Have you ever considered the impact of investing locally?
We have. 10C, a shared workspace and community hub for social enterprise, has built a placemaking project and social finance investment opportunity capable of answering these questions. And through the recent purchase of a 15,000-square-foot building in Guelph, Ontario, our community has turned a dilapidated furniture store into a significant community asset.
10C’s mission is to “create space for change”, and this approach allows us to offer coworking, private office and community event space for over 150 members working to improve community.
In 2008, we launched at 10 Carden Street in a small, leased space, and gradually almost quadrupled the 800-square-foot location at which we started. Hundreds of events and thousands of people graced the space in our first years, as staff balanced the need for inclusivity with the accessibility constraints of an old building and the financial anxieties of running a start-up, not-for-profit social enterprise.
Between 2012 and 2015, 10C began actively exploring options to expand its model and deepen its impact. By this time, Downtown Guelph was seeing strong interest in real estate development, with new commercial and residential projects underway. Many not-for-profits felt squeezed by the increased pressure for space and left downtown for more affordable rent outside the core. With a business model only beginning to find balance and no money in reserve, it became clear that 10C needed to shake up its model.
10C is a part of a global coworking movement taking root in downtowns large and small. Coworking, or shared workspaces, first emerged in the early 2000s in San Francisco as a means for workers to organize to collaborate, share resources and work beyond the confines of traditional office spaces.
It was not until the 2008 economic downturn that coworking became a truly global phenomena.Deskmag, an international coworking publication, estimates that in 2019 there will be 2.2 million coworkers in over 22,000 locations around the world.
Researchers have attributed the growth of coworking to three distinct but interconnected factors. The first relates to the decline of manufacturing and the rise of creative and knowledge-intensive economies. This phenomenon is occurring spatially as creative industries reclaim spaces once occupied by urban manufacturers.
The simultaneous rise of the sharing economy is the second factor. Coworking spaces came about as a means to not only share space but also curate the needs of like-minded, often socially conscious workers.
Finally, and perhaps most concerningly, coworking spaces became the only office locations many precariously employed workers could afford. With more individuals working part-time or living contract-to-contract, coworking spaces began providing stable, amenity-rich workplaces that helped take the sting out of the gig economy’s nastier tendencies, while providing valuable social and professional networks to entrepreneurs and freelancers.
These interconnected trends illustrate how labour market changes have impacted cities. As economies shift from traditional manufacturing to knowledge industries, and as the cost of living in urban centres rises, cities have been grappling with how to provide services and support to a new generation of workers.
As these urban inequities continue to grow, cities and coworking spaces can collaborate to address challenges in their communities. In Kitchener, for example, the municipality has identified support for coworking spaces in their 2012 Downtown Action Plan. The plan created a new incentive, the Startup’s Landing Pad Program, that aims to foster downtown renewal and local economic development by connecting new businesses incubated in coworking spaces with renovated second storey offices. Not only does this program fill vacant office space in the core, but it also serves to retain newly created businesses within the city.
And in Guelph, 10C’s mission is to address the same community need for connectivity and affordable space. But buying and maintaining a commercial property isn’t cheap. Coming out of its commitment to work with local partners, it was natural for us at 10C to try and leverage an innovative approach to financing the purchase and renovation of a declining downtown building, so we pursued collaboration and social finance.
Social finance is a way to achieve positive community outcomes via private capital. The concept also prioritizes stakeholder engagement, a common good and sharing any benefits resulting from an initial investment. Innovative approaches to financing, what is sometimes called “finnovations,” initially meant reconceptualizing traditional finance to include social impact.
At 10C, with very little cash capital, our vision for creating the coworking space we envisioned was to develop a community investment opportunity to build the equity required to purchase and redevelop the property. We had social capital from seven years of operating in Guelph, and at that point, we imagined we could leverage that social goodwill to ultimately put financial returns back into our supporters’ hands.
We looked to community bonds. In southern Ontario, the idea had been pioneered by the Toronto-based Centre for Social Innovation on properties it purchased in 2010 and 2014. Our goal was to match the first mortgage financing with community bond investment, leaving us able to repay the first mortgage and community bonds with operational proceeds over a 25-30-year timeframe. We hoped the project would steward the property as a strong continued change in the years ahead. We planned to finance the project with the help of the community and fill it with fantastic organizations working for the greater benefit of the community.
