Kitchener Waterloo Community Foundation (KWCF) invests in market investments to both grow our assets and ensure we will have funds to support our community in perpetuity. Through successful investing, KWCF granted over $3 million in 2018.
One of the strategies KWCF has embraced to increase our reach is Impact Investing. As a first step, the Board has approved deploying $4 million of the $80 million in KWCF’s current investment portfolio.
What is Impact Investing?
Impact investments are investments made into companies, organizations, and funds with the intention to generate social or environmental impact alongside a financial return.
Why impact investments?
Impact investments have the ability to complement grantmaking to drive greater impact! They can also be a tool to stimulate private-sector innovation and collaboration, encourage market-driven solutions and efficiencies, and attract external capital to the charities, non-profits, and other social purpose businesses.
Does Impact Investing affect KWCF’s grantmaking?
KWCF has historically worked to make a lasting difference through our investments in the community via our granting. 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 take a different approach whereby a portion of the endowed capital is deployed into the community in order to drive social or environmental good. Charitable organizations that participate in impact investment opportunities are still able and encouraged to apply for funding from KWCF’s granting streams.
The practice of Impact Investing is defined by four characteristics:
Intentionality – Investor must intend to have a positive social or environmental impact.
Return expectation – Investors understand there is a market return and a social return.
Range of asset classes – Investments can be made across asset classes, including but not limited to loans, fixed income, venture capital, and public or private equity.
Impact measurement – Organization receiving investment must measure and report the social or environmental performance of its impact investments.
Current Impact Investing Focus
The current focus for KWCF’s impact investments is aligned in general with the three focus areas of Wellbeing Waterloo Region, a community-wide initiative with a goal of making transformational change in community wellbeing. These include Affordable Housing, Healthy Children & Youth, and Social Inclusion. However, we are always open to investments in other areas that demonstrate strong positive social or environmental impact.
Investment criteria for KWCF’s impact investments:
Geographic focus – Investments where impact accrues directly to Waterloo Region are preferred.
Term – Generally no more than 5 years.
Return – Subject to discussion and would be based on each project.
Organizations – Open to both non-profits and social enterprises that demonstrate strong positive social and/or environmental impact.
Instruments – A range of asset classes, including but not limited to: loans, mortgages, promissory notes, community bonds, and social impact bonds.
If you are interested in applying for an impact investment please submit your request through KWCF’s Impact Investment Pre-Screen Application. We have created this short pre-screen to help us learn a bit more about your project or initiative. We will review your pre-application, and then we may reach out to you with questions, and invite you to submit a full application.