpose is to provide social support infrastructure to enterprise employees Grants are generally in the C$15K to C$50K range Will consider equity or near equity investments under some circumstances Desired rates of return are assessed based on risk profile and value- added support required SCP will take an ongoing governance role Grants Equity Loans Loans are generally in the C$50k to C$250k range Interest rates will be assessed based on the risk profile of the business and the value-added support required SCP will take an ongoing governance role

9. What We Look For in an Enterprise Social Elements: Majority of employees from an economically disadvantaged community Employ at least 12 individuals Provide skills and experience that promote long term employment Help create a sustainable livelihood for target employees Business Elements Financially viable -- reach break-even or profitability within 3 years Realistic long term growth plans that involve employing 20 or more individuals Meet any repayment obligations to SCP and other financiers Develop an outstanding management team capable of carrying out the plan

10. Total Investments: C$1.1M Loans: C$700k Grants: C$335k Equity: C$60k Investments Made in Portfolio Companies

11. Total Employees in Portfolio: 400 Target Employees: 250 Employment in Portfolio Companies

12. LocationIndustryDate of Initial SCP Investment Atira Property Management Vancouver, BCProperty Management February 2005 Cook Studio Food Services Vancouver, BCCommercial CateringApril 2005 Inner City Renovations Winnipeg, MBConstructionJune 2002 RenaissanceMontreal, PQSecond Hand GoodsApril 2004 Two Men and a Truck Oakville, ONMoving CompanyApril 2006 Active Green+ RossHamilton, ONAuto Tire and Service Centre March 2006 Turnaround CouriersToronto, ONBicycle CourierAugust 2002 Active SCP Portfolio Companies

13. SROI Report Card: Year Three October 2004 - September 2005 COURIERS TURNAROUND

14. TurnAround Couriers: Social Mission Overview SROI Report Card: Year End 2005 GoalsMethodsSuccess Metrics Hire couriers and office administrative staff from disadvantaged youth population Provide transitional work experience to enable youth to develop employability skills, a resume and a support network Enable youth to access the mainstream job market Enable youth to stabilize life situation, begin a career path and leave the shelter system Recruit youth from youth shelters and youth serving agencies across Toronto Provide a real job, not a job training experience Establish a supportive management environment Assist youth with planning and making next steps regarding housing and employment Youth are able to get out of shelter system and into independent housing Youth meet or exceed job expectations TurnAround helps youth secure next job and establish a career path Youth are able to get off and stay off government financial assistance

15. Enterprise: TurnAround Couriers Location: Toronto ONDate of Inception: October 2002 Overview of Target Population (sample group) Majority of youth recruited from Evergreen Centre for Street Youth, an initiative of the Yonge Street Mission Males: 70% Average Age is 21 90% unemployed at time of hire 60% receiving social assistance at time of hire 90% had been recruited from youth shelters or had used the shelter system within the last year 30% had been involved with the justice system 70% did not complete high school Overview of Business Did not require any additional external investment Grew sales 17% from Year 2 Grew monthly sales 31% by end of Year 3 Royal Bank of Canada remains TurnAround’s biggest client and tripled its delivery volumes during the year Developed in-house capacity to deliver on-line courier service Market wages paid and WSIB coverage offered to all staff SROI Report Card: Year End 2005 Financial Performance Total Sales Revenue:$135,000 Total Grants and Subsidies:$0 Total Sales Revenue and Grants: $135,000 Additional Social Support Infrastructure:$0 Total Operating Profit (Loss):$916.00 Total Investment in Year Three:$0 Social Return On Investment Average Change in Societal Contribution (Target Employees):$10,000 Average Number of Target Employees:4.5 Number of Target Employees in Sample Group: Current Year Cost Savings to Society: 10 $45,000 Cumulative Cost Savings (prior to Y3):$83,178 Total Cost Savings to Date:$128,178 Cumulative Societal Payback Period:2.3 years Cumulative SROI:128% Employment Outcomes (sample group) Maintained a staff ratio of 75% target/non target staff throughout the year Paid out $76,400 to courier wages over Year 3 30%of TAC’s couriers went on to work at larger courier companies after leaving TurnAround and were able to increase their income by approximately $500.00 per month 40% continue to work at TAC 30% reported that working at TurnAround motivated them to finish high school and/or go to college or university TurnAround now in a position to offer career laddering opportunities within the company Sustainable Livelihoods Outcomes (sample group) 90% of youth who were on social assistance before hire were able to get off and stay off social assistance 90% of youth were able to move into independent housing within 3 months of working at TurnAround Those that had previously been involved with the justice system had no additional issues while employed at TurnAround or at time of follow up after leaving TurnAround

