Annually, the 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 the 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 tenets of impact investment – sometimes called social finance or social investment – whereby private or public capital is invested into organizations with the intention of generating measurable social and environmental impacts, and where possible, modest financial returns.
"Impact Investing is an approach to investing that intentionally seeks to have a positive social and/or environmental impact while also generating a financial return."
Grants vs. Impact Investments
The 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 the 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 the KWCF’s traditional grant streams.
Current Impact Investing Focus
While the KWCF’s focus for Community and Barnraising Grants is aligned with Wellbeing Waterloo Region,on increasing our community’s overall sense of belonging, the focus for Impact Investments is on making housing more affordable and accessible for residents of Kitchener, Waterloo and area.
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 contact John Bowden at 519-725-1806 x 202