Community Bonds
Description
By Jonathan Wade:
"a community bond (or sometimes called a community investment bond) is where a private citizen can purchase the bond directly from a social enterprise, and they may receive a both a financial and a social return on that investment over time. Financial returns are modest, typically ranging from 2-6%. Maureen Stapleton of Investing for Good offers a clear definition: “Community bonds allow people to support a charitable cause while knowing that the money will be returned to them at the end of the investment period.”
Example
1.
"The Canadian leader in this tool is the Centre for Social Innovation (CSI) in Toronto, as they have issued community bonds for sale to investors in order to finance their shared space business. As a result of their expertise, they have created a website to answer many of the questions regarding the use and design of this particular financial instrument in Canada." [1]
2.
Tyler Hamilton:
"There is plenty of good news happening around community bonds in my home province. SolarShare, for example, announced on Dec. 6 that it had been approved by the Financial Services Commission of Ontario to sell bonds (which offer a 5 per cent annual return) beyond a cap of $1,000. It is now selling up to $25,000, and can go even higher if requests are approved on an individual basis by their board of directors. This has opened up the possibility off pursuing projects more aggressively. The co-op is now going through a process to make its bonds RRSP-eligible. “Once an independent evaluation of SolarShare mortgages that secure your bonds is complete and we have received a legal opinion based on that evaluation, a self-directed RRSP account can be opened through Concentra Credit Union via the Canadian Workers Co-op Federation (CWCF),” the co-op reported in a recent newsletter. “You are also welcome to take that legal opinion to your own wealth management representative and request an account through other channels” – i.e. you can take it to your own bank and make a case for carrying the bonds in your existing self-directed RRSP.
These bonds are a safe investment, so if you’re tired of getting pummeled by the market and want a safe 5 per cent return, you might want to learn more at www.solarbonds.ca
SolarShare also announced this week that it has partnered with green energy retailer Bullfrog Power, which is helping to finance future co-op solar projects. As an investor, Bullfrog will also market SolarShare’s “solar bonds” to its existing network of green-minded electricity customers. It’s a great partnership." (http://www.cleanbreak.ca/2012/12/14/green-community-bonds-gather-momentum-in-ontario/)