It’s a good read, telling the stories of and drawing lessons from nine foundations across the country that are using their assets – not just their grants – to directly support economic development domestically and internationally – jobs for the hard-to-employ, affordable housing, conservation, sustainable venture capital, and non-profit capacity building.
The most common vehicle foundations are using in Canada, by far, are market-rate and below-market-rate mortgages and loans to charities and non-profits. There are a number of other community/mission investing vehicles available to foundations and some of the profiled foundations like Bealight and Vancity Community Foundation are using them. But as Coro says in the report, community/mission investing is really still in its infancy in Canada.
To this point, I was talking recently with Bob Ward, who runs the Edmonton Social Enterprise Fund (ESEF) at the Edmonton Community Foundation, one of the foundations profiled, and I was struck by a comment he made: “The ESCF is still small (about $6.5 million), but it is a very big idea – providing access to capital. It is a great role for foundations.”
Clearly there are some regulatory and legal issues and foundation policies to be considered before embarking on community/mission investing. And there are some challenges related to deal flow and a lack of intermediaries right now, but that is beginning to change.
The potential of using some of the 96.5 per cent of foundation assets not allocated to grants to work in the community in foundation program areas is pretty impressive.
To get a sense of that, I highly recommend reading Equity Advancing Equity, a recent publication of the Futures Matters series, written by Blueprint Research & Design and GPS Capital Partners.
It focuses on the impact investing of about a dozen US community foundations, but I think it is equally relevant to private foundations.
A few examples of the investments being made by community foundations in the US: loans & equity investments for transformational real-estate developments and businesses that create local jobs; debt, equity, real-estate, deposit and loan guarantee investments for housing, small business, green building and foreclosure prevention; market rate fixed-income investments; and donor-customized program-related investments.
As the Equity Advancing Equity report says: “Community Foundations have the opportunity to change the conversation from short-term grantmaking to poor parts of a community, to long-term investment strategies that strengthen business, home ownership, education, and wealth-creation opportunities for the betterment of all.”
Coro’s report shows us where Canadian foundations stand, and these nine foundations are showing extraordinary leadership in this country. Equity Advancing Equity shows us what’s yet possible. Together they make a pretty compelling case for advancing community/mission investing among Canadian foundations.
Betsy Martin is a senior advisor with Community Foundations of Canada
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