NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Friday, February 13, 2015

After decades of existing primarily to distribute grants, many of Canada’s 191 community foundations have been wading into a new kind of financial activity, impact investing. The shift encompasses exploring deep questions about their reason for being and how they are/should be showing up in the world.

While a handful of these entities had already dipped into impact investing, it was largely the financial meltdown of 2008 that generated widespread earnest conversations about the possibilities in this new financial activity.

Questions arose for community foundations such as: If granting has been the essence of our value and identity in community and that activity is tied so closely to market returns and market volatility is now apparently the new normal, what’s our value proposition to communities? How can we add value to communities when these market meltdowns happen — typically the time when communities need us most?

Hamilton Community Foundation took a leadership stance by responding with the creation of a large social finance fund. Some other community foundations followed suit in ways that were most appropriate for them.

Today, just seven years later, Canada’s community foundations have collectively jumped from almost zero in impact investing to nearly $200 million.

The collective assets of the movement are about $4.3 billion. In a 2010 report, the Canadian Taskforce on Social Finance called on community foundations to invest 10 per cent of their assets in social finance. Given the above figure, Canada’s community foundations are about halfway to that target.

Community Foundations of Canada chief operating officer Andrew Chunilall formerly worked with the London Community Foundation. Through his role with the national association, he is actively supporting the exploration of and shift to social finance among foundations.