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Impact Investing Event

Impact investing continues to evolve as more charitable foundations dedicate time and resources to this transformative approach. On Tuesday, November 12th, Cumberland was honoured to host members of the philanthropic community for a dynamic panel discussion featuring three leaders making strides in impact investing.

The event opened with remarks from Alex von Schroeter, Cumberland partner, who welcomed both new and familiar faces to this second Cumberland Foundations Circle event of 2024. She introduced moderator Charlie Sims, CEO of Cumberland Private Wealth Management, and the esteemed panelists:

  • Upkar Arora, Founder and CEO of Rally Assets and Managing Partner of Realize Fund L.P.
  • Andrew Spence, Founder and CEO of Spence Strategic Consulting Group and Chair of the Investment Committee of Toronto Foundation
  • Riz Ibrahim, President and CEO of The Counselling Foundation of Canada

 

Defining Impact Investing

The conversation began with Charlie asking Upkar to define impact investing. Upkar explained the “four dimensions” that his team uses in managing Rally Asset’s impact funds:

  1.  A positive impact must be intentional from the start
  2. The impact must be real and tangible
  3. The impact should be measurable
  4. There should be an expectation of financial return

Upkar also clarified impact investing versus some of its related categories:

“There are lots of other terms like sustainable, responsible, ethical and so forth. ESG (Environmental, Social, Governance) is often integrated or confused with impact investing and, from our perspective, ESG is not the same. [With ESG], you’re looking at how the world is affecting a company, whereas impact investing is about how a company is affecting the world.”

Transforming Portfolios

Andrew Spence shared the Toronto Foundation’s journey toward a target of 70% impact investments by 2030. This required shifting core beliefs, rewriting the Investment Policy Statement, and engaging specialized advisors.

“We have about $100 million out of our $400 million now invested in intentional impact opportunities. They are delivering the returns they promised, and we are doing more good while getting the return.”

Andrew also addressed some of the governance challenges that can come with impact investing:

“When does an investment become a grant? If a well-deserving enterprise cannot stand on its own and you write off $300,000, how do you justify that to the person you give $10,000 a year to? We’re slowly getting that evaluation process in place, but that’s what keeps me up at night as a board member.”

Mid-Journey Lessons

Riz Ibrahim shared how The Counselling Foundation of Canada began exploring impact investing about a decade ago, and described his progress as “mid-journey.” He highlighted their breakthrough moment – providing a $200,000 loan guarantee to skilled immigrants seeking accreditation in Canada:

“We were using our balance sheet, not our asset base. It was within our wheelhouse. We understood what the impact could be, and the risk was nominal. We really liked it, and it got people thinking, ‘Okay this is something we can get into.’”

Over nearly an hour, the panelists provided invaluable insights into the purpose, strategy, and governance of impact investing and philanthropy more broadly. Their expertise inspired meaningful reflection on how foundations can maximize their resources to drive positive change.

Join Us to Learn More

Cumberland Foundations Circle was created to help families, foundations, professionals, and experts come together in a dynamic set of discussions to share their knowledge and experiences across an array of philanthropic topics, including impact investing.

Interested in learning more? Contact us to access a video replay of this event or to join future discussions.

Impact Investing: Hybrid Giving

Traditionally, investing focuses on profit and charity is about improving the human condition and world. Impact investing can be likened to a hybrid way of giving that aims to generate positive social and environmental impacts with financial returns simultaneously.

Impact Investing Versus Charitable Giving

One way to compare impact investing with more traditional charitable giving is to imagine how you might assist a community organization that needs physical space to sustain its highly successful outreach program.

With traditional charitable giving, a donor might provide cash that the organization could use to lease space. With impact investing, a donor might instead purchase or even construct a building and allow the organization to occupy the space it needs for free or at a below-market rate. In this way, the impact investor benefits from owning the real estate asset while supporting the community at the same time.

Interest in impact investing has surged across institutional investors, family offices, and individual investors, spurred by growing recognition that it’s possible and desirable to make a positive difference without sacrificing returns.

Social Impact With a Financial Return

Impact investing often funds scalable solutions with long-term potential. This could be anything from a real estate project as in the above example to a business that provides social or environmental goods in a sustainable manner. Since impact investing may not offer the same immediate financial support as charitable giving, many philanthropists combine both approaches to maximize their impact.

Impact investments span a wide range of asset classes, from private equity and venture capital to fixed income and more, allowing investors to diversify their portfolios and align their values with their financial objectives. Many impact investments target a rate of return similar to the market, although some are structured to accept lower returns if it leads to a high level of positive impact.

Impact Investing Frameworks

The UN Sustainable Development Goals have provided a global framework for impact investing by outlining specific goals related to issues such as poverty, hunger, clean water, education, gender equality, and climate action. Many impact investors reference these goals as a way to shape their strategies and share a common language with other impact investors.

There are also frameworks for measuring outcomes, including the Global Impact Investing Network standards and the Impact Reporting and Investment Standards. These standards help investors avoid “greenwashing,” where companies may falsely claim sustainability efforts without substantiating them.

Join Us to Learn More

Cumberland Foundations Circle was created to help families, foundations, professionals, and experts come together in a dynamic set of discussions to share their knowledge and experiences across an array of philanthropic topics, including impact investing.

