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From his home office in Co. Meath, Dónal Traynor tells us about the serious business of social impact through community investment. Leading a large organisation which began as ‘a child of the peace process', Community Finance Ireland today manages over €60m of funding to community-led groups across every county on the island. “We are unique in social lending.” 

Fondest memories 

Dónal opens our chat with an interesting fact. Where he lives, Bohermeen, just outside of Navan is the second largest parish geographically in Ireland, “so, I believe”, he says. Less familiar to him, it seems, was the geography of Limerick city when the Cavan man arrived to take up a post-grad place at UL. “That summer I was working on a dairy farm, heard an advertisement on the radio and the clock was ticking... and not knowing the local terrain too well, despite my shiny new degree in Geography, I ended up securing lodging a good distance away from Castletroy!” This was a happy accident for Dónal. He found himself on the Dock Road in what was student accommodation mainly catering for Mary Immaculate College. And while the commute by foot to the bus in the city centre each day could be trying, “even on a dry day”, Dónal says it all paled into insignificance when juxtaposed against the warm and friendly environment at Sommerville and Westborne Student Accommodation. “I wouldn’t change it for the world. Especially because of the many friends for life that I gained”. 

 The Paddocks felt it only right to let me know during my last week that it is actually pronounced ‘KAYSHIN” 

Overarching memories of his time on campus, meanwhile, include his first insight into “the American academic scoring system, the importance of undertaking industrial-related work experience as part of the course, and an introduction to what I spent the entire year pronouncing as ‘KA-JUN’ chicken. To be fair, the staff at The Paddocks felt it only right to let me know during my last week in Limerick (complete with ear-to-ear grins) that it is actually pronounced ‘KAYSHIN’ chicken!” 

 Tourism 

 Dónal says he felt fortunate to access the one-year Graduate Diploma in Tourism Studies at UL, having completed a BA in Economics and Geography in Dublin. His background in economics, coupled with many summers working within the hotel industry, had an influence on his choice of Post Graduate route at the time.  

“The course itself and the atmosphere around UL was wonderful. Ours was a close-knit group of about 14 students, with my highlight being a study trip over 2 days to a variety of both community-owned and private tourism providers.” He recalls that the trip was facilitated by a local consultant Niall Heenan. “I think Niall was invited in by our lecturer Greg Knipe and to this day, I’ll never forget his talk to us, it still resonates with my career and the organisation I work for. Niall spoke about how the sheep farming industry in New Zealand, which back in the day was very heavily subsidised by grants, to the point where it became uneconomic. And almost overnight, the government withdrew the grant aid… and the benefit of that is that New Zealand is the world’s number one in sheep-farming sustainability. I think about that example every week of my life.” Dónal also cites the industrial work experience he undertook at Cavan Monaghan LEADER as being hugely influential on his subsequent career path. 

New Direction 

 That same aid had been drying up since the arrival of the peace process.” 

On graduating, Dónal almost immediately took up a series of posts working for voluntary boards, managing community enterprise projects, both with a tourism slant. During this time, he was first introduced to the concept of Social Finance, through a society then known as Ulster Community Investment Trust (UCIT). “Their CEO arrived into my office one day back in 2000, with a view to refinancing that business’ existing debt on more sustainable terms”. Dónal explains that UCIT was operating only in Northern Ireland at that time. Despite not doing business then, in 2004 he came across a new role being advertised with UCIT, whereby they were seeking to deliver an innovative cross-border support programme for community enterprise. “UCIT really is a child of the peace process. The goal was to help these community organisations become self-sustaining, to get off grant aid, something many had become dependent on. That same aid had been drying up since the arrival of the peace process.” 

 An initial 2 year funded programme was extended to 4 years and was tailed off with the hosting of the island’s first-ever Social Enterprise Trade Show in Belfast. Over 1,000 people attended, with 95 Social Enterprises from both sides of the border exhibiting. “And we had close to 150 Meet The Buyer meetings taking place, with Corporates such as PWC, Queen’s University, Bord Failte, and Coca Cola to name a few.” 

Evolving Role

Dónal’s role within the organisation changed in mid-2008 from being a Programme Manager to that of a Client Relationship Executive, with responsibility for developing a loan portfolio specific to the Republic via a new subsidiary UCIT (Ireland), “in essence, setting out to replicate what the society had established in Northern Ireland.” With an initial investment of €1.5m, and armed with the many contacts he had developed during the 4-year business support programme, Dónal recalls “The journey in earnest began and it was not long before we secured accreditation as a specialist Social Lending Organisation with the Social Finance Foundation”. The organisation also gained access to its external credit line, which was being financed by the Banking and Payments Federation. 

