Credit Union Investment Signals Shift In Impact Investing

Blog November 16, 2017

Posted by Andrew Greer

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Celebrating investment isn’t always on the top of my list, but let’s take a look at Volinspire’s announcement from yesterday. There are some interesting indicators from an impact investing perspective.

Volinspire is a social enterprise who created Do Some Good, an app and platform that connects people to charitable organizations and business to make meaningful impact in their communities. It allows you to find volunteer opportunities, find volunteers, track your impact, shop, and donate.

Two credit unions invested. Together. It’s not very often we see financial institutions taking equity positions into early stage startups, especially as a collaborative investment. Financial institutions are typically known for their risk aversion not their risk taking; it’s nice to see this sort of investment from Interior Savings and Prospera Credit Union. 

Investment into a Community Contribution Company (CCC or 3C) is unique. Volinspire is a CCC which is a new form of incorporation in British Columbia and so far there are only about 100 in the province. CCC’s are a bit of a hybrid incorporation for social enterprises; they combine some of the risk taking ability and control of a for-profit but include some of the transparency requirements of a non-profit. Take a look at this great summary of CCC’s in BC.

CCCs are taxed the same way as for-profit companies. In the most strict requirement, if profit is distributed to shareholders, a minimum of 60% of that profit must be distributed back into the community. In a certain way it makes sense that credit unions are aligned and okay with any shareholder disbursements taking a minimum 60/40 split. The investment from Interior Savings and Prospera Credit Union into Volinspire carries much different valuation expectations than an investment that a typical angel investor or venture capital firm would consider. This sort of blended return is a more realistic expectation for true impact investments.

The investment wasn’t a quick decision. Interior Savings and Prospera Credit Union were both early stage customers of Volinspire. They saw the value of the product, saw the impact in their community, built a relationship with the company, and then an investment was made. This investment is also working together to build impact rather than just putting a cheque in to get a bigger cheque back out. It’s a good lesson for other companies – both tech companies and social enterprises – look first to get customers, then build impact, then seek investment partners that can help you scale.

The celebration here is not about the investment in particular, it’s about a clear signal of a shift in how community investment can be done.

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