Funding Approaches

A. Coordination: Acting as the organising function for this model, coordination activities pull all six essential components together into strong and cohesive initiatives and infrastructures. A high level of coordination needs to be strongly established to effectively execute on the city initiatives; this builds on the existence of the six, deeply interdependent essential components.

B. Relationships and Partnerships: Establishing relationships and partnerships creates opportunities and deep collaboration within the practical participatory ecosystem.

Across the six essential components, this enables the

Participatory City approach to bring together the right people and organizations to form the capacity and support that a city implementation requires.

C. Communication and Storytelling: Spreading the word and bringing the Participatory City approach to life through creative and enticing stories is essential to building a large network of contributing partners and growing the elements of the ecosystem. It is a vital function that enables co-creation of the approach (where people see themselves in the stories) and growth of the emerging field of learning and practice in the Here&Now School.

Balancing the pace and scale of integration and development of each essential component in a city will support the successful growth of practical participation ecosystems through the Participatory City approach. To identify the appropriate funding to support the growth and scaling of the Participatory City approach in Canada and its essential components, there is a need to consider the strategic choices around two dimensions of Participatory Canada: the systemic and transformational nature of the Participatory Canada vision, and the direction for initiative leadership. For example, the overall projected costs will need to consider which strategies, tactics and learning architectures of the Participatory City approach will be built and to what degree, (such as Tomorrow Today Streets, Every One Every Day, a learning campus), and who will be responsible for driving and sustaining the effort (such as a nationally-led core team for overall strategy, partnership building, research and learning, systems development, and for city-led teams who develop the work according to local context and build local partnerships, systems change visions, data collection and outcomes measurement, research and learning that connects with other nodes, etc.).

Tomorrow Today Streets

A project from Every One Every Day and IKEA’s Live Lagom Programme. Tomorrow Today Streets gives local neighbours, families and friends the opportunity to start exciting projects right on their own streets. It offers 24 Kits to help residents start projects that are practical and help stay connected.

Systems change

It’s collaborative planning, designing in success and failure and space to co-design lots of little projects as well as work on larger ones. This is an opportunity to create a circular economy. Coexisting together and connecting with other ecosystems while putting residents at the center of the system allows for self directed involvement through a diverse range of project ideas and participation opportunities.

Funding for the Social R&D pilots in Canada was primarily provided by the J.W. McConnell Foundation and support from the Government of Canada (ESDC Investment Readiness Program9), with $100K grants given to each city to establish Social R&D projects on embedding participation within their communities. Significant matched funding and in-kind contributions were secured by local pilot partnerships. The initial Social R&D pilots have led to substantive conversations and interest in each city in continuing or expanding the participatory systems moving forward.

To support the demand for growth and scaling of the Participatory City approach, financing Participatory Canada will likely require cross-sectoral and hybrid partnerships with governments (e.g. federal, provincial, municipal, and Indigenous), foundations, private sector partners, and other investors at different scales (such as neighborhood, community, region, country, and internationally) where collaboration is required to help deliver change from the ground up, and connect in with a global network.

Within Canada, there are many established financing tools available that could be used to fund the Participatory City approach, helping to shift Canada towards a more inclusive and participatory society. Financing tools can be understood through a spectrum. Refer to Figure 8 for this visualization: start on the left

Figure 8 - The financing landscape in Canada

with smaller catalytic funding and move to the right with larger, scaled funding with a revenue or cost benefit. outcomes are achieved. Examples of Social Impact Bonds include the Heart and Stroke CHPI SIB16 and Saskatchewan’s Sweet Dreams SIB.

• Grants: Provide critical initial capital to fund initiatives without a strong record of revenues and proven outcomes.

Additionally, grants are typically dispersed in smaller denominations and aim to provide catalytic funding for exploratory work, or particular initiatives.

Examples of grants and organizations providing funding include the Federation of Canadian Municipalities10 ,

Community Foundations of Canada11, and other foundations.

• Blended financing tools: Tools that leverage public or philanthropic capital to mobilize additional private sector investment towards a social or environmental objective.

Often used in development contexts, blended finance typically sees public or philanthropic capital absorb risk through guarantees or grants to improve the risk/return profile and catalyze private sector investment that otherwise wouldn’t have flowed to a project. Another form of blended finance, venture philanthropy, channels philanthropic capital towards high-impact ventures, alongside strategic and operational advice, and other non-financial support.

