Overview
The Foundation’s 2024-25 financial results highlight the enduring generosity of our donors, with $7.8 million in donations and $12.3 million distributed on grants and community leadership initiatives. In addition, almost $63 million in capital has been committed for impact, and five- and ten-year investment returns continue to exceed our long-term investment policy targets.
Historically, HCF has consistently exceeded the five percent disbursement quota (the amount HCF is required to spend on charitable activities or on qualifying disbursements), with excess disbursements totaling $24 million over the last five years. In addition, the Foundation has continued to mobilize its capital to contribute to positive social and environmental outcomes with almost 24 percent in impact investments locally, nationally, and globally. HCF’s endowment spending policy will remain at four percent for 2025-26 which, when added to our flowthrough granting and charitable activities, which will again exceed the disbursement quota.
Public markets experienced volatility throughout the year driven by policy uncertainty, trade and tariff tensions, market corrections and transformative forces such as AI. Despite market volatility, specifically in the fourth quarter, and ongoing geopolitical fragmentation, the market benchmark return was 14.6 percent. HCF’s public portfolio returns were 12.0 percent for the year ended March 31, 2025, while HCF’s total returns including impact investments were 10.5 percent for the year.
In addition:
In keeping with our commitment to financial accountability and transparency, full audited financial statements are available at www.hamiltoncommunityfoundation.ca or by mail. If you have any questions regarding our financial highlights, please contact Yulena Wan, at y.wan@hamiltoncommunityfoundation.ca or by phone at 905.523.5600 x 228. You may also access information from the T3010 Registered Charity Information Return online here.
The Foundation receives donations from individuals, corporations and other charitable organizations. Donors may choose to contribute to named endowment or flowthrough funds, the Board-directed Community Fund or HCF’s community leadership initiatives.
In 2024–25, HCF received over $7.8 million in donations. Annual donation totals are influenced by the realization of bequests and significant one-time gifts such as property and private equity. Over the past eight years, annual donations have ranged from $6.5 million to $35.1 million. In the 2020 fiscal year, HCF received a single donation of $25 million.
This year, HCF recorded 1,218 donations, representing an 8.6 percent decrease from 1,333 donations the previous year. The number of donations varies year-to-year, often influenced by “in memoriam” contributions, and the quantity and type of donor-led fundraising events.
Chart 1
Grants are made annually from both endowed and flowthrough funds. Since flowthrough fund balances are typically distributed more quickly, this can significantly impact HCF’s total annual granting.
In 2024–25, HCF distributed $12.3 million in grants and spending on community leadership projects. Over the past five years, total annual distributions have ranged from $12.3 million to $13.6 million.
The proportion of granting from flowthrough funds and expenditures on community leadership initiatives has varied between seven and 37 percent of total annual granting during this period. Years with higher flowthrough granting were due to federal government funding related to social finance investment and pandemic relief programs.
Throughout the year, 930 grants were released, which is slightly higher than the five-year average of 925.
HCF is endowment-based with a policy focus on long-term investing. It is supported by a reserve that is currently at its policy maximum and is in place to ensure long-term organizational, granting and operational stability in the face of market volatility. HCF invests according to policy guidelines established by the Board of Directors. Two committees of the Board oversee investments to ensure compliance with the policy:
The investment policy sets out a total portfolio target asset mix, as well as a range around these targets. The public market investment managers have mandates within this targeted asset mix and use their discretion to invest the portfolios within these ranges.
HCF is dedicated to fostering a more transparent and equitable public market through its evolving responsible investing strategy. A key component of this approach is integrating environmental, social and governance (ESG) considerations into managing the Foundation’s investment holdings, aligning financial stewardship with our mission.
Over time, this strategy has progressed from foundational ESG assessments and manager accountability audits to a more active role in shareholder engagement. Through organizations such as SHARE (Shareholder Association for Research and Education), HCF is working to engage more proactively with companies on issues that reflect our organizational values and priorities, reinforcing our commitment to long-term, mission-aligned impact.
Two of HCF’s long-term portfolios are invested in public markets through professional investment firms. Chart 2 illustrates their performance relative to benchmarks in three ways:
These benchmarks represent how HCF’s investments performed against market indices tailored to its target asset mix. Comparing actual returns to benchmarks helps assess the value added by investment managers beyond average market performance.
