Doing Business Differently with the Alberta Impact Fund

**This is a special blog post as part of a series highlighting social entrepreneurship in southern Alberta as part of Simon Fraser University’s CED Certificate program

 

Driven by a belief that business is an agent for radical change, Rosalynn Dodd’s entrepreneurial nature has her never quite satisfied with the status quo. Her willingness to take a hybrid approach to find solutions for lasting change is best exemplified with the Alberta Impact Fund. Originally intended to address poverty through business solutions, the Poverty Reduction Fund has morphed into the Alberta Impact Fund.

Rosalynn and her partner have a consulting company, Creating Eudomania, offering services to entrepreneurs seeking to create social impact in their business practices. “The Alberta Impact Fund is one way of scaling up our activities to work with more companies” says Rosalynn “creating a movement and proving that business can be a force for good in the world.”

Did you know, small businesses in Alberta represent 95% of all companies in the province? These businesses are the cornerstone of our economy, but access to capital and capacity building consistently rank as the biggest challenges facing these small businesses. More specifically, acquiring capital for social impact is a challenge as social finance tools are virtually non-existent in Alberta.

Rosalynn and a small team of committed individuals from various sectors chose to take on this challenge. They are developing the Alberta Impact Fund using a private debt fund that integrates social and environmental targets into the model. They intend to raise $25 million in capital from impact investors to invest in up to 40 of Alberta’s small & medium sizeAIF Final Logod businesses. These are businesses interested in blended value returns that have a willingness to transition towards sustainability.

The fund provides capital to businesses to integrate social or environmental impact into their business practices while offering capacity building in the areas of sustainable strategic planning, governance & leadership development. Companies would complete the B Impact Assessment at the outset of the investment and again at the end of the investment period. By aggregating impacts from companies that have accessed this capital, the fund will demonstrate and showcase movement to a more resilient & diversified Alberta economy.

This initiative has met challenges along the way. “They have faced many obstacles over the years. Impact investing terminology has several nuances so communicating the fund has been a challenge. The biggest hurdle has been regulatory restraints with the Alberta Securities Commission. They have had to redesign the prototype of the fund over the years to ensure they remain within regulatory rules,” reflects Patti Dolan. Patti is a financial advisor specializing in socially responsible investing. She has been a sounding board to Rosalynn and the fund development team since the early ideation phase of this initiative.

Rosalynn’s tenacity along with that of her team, generous in-kind support from Bennett Jones LLP and support from experts in the impact investing sector have been instrumental in overcoming these challenges. “It has not been easy” says Patti. “There have been many times they have wanted to quit, but they truly believe in the fund and have persevered. I admire their spirit and fortitude.”

For this ambitious initiative to succeed several things are needed in the outlying ecosystem:

  • A robust sector of impact investors committed to blended value returns. Impact investing generates a measurable social and/or environmental impact alongside a financial return.
  • Entrepreneurs that are committed to integrating social and environmental impact into their business practices.
  • Growing awareness that blended value returns are viable and resources are available to support that transition.
  • Policy change that enables the average Albertan to invest locally. Currently, only a small segment of Albertans that are accredited investors are able to invest in local businesses.

Rosalynn is also considering the type of financing they will offer. Originally conceived as loan capital, they are also considering the implications of equity financing similar to venture capital models. Consideration is also needed related to the initial stages of the fund. Raising a significant pool of capital prior to offering investments to small businesses may present challenges. The time delay in raising that amount of capital may slow the momentum that’s been growing in bringing this social finance tool to market.

The Alberta Impact Fund aims is to create economic innovation, social prosperity & environmental integrity by providing capital and capacity building to Alberta’s small & medium sized businesses. This fund is a pioneer, addressing the need for social finance in Alberta and self-determining a new path for doing business differently.

What can you do?
• Learn more about local investment tools in Alberta through Unleashing Local Capital
• Make the 10% Shift in your spending habits to support local business
• Stay tuned for more updates as the Alberta Impact Fund evolves

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