Giving

Fund status notes for 2025

Fund balance

Fund balance represents accumulated donations plus investment earnings on these donations. Investment earnings are allocated to granting, operating cost recovery and to growing the accumulated donations to account for inflation. For a more detailed explanation of the fund balance, refer to the details below.

Granting: Our spending policy

A fund does not distribute its total net income each year. Instead, a spending amount is calculated for each fund in accordance with the Foundation’s spending policy. A Foundation-wide spending rate is determined annually based on long-term investment return expectations, reserve requirements for years where returns are below average, and Canada Revenue Agency’s disbursement requirement.

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.

To account for investment market volatility, and in accordance with best practices for endowment management, the spending amount is calculated using the spending rate applied to the fund value averaged over a period of time, rather than at a single point in time.

Investments

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 and supported by two committees of the board. The Finance & Investment Committee oversees the responsible investing strategy (public markets) which is managed by two professional investment firms. The Impact Investment Committee oversees the impact investing strategy with due diligence and other support from professional consultants. This committee recommends approval of new investments to the Board and reviews monitoring reports throughout the year.

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. Total investment returns for the year were 10.5 percent, which includes the responsible investment portfolio and impact investment portfolio.

As long-term investors, HCF’s investment and spending policies recognize that market volatility is a reality. Our spending policy determines the amount available to grant in any given year, and enables HCF to grant at a consistent level, with excess income in higher-return years used to support income shortfalls in lower-return years. income shortfalls in lower-return years. 

Responsible investments

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.

The public markets experienced a strong year ending at 14.6 percent benchmark and HCF’s portfolio posting 12.0 percent return. 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 against the average market performance.

The two long-term portfolios are invested in the public markets with two professional investment firms. Chart 1 compares those portfolios against benchmarks as follows:

Chart 1

Impact investments

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.

Locally

Local investments since inception total $23.4 million with $15.1 million outstanding at year end and an additional $6.8 million committed. Chart 2 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 2

Nationally/globally

These investments include private equity, private debt, and real estate.

Chart 3 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 3

Carrying value
($MM)
Total
commitment
($MM)
% of Total
committed
Affordable housing3.65.815.2%
Education and employment1.11.12.9%
Environmental3.75.815.3%
Financial services: charity/NFP/social enterprise2.02.05.3%
Health and cleantech2.74.912.8%
Sustainable development: emerging markets10.510.527.5%
Sustainable development: national2.54.311.3%
Truth and Reconciliation2.23.79.7%
28.338.1100%

Total investment returns

20252024
Investment income during the year:
Interest and dividends9,935,9616,700,733
Realized gains on sale of investments12,639,3245,973,000
Unrealized gains (losses)4,563,74315,534,002
27,139,02828,207,735
Deduct:
Investment fees(1,347,277)(1,279,188)
Investment income allocated to funds held on behalf of third party(251,196)(268,119)
25,540,55526,660,428

Fund balances

Fund balances include:

  1. Capital
    Accumulated donations plus inflation adjustments.

  2. Inflation adjustment
    Protects the value of distributions over time by adding to the fund’s capital. The Board of Directors annually determines if an inflation adjustment will be made and, if so, the size. This is based on current year returns and whether the last several years of returns have resulted in accumulated investment income greater than the amount required for annual distribution and fund administration costs. Based on the current year’s return, a 2.0% inflation adjustment was made for 2024-25.

  3. Undistributed income
    Accumulated investment earnings less:
    • Administration fee cost recovery: Each fund is charged an administration fee to recover the investment counsel and custodial fees, administration, financial management and grantmaking costs of the fund. This is calculated in accordance with the fund agreement.
    • Available to grant: A fund does not distribute its total net income each year. Instead, a spending amount is calculated for each fund in accordance with the Foundation’s spending policy. A Foundation-wide spending rate is determined annually based on long-term investment return expectations, reserve requirements for years of below average return, and Canada Revenue Agency’s disbursement requirements. The spending rate for 2025-26 is set at 4%. The spending amount is calculated using the set rate, and the fund value averaged over a period of time, in accordance with best practices for endowment management.

Depending on the nature of the nature of the agreement, when current investment returns are not adequate to meet the full spending amount, the funds may grant from:

Any amount not spent by the fund in a year is carried forward and available to be used for granting by the fund in a subsequent year.

    Contact Us

    Learn more here or contact philanthropicservices@hamiltoncommunityfoundation.ca, 905.523.5600 X 253 or fill out the below form.