Chart 2
As a long-term investor, HCF acknowledges that market volatility is an inherent aspect of public investing. Our spending policy is designed to provide stability in annual granting by smoothing fluctuations in investment returns. It allows HCF to maintain consistent grant levels year-over-year, using surplus income from high-return periods to offset shortfalls during lower-return years.
The Foundation’s 10-year annualized return of 8.6 percent continues to exceed the targeted investment policy range, reinforcing the strength of our long-term investment strategy.
Impact investments allow donations to endowed funds to generate positive change beyond traditional granting. These investments are designed to deliver both financial returns and measurable social or environmental benefits, aligning with HCF’s mission and values.
In addition to diversifying the Foundation’s portfolio with assets less correlated to public market volatility, impact investments support initiatives in areas such as affordable housing, the arts, environmental sustainability and community development. They also play a key role in advancing HCF’s response to the Truth and Reconciliation Commission’s 94 Calls to Action.
HCF’s impact investment portfolio includes a range of instruments — such as loans, community bonds, private debt, real estate and private equity — spanning local, national, and global opportunities. Approximately 24 percent of HCF’s total assets are allocated to impact investments. Over the past five years, this area of focus has grown significantly, with $49.6 million currently invested and an additional $13.3 million committed, bringing HCF’s total impact investment commitment to $62.9 million.
We are encouraged by the strong financial performance and the positive social and environmental outcomes these investments continue to generate. In 2024–25, the impact portfolio saw an 8.6 percent return in private equity as several funds matured, while the loan portfolio delivered a 5.9 percent return for an overall return of 7.8 percent.
Local investments since inception total $23.4 million with $15.1 million outstanding at year end and an additional $6.8 million committed. Chart 3 shows the impact areas our investments have supported. Since inception in 2012, $8.3 million in investments have been repaid and recycled as new investments in our community. Affordable housing continues to be a primary focus of our local investing with 63 percent of our investments since inception supporting housing providers to build and preserve affordable home ownership opportunities, affordable rental housing and supportive housing options.
Chart 3
These investments include private equity, private debt, and real estate.
Chart 4 identifies the national and global impact investments by area of focus, with a current carrying value of $28.3 million placed and a total commitment of $38.1 million across 22 investments.
Chart 4
| Carrying value ($MM) | Total commitment ($MM) | % of Total committed | |
|---|---|---|---|
| Affordable housing | 3.6 | 5.8 | 15.2% |
| Education and employment | 1.1 | 1.1 | 2.9% |
| Environmental | 3.7 | 5.8 | 15.3% |
| Financial services: charity/NFP/social enterprise | 2.0 | 2.0 | 5.3% |
| Health and cleantech | 2.7 | 4.9 | 12.8% |
| Sustainable development: emerging markets | 10.5 | 10.5 | 27.5% |
| Sustainable development national | 2.5 | 4.3 | 11.3% |
| Truth and Reconciliation | 2.2 | 3.7 | 9.7% |
| 28.3 | 38.1 | 100% |
Total investment returns
| 2025 | 2024 | |
|---|---|---|
| Investment income during the year: | ||
| Interest and dividends | 9,935,961 | 6,700,733 |
| Realized gains on sale of investments | 12,639,324 | 5,973,000 |
| Unrealized gains (losses) | 4,563,743 | 15,534,002 |
| 27,139,028 | 28,207,735 | |
| Deduct: | ||
| Investment fees | (1,347,277) | (1,279,188) |
| Investment income allocated to funds held on behalf of third party | (251,196) | (268,119) |
| $25,540,555 | $26,660,428 |
HCF allocates expenses across its core operational areas: grants administration, community and philanthropic leadership, community relations and knowledge sharing, philanthropic services, and administration and governance. Community and philanthropic leadership includes convening around critical local issues and sharing staff expertise and resources to support others by advancing strategies related to philanthropy and impact investing.
For the fiscal year ended March 31, 2025, HCF’s total operating expenses were $3.1 million, representing a 1.6 percent decrease from the previous year. Staffing costs for HCF’s 24 employees accounted for 69 percent of total operating expenses. Looking ahead, HCF expects this to increase in the coming years with planned investments in our people, office and systems infrastructure. Charts 5 and 6 provide a breakdown of expenses operating area and by expense type.
Chart 5
Chart 6
The Foundation’s annual donor development expenses are not necessarily attributable to the donations received in that year. The nature of donations to the Foundation can result in costs preceding the receipt of the donation by several years (for example, donations through wills). As a result, consistent with the community foundation sector, operating costs are evaluated by a ratio of total operating expenses to average total assets. Ratios fall within a range related to the size and stage of the Foundation’s development.