Our next event takes place in Toronto on Tuesday, November 12th and will feature a panel of experts on impact investing who will share their insights and discuss the issues of the day. Please contact us if you and/ or your foundation are interested in attending the event, or accessing a replay after the event.

From Charity to Change: a discussion for the ages

Canadian foundations and endowments are increasingly called upon to not only provide financial support to charitable causes but to lead broader change on issues that impact our shared environment.

This is the thesis that Hilary M. Pearson, author of the book, “From Charity to Change,” presented to a dynamic group of donors, executives, board members, and other experts from the nonprofit world who gathered at the Cumberland Foundations Circle event held on Wednesday, November 29, 2023.

Ms. Pearson spoke from deep personal experience. As the founding President of Philanthropic Foundations Canada, she has collaborated with many of Canada’s largest private charitable foundations over the past 20 years. In 2018, she was appointed as a Member of the Order of Canada for her contributions to the field of philanthropy. From 2019 to 2023, she advised the federal Minister of Revenue as co-chair of the Advisory Committee on the Charitable Sector.

 

Facing the challenges of our time

 

Following welcome remarks from Cumberland partner, Alex von Schroeter, Ms. Pearson sat down for a fireside chat with Cumberland President and CEO, Charlie Sims.

She offered a striking portrait of how today’s organizations are acting with purpose on some of the most pressing social and economic challenges of our time: climate change, the future of cities, education and the evolving workforce, housing, and the urgent need to repair and build new relationships with Indigenous Peoples.

She drew not only on her own experience but also on interviews that she conducted with over thirty foundation leaders from across Canada in the course of writing her book during the COVID pandemic. Through their stories, she was able to trace how the practices of foundations have changed over the past two decades in response to a rapidly evolving society. 

At a time when private giving can seem under pressure from both public policy and public perception, Ms. Pearson made a compelling case for the unique value that grantmaking foundations create in our philanthropic ecosystem. She set out a persuasive argument that Canadian philanthropists have both an opportunity and a duty to partner with stakeholders to help protect the natural environment, enhance social and racial inclusion at home, and strengthen public health and democratic institutions abroad.

Over a 45-minute conversation, topics ranged from how Ms. Pearson sees foundations responding to calls for greater transparency, where she sees philanthropic innovation taking place, how foundations are partnering with institutional players and with one another, why some are choosing to ‘spend down’ their assets, what a younger generation of leaders will mean for philanthropy, and much more – all of it punctuated with insights and anecdotes that brought her unique perspectives to life.

The conversation was followed by a lively Q&A and reception that was no doubt animated by the inspiring ideas that were presented about some of the most important issues of our age, and how Canadian philanthropists can continue to lead the way.

 

Join our Circle

 

Those who steward charitable assets in Canada face a unique set of responsibilities and challenges. Cumberland Foundations Circle was created to help families, foundations, professionals, and experts come together in a dynamic set of discussions to share their knowledge and experiences. To learn more or join the guestlist for a future event, please send us a line here.

Cumberland Foundations Circle brings charitable sector together

On a Tuesday afternoon in June, donors, executives, board members, and experts from the charitable sector came together to make connections and share their experiences at the inaugural Cumberland Foundations Circle event.

At Cumberland, we’ve been involved in helping foundations and endowments manage their investment assets for many years. However, one comment that frequently arises is that there is a need for greater peer support for and information exchange within those in the nonprofit space. We created the Cumberland Foundations Circle as a way to encourage more community, collaboration and support that brings real value.

Great speakers and friendly networking

Around two dozen invitees gathered at noon for a light lunch before our President and CEO, Charlie Sims, took the podium to officially kick things off. Charlie’s remarks addressed the value that philanthropy creates for society, some of the key challenges facing the sector, and the impact of these challenges on the investment decisions facing boards and investment committees today.

Charlie then introduced Brad Offman, founder of Spire Philanthropy, who took a deep dive into the current trends shaping the landscape for Canadian foundations. Brad provided insight on issues such as the higher disbursements quota, changes to donees, evolving donor sources and attitudes, increasing scrutiny around how charities are being evaluated, and new offerings coming to market for those who wish to become donors.

Next to present was John Poulter, CFA, Portfolio Manager at Cumberland Investment Counsel and founding partner at Cumberland Partners Ltd.. John presented proprietary research on how foundations and endowments can expect to achieve the recently increased 5%+ minimum annual disbursement while remaining conservative in their investment policies and still continuing to grow their assets. His findings provide some focus and new direction to charities who may be grappling with this issue.

Finally, Charlie sat down with Bruce Lawson, currently Special Advisor to The Counselling Foundation of Canada and formerly its long time President, for a fireside chat on how focus and collaboration create value in the philanthropic sector. During this candid discussion and subsequent Q&A, Bruce shared a multitude of insights and personal experiences that he has gained as a member of a prominent philanthropic family and a true innovator in the not-for-profit space. He reviewed a few of the ways in which the Foundation has made strong impact including recent funding projects to indigenous communities in Canada.

After the speakers wrapped up, the event continued onto our third floor patio overlooking Yorkville Ave. Most of the attendees stayed to enjoy a cool drink, continue the conversation, and make what we hope will be lasting connections with one another.

Join us next time

If you are involved in the stewardship of charitable assets, whether as part of a public-facing organization or a private foundation, the Cumberland Foundations Circle is a place where you can connect with like-minded individuals.

If you would like to learn more, or join the guest list for a future event, please send us a line here.