Social Capital Partners

Today, we launch a Special Series?in response to the Trump administration's economic war against Canada. We are a country of brilliant, strong people and there are policy solutions to the economic and geopolitical threats we face. Over the past twenty years, Canadian wealth and the ownership of our economy have become more concentrated in fewer hands. Our CEO, Matthew Mendelsohn, explains why we need to own more of our economy, and?create more realistic pathways for working Canadians to build economic security, wealth and an ownership stake. Some things might not work—but failing to act quickly and ambitiously is by far the bigger risk. Read the series launch blog here: https://lnkd.in/eNnmHA8V #AlwaysCanada #Never51

Eight weeks ago, many in Canada were preparing for a trade war with the United States and were looking for compromises we could make to avoid it. The media were filled with stories about workers about to lose their jobs and businesses thinking about re-locating to the U.S. to avoid tariffs.? ? That seems like a long time ago.?? ? There are real risks to Canada. But we’re not talking nearly enough about the risks of doing business or investing in the U.S.? ? I remember learning about risk and uncertainty a long time ago. We discussed these concepts in the context of investing in emerging markets or unstable democracies. I remember learning about the “prudent investor” rule and fiduciary duty to shareholders.?? ? Doing business in an unstable, retreating democracy governed by the whims of erratic billionaires, career criminals and Russian assets is not a place you should want to invest. It isn’t prudent.? ? Large parts of the U.S. economy are becoming more extractive and predatory, with the same uncertainties that one finds in other authoritarian systems – corruption, cronyism, corporate blackmail, extortion, civic unrest and threats to one’s livelihood and civil rights.? ? These are new risks for businesses and investors in the U.S. How does one calibrate the risk that comes from a president that might try to shake you down? Or Elon Musk waking up tomorrow and canceling your firm’s contract?? ? I’m not a financial analyst and I don’t know how one would quantify these risks. The risk of investing in the U.S. today feels a lot like investing in Russia 20 years ago. Yes, wealthy and powerful companies will probably become even more wealthy and powerful. But it will be more difficult for most companies to compete in a rigged market, with success determined by fealty to the regime.? ? The rules of commerce that we have taken for granted in democratic capitalist societies no longer apply in the U.S. Call their emerging model of capitalism what you will – gangster, crony, disaster, techno, late-stage – there is no doubt there is money to be made if you get in at the right time with the right people. But it is highly volatile and unpredictable.?? ? The impact of what is going on today – for example, the hollowing out of state capacity to perform the basic functions of democratic government – will grow.? ? I don’t want to understate the risks to Canadian jobs and businesses right now. Many businesses are facing very difficult choices. But we need to talk more openly about risks in the U.S., and the risk to Canadians in continuing to tie ourselves to an unstable, authoritarian power.? ? The American version of capitalism and democracy on display is not one to which we should aspire. It is a result of a model that produces extreme inequality, concentrated power and inadequately funded public services.? ? What can we do? Read the post below for some ideas. https://lnkd.in/gEC4bjAP

Kudos to Social Capital Partners for using their resources to help us better understand how to respond to US aggression by building a more independent, equitable and prosperous economy. I'm looking to #AlwaysCanada #Never51 for ideas on effective policy levers, big moves by Canadian investors and suggestions for Canadian philanthropists. And then there are all the small acts that each of us can do to buy Canadian, invest locally and speak out when politicians can't.

I think a lot about what we can do in Canada to keep the Canadian dream alive for working people and smaller businesses under the relentless pressure of our increasingly authoritarian neighbour. It is why Social Capital Partners launched #AlwaysCanada #Never51: to identify practical ideas that will prevent the damage to our economy that Trump wants to inflict, and also allow us to build something better – a more independent, prosperous economy where we are less vulnerable to threats. One thing we need to do is use our large pools of capital in ways that don’t arm those trying to do us harm. It is time we invest more in Canada and invest more locally for impact. Those who manage, control or invest large pools of philanthropic capital need to stop investing in those things that undermine your mission. And, even better, invest in things that actually further your mission. 20 years ago, there was not a mature infrastructure for local impact investing that delivered social and environmental as well as financial returns. Now there is. And holders of philanthropic capital – like hospitals, universities and charitable foundations – can accelerate and grow the market even further. You should insist that your investment advisors and managers find more investments that deliver social and community impact. Those in Canada who have the privilege of controlling how capital is invested need to step up for Canadians, our communities and our businesses and not-for-profits. This is a whole-of-society project. We are a big powerful, wealthy country. Let’s mobilize our investment capital for long-term resilience and prosperity. https://lnkd.in/geCQeqg6

Canada’s economy is being attacked, and our foundations sit on huge pools of capital. Next in our #AlwaysCanada #Never51 special series - an appeal to every institution that holds capital, power and influence to invest in Canada’s long-term resilience, growth and sovereignty. Unlike 20 years ago, investment managers today can find investments at scale that deliver positive social and environmental impact across asset classes, including public markets, private markets, debt, affordable housing and infrastructure. As Matthew Mendelsohn writes, Canada's foundations need to target transformative impact now, as the communities they serve are under threat. Link to the blog is in the comments below ??

