Annually, Kitchener Waterloo Community Foundation invests in excess of $3 million into local community. While the impacts of these investments are significant, the Board of Directors of KWCF has agreed that part of its assets should be invested for impact in (but not limited to) local charities and not-for-profits. This approach is based on the principles of impact investment – sometimes called social finance – whereby capital is invested into organizations with the intention of generating measurable social and/or environmental impact in addition to financial returns.
"Impact investments are investments made into companies, organizations, and funds with the intention to generate social and environmental impact alongside a financial return. Impact investments can be made in both emerging and developed markets, and target a range of returns from below market to market rate, depending on investors' strategic goals.” – Global Impact Investing Network
Grants vs. Impact Investments
KWCF has historically worked to make a lasting difference through our investments in the community via our grant streams. Funds disbursed through the grant streams have always come from positive investment returns on the endowed capital that KWCF has been entrusted to preserve.
Impact Investments takes a different approach: whereby a portion of the endowed capital is deployed into the community in the form of short-term loans in order to drive social good. Charities that participate in Social Impact Investment opportunities are still able and encouraged to apply for funding from KWCF’s traditional grant streams.
Current Impact Investing Focus
The current focus for KWCF’s impact investments is aligned with the three focus areas of Wellbeing Waterloo Region, a cross-community initiative with a goal of making transformational change in community wellbeing.
The Canadian Task Force on Social Finance has called for a minimum 10 percent allocation to mission-related investments by 2020 through public and private foundations. Building on that, the Board of Directors made an initial allocation of $2M from its endowed funds to impact investments, and has now increased that allocation by another $2M. We realize that the return on certain impact investments may fall below our targeted rate of return for the overall portfolio. However, the social return of these particular assets will outweigh their financial return. We are looking for short-term loan opportunities of (likely) no more than 5 years and the rate of return for each loan would be based on each project.
If you are interested in applying for an impact investment please submit your request through KWCF's Impact Investment Application.