16. SROI Report Card: Year Ending March 31 2005

17. Renaissance: Social Mission Overview SROI Report Card: Year End 2005 GoalsMethodsSuccess Metrics Provide job skills training and employment placement to people with employment barriers Help participants at end of employment placement to access mainstream job market and/or formal education system Be a leader in sustainable recycling practices of clothing and other consumer goods Deliver six month skills training program and ‘real world’ employment placement (Reintegration Program) accredited by Emploi Québec – to eligible participants Provide employment opportunities in retail, office administration, maintenance, shipping and handling Provide specialized training, personal counseling and post training follow up to assist participants transition into mainstream employment Continually improve collection and sorting practices to create access for low income people to modestly priced, recycled consumer goods Maintain an 80% or better employment placement/return to school rate after program completion Continue to generate an operating profit while running a successful employment training program Continue to be recognized as a Bruntland enterprise in Québec Re-sell 35% or more of recycled goods collected in network of stores Sell at least 95% of remaining goods to recycling operations Ensure that 5% or less of collected goods goes to landfill

18. Enterprise: Renaissance Quebec Location: Montreal, Quebec Date of Inception: 1994 Overview of Target Participant Group (sample group) 100% unemployed and meet all Emploi Québec’s eligibility requirements 53% of African origin 35% West Indian and South American 12% Quebecoise 90% female Average age is 33 57% receiving government financial assistance at start of program 39% live in two parent households with 1 or more children 14% are single parent households with 1 or more children 67% of non Québecoise arrived in Québec between 2000 – 2004 (e.g. New Canadians) Majority had finished high school and had some post secondary training (home country) Overview of Business  Accomplished 10 years of job training – over 1000 people secured employment  Over 10 year period averaged 78% job placement rate  2004 grand opening of brand new ‘flagship store’ – model for gradual revamping of stores in network  Refined marketing strategy in 04/05 led to annual 9.5% increase in sales across network of stores (excluding the flagship store)  Reorganization of training model to increase efficiencies and customize training support  Improved customer service, sorting methods and merchandizing systems across store network SROI Report Card: Year End 2005 Financial Performance Total Sales Revenue:$4, 216,764 Total Grants, Gifts and Subsidies (GGS):$415,434 Total Emploi Quebec Service Contract/SSI $2,677,435 Total Sales,GGS and Government Contracts: $7,309,633 Total Operating Profit (Loss)$93,768 Total Investment:$2,999,101 Social Return On Investment Average Change in Societal Contribution (Target Employees):$5,784 Annual Number of TE Completed 6 Month Reintegration Program:192 Number of Target Employees in Sample Group: Current Year Cost Savings to Society: 49 $1,110,528.00 Current Year SROI37% Societal Payback Period:2.7 years Employment Outcomes (sample group) 84% of participant group entered mainstream employment or returned to school at end of employment training program 65% secured employment and 18% returned to school 63% secured full time employment 38% secured part time employment $8.48 – average wage for next job Majority of jobs secured were in customer service/retail sales sector 16% stopped job search for personal reasons Sustainable Livelihoods Outcomes (sample group) 79% of those receiving government income assistance at start of program did not need this assistance at end of program 47% of the sample group reported that the reintegration program significantly contributed to their cultural integration into Quebec society 39% of female participants reported that their experience at Renaissance enabled them to move from living in a socially isolated situation to establishing friendships and social support networks outside of their immediate household/family structure 39% of female participants reported that the program structure - particularly the customized, one on one support - positively influenced their self esteem, capacity to adapt to new (employment) settings, ability to set goals, deal with stressful situations and ability to seek out community services/resources

19. Context The impetus for our beginning to think about social support for low wage employees evolved from our work with social enterprises SCP works with social enterprises that employ individuals with employment barriers and helps these employees create more sustainable livelihoods There are thousands of individuals working in low-wage jobs in the private sector who experience similar sustainable livelihood challenges to those faced by employees of our social enterprises Therefore... We began wondering whether we could apply the methods used to improve outcomes for social enterprises employees in ways that would benefit people with similar profiles working in the private sector Perhaps... We can create a “win-win-win” where private sector companies maintain more productive and satisfied workers, low wage employees live more sustainable livelihoods, and the principles of social enterprise become more “mainstream”