In 2015, Dónal changed the trading name of the southern business to Community Finance Ireland, and in 2016, welcomed the first of a number of new Client Relationship Executives “to help spread the word across Ireland... from that point, each year has seen our reach on the island substantially increase.” To date, circa €32m in loans have been disbursed to community-led groups. 

Community Investment 

 The crux of it is in terms of ownership and profit distribution.” 

So, what types of organisations do Dónal and his team support? “Any volunteer-led, community-owned organisation on the island. Falling into this wide category are every sports club, digital hub, eco-village, counselling centre, creative studio, faith-based centres, housing association, tourist facilities as well as community-owned hospitals, hotels and creches.” These are typically cooperatives or companies limited by guarantee, with voluntary directors and where the assets would be held within a community interest and profits reinvested. 

 “The crux of it is in terms of ownership and profit distribution. The difference with these organisations is that ownership does not sit within any private entity or private person, it’s in a community space. And the profit redistribution, it does not go into anyone’s pocket, it goes back into a circular economy or back into that organisation for the betterment of society.” 

Dreamers Welcome 

 “Our clients can see what’s missing in their communities and they can dream of the change needed. But making that dream a reality takes finding someone equally invested in social change. Us.” 

How does Community Finance Ireland differ from a bank? “It’s very simple. When these organisations go to the banks or conventional finance institutions to get a loan, the banks and the banking system will look upon them as very high risk. Why? Generally speaking, the lending would have to be done on an unsecured basis, because these entities don’t have any assets of real commercial value, unlike you or I could mortgage our house, for example.” 

 It is counter-productive to encouraging volunteerism in the community.” 

“And the second reason we exist is because a bank might say ‘Okay, yeah, we will take a punt on you, but we will want the directors of the entity to sign a personal guarantee’. And remember, that could be anything up to half a million euros. So now the homes of these directors are actually at risk, purely because they have chosen to back a community-based organisation. That has happened all over the country. And it is counter-productive to encouraging volunteerism in the community.” 

And how are these loans decided upon? Dónal stresses that every loan approved must have a convincing social impact attendant to it. “We are going into these loans on the basis of gut judgement of the character of the group that’s behind the project. As well as their repayment capacity based on the cash that they have been generating over a period of time.” 

 Ambition 

 We are now unique in social lending, operating both within and beyond the EU!” 

In 2020, the society which operates both north and south of the border agreed to change its trading name to Community Finance Ireland. “This enabled us to rebrand the group on an all-island basis. We are now unique in social lending, operating both within and beyond the EU!” 

In November, Dónal was appointed to the role of Group CEO, the first in the organisation’s history without a banking background. “Today we manage just over €62m of funding to community-led groups across every county on the island and another £7m in private SME finance which we administer on behalf of Invest Northern Ireland in that region.” Also, since October, Community Finance Ireland has been involved in disbursing over £14m in grant support to the Charities and Social Enterprises on behalf of the Department for Communities (NI). In early 2021, it signed a new credit agreement with capital providers in the Republic, Social Finance Foundation who are accessing €45m worth of credit from the banking sector. This is also supported by the EASI Credit Guarantee instrument, courtesy of the European Investment Fund. 

I am very committed to the work. I don’t see it as a job.” 

Outside of work, the father of two enjoys family time, as well as over-40’s Gaelic football, tag rugby and walking. He also reveals that he finds it hard to switch off from his job. “I am very committed to the work. I don’t see it as a job. My mother also was extremely involved in community work. It’s built into me, giving back to society.” 

Dónal concludes: “This is a fantastic sector to be working in… I took on the role with an ambition to ensure the positive social impact is felt by every community on the island. That really is the driving force behind everything that I do.” 

Lessons for Life 

I had a fantastic mentor in a previous role. She always said to me: “Never step on the crocodile when you’re crossing the river. Because you will have to come back across the river again sometime”. That is so important. We can all develop misperceptions of other people. Whatever your perception, you should probably keep it to yourself, and let it sit and breathe for 5 or 10 years. Then look back and compare it with the original perception and ask yourself: was I on the mark or not? If you were on the mark, good on you. And if you weren’t on the mark, aren’t you glad you kept your mouth shut? 

It is not beyond the realms of possibility that any individual you come across in any walk of life could end up buying a share in the organisation you work for. It is possible therefore for that person to end up on your board of directors. Effectively being your boss. That’s what I mean by not stepping on the crocodile. I always stress this to my team, to bring their diplomatic skills or bedside manner into every situation. Because there could be a day when that person could turn around and be your boss.