Canadian foundations to increase impact investing

Canadian philanthropic foundations together represent over $60 billion of capital. Back in 2010, the Canadian Task Force on Social Finance set a target for Canadian foundations to invest 10% of their capital in mission-related investments by 2020. If this target were to be achieved, it would redirect an estimated $7 billion in assets towards greater impact.

Last week, the Canadian Environmental Grantmakers’ Network, Community Foundations of Canada, Philanthropic Foundations of Canada and The Circle on Philanthropy and Aboriginal Peoples in Canada announced Foundation Investing 2.0, a new partnership to support foundations in their journey to deepen and scale their impact and responsible investing activities.

Implemented by Rally Assets and the Shareholder Association for Research and Education (SHARE), the project will provide practical steps to embed impact into investment management and governance.

At Deetken, we are thrilled to see this call to action and, perhaps more importantly, that it is accompanied by a clear path to guide foundations towards greater alignment between portfolio and purpose.

There are many examples of Canadian foundations that have become national and international impact investment leaders, including large foundations such as McConnell Foundation and Hamilton Community Foundation. There is much to be learned from these individual journeys, as each foundation works towards investing in a way that furthers their unique mission in the community.  

At this year’s Responsible Investing Association Conference in Montréal, Inspirit Foundation made a splash with their announcement of a truly impressive 84% allocation to impact investments – within close reach of their goal to invest 100% of their portfolio in impact by 2020. Inspirit sees impact investing as an imperative for creating the system change needed to realize their vision of a more inclusive and pluralist society. They have been particularly active in the financing of co-working and community spaces, such as Artscape, the Centre for Social Innovation and New Commons Development. They have also invested in a number of Canadian impact funds including Raven Indigenous Impact Fund, Renewal Funds, and the Verge Breakthrough Fund.

Catherine Donnelly Foundation is committed to promoting positive social change, with a granting program focused on housing, adult education and environmental enhancement in Canada. Recognizing that these intractable problems require extraordinary solutions, CDF was an early adopter of responsible investing and an early mover into impact investing. Today, CDF has completed impact investments in renewable energy bonds, direct investments in affordable housing projects and has also participated in social impact bonds designed to achieve specific public health and education goals. They are well on their way to achieving their target 10% portfolio allocation to impact investments.  

Closer to home, Central City Foundation is a 100-year old foundation with a mission to provide sustainable, timely solutions to neighbours in need in Vancouver’s inner city. Starting as far back as 1909, CCF amplified its grant-making by investing in properties and buildings that provide low-income housing or offer space and place to mission-aligned community organizations. CCF now has over 40% of its portfolio invested in social purpose real estate.

Bill Young, well-known for founding Social Capital Partners, uses his Bealight Foundation to provide catalytic capital into impact investment funds with a diverse set of mandates. This can provide an important “vote of confidence” for impact managers, particularly when raising capital for first-time funds.

Through participation in initiatives like Foundations Investing 2.0, Canadian foundations are showing a clear commitment to greater impact as well as a willingness to share their experiences and challenges to help others on the same journey. Foundation investors have been an important part of our growth at Deetken Impact, and we welcome this continued commitment and collaboration.

To learn more about how you can also align your investments with your values, click here.

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