For the Centre for Social Innovation, building the Next Economy starts with supporting and empowering their members. To do that best, they’ve needed financial security.
Since launch in 2004, the Toronto-based co-working and acceleration space has positioned their business model for resilience and growth, despite forces that may have had them do otherwise. Over the last two decades, they’ve faced rising commercial rental rates, necessary (and surprise!) renovations needed for their properties, and most recently, the COVID-19 pandemic.
Faced with each obstacle, they’ve tweaked their offerings – each time toward increasingly member-centric, green, and social responses. In the process, they say, they’ve benefitted from a partnership that has helped to take financial stress out of the equation.
“I think there were some banks out there that would have found us to be too edgy – too unusual,” said Raissa Espiritu, CSI’s director of partnerships. “And I’m sure Vancity Community Investment Bank did too! But it never showed. They’ve been with us each step of the way and they’ve always trusted us.”
“It allowed us to really focus on building the Next Economy and continually pushing our mission and vision out there.”
Over the last seven years, Vancity Community Investment Bank (VCIB) has provided CSI with a mortgage, a line of credit, mortgage refinancing and two grants. VCIB’s first office was based out of the organization’s co-working space. And VCIB’s CEO, Jay-Ann Gilfoy has been an advisor to CSI on its real estate strategy.
It’s not your average bank relationship, but that’s just the way CSI likes it.
“They have our back,” said Espiritu.
Protecting Members from Rising Rents: More than a Mortgage
In Toronto, commercial lease rates have increased nearly sixty percent over the last seven years. For CSI’s members – social entrepreneurs, non-profits, and charities – paying sixty percent more for their co-working space just wouldn’t be a possibility.
“We wanted to own our own building,” said Espiritu, “because when you own, you can set all the rental rates, all the lease rates, all the membership rates.”
“Many of our members are immigrants, newcomers and racialized people, some of whom are low-income. We can’t set rates high, like other co-working spaces. We needed it to be affordable.”
To help support their members, CSI hatched a plan to purchase and renovate an old print factory in the heart of Toronto’s Chinatown, and to transform it into a 64,000 sq. ft. co-working space. To make it happen, they looked to their community and to VCIB.
The non-profit solicited investment from individual investors through the use of Community Bonds, a ground-breaking fundraising model of their own invention, and their members and supporters bought in. For some, it was the first time they’d ever invested in anything.
Alongside, VCIB provided CSI with an initial mortgage to finance the purchase of the building. And in 2017, they provided a mortgage increase to allow for the renovation of the properties’ third and fourth floors. This enabled CSI to move out of a rented space – 215 Spadina.
“With rent going up – I don’t know if it would have been feasible. I don’t know if CSI would have been able to continue if we’d had to continue to lease,” said Espiritu.
Bouncing Back from COVID-19 Together
In early 2020 when the pandemic struck, VCIB and CSI found common purpose once again.
“When the pandemic struck, many of our members found themselves with little to no revenue –unsure whether they’d make it through the crisis,” said Espiritu.
To help community members who were hit hardest, CSI developed a Community Rent Pool, inviting members to chip in, as they were able. “Those who could pay did,” said Espiritu, “and for those who couldn’t – it was okay.”
Alongside, CSI offered members tools for navigating the pandemic, like a guide on accessing the Canada Emergency Response Benefit (CERB) and additional ‘Social Entrepreneurship 101’ workshops. To cover the cost of this expanded support, CSI reached out.
“VCIB gave us $50,000 to allow us to continue to provide programming to those who were most affected by COVID-19 and to ensure that they could continue to develop their ideas,” said Espiritu.
“That was our single biggest gift to that fund.”
Building the Next Economy Through Financial Security
Since establishment, CSI has been home to over 5,000 ventures, non-profits and charities, incubated over 1,700 new social enterprises, and helped to create over 500 new jobs. Today, the organization owns two commercial buildings in downtown Toronto – worth over $45 M.
“This is a financial access story,” said Espiritu. “That we were able to get people to join us so that we could free ourselves and our members and be able to set the rates that we want.”
As the team and their members work to build the next economy, for Espiritu, the goal is “to prove that solutions for a people and planet-first economy already exist.”
“Now we need to continue to invest money and time in making those things happen.”