A few hundred workers at a company in Vermont are about to share in about $1B. They will get over $1M each on average. Some will get as much as $10M. Most of these will ?????? be executives - they will be receptionists, salespeople, analysts, etc. They didn't win some big State lottery with a shared lucky ticket. This is the magic of employee ownership at work. Here's their story. Vermont Information Processing Inc. (VIP) was a 45-person company and had been around for 30 years when its founder, Howard Aiken, sold it to his employees through an Employee Stock Ownership Plan (ESOP) in 2001. That means the company became 100% owned by its workers and Aiken would have been paid the purchase price out of company cash flow over time. VIP is a technology provider for the beverage industry. By 2010, it had grown pretty well - it had about 124 employees and was worth about $42M. Not bad! In an ESOP, when an employee leaves the company their shares are repurchased. That year, in 2010, they paid about $1M to exiting workers. Then things started to take off. They reached $100M in valuation by 2015, and by 2021, the last year data is available, they were worth almost $400M and had almost 400 employees. They bought 5 companies in that time, adding their employees to the ESOP and showing how employee-owned companies can compete and win. Between 2019 and 2021 they paid out about $75M to exiting employees. This small company based in Colchester, Vermont (population 17,524) had become an incredible engine of worker wealth, and had stayed rooted in their local community. They bought two more companies in 2022. This week they announced that they are being acquired by the massive private equity company Warburg Pinkus for $1B. 100% of the proceeds of that sale will go to workers. In an ESOP, once an employee has worked for a year, they start getting shares. They don't pay for their shares - it's a benefit of working for an ESOP-owned companies. That means it's inclusive and accessible and one of the best inventions ever for distributing wealth to the people that really create it. The longer you work for a company, the more shares you get. The American ESOP is a public policy miracle. It started in 1974 and has broad support from Republicans and Democrats alike. It has been enhanced many times due to its incredibly good outcomes, like the $2.1T in wealth currently held by workers in ESOP-owned companies. Sometimes (rarely) ESOPs don't work. Sometimes they lead to pretty good outcomes. And sometimes a Vermont businessman can sell his business for a fair price, creating a platform that pays out over $1,100,000,000 to real workers. ESOPs give every day American workers a chance to hit the kind of home run normally reserved for CEOs and finance-types. Canada launched our version of the ESOP, called an EOT, in June. One day I'm going to write a post like this about a Canadian company. That will be a great day.

??? And we're live! Still time to join Matthew Mendelsohn and this expert panel on cities and economic resilience for the next hour. Register at: https://lnkd.in/dUX4SFVp

??Podcast Reminder?? ?? Tomorrow - 1-2pm EST on Tuesday, February 25. Register for free: https://lnkd.in/g-kRf5A5 #EconomicResilience #Cities

This webinar is tomorrow - February 25th - register now: https://lnkd.in/g4z_q_SN Future of Good Canadian Association of Municipal Administrators (CAMA) Municipal Finance Officers' Association (MFOA) Nova Scotia Federation of Municipalities Municipalities Newfoundland and Labrador Union of Municipalities of New Brunswick | Union des Municipalités du Nouveau-Brunswick Federation of Prince Edward Island Municipalities Union des municipalités du Québec (UMQ) Association of Municipalities of Ontario (AMO) Ontario Municipal Administrators' Association (OMAA) Association of Manitoba Municipalities (AMM) Saskatchewan Association of Rural Municipalities Alberta Municipalities | Strength in Members Union of BC Municipalities Tamarack Institute for Community Engagement Youthful Cities

Kudos to our frequent collaborator Keldon Bester, Co-Founder of the Canadian Anti-Monopoly Project, for making the Globe's Top 20 emerging leaders list. "In 2017, when Keldon Bester was studying at the Harvard Kennedy School, Lina Khan—a rising star among antitrust thinkers who would later become chair of the U.S. Federal Trade Commission—gave a talk to a small group of students. Bester already sensed that something had gone badly wrong in the economy, with each sector dominated by just a few companies, and Khan’s talk—an emerging antidote to the long reign of the bigger-is-better corporate ethos—had him hooked. Then came a formative summer in Washington, D.C., at the Open Markets Institute, a competition-policy think tank that fought against monopoly power. Bester saw how to wield “a powerful set of ideas” to foment change. Back home in Canada, after two years at the Competition Bureau, he leapt into an activist role by co-founding the Canadian Anti-Monopoly Project—just as the federal Liberals proposed a potential overhaul of the 1980s-era Competition Act. Bester was there in Ottawa calling on Parliament to break from the laissez-faire law that effectively greenlit every corporate merger. As executive director of CAMP, he testified at House and Senate committees, and helped build political support to toughen rules on mergers in heavily concentrated industries. These and other changes in the new Competition Act garnered rare unanimous approval in a fractious Parliament. As momentum accelerates, the daily work of change churns on. In the fall of 2024, Bester co-wrote a report that detailed the deleterious taint of monopoly power throughout the Canadian food production system, from seeds and fertilizers to the kitchen table." Read the list and show this man and his ideas some love ??