As a lead partner in the project, 10C engaged Chalmers Community Service Centre, a local charitable organization, as a collaborator. Since 1997, Chalmers has assisted people in need with food, clothing, and connection. Some 500 guests currently experiencing poverty seek assistance through Chalmers each month. We were both in the same situation of needing long term accessible space to fulfill our social missions and felt the external pressures of changing access to commercial real estate. From an early conversation through to formalizing structures, this has been a valuable collaboration. Chalmers is now the building’s co-owner and is a key stakeholder in the project.
Between 2016 and 2019, through the engagement of 136 individual and organizational investors, we raised nearly $2.2 million in community bonds through investments ranging from $1,000 to $150,000. And the returns are solid. Investors are earning fixed rates from 2.5 to 5 percent on bonds backed by a physical asset – the redeveloped property itself.
Kerry Daly, a Founder Series Investor in 10C, believes committing to a better future requires taking risks. “10C’s leadership inspires,” he says, “and I am happy to support the initiative and carry a little piece of that risk as an expression of my support.” In 2018, Daly joined the 10C board of directors.
This steadfast support helped 10C engage Vancity Community Investment Bank, a values-based bank dedicated to building the social finance market in Canada, to hold our first mortgage. It was no sure thing, as, in the renovation stages, 10C’s building project was extremely risky. The property had outdated plumbing, electrical and accessibility services and required a great deal of structural work. It was essentially rebuilt from the inside out.
Our new location fully opened in January 2018, less than two years from the date of purchase. We now provide space for upwards of 50 employees working in a variety of social and environmental sectors while accommodating hundreds of visitors who use the event spaces every week. They come to take part in the community programming of 10C and its numerous collaborators, including the University of Guelph, Guelph Arts Council, Wellington Water Watchers and Wildlife Preservation Canada, groups that now use the space to amplify their community engagement and organizational work.
But we’re not content to act locally without thinking globally. Our changemaking members are the essence of 10C and currently, we are curating this membership based on how their missions and work supports
Canada in meeting the United Nations Sustainable Development Goals. For example, eMERGE Guelph is working on goal number 13, Climate Action to move Guelph to 100% renewable energy by 2050. Other members are working on wellness and inclusivity and specifically goal number 5, Gender Equality, with workshops to empower all women. Changemaking work is often intersectional and difficult to measure. Collecting data and measuring the impact of 10C and our members is one of the program areas 10C will be focusing on moving forward.
A recent survey of 10C members showed that the combined forces of Chalmers, 10C and its 200 members are working towards all 17 UN Sustainable Development Goals. And it’s not just the SDGs – as part of our accountability to our investors, 10C has reaffirmed its commitment to measure its impact using the IRIS indicators, an initiative of the Global Impact Investing Network, which are designed to measure the social, environmental and financial performance of an investment.
This commitment means that social returns, alongside a solid financial return, will be shared with our investors. To date, 10C’s largest global sustainability impact has been in SDG number 11 – Sustainable Cities and Communities. We have successfully increased the occupant density at our redeveloped location by almost 2,000 percent above what existed before, while boosting the physical accessibility of downtown Guelph by adding 15,000-square-feet of accessible space for community event programming.
Our experience with community bonds has been a powerful example of changemaking projects capable of taking root anywhere across Canada.
Social finance in communities large and small offers like-minded groups a chance to invest in a shared vision for local projects. As the world becomes an increasingly complex space to work in, those creating space for change can only make it easier to navigate.
This article is featured in our latest issue: Invest in Change. For a limited time, Alternatives Journal is releasing FREE digital downloads, valuing at $250,000 for the first 50,000 interested Canadians! Check out this link to qualify!
Popular on A\J
- What is a walkable city? Imagine if you lived in a city where the grocery, your home, work & other services were al… https://t.co/CP2O3RUr9e — 2 days 5 hours ago
- Innovative Canadian municipalities lead by example. From teaching tools to students and newcomers on how to use the… https://t.co/IQwCRGOEhW — 1 week 2 days ago
- RT @PLT_Canada: Don't delay to join our #MyGreenMentor program 🌲 The registration is almost closed and this is a huge opportunity… https://t.co/VR3IMu2Rit — 1 week 3 days ago