Imagine yourself as a grain farmer in rural Alberta. You sell crops to a local grain terminal, but its owner hopes to increase revenues by centralizing grain collection. You face the prospect of driving 100 kilometers to Edmonton to sell your grain – now with higher costs. What will you do? Seth Leon, research officer at Alberta Community and Co-operative Association (ACCA), would suggest you chat with Westlock farmers.
In 2002, Westlock community members raised $1.2 million to buy their local grain terminals using the New Generation Cooperative model (NGC). So far, so good! After the first year, Westlock Terminals investors – more than 200 local farmers and local business owners – received a dividend of 7%. It is one of the busiest grain terminals in Western Canada today!
Seth shared the story of Westlock Terminals June 9th during a fascinating conversation on social finance organized by Thrive and Calgary Economic Development. This discussion revealed that this small Albertan community is not simply lucky. Tim Draimin, Executive Director of Social Innovation Generation (SiG), shared with the audience that financial returns of impact investing – another name for social finance – is substantial. When surveyed, 87% of investors who chose to support social or environmental initiatives “either met or outperformed expectations in 2013” in terms of financial return. Impressive!
Tim describes social innovation simply, as things that reduce our sorrows and multiply our joys. Many aspects of our society that we now take for granted were social innovations in their early days. Think of labor standards, antibiotics, and social media. More recent social innovations include collective impact, and the emerging sharing economy.
Social finance is one handy instrument in the larger social innovation toolbox. It will not cure all social issues, just like antibiotics have no use for flu. Still, the people of Westlock invested in a business that yields sustainable financial dividends along with important social improvements. Any other rural and urban community can do the same. Want to know how?
- Learn how to create a cooperative in your community with ACCA’s Guide for Community Leaders.
- Register for the 16th Soul of the City: Why the Collaborative Economy is changing everything on June 25: follow the link for more details and RSVP.
Written by Hanna Zavrazhyna