Impact Investing Guidebook
Impact Investing Guidebook for Foundations
Foundations have a long history of enabling social change as they have been uniquely positioned outside the constraining structures of business and government to address the most pressing of issues facing society. These changes have primarily been achieved through mission-driven programs and grant making, even though the majority of a foundation’s assets remain invested in traditional financial products without consideration of their impacts on the world.
Increasingly, foundations are seeking to place a greater portion of their endowed assets in investments that will generate financial returns and enhance their positive social and/or environmental impact. At the same time, there is an ever-increasing number of organizations that generate this kind of holistic return, examples of which can be found throughout this guidebook. Impact Investing is an approach to providing capital these types of organizations, companies and funds with the intention of generating positive social and environmental outcomes alongside a financial return
Foundations have in turn become natural leaders in Impact Investing in Canada and across the globe, as it can serve as a strong complement and potentially transformative addition to grantmaking. With a history of only 3 – 5 percent of their total assets conventionally being used for grant making, there is potential to unlock up to 20 times more resources for mission than before. Beyond an opportunity – some have gone so far as to suggest that Impact Investing is a moral imperative for the philanthropic sector.
As the field has matured in recent years, Impact Investing has steadily gained more attention in the philanthropic community in Canada in particular. The Canadian Task Force on Social Finance has set a target for Canadian foundations to invest at least 10°/o of their capital in mission-related investments by 2020 – which would collectively redirect an estimated $7 billion in assets toward greater impact.
While dozens of Canadian foundations of all types and sizes took to action, including those featured in this guide, more and more time was dedicated to discussing the topic at conferences and board meetings. Yet many interested executive directors and board members’ progress was stalled when encountering a set of issues, both real and perceived, that could be easily resolved with a practical guide and dedicated suite of supports from experts and peers.
This guidebook, a companion primer and online hub are intended to address that need. It was created through a partnership between Community Foundations of Canada, Philanthropic Foundations Canada and Purpose Capital (now Rally Assets) as a trusted resource rooted in the practical, day-to-day realities of foundations and impact investors.
The end goal of this project is simple: to help a wide range of Canadian foundations take informed action to align their investments with their values. In doing so, they will be joining a community of hundreds of foundations from around the world who have already taken major strides to invest their capital in accordance with their mission.
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