The second round of the Investment Readiness Program (IRP) opened on September 8th until October 9th, 2020. The first round of the IRP provided a number of important lessons for applicants that IRP Alberta (of which SEF is a partner) hope will be a benefit in this round. These key lessons, listed below, should help to develop stronger applications. And most of these lessons are useful no matter what kind of application or proposal you are making.
Lesson 1: What the heck is “investment readiness” anyway?
Anyone who’s written an unsuccessful grant proposal has probably pondered the same question. “What did I do wrong? What were they looking for? Why don’t they see I really need to do this project?”
In the first round of the Investment Readiness Program in Alberta, it was clear that many applicants had overlooked one of the first rules of grantsmanship – to keep a clear eye on the intent of the grant program, and the aim of the program’s creator.
Some context: After several years of conversation between Canada’s social finance intermediaries and the federal government around the potential of social finance tools to solve some of the country’s most difficult challenges, the government responded in Budget 2019 with the commitment to establish the Social Finance Fund. This fund is to be a capital pool that will hopefully spark individual and institutional investors to match the government dollars placed with Canada’s social finance intermediaries – operations like the Social Enterprise Fund (SEF), Local Investing YYC or local investment cooperatives– that will in turn invest that money through loans (debt financing)or equity investment into the social purpose organizations needing capital to carry out their public benefit missions.
The federal government decided that the first step in their process would be to help those social purpose organizations, including non-profits, co-operatives and for-profits all working to deliver good in community, to do the work needed to prepare a pitch to a social finance intermediary for debt or equity investment. They created the IRP with this intent in mind, and the key is in the name. Investment Readiness. One clue to a successful application is in those words.
The easiest way to think about this is to use a specific example. What would your organization need to do to get ready to go to SEF for a loan? What kind of strategic planning, draft proposal writing, financial projections, architectural plans, market research, legal work, project budgets, development permissions, whatever, would you have to spend time and money on in order to get that loan proposal ready? That’s what the IRP was created to support. That, along with the key process of deep thinking around the enterprise you are considering, and clearly analyzing the capacity of your organization to carry it out sustainably. So at the completion of the work funded by IRP, the organization would have all the necessary elements, hopefully, to access longer term financing.
Lesson 2: What was the program not made for?
The fund was not created to support operations, although if eventually successful, a loan or equity investment will add in a positive way to your business operations, making your organization more successful.
In the application, be careful to think about how the money will be used. If you are planning to use the money for things you are already doing in the enterprise, it will not be accepted.
Lesson 3: Ensure the application is for an enterprise
Does the project apply a market-based solution to a social problem? If so, you will have a clear idea of who the customers are, and you will be able to articulate the market that you are looking to capitalize to solve a social problem. In the application, clearly explain what the market-based solution is, and, as stated above, what is needed to get the enterprise ready for investment.
Lesson 4: Justify the amount of the ask
During the first round over 80% of applicants in Alberta applied for the full amount ($100,000), totaling almost $15 million in requested funds. The budget available was $1.1 million. Asking for the full amount may be justified in your case, but remember, the juries will be looking at the whole amount of expenditures and comparing your application to others. If the dollar amount in the application is not clearly justified and reasonable, the jury will know.
Lesson 5: The opportunity
The IRP is a unique opportunity, one not often afforded to a social purpose organization. It’s a chance to not only dream about change and growth, but to have the resources to hire the professional help, research and support that is often needed to test whether the dream is real, or just an interesting thought. To get that thinking process off the corner of your desk, and move it front and center. To get the organization to the point where it’s ready for an external financial investment.
If you read this and you think you have a proposal for a social enterprise business, the portal will be open for the second, and last round of applications on September 8th until October 9th, 2020.
Where do I apply?
Potential applicants should go to https://cfc-fcc.smapply.ca/prog/the_investment_readiness_program_/ to begin their application.
What if I have questions?
You can email firstname.lastname@example.org or call 1-855-593-1003
Phone calls and email will be answered within 5 business days. Please indicate your question clearly in the email to facilitate speedy replies.
You can also visit https://www.communityfoundations.ca/initiatives/the-investment-readiness-fund/ for more information.