I know how that sounds: borderline-heretical, and yet I do believe it’s the whole point of social finance. We are seeking ways of monetizing the efficiencies of social and environmental interventions proven to be (cost) effective. And so, we have a whole range of emerging strategies targeting so-called impact investors with a goal of increasing the capital available to move the needle on a range of vexing social and environmental challenges. So what’s the hitch? Maybe we’re not focused on the right activities?
Friends at Community Food Centres Canada recently posted a 2014 opinion piece that ran in the Toronto Star pointing out “Income inequality is not only bad for our quality of life and economic productivity, it is directly related to the deaths of Canadians on an almost unimaginable scale. The study demonstrates that income inequality is associated with the premature death of 40,000 Canadians a year. That’s equal to 110 Canadians dying prematurely each day. To put that into context, imagine a Bombardier CS-100 jet airplane full of passengers falling out of the sky every day for a year.” The study they are referring to is Statistics Canada’s 2013 report entitled Cause-specific mortality by income adequacy in Canada: A 16-year follow-up study.
And rightly so…you can tackle specific social challenges like hunger and housing with interventions like food banks or housing first strategies but…there is growing evidence that income inequality and the economy are the drivers. The others are symptoms.
What I find compelling is growing evidence that closing the income gap creates net benefits for rich and poor alike. This is really well explained in the following video from Richard G. Wilkinson and Kate Pickett, authors of The Spirit Level: Why More Equal Societies Almost Always Do Better.
So the question remains: Can closing the income gap be monetized in a way that draws more impact investment to the very interventions that are shown to be effective at closing the gap – to the benefit of rich and poor – such as housing first, community owned energy and community food centres? I’d love to know what you think. sw