Small-scale farm and food businesses have long been overlooked by traditional investors and big banks. These businesses tend to be asset-light, which meant that traditional lenders had a difficult time approving them for financing.
That’s why, in 2019, the Fair Finance Fund in Ontario turned to community bonds as a way to provide loans for farmers and food start-ups across the province. The thesis: “If we can support small-scale farming [and] sustainably focused food production, we keep more money in our local economies, and thus our local economies thrive,” says Justin Abbiss, executive director of the Fair Finance Fund.
The Fair Finance Fund is far from the only organization using community bonds to raise capital. For example, community bonds helped Brique par brique build affordable housing in Montreal, allowed SolarShare to develop 51 solar projects across Ontario, and they are currently helping the Hamilton/Burlington Society for the Prevention of Cruelty to Animals to finance a first-of-its-kind animal welfare centre in Ontario. The non-profit impact-investment firm Tapestry Community Capital says it helped Canadian organizations raise a total of $147.5 million as of the end of 2025.
The prospect of local economic impact exerts a strong draw for many investors. “It’s something that’s very tangible in your own backyard, often where you can see and feel that impact,” says Stephanie Pinnington, director of growth and partnerships at Tapestry.
Civic capital
Compared to traditional investments, community bonds allow people to loan money to mission-driven organizations. In Canada, community bonds can only be issued by charities, non-profits or cooperatives and are repayable to investors under fixed terms. Investors typically receive money back in interest payments from funds generated by the project. But there are plenty of creative ways that interest payments could be rethought, Pinnington says. For example, a farm enterprise could pay out investors in food boxes rather than cash.
While community bonds can be a win-win scenario, they’re not a silver bullet. Bond issuers should have predictable revenue streams that allow for repayment of the bonds, Pinnington says, such as reliable rental income or programming. Like any investment, community bonds carry risk. They are considered private market investments, which means that there are no independent credit ratings, and bondholders could lose what they invest.
While values drive some investors, traditional investing is a much larger market than mission-led investing, points out Jennifer Hinton, ecological economist and author of the forthcoming book Game Changer: An Economy Beyond Profit. One clear reason is that conventional investors prioritize financial returns, while impact investors may accept below-market returns in order to achieve wider social benefits.
Traditional investments are also often made through share-based or equity-based capital. “Once you start getting shareholders involved, then that ownership gets diluted,” Hinton says. Shareholders can be located anywhere in the world, far removed from where the investment exists. But if you’re trying to do something good for the community, Hinton says, you want ownership to stay local and rooted to the mission. So, even if an organization can secure traditional funding, it can still be problematic, she says, compared to community wealth-building tools like community bonds.
Canada’s retail investment market is valued at $4 trillion, according to the Canadian Coalition for Community Capital. If even a small percentage of this sum were directed toward community bonds, it would have an outsized impact. It also has the potential to unlock funding that many community and environmental organizations might otherwise struggle to secure.
“We’re all talking about Canadian resilience, keeping it local. This is all part of that conversation,” Pinnington says. “I think it just needs a little bit more attention than it’s getting now.”
Ashley Perl is a Canadian freelance journalist based in Stockholm.