20. Step 1: Engage Existing SCP Portfolio Step 2: Engage Select Private Sector Partners Step 3: Engage the Broader Private Sector SCP works with a portfolio of social enterprises These enterprises have been developed for the express purpose of assisting low income individuals These companies will act as test beds for new social support programs SCP has begun developing partnerships with mainstream employers Our first relationships are with franchisors and retail consulting company We will work with these partners to create social support programs as part of the business Once the value of creating social supports has been established there may be opportunities to partner with a broader set of mainstream employers SCP may share its experience or consult to mainstream employers SCP will work toward creating a greater understanding for the importance of workplace social supports for low wage employees SCP’s Approach

21. SCP has begun testing ways to provide workplace-based social supports to employees of its portfolio companies Inner City Renovations employs inner city residents in Winnipeg who experience employment barriers In addition to providing employment and on-the-job training we have also worked with our partner, Community Ownership Solutions, to institute programs that help employees create more sustainable livelihoods including: – Company-based employee savings program to influence behaviour change re: money management and asset development – Apprenticeship and skills upgrading opportunities – Access to a social worker to help with personal challenges and emergencies – Culturally sensitive opportunities to build social connectedness 1 Social Development Canada, 2002 SCP’s Approach: ICR Example

22. Franchise Strategy The Franchise Strategy was born from experiencing how difficult it is to manage the dozens of variables required to ensure financial success while at the same time managing a social mission Anticipated Benefits: A successful franchise represents a proven, branded business model that reduces business uncertainty and financial risk A well-defined operating model or ‘turn-key operation’ with training and support allows entrepreneurs to devote more time to the social mission and less time to ‘fighting fires’ By lowering business and financial risk, the social mission can flourish while the business continues to grow A successful franchise model can be replicated

23. Franchise Strategy: Progress to Date –One of the largest chains of tire and auto care centres in Ontario with 50 stores –SCP provided $120,000 in financing to convert a corporate store in Hamilton to a franchise –Franchisee is the former manager of corporate store –Working actively with the YMCA, Job Connect program of Hamilton and others to recruit target employees –One of the largest moving companies in the United States –173 locations in 27 states –Recently established operations in Canada and plan to expand across the country –SCP provided $125,000 to help finance a location in Oakville –Working actively with Region of Peel Social Services and others to recruit target employees

24. Fresh Start Market: Overview What is Fresh Start Market? 1.Idea generated from private sector company – Perennial Inc. – Canada’s leading retail consulting firm specializing in grocery market sector 2.Charitable mission with a private sector philosophy 3.With Fresh Start Market, running a self-sustaining business IS the social mission Supermarket that will employ single mothers and provide financial support to help parents pay for quality child care/development programming Goal is to help single mothers become financially independent, develop employment and job retention skills and define a career path

25. The Opportunity: Fresh Start Market When taken together, these needs demonstrate the opportunity to create a new type of supermarket.... Social Need Market Niche Create an independent supermarket that will compete within a strong market niche Recruit seasoned retail management team Partner with key social agencies to pre screen, customize training program and recruit single mothers as target employee group Target employees earn employment income, gain transferable job skills and work in a supportive environment Provide financial support for child care or child development programming Empower them to develop a career and life path +

26. Branding: Fresh Start Market

27. Social Enterprise Key Social Mission Components 1)Recruit target employees Current portfolio Franchise Strategy Fresh Start Market 2)Create access to jobs and skills training (formal, informal) 3)Establish a supportive work environment 4)Offer opportunities for internal and/or external career advancement

28. Collaborative Partnerships Some Early Learnings 1.Social enterprise model requires expertise and resources from different sectors 2.Need to effectively sell the idea and vision of social enterprise to motivate interest in getting engaged 3. Engage organizations with similar mission and vision at key stages along the way 4.Engage organizations and individuals that connect to SE mission and want to lend support 5.Need certain level of critical mass (e.g. 50% target employee base) within individual social enterprises before formalizing partnership model re: social support infrastructure

29.  Thank you  Please contact us if you have further inquires at:  416 646 1871 x110 – Joanne Norris  For more information, please visit our website:  www.socialcapitalpartners.ca www.socialcapitalpartners.ca