10C Shared Space is a non-profit community hub and shared workspace in Guelph, Ontario that aims to create a platform for collaborative work to improve communities. People work, meet, eat, create, and brainstorm together at 10C.
Problems and Purpose
When 10C was founded in 2008, the organization operated out of a small meeting room and coworking space in Guelph, Ontario. As 10C’s membership grew, the organization began considering options for expansion, as it was important to ensure their physical space met the needs of their ever-evolving social innovation hub.
Utilizing the model of raising bonds from community members, 10C financed the purchase and renovation of 42 Carden Street, This model of leveraging community capital was pioneered by The Centre for Social Innovation (CSI), a Toronto-based organization which seeks to support non-profits by leveraging social capital.
Since then, community bonds have been successfully employed across Canada, particularly being used as a second mortgages in the acquisition of real estate by non-profits, social enterprises, and charities. This physical real estate works to provide security to the bond holders who are typically local community members. Bond holders are asked to invest with the repayment of principal and interest based on expected future revenues of the organization. Community bonds act to close the gap between down payments and mortgages, and are typically a higher risk investment and should not exceed 20% of the property’s appraised value . If the project defaults, bondholders are paid second to the financial institution holding the first mortgage.
Background History and Context
Founded in 2008, 10C initially operated out of a leased property that hosted the organization's community gatherings. By 2013, it was clear the space it was operating in could no longer sustain the organization’s growth, as it was too small and lacked the accessibility to support the organization’s events and coworking members. With this in mind, 10C began seeking opportunities to create - through a property purchase, a large-scale community coworking and event hub with the help of a Ontario Trillium Foundation seed grant. In 2015, 10C concluded that an ownership model was the best path forward to respond to partnership opportunities and to ensure future sustainability.
In 2015, co-founder Julia Grady began to evaluate a historic property in the City of Guelph’s downtown core as a potential space for 10C. Seeking to expand to a space which could both facilitate 10C's future growth, as well as service the needs of the Guelph community, it was decided that 10C would purchase the building at 42 Carden Street. Formerly the home of the Acker's Furniture building, the 15,000 square foot commercial building would house both the 10C Shared Space, as well as the Chalmers Community Services Centre.
Over the next four years, 42 Carden Street was redeveloped into a fully accessible building, featuring a number of open concept coworking spaces, soundproofed meeting rooms, a creative arts space, a rooftop community classroom, and commercial kitchen. 10C officially began operations in the new space in July 2017 when the preliminary renovations were completed.
Organizing, Supporting, and Funding Entities
In order to finance the purchase and transformation of the 42 Carden building, 10C pursued a social financing model. This model involved creating a series of community bond offerings with investments from 140 community members, businesses, and foundations. Approximately $2.3 million CAD was raised for the project between August 2015 and January 2019 through community based long-term capital financing.
In the past, nonprofits would finance their work through a series of grants and private donations. Opting for a more socially conscious funding stream, 10C chose to utilize community bonds to fund the redevelopment of 42 Carden, integrating its finances with its long-term vision of building sustainable relationships with like-minded organizations and individuals that share its vision. It would also have been difficult to finance the project using traditional funding streams alone, given the lengthy and often complex processes that are often required to secure grants and business loans.
Throughout the process, 10C utilized the existing community bond structure developed by the Centre for Social Innovation (CSI). Following this model, 10C developed a customized series of bonds. Each bond series had varying minimum investments, interest rates, interest repayment schedules, and total offerings. Series E and F Bonds were secured by a second mortgage on the property in 2016 and required minimum investments of $1,000 CAD and $50,000 CAD respectively. Series G and H Bonds were issued in 2018 to replace construction financing required for the project completion and required minimum investments of $5,000 CAD and $15,000 CAD respectively. The bond’s 3-5% interest rates proved to be enticing to investors because it was higher than Canadian Guaranteed Investment Certificates (GICs). Bonds had varying maturity dates from two years to five years from the initial investment.
Participant Recruitment and Selection
Harnessing 10C's vision of activating spaces and communities was a major component of its strategy in attracting local investors and businesses towards funding the project of transforming 42 Carden. In addition to this, Julia Grady leveraged her own personal networks, alongside the organization's existing ties with the community to identify potential investors. Using a combined approach of social media and direct advocacy, 10C was able to amass the social capital required to get the project off the ground.
One of the most successful methods of securing new investors was the ability for them to visit the space as it was being revitalized, allowing them to envision the project as it came to life. The relatively accessible starting point for investment enabled community members of varying financial situations and risk tolerances to invest in the project, thus ensuring a diverse group of investors that was reflective of the Guelph community at large. In total, donors committed between $1,000 to $150,000 CAD towards the bonds, with an average investment of $16,600 CAD.
While many investors saw the community bonds as a great opportunity to invest in an innovative and profitable social finance initiative, many simply felt good about financing an initiative that would benefit their community.. An investor survey conducted by Terrapin Social Finance found approximately three-quarters of 10C’s bond holders lived locally, 66% were female, and 66% had a graduate degree. The main motivator for investors was social impact but key contributors also included the interest rate and investment risk. In total, 140 investors from the Guelph community and beyond invested a total of $2,325,000 CAD.
Methods and Tools Used
10C’s Community Bond project is a form of social financing. Social financing utilizes private capital to achieve social and environmental objectives by delivering both a social dividend and an economic return for investors . The ability to mobilize private capital for social good enables investors to financially contribute to community led projects that benefit society. Social finance tools include community bonds, micro-lending, crowd-funding, social finance investment funds (SFF), and social impact bonds (SIB) .
