In 2012, the Board of Governors of the Ottawa Community Foundation (CFO) approved the implementation of an Impact Investing strategy that builds on the commitment it made to a new Responsible Investing policy in 2011.
Designed to allow the Foundation to seek out investments that provide both a financial return and a social or environmental benefit, the Impact Investing strategy will allow CFO to do more with its endowment by leveraging its assets in new ways to have maximum community impact.
How it works:
The Community Foundation allocates up to 10% of its endowment to the Impact Investing strategy that will allow it to leverage its assets through both Direct Investments and Market Investments, with a 5% allocation to each.
Direct Invesments: The Foundation has set up a new Impact Investing Fund that is separate from the existing endowment to make Direct Investments in local charities in the form of loans, patient capital, guarantees or mortgages. Donors are encouraged (but not required) to allocate some of their existing funds, or provide new donations, to the Impact Investing Fund. The fund could grow over time up to a maximum of 5% of the total endowment.
In March 2012, the Impact Investing Fund was launched with a Direct Investment of $1-million in the Community Forward Fund. Through this partnership, CFO is now providing loans to local charitable organizations, thus providing a new vehicle for donors to support the community.
“Through this unique collaboration, CFO can go far beyond its traditional grant-making role,” says Brian Toller, Chair of the Foundation’s Board of Governors. “It provides us with a substantial new way to serve the community and increase the sustainability of the charitable sector.”
Market Investments: The Foundation has also allocated 5% of its current endowment to Market Investments that achieve a market rate of return while having a social or environmental benefit. The Investment Committee is currently investigating opportunities to introduce Market Impact Investments to the endowment.
A new Impact Investing Committee has been established to manage and monitor the Impact Investing Fund, and to assist and advise the Foundation on opportunities and objectives for market investments.
Both Direct and Market Impact Investments give the Ottawa Community Foundation a way to use more if its assets to support its mission, which is to have “an enduring impact on communities.”
View our Impact Investing Policy.