1) ESSF agreement: An agreement between Employment and Social Development Canada (ESDC) and Colleges and Institutes Canada (CICan) pursuant to which CICan acts as the intermediary and manages the ESSF Pilot project.

 

2) Flow of investment funds: Impact investors subscribe to Essential Skills Social Finance Limited Partnership (ESSP LP) units, and the investment proceeds are loaned, via a principal at risk note, from the ESSP LP to CICan who is, in turn, using the funds to contract with each college service delivery providers to deliver essential skills training. 

 

3) Measurement of results: Social Research and Demonstration Corp. (SRDC) administers essential skills testing that provides baseline results for each participant to the college service delivery providers for purposes of program delivery, and measures skill gains post-training and 12 months following post-training. From the results, aggregate gains are calculated and released to ESDC to trigger contingent payments.

 

4) Contingent payments: As warranted by the aggregated essential skills point gains, identified using the International Adult Literacy Survey (IALS) 500-point scale, ESDC makes the contingent payments to CICan.

 

5) Success payments: CICan uses contingent payments from ESDC to repay the principal at risk notes to the limited partnership. The limited partnership then returns capital and any earned return on capital to investors based on skills gains.