10C utilized community bonds as the primary financing method for the capital costs of the property purchase and redevelopment. Community bonds are interest bearing loans that enable non-profits, co-operatives, and charities to leverage their surrounding community of supporters in an effort to raise project capital . Nonprofits face many barriers to accessing mainstream financing, and community bonds can often provide these organizations with the needed sources of capital. These bonds provide investors the opportunity to not only improve their communities, but also financially benefit from their investment. Community bonds are a financing method for projects looking to raise $500,000-$5,000,000 CAD in capital . A successful community bonds initiative requires the interest of the local community and a sustainable revenue model to repay investors.
What Went On: Process, Interaction, and Participation
Transforming the building at 42 Carden into a viable community space was not without its challenges. Despite the amount of social leverage and goodwill 10C had accumulated over the years, it was inevitable that such a massive project would come with unavoidable uncertainties. Relying on this relatively new model of community funding alone was risky in that without a clearly defined set of metrics that could be used to measure the success of a potential venture, it could be difficult to attract the investment required to make it sustainable.
With the help of Good Roots Consulting, Terrapin Social Finance, and the Ontario Trillium Foundation, 10C conducted an assessment on the viability of community bonds in Canada, publishing its research in a report titled "Beyond the Bond". The document included key findings on the process, interaction, and participation of community bond initiatives, at the time, in Canada. It was found that community bond initiatives were more likely to be successful if the organization had the following:
- Strong social capital
- Supportive board of directors who endorse the project
- Partnerships with organizations who have issued community bonds before (e.g.: TREC, MaRS, CSI)
- Readily available staff member/volunteer/contact with strong financial literacy
- Highly visible community champion with credibility
- Partnership with an innovative financial institution
- Iconic project that meets community needs
- Simple bond terms and project communications
- Clear project timeline
- Portfolio approach where community bonds make up only a part of the project financing
- First loss capital from the government
10C utilized these process findings as they continued to develop stability in their offerings and long-term plans for the 42 Carden Street community bond project. Initially, as the scope of renovations was not known, 10C believed they would only need to raise $1,000,000 CAD for the project with an unknown number of investors. The team utilized templates from CSI including bond certificates and a legal trust agreement, which outlines all terms and conditions of the community bond, including legal trustee, series of bonds, and mortgage backing.enter a legal agreement. Additionally, Julia Grady secured the support of the 10C Board of Directors, including Board Chair Kerry Daly.
Finding an innovative financial institution that supported the organization’s use of community bonds was challenging, but 10C eventually discovered and partnered with VanCity Community Investment Bank for the project. The project’s first threshold was to raise $400,000 CAD from 22 investors. However, as the project took off and the building renovations continued, additional financing goals and bond series were announced to secure additional financing.
As a result of utilizing a community based financing method, there existed a communal sense of ownership for the project amongst many of the bond holders. Some investors became highly participative in the process and developed a strong passion for the organization’s mission and vision. Community engagement and collaboration remain at the heart of 10C’s vision for the Guelph community. The participatory approach to funding enabled the organization to integrate this vision into their real estate redevelopment project in a highly functional manner.
Influence, Outcomes, and Effects
Ultimately, the use of community bonds to finance the purchase and renovation of 42 Carden Street was deemed a success by the organization and the broader community. Over the past five years, 10C was successfully able to finance the bonds annually using its various revenue streams. These revenue streams included 10C memberships, event bookings, coworking space and kitchen rentals.
A positive effect of utilizing community bonds was increased community engagement with the project. 10C offered a complimentary annual membership to all of their bond holders which enabled them to stay up to date with the organization and utilize the physical space at 42 Carden Street. The use of community bonds also promoted partnerships and collaborations with local organizations and businesses who chose to invest, such as the University of Guelph. A key indicator of success was the fact that approximately two thirds of bond holders stated they would recommend purchasing community bonds to their friends, family, or colleagues.
As the first two series of community bonds reached their five-year maturity in 2022, 10C began the bond renewal process. Between 80-85% of investors have chosen to renew their bonds, meaning the remainder of the bonds will be held by new investors. The high bond renewal rate was seen as a key metric in measuring the project’s success. Based on the organization’s successful use of community bonds in the last five years, they have tentative plans to utilize additional community bonds for future project financing.
Analysis and Lessons Learned
Reflecting on key lessons learned through the project, 10C cites learning the importance of building organizational strength and structure at the same time. With so many unknowns going into the project, Co-founder and Executive Director Julia Grady’s entrepreneurial spirit was a key factor in the project’s success. Taking on innovative financing methods comes with a certain level of risk that must be properly mitigated. Approaching the project with resiliency in mind was crucial to obtaining a successful outcome.
Finding interested investors was a major learning area of the project. Understanding how to tailor its pitch to individual investors was crucial for 10C’s success.. For many investors, Community bonds remain uncharted territory, and as such it is important to listen to their concerns and questions. It is this open-minded and adaptive approach that facilitated the long-term viability of the bond initiative..
Learning to adapt the internal organizational model to an ever-changing world proved to be another key lesson learned throughout the process.
 Davis, M., Grady, J., & Woeller, S. (2018, July). Beyond the Bond. Retrieved April 7, 2022, from https://10carden.ca/wp-content/uploads/The-Bond-and-Beyond-July-30-2018.pdf
 Government of Canada. (2015, July 21). Social Finance. Canada.ca. Retrieved April 6, 2022, from https://www.canada.ca/en/employment-social-development/programs/social-finance.html
 CSI & Tapestry. (n.d.). What is a Community Bond. Community Bonds. Retrieved April 6, 2022, from https://communitybonds.ca/#:~:text=What%20is%20a%20Community%20Bond,and%20create%20more%20vibrant%20communities
Written by Rachel West as part of McMaster University's Integrated Business and Humanities program in collaboration with 10C.