Chart 7
As shown in Chart 7, HCF’s expense-to-asset ratio for the fiscal year was 1.06 percent, a notable decrease from the pre-pandemic level of 1.26 percent in 2020. The decline in 2021 and 2022 was driven by strong investment returns, which increased the Foundation’s average asset base, along with cost savings resulting from pandemic-related impacts.
In recent years, the ratio has returned to levels more consistent with historical trends. Management considers this range appropriate for a foundation of HCF’s size, maturity and level of community leadership, based on benchmarks for the community foundation sector. While we saw a slight decrease again in fiscal year 2024-25, our future planning anticipates an increase in operational spending in the coming years with planned investments in our people and infrastructure. HCF continues to monitor both actual performance and industry standards to ensure responsible financial management.
Hamilton Community Foundation’s total assets of $298.6 million on March 31, 2025, include balances of HCF funds and $2.9 million in funds held on behalf of others.
Donations to the Foundation are invested for the long term in public markets and in alternative investments. Investment income is then allocated annually to support granting, community leadership and operations. The summary and charts presented here provide both a financial snapshot and a history of recent activity that underlies the grants and community leadership activities represented in this annual report, made possible by remarkable donors.
Donations to the Foundation are from individuals, corporations and other charities. Donors may contribute to named endowment or flowthrough funds, to the Board-directed Community Fund, or to HCF’s community leadership projects.
The $35.1 million in donations this year is the second highest total in HCF’s history. Annual donations are influenced by the timing of the realization of donations in wills and significant one-time donations like the $27.7 million in donations of property and private equity. As illustrated in Chart 1, annual donations have ranged between $3.2 and $35.1 million over the past eight years. The five-year rolling average of donations ranges from $5.0 million to $13.3 million over the past eight years.
The five-year rolling average number of donations is 1,787 with 2019-20 at 1,853. The number of donations fluctuates based on “in memoriam” donations and the number and nature of events sponsored by donors to raise money for their funds.
Chart 1
Grants are made annually from both endowed and flowthrough funds. Because flowthrough fund balances are distributed in a shorter time period, granting from these funds can materially influence HCF’s total annual amount granted.
As illustrated in Chart 2, grants and community leadership project spending over the past eight years has ranged from $4.7 million to this year’s historic high of $11.5 million. Granting from endowment funds was reduced in 2013 as a result of the decline in investment returns in 2012 which a) lowered the asset base used for the granting calculation (currently four percent of the fund balances), and b) resulted in less income available to grant. Flowthrough granting and expenditures on community leadership projects has ranged from 22 to 56 percent of total granting in any given year and is dependent on the timing and nature of flowthrough and project activity. At 893, the number of grants for this year is 37 percent higher than the eight-year average.
Chart 2
Investments traded in active markets are reported at fair market value. Investments not actively traded are recorded at their cost less any impairment of their value.
To support our strategy of aligning our assets with our mission and to provide a more diverse and robust portfolio, HCF has committed to investing in alternative asset classes including loans to charities and not-for-profits, private debt, real estate, infrastructure and private equity. These alternatives are consistent with the Foundation’s long-term investment horizon and liquidity requirements. Since these investments are not actively traded, they are valued at cost in the investments. These alternatives total $25.8 million.
HCF invests according to policy guidelines established by the Board of Directors. Two committees of the Board oversee investments to ensure compliance with the policy:
As an endowment builder, HCF’s policy focuses on long-term investing and is supported by reserve accounts that are currently at their policy maximum.
The investment policy sets out a total portfolio target asset mix, as well as a range around these targets. The public market investment managers have mandates within this targeted asset mix and use their discretion to invest the portfolios within this range. Chart 3 reflects the current and target asset mix. Note: $25 million of private equity relates to a fund established by a donor and is not part of the asset mix or the consolidated portfolio results.
Chart 3
Two long-term portfolios are invested in the public markets with Jarislowsky Fraser, and Connor, Clark & Lunn. Chart 4 compares those portfolios against benchmarks as follows:
Benchmarks reflect the performance of each market index based on HCF’s specific target asset mix. Comparing actual results to the benchmark measures the value added by investment managers compared to the average market performance. HCF’s investment policy target is a long-term investment return in the 6.5 to 7.5 percent range.
