We recently paused to reflect on our journey and the evolution of VERGE Capital as our regional place-based social finance intermediary. What were the key conditions that led to the successful roll out of a community bond, two loan funds and a new understanding of how caring wealth holders can invest for both a financial return and community impact? While there were years of work that went into creating VERGE, the underlying factor to our success has been the way we have been able to collaborate effectively with so many community partners and supporters.
Everyone knows that collaboration is not easy, but we also know that blending diverse skills, vantage points and resources provide the best outcomes. VERGE’s Founding Manager, André Vashist, shares his reflection about collaboration: ‘To explore tension in a creative way, we change “or” to “and” – then we can see the truth from all perspectives.” Our collaborative has survived this tension and has explored differing truths and perspectives along the way. In this article we explore how each collaborator contributed to our success, which includes compelling testimonials of how VERGE has changed over the years and what being a part of VERGE means to them.
Our local collaborators
Three local key organizations have been vital collaborators in Pillar Nonprofit Network’s ability to get VERGE off the ground: Libro Credit Union, London Community Foundation, and Sisters of St. Joseph of Canada. While at times, each partner may have been unsure of their role in making VERGE a success, they all played critical roles. These organizations provided matching operational funding that enabled Pillar to receive grants, administrative support, engage impact investors, launch VERGE social finance products and be impact investors themselves. Along the journey to develop VERGE, we have also seen each collaborator embark on their own social finance journey in parallel to helping VERGE flourish.
London Community Foundation (LCF) has bounded forward with their own commitment to investing five percent of their endowment funds. VERGE and LCF have worked very closely on due diligence processes and have leveraged each other’s areas of expertise. With LCF’s developed expertise and review process for affordable housing initiatives, and VERGE’s honed due diligence and expertise in social enterprise, it was a natural next step to co-invest and each play a lead role in our own areas of expertise. This partnership has significantly increased our capacity to review potential investments.
Libro has always provided expertise to VERGE and have been generous in supporting through in-kind loan administration. For the Startup Fund, Libro is effectively the lender, with VERGE providing 75 percent of the loan amount. Working with a local credit union to take on the administration of the loans means the entrepreneurs get backed by a real finance institution and can establish a relationship for the future. In addition, Libro has begun the journey of formalizing their own impact investing journey as a leading B Corp in the region with their first investment in the VERGE Breakthrough Fund.
The Sisters of St. Joseph have been on their own impact investing journey and engaging in VERGE has helped them better understand their own mission-based investment opportunities. Since the start the Sisters have always wanted to create systems change as their roles in community have changed from providing direct services to being able to empower others.
Here are some of the reflections provided by collaborators at our 3 year anniversary since the launch of our VERGE collaborative in 2015:
Relying on national experts
Since our very first community roundtable about social finance, the SVX team has been on hand to provide advice and support. We have acknowledged that as a place-based social finance intermediary, we would be unsuccessful if we tried to duplicate other highly-funded groups that have earned a solid reputation as national leaders in the field of social finance. Where possible, we have leveraged their expertise in designing and developing funds and our ecosystem. The SVX sees VERGE as a leader in place-based work and have partnered with us as co-owners of VergeSVX, the trustee that governs the Breakthrough Fund. This governance structure creates investor confidence, especially for those who are not familiar with our work. Our relationship with SVX has also helped us connect to other place-based social finance groups across the country; groups that are trying to do the same work to connect local investors to local impactful ventures.
Keys to a successful impact investing collaborative
What are the key conditions that make collaborations successful? These are just a few of our ponderings about some of the vital elements that have helped our work.
- A neutral convener – A passionate convener that can bring the community together in a neutral way will be the glue that ensures people work well together. There will be overlapping goals in the group, but the convener should be able to help everyone at the table see the benefits of working together. This person can help the group to and stay focused on the mutual mission of creating a vibrant and resilient community.
- Regular engagement of collaborators – We have found it’s important to engage collaborators more regularly than just at quarterly governance meetings. We are fortunate to have a cross section of volunteers from across the region with a variety of skills and expertise who provide regular support in the form of review panels and providing technical and strategic advice to us as well as our social entrepreneurs. Our collaborators have been a part of this group, rolling up their sleeves and staying engaged with the detailed work of assessing loan applicants.
- Create structure to meetings and roles – Structured meetings with agendas and two-way communication and sharing, not just reporting back to the management team, is essential for a successful collaborative. In our collaborative, roles evolved over time but there was always a keen need to understand how each collaborator was to contribute and what they were accountable for.