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Impact Investing

Aligning our assets with our mission

Recognizing that all investments have impact, we believe they can be powerful tools to accelerate achieving our vision and mission. For Hamilton Community Foundation, “all in” means we are committed to aligning 100 percent of our investments with our mission and vision through:

Impact investments: Public and private investments intended to create positive impact beyond financial returns.

Responsible investments: Public market investments that integrate environmental, social and governance factors (ESG) into their selection and management.

WHAT WE BELIEVE
As a public foundation, we exist to advance our mission and vision in the interest of the public good and in support of our donors’ intentions. We challenge the premise that our investments are only a means to create income to fund granting and operations of the Foundation. Instead, we believe that:

  • All investments broadly have social and environmental impact – positive, neutral or negative. As such, we are committed to recognizing the impact of our investments to ensure that we don’t undermine our vision, mission and values.
  • Our investments will be catalysts to accelerate our ability to achieve our vision and mission. We actively seek out opportunities to create positive change through our capital.
  • We are not sacrificing investment returns on our portfolio but, rather, using responsible investing and impact investing as tools to ensure sustainable long-term returns and provide diversification through alternative investments.  Read the research here.
  • We must use evidence-based decision-making to ensure that our assets are invested in a socially responsible manner and that they do not contravene the work of our grantees or our community leadership efforts.
  • This warrants time and resources due to the inherent complexity of our vision and mission. We are committed to take the time to shift our investment processes, investment products and engagement approach with our managers.
  • These efforts will accelerate our overall success. We are confident that aligning our portfolio with our vision, mission and values is the most responsible use of our resources to accelerate their achievement.

Download an overview of impact investing at HCF.

Impact investments

Through impact investing, all donations to endowed funds drive positive change in two ways: through granting and through investments that deliver financial returns coupled with positive social and/or environmental outcomes.

As illustrated in the chart below, we have generated steady growth toward our impact investment goals with $25 million currently placed or outstanding and an additional $15 million committed as of our fiscal year ended March 30, 2020. This brings our total commitment to $40 million, up from $34 million last year. Our impact investments cover areas including affordable housing, arts, environment, and sustainable development.

Locally

Local loans since inception total $9.7 million with $7.1 million outstanding at year end. The chart below 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.

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. The chart below identifies the investment areas, with $18.0 million placed and a total commitment of $33 million across 21 investments.

Responsible investments

Responsible investing is the way we drive impact through our public market portfolio. We do this through independent audits of our investment portfolio’s environmental, social and governance (ESG) performance, and proxy voting records on important ESG issues. In this area, our accomplishments last year included developing an exclusion policy. We consider excluding specific industries/sectors from our portfolio on an exception basis. Currently tobacco, illegal weapons and predatory lending are excluded. We continue to explore additional responsible investing tools, including more active shareholder practices, as we learn.