Examples of organizations and foundations utilizing blended finance include Bill and Melinda Gates Foundation12 ,

Omidyar Network, and Shell Foundation. Major venture philanthropy funds include the Draper Richards Kaplan

Foundation, 13 PRIME Coalition14, and JDRF T1D Fund15 . • Community Bonds & Loan Funds, and Private Debt/Equity:

Community bonds are similar to traditional bonds, except they always generate a social or environmental return in addition to a financial return, and are generally open to nonaccredited investors. Community loan funds lend to local nonprofits or social enterprises and accept higher risk and offer more generous repayment terms than conventional lenders. Finally, there are impact-focused private debt or equity funds that function similarly to community loan funds except they target a specific social or environmental topic while often operating across a broader geographical footprint. As these tools require the lenders to be repaid (either by the lendee or via a resale of equity), they require reliable, growing revenue streams.

Examples of these financing mechanisms include the CSI

Community Bond18 , Social Enterprise Fund19, and Nesta’s

Arts & Culture Impact Fund20 .

• Social Impact Bonds (SIB): Designed as an outcomes based financial instrument for investors to fund social services, these bonds earn repayment of capital and, often, a return (paid by an outcomes funder like the government) if

10 Federation of Canadian Municipalities, “Funding Opportunities” https://fcm.ca/en/funding 11 Community Foundations of Canada, “Current Initiatives”, https://communityfoundations.ca/ current-initiatives/ 12 Bill & Melinda Gates Foundation, “Strategic Investments”, https://www.gatesfoundation.org/ about/how-we-work/strategic-investments 13 Draper Richards Kaplan Foundation, “Our Model”, https://www.drkfoundation.org/about/ourmodel/ 14 PRIME Coalition “What is Prime”, https://primecoalition.org/what-is-prime/ 15 JDRF TID Fund “Investment Strategy”, https://t1dfund.org/investment-strategy/ 16 Heart & Stroke, “Innovative program tackles blood pressure risk”, https://www.heartandstroke. ca/activate/chpi 17 Innovation Saskatchewan, (September 3, 2019) “The Sweet Dreams Initiative”, https:// innovationsask.ca/news/the-sweet-dreams-initiative 18 Centre for Social Innovation, “Invest in your community”, https://communitybonds.ca/invest-inyour-community 19 Social Enterprise Fund, https://socialenterprisefund.ca/ 20 Nesta, “Arts & Culture Impact Fund”, https://www.nesta.org.uk/project/arts-culture-impact-fund/

Cities, communities and residents looking to transition their neighborhoods to a just, sustainable, and participatory future require a financing and wealth approach that holds a long term view to successfully scale the Participatory City approach in Canada. While the financing mechanisms described in Funding Approaches might act as one set of mechanisms to finance the Participatory City approach, to have meaningful, scaled systems change in Canada, this work would additionally benefit from Transition Financing21. This type of financing enables capital holders and investors to redirect very large amounts of capital towards novel portfolios of assets with accompanying infrastructure around people capacity, data and innovation at macro and micro levels. This is a new way to scale transformation through systems change while identifying and aligning with actors’ priorities, risk profiles and envisioned outcomes, in this case relating to Participatory Social Infrastructure.

Transition Financing can balance the high pace of government spending as a result of COVID-19, both in managing the pandemic response and jump-starting the economy. The capital, policy and infrastructure solutions needed both for COVID-19 recovery and to make progress on the larger issues of growing inequality, unemployment, poverty, homelessness, inadequate healthcare, domestic violence, and racism, can be financed through a portfolio of long-wealth assets instead of isolated, medium term infrastructure projects. A new class of public-private capital can be further leveraged through co-investments by residents using community wealth mechanisms. This could lead to the creation of co-funded, participatory social infrastructure crucial to building forward better from COVID-19, bridging social capital and cohesion, and strengthening civic legitimacy and resilience.

The capital, policy and infrastructure solutions needed both for COVID-19 recovery and to make progress on the larger issues of growing inequality, unemployment, poverty, homelessness, inadequate healthcare, domestic violence, and racism, can be financed through a portfolio of long-wealth assets instead of isolated, medium term infrastructure projects.