ZooShare is a unique renewable energy project based in Toronto, Canada, and funded by the local community.
We are working with the Toronto Zoo and Canada’s largest grocery chain to recycle 3,300 tons of manure and 15,400 tons of inedible food waste into renewable power for the provincial power grid. In addition to creating enough power for 250 homes each year, we will also produce a nutrient-rich fertilizer, which will be used to return nutrients to the soil.
We were able to fund our project by leveraging local supporters: We raised US $1.7 million in just over a year using a product called community bonds.
Community bonds fall under the category of crowd funding, but instead of using a digital platform like Kickstarter or Indiegogo to raise money and dispense rewards, we chose to create a local economic development opportunity by selling investment securities to the people who live and work near the project. This empowers local residents to put their money where their mouth is and support the development of renewable energy projects.
“Community bonds are an investment product that allows members of the public, people who may not be accredited investors, to directly invest in and then earn interest income from local projects,” says Daniel Bida, Executive Director of ZooShare.
He learned about community bonds from two other Toronto-based organizations that were ahead of ZooShare on the development curve: First, the Centre for Social Innovation (using community bonds to purchase real estate) and SolarShare (using the same model to fund solar projects).
But why bonds and not shares? As a not-for-profit, ZooShare was not able to sell shares with dividends. Shares are an equity stake in a business, whereas Community Bonds allow not-for-profits to pay supporters with interest income.
Being a not-for-profit ensured that ZooShare could embed its mission into the business model. After repaying bondholders, ZooShare reinvests its profits into growing the community-owned biogas sector, “so instead of a steadily growing snowball of profit, we will have a steadily growing snowball of impact,” says Bida.
The financing model works in a very conventional way, with a very unconventional twist. Just like most construction projects, ZooShare is investing equity that will be leveraged to contract debt and finance the project.
“It’s just that we are also borrowing the equity we are investing from our members,” says Bida, adding “I think this could be applicable to all types of social entrepreneurship: Many investors are looking to do more with their money than just earn more money.”
In ZooShare’s case, investors see the value in a local project that has a local environmental impact. Furthermore, investors see value in ZooShare’s educational mission, which teaches people about the value of waste.
“Currently we run in-school workshops teaching students about how waste is a valuable resource that can be used to create energy. Once the plant is operational, these workshops will be complimented by on-site tours, giving visitors an up-close and personal look at the power of biogas production,” says Bida.
Furthermore, our high-profile location at a popular tourist attraction, the Toronto Zoo, means that potentially a million visitors a year could learn about and experience the true value of waste.
This is part of ZooShare’s story. When it comes to successfully marketing bonds, Bida says his primary tip would be to “focus on the story…Making the impact meaningful, authentic, and tangible. Most of the ZooShare investors are primarily excited about the environmental impact and educational potential, not only the returns.
“Keep the messaging as simple and straightforward as possible. People are already hesitant to purchase investment products from new organizations, so do whatever you can to make your community bond seem like something familiar.”