Planned giving options

Financial highlights

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

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 and community leadership

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

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:

• Public market portfolios are managed by two professional investment firms and are overseen by the Finance and Investment Committee. This committee reviews the investment managers’ reports quarterly to assess each manager’s performance and formally evaluates their performance semi-annually.
• Impact investments are overseen by the Impact Investment Committee, with due diligence and other support from professional consultants.

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

Public markets

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:

• Returns for each year against the annual investment policy benchmark for that year
• Seven-year annualized return against the seven-year annualized investment policy benchmark
• Both return rates against the targeted investment policy long-term return range

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

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

Locally

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

Investment Readiness Program (IRP)

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.

Nationally/Globally

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

Total investment returns

Operations

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

Total assets

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.

HCF fund balances

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.

Advisors

Auditors
BDO Canada LLP

Bankers & Custodian
Bank of Montreal and BMO Private Banking

Solicitors
Gowling WLG

Investment Managers
Connor, Clark and Lunn Private Capital Ltd.
Jarislowsky Fraser Ltd.

Link to PDF

Community Fund: Unrestricted fund

This fund is used to address the highest charitable priorities in the community.

Board advisory committees

Hamilton Community Foundation’s work is supported by both standing committees of the Board of Directors and board advisory committees. Membership of the board advisory committees includes both board members and a wide range of community volunteers whose expertise we rely on and appreciate.  Standing committees of the board include: Governance & Board Effectiveness, Finance & Investment, and the Impact Investment Committee.

Audit Committee

• Cameron J. Beatty, CPA, CA, Chair
• Steve Borsellino, CPA, CMA, CIRP, LIT
• Dr. Bill Evans
• Tom Sawyer, CPA, CA
• Kathy Watts

Chaney-Ensign Bursary Fund

• Sandra Stephenson, Chair
• Dr. Maroussia Ahmed
• Terry Costello*
• Assad Hoosein
• Myrna Kelly
  *retired from committee March 2020

Community Fund

• Laura Cattari
• Dr. Juliet Daniel
• Sandra Edrupt
• Shelly Hill
• David Hoy
• Milé Komlen
• Teresa Smith

Community Health, Education and Research Fund

• Dr. Bill Evans, Chair
• Paul Armstrong
• Dr. Jane Aronson
• Marion Emo
• Dr. Gianni Parise
• Dr. Jenny Ploeg
• Dr. Leila Ryan

Edith H. Turner Foundation Fund

• Renate Davidson, Chair
• Dorothy Bartalos
• Timothy Bullock
• Karen Burson
• Sondra Cornett*
• Terry Horne, Honourary Member
  *retired from committee November 2019

Finance & Investment Committee

• Sarah Murphy, B.Eng, CIM, Chair
• Dr. Justin Cooper
• Sandra Edrupt
• Dr. Bill Evans, Vice-Chair
• Dr. Maroussia Ahmed
• Kathy Watts
• Gwyn Williams

Hamilton Spectator Summer Camp Fund

• Diana Frate

Impact Investment Committee

• Sarah Murphy, B.Eng, CIM, Chair
• Sandra Edrupt, Vice-Chair
• Paul Gibel, FCPA, FCA (Advisor)
• Assad Hoosein
• Pranav Pandya, CPA, CA
• Mario Paron, CPA, CA, CPA (Illinois)*
• Brooke Eady
• Bill Young Jr. (Advisor)
• Marita Zaffiro, BScPhm, MBA
  *resigned from committee December 2019

McCallum, McBride Fund Advisory Committee

• John McCallum, Chair
• Kevin Beattie
• Carole Capling
• Linda Hughes
• Debbie-Ann Rashford

Nomination Committee

• Teresa Smith, HCF Past-Chair/Committee Chair
• Mayor Fred Eisenberger, City of Hamilton
• Mark Giavedoni, President, Hamilton Law Association
• Police Chief Eric Girt, Hamilton Police Service
• Pat Mandy, member-at-large
• James McAskill, Chair, United Way Halton & Hamilton
• Bob Savage, Board Chair, Hamilton Community Foundation
• Carmela Trombetta, Chair, Hamilton Chamber of Commerce
• Dr. Gary Warner, member-at-large

Ontario Endowment for Children & Youth in Recreation

• Tyler Cowie, Chair
• Don Curry
• Elizabeth Duvall
• Rikki Frith
• Linda Godin
• Melissa Ricci

as at March 31, 2020

Terry Cooke
President & CEO

Jill Anderson
Director, Philanthropic Services

Annette Aquin, CPA, CA
Executive Vice-President, Finance & Operations

Sharon Charters
Manager, Grants

Grace Diffey, APR, FCPRS
Vice-President, Community Relations

Allan Enriquez
Administrator, Philanthropic Services

Sarah Glen
Manager, Community Initiatives

Matt Goodman
Vice-President, Grants & Community Initiatives

Lisa Habisreutinger
Philanthropic Services Officer

Morag Halsey
Receptionist/Foundation Support Assistant

Tami Henderson
Administrative Assistant, Grants

Jake How
Accountant

Melissa Klaver
Corporate Secretary/Executive Assistant, President & CEO

Angel Li
Senior Accountant

Shylah MacIntyre
Senior Philanthropic Services Officer

Sheree Meredith
Advisor, Philanthropic Services

Michael Parente
Communications Specialist

Jen Pearson
ABACUS Project Manager

Katherine Roy
Scholarship and Bursary Project Lead

Lorraine Valmadrid
Learning & Evaluation Lead

Tracy Varcoe
Administrative Assistant/Webmaster, Community Relations

Yulena Wan, CPA, CA
Manager, Corporate Services

Yvonne Yeoh
Executive Assistant, Finance & Operations

Board of Directors

Bob Savage
VP, Manufacturing, ArcelorMittal Dofasco (retired)
Board Chair

Teresa Smith
President, Hamilton General Hospital (retired)
Past Chair

Dr. Maroussia Ahmed
Professor Emeritus, Dept. of French, McMaster University

Laura Cattari
Advocate, Community Engagement and Media

Dr. Juliet Daniel
Professor, Department of Biology, McMaster University

Brooke Eady, CHRP
President, Broadcast Services International

Sandra Edrupt
General Manager, Strategy & Business Planning, ArcelorMittal Dofasco (retired)

Dr. Bill Evans
Professor Emeritus, Dept. of Oncology, McMaster University
President, Oncosynthesis Consulting Inc.

Assad Hoosein
Manager of Facilities, Hamilton Public Library

Milé Komlen
Managing Director, Ethical Associates Inc.

Sarah Murphy, B.Eng, CIM
Investment Advisor/Portfolio Manager, CIBC Wood Gundy

Mario Paron, CPA, CA, CPA (Illinois)*
Canadian Managing Partner, KPMG Enterprise
*resigned from the Board December 2019

Kathy Watts
Vice-President Finance & CFO, Hamilton Health Sciences (retired)

Marita Zaffiro, BScPhm, MBA
President & CEO, Marchese Health Care

Terry Cooke
President & CEO
Secretary of the Board

Grants by recipient organization

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