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Product Overview: In 2015, the Centre for Social Innovation (CSI) issued a community bond to finance the purchase of a building in Toronto as part of its co-working model. The community bond offers three variations (Series C, D, and E). The retail product is the second community bond issuance by the CSI. Through its first issuance in 2010, CSI raised $2 million.

Organization Description: CSI is a social enterprise with a mission to catalyze social innovation and to foster collaboration by connecting social innovators and entrepreneurs working across sectors. CSI believes that society is facing unprecedented economic, environmental, social, and cultural challenges and that new innovations are the key to turning these challenges into opportunities to improve our communities and our planet. CSI has three locations in Toronto and one location in New York City.

Structure: Community bonds are available to non-accredited investors. Subject to provincial securities regulations exemption rules in Canada, these bonds can only be issued by nonprofit organizations. The CSI Community Bond is an asset-backed debt instrument, and it is a qualified investment, which means that individuals can purchase it through self-directed registered accounts (e.g., RRSP and TFSA). To finance the full purchase of its new building, CSI had to raise a total of $16 million. A portion of the total purchase price ($12 million) was financed through a mortgage from a credit union. The remaining $4.3 million was raised through the sale of community bonds. The bonds are subordinate (second position) to CSI’s mortgage loan provider. This means that CSI is obligated to repay the bank before it repays bondholders.

Target Demographic: Over 50% of bondholders are members of the CSI. The remaining bondholders tend to be connected to CSI’s network. Any resident of Canada or a Canadian corporation or nonprofit organization can invest in the community bond. CSI is looking at extending the investment to investors outside of Canada.

Impact Focus: CSI has purchased a 64,000 sq. ft. building in Toronto to expand its co-working model. Proceeds from sales of the community bond go towards the financing of this new co-working space.

“Internal capacity to manage this process is really important for anyone looking at launching a bond because there are so many different aspects to it from sales, marketing, and legal to finance and administration. There are also a range of administrative activities that are very important to get right and often under-appreciated. Pulling it all together among a strong team is key.” Chelsea Longaphy, CSI


The structural development of the community bond closely follows CSI’s original bond issuance process in 2010. The profile below focuses on the unique strategies that the CSI deployed from the launch phase of the original bond to the new issuance of the second community bond.


CSI developed the concept for its first community bond in 2010, working with Alterna Savings Credit Union to finance the purchase of a building in Toronto, Ontario. The second CSI Community Bond concept was developed to finance the purchase of a second building in Toronto alongside a syndicated mortgage from Alterna Savings Credit Union and Citizen’s Bank. CSI lowered the minimum investment threshold from $10,000 in the first issue to $1,000 in the second issuance to increase access to retail investors. Working with a strong and diverse internal team was critical to CSI’s success with the second bond. Core team members had expertise in law, finance, marketing, and communications. In some cases, it was necessary to use external expertise, such as lawyers, to draw up the trust agreement between the bondholders and CSI.

Product Design

Unlike the other products reviewed in this guidebook, the CSI Community Bond was not the first retail impact product to be issued by the organization. CSI was thus able to build on its experience and to demonstrate demand by referencing success with their first issuance. CSI leveraged the over-subscription of the first bond by using a waiting list of individuals seeking to purchase the second bond.

CSI explored the possibility of working with lending institutions to issue and distribute its bond. Compared to its first bond issuance, CSI found that fewer financial institutions were willing to process the bond in a more conservative regulatory environment. In particular, financial institutions were more cautious than they had been in 2010 of non-standardized products that require more due diligence to evaluate their risk profiles. The lack of standardization for the community bonds also meant that financial institutions needed to establish a new set of internal processes, which can be costly if not done at scale. CSI benefited from a passionate and committed group of investors who were determined to buy a bond even if it could not be purchased through their own lending institutions.

CSI benefits from its relationship with TREC Renewable Energy Cooperative, an organization that provides community bond investment administration services to clients. These services include record keeping, contact for member and investor inquiries, administration support for the bond, and marketing and other activities related to community bond development.

Pre-Launch and Launch

Upon the launch of the product, CSI engaged an internal team of four staff to develop and to promote the organization’s retail product. Specific marketing activities included the following:

Information sessions: The CSI team hosted a community bond fair where they worked with other retail impact investment bond issuers, Zooshare and Solarshare, to jointly deliver information on impact investment options to individual investors. The joint session exposed CSI to a wider market of potential investors. The marketing team heavily promoted their information sessions to the CSI co-working community, to philanthropic networks, and to the public through social and digital media.

Leveraging credibility and history: CSI was able to leverage its reputation and networks to market its second community bond. Other marketing tools included paid advertisements on social media sites and leveraging testimonials from community members and previous investors. This was particularly important for their marketing material on the second issuance, as first-time investors were interested in the performance impacts achieved with the first bond.


CSI distributes a quarterly mailing list that keeps investors updated on relevant financial matters, such as cash flows, and gives background information about the tenants that use the building. CSI staff find that storytelling is among the most powerful tools for communicating with its investors. Investors who come to the building are given a tour to see the community they have helped to build.


Step 1: Any individual interested in the CSI Community Bond can make a minimum $1,000 investment into the financial product. Individuals can invest directly, by contacting CSI, or indirectly, through their self-directed RRSP account, provided that their banking institution allows them to do so.

Step 2: Funds raised from the investors goes towards financing the purchase of the CSI co-working space.

Step 3: CSI pays back the interest (depending on which series of bond, this may be paid semi-annually or on an accruing and compounding basis) and the principal at the end of the three- or five-year term. CSI has the option of refinancing the bond.

“Updates to our community serve three purposes. They provide financial updates, stories about our members’ successes, and event invitations to ensure our Bondholders have an opportunity to celebrate with our community of entrepreneurs whenever possible.” Leah Pollock, CSI

Key Success Factors

Follow-up with investors on the success of the first community bond was key to driving investor demand for the second retail community bond. For example, one of the most common questions that potential investors asked CSI was about financial risk, and having a track record to draw on was useful for building confidence among new investors.

CSI staff see an opportunity for banks and credit unions to facilitate the distribution of community bonds, but staff also recognize the challenging regulatory environment and resource constraints that these financial institutions face.

CSI has developed a guidebook for developing community bonds. The Community Bond — An Innovation in Social Finance provides lessons for social enterprises and other community-minded organizations that are interested in launching their own community bond. In addition to specific templates for subscription and trust agreements, the guidebook provides broader advice to policy makers. It has been adapted for British Columbia, as well. The guidebook is available to download on CSI’s website for a fee.