Chart 4
The effect of the global pandemic has materially affected investment returns, resulting in a -8.4 percent public market return for the year. The seven-year annualized return at 6.8 percent is within the targeted investment policy range and is 1.2 percent higher than the 5.6 percent benchmark. As noted in the financial highlights, the current 10-year annualized return of 7.0 percent is in the target range and is higher than the benchmark by 1.2 percent.
Impact investments enable donations to endowed funds to drive positive change beyond granting, because they represent investments of capital that deliver financial returns coupled with positive social and/or environmental outcomes. In addition, these investments provide a pool uncorrelated to the public markets which, in turn, buffers the portfolio from the volatility currently experienced.
More than 15 percent of our long-term assets are in impact investments. Chart 5 illustrates HCF’s impact investing progress over the past five years, with $25 million currently placed or outstanding and another $15 million committed. This brings the total commitment to $40 million, up from $34 million last year. Impact investments cover areas including affordable housing, arts, environment and sustainable development.
Chart 5
Local loans since inception total $9.7 million with $7.1 million outstanding at year end. Chart 6 shows the impact areas our loans have supported. Since the loan program’s 2012 inception, $2.6 million in loan principal has been repaid and recycled as new loans. In addition, the interest from these loans supports HCF granting.
Chart 6
IRP is a Government of Canada program being delivered nationally by partners including Community Foundations of Canada. As the first phase in the government’s long-term investment in social finance, the IRP’s goal is to make social-purpose organizations “investment ready” so they can make a difference in new and innovative ways through their participation in the social finance market. HCF has partnered with community foundations in London and Niagara, and the McMaster Innovation Park to manage the program regionally on behalf of Community Foundations of Canada. The first request for proposals for funding in January created enormous interest nationally and garnered 65 submissions to our regional partnership. Approved funding is expected to be released in June 2020. As an additional benefit, the IRP brought a growing number of potential opportunities for local loans to HCF’s attention.
These investments include private equity, private debt and real estate investments. Many of these investments are long term in nature, are maintained at cost and do not have a regular income stream. As these investments are maintained at cost, their results include interest income and realized gains, but not unrealized gains. Results for these investments are closely monitored and are reported when realized. Chart 7 identifies the investment areas, with $18.0 million placed and a total commitment of $33 million across 21 investments.
Chart 7
Operating expenses for the fiscal year ended March 31, 2020 total $2.5 million and were 2.5 percent higher than last year. Staffing costs related to the Foundation’s 22 employees represent 70 percent of HCF operating costs.
In addition to breaking out cost by type, operating costs are allocated to each of the Foundation’s operating areas: grants administration, community and philanthropic leadership, community relations and knowledge dissemination, development activities, and administration and governance. Examples of community and philanthropic leadership include convening around the city’s critical issues and fostering the growth of philanthropy by sharing staff time and knowledge to support other charities. Charts 8 and 9 illustrate these costs by operating area and by expense type.
Charts 8 and 9
The Foundation’s annual development expenses are not necessarily attributable to the donations received in that year. The nature of donations to the Foundation can result in costs preceding the receipt of the donation by several years (for example, donations through wills). As a result, consistent with the community foundation sector, operating costs are evaluated by a ratio of total operating expenses to average total assets. Ratios fall within a range depending on the size and stage of the community foundation’s development.
Management considers the ratio of 1.26 percent (1.25 percent in 2019), as illustrated in Chart 10, to be within an acceptable range for a foundation of HCF’s size, stage and level of community leadership, compared against benchmarks established in the community foundation sector. We continue to monitor both the actual results and the benchmarks on an ongoing basis.
Chart 10
Hamilton Community Foundation’s total assets of $201 million at March 31, 2020 include balances of HCF funds and funds held on behalf of others at $1.7 million.
Hamilton Community Foundation’s fund balances, illustrated in Chart 11, represent accumulated donations plus the net investment earnings on these donations, minus granting and operating costs. Funds include both endowed and flowthrough funds. Endowed funds are held permanently and grant from investment earnings. Flowthrough funds are fully distributed as grants over a pre-determined term.
Chart 11
The fund balances have grown 55 percent to $198 million at the year ended March 31, 2020 from $128 million in 2013. Donations of $35.1 million included $4.4 million in flowthrough donations that were largely distributed as grants in the year and, as a result, do not remain in the fund balances at year end. This results in a modest total funds balance growth of 4.8 per cent for the year. The number of funds has grown 19 percent to 377 from 318 in 2013.
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