Good things come to those who wait. For a recent opportunity in HCFโs impact investment portfolio that wait will be 22 years, as it provides โpatient capitalโ to help acquire two local residential properties and secure 31 units of permanent affordable housing.
Patient capital refers to investments in projects that take time to reach their potential. Although HCF wonโt see the full return on investment until 2044, this project, at King Street East and Tisdale Avenue, fits into the Foundationโs strategy to rebuild a healthy affordable housing sector today. The $1 million investment with New Market Funds โ a fund management firm focused on opportunities that benefit communities โ will help to secure properties that might otherwise be acquired by the private sector. As New Marketโs Derek Ballantyne told the CBC, โIt helps low- income tenants have some predictability over what the rents will be like over the longer term and, obviously, some stability in their housing.โ
Recent data underscores the importance of retaining Hamiltonโs affordable housing stock. The Foundationโs latest Vital Signs report shows that Hamilton lost more than 15,000 affordable units in the private market (rent $750 per month or under) between 2011 and 2021. More than 9,000 units that rent between $750 and $1,000 per month were also lost.
Yulena Wan, HCFโs Vice-President of Finance & Operations, says that the ability to provide patient capital is one benefit of an endowment. โWhile no single offering can solve the problem, it is important that we act on what is possible,โ says Yulena. โHCFโs endowment model makes us uniquely positioned to use more of our capital for good.โ
From Fall 2023 Legacy Newsletter
For Joan Lindley, or โGrandma Joanโ as she likes to be called, farming has been not just a way of life, but a generational legacy โ one that includes philanthropy.
The Lindley family supports the Hamilton Spectator Summer Camp Fund at HCF which funds summer camperships for children whose families could not otherwise afford the costs.
This charitable endeavour reflects the passions of Joanโs late husband, Peter, or โPickinโ Peteโ, who attended camp as a boy. His desire was for other kids to be able to have the same opportunity to bond with nature, engage in healthy competition and develop outdoor skills.
The Lindleys have been farming in Halton and Wentworth for eight generations, specializing in strawberries and pumpkins. Although her son Joe now operates the Lindley Farm and Market on Fiddlerโs Green Road, โGrandma Joanโ still likes to help, in addition to following charitable pursuits.
โIf you have made a success of your lifeโs work, giving back is a satisfying gift,โ says Joan.
From Fall 2023 Legacy Newsletter
Gender-based safer-use drug space is saving lives and changing futures
Not so long ago, staff at Carole Anneโs Place on MacNab Street were calling 911 for a drug poisoning or overdose at least once a night.
Thatโs no longer true, now that Canadaโs second gender-based safer-use drug space has opened at the drop-in shelter run by the YWCA Hamilton. โWe have saved more than 50 lives and had no 911 calls since we opened in April 2022,โ says Mary Vaccaro, the YWCA Hamilton liaison who oversees the program. โThis is saving the lives of women and non-binary people I know and care about.โ
The program, which operates during the hours when all other spaces supporting people who use drugs are closed, is a partnership between the YWCA, Keeping Six Hamilton Harm Reduction Action League, and the Hamilton Social Medicine Response Team. Patrons bring their own drug supply and are monitored by trained staff for 20 minutes โ though theyโre welcome to stay longer. The warm, inviting space is decorated with artwork made by women during their visits.
โWomen are actually using it,โ says CEO Medora Uppal. โAs much as we talk about the need for harm reduction, it feels very vulnerable for women to come in to use and be their authentic selves. Here, they feel they have a voice and a sense of belonging.โ
The benefits go beyond responding to the drug poisoning epidemic. Women and non-binary folks forced to use drugs in secret are at high risk of violence from men. The program also connects patrons to wraparound services, including a safe supply clinic, detox services, housing, gender-based counselling, healthcare, and peer-run programming, such as yoga and meditation. It can also create pathways to and options for treatment.
HCF has been a champion of this made-in-Hamilton approach since the beginning through the Community Fund and Women 4 Change. Recently dedicated dollars will provide the program with stability, help to meet its most pressing needs and, ideally, attract additional support.
โThe space wouldnโt exist without HCF,โ Medora says. โThey allowed us to pilot the program and now theyโre helping us build for the future.โ
Agency fund helps Hamilton Naturalistsโ Club focus on its mission
Tracing its history to 1919, the Hamilton Naturalistsโ club now oversees ten nature sanctuaries covering over 500 acres of protected habitat, mainly in the Hamilton area. In addition to managing those lands, the club focuses on research that informs their stewardship practices, and outreach to take environmental education to both adults and children.
With 14 years as a staff member and ten previous years as a volunteer, Jen Baker, the clubโs land trust manager, has witnessed the clubโs growth and evolution over the years. Notably, in 2000 the club received a substantial bequest. The board of directors โtook this opportunity to assess the future of the organization,โ she says. As a result, they established an agency endowment fund for the club with Hamilton Community Foundation. Two decades later, the fund is a boon, says Baker. Because of the way HCF manages its funds, the club can budget for a predictable revenue stream from the endowment. โIncome from the endowment fund helps to cover the basic costs of maintaining the nature sanctuaries โ things like taxes and garbage collection and other needs that donors donโt necessarily think of. That allows us to fundraise for the bigger, more exciting projects.โ
The clubโs focus on youth takes it into Hamilton classrooms and then brings the students out into the natural environment. For many children, itโs unknown territory. Income from the endowment fund, in addition to other grants, helps make sure there are no financial barriers to participation: the club pays for transportation and provides binoculars for the kids to use, for example, so there is no cost to families.
โI have nothing but good things to say about the relationship with Hamilton Community Foundation,โ says Baker, who admits she is not a finance person. โThe community foundationโs staff has been incredibly patient explaining the financial aspects of the fund: they even attended one of our board meetings. They are generous with their time and expertise, and we have real confidence in their management of our fund.โ
Program helps vulnerable seniors age at home successfully
Sometimes the simplest solutions are the most powerful.
Like helping a senior complete a housing allowance form that reduces their rent to $450 a month. Or connecting them to tax help so they can use the refunds to cover back rent. Or representing them at a Landlord and Tenant Board hearing to fight a renoviction. Or helping them manage clutter so their apartment passes inspection.
Thanks to the HOPES program at St. Matthewโs House, every one of these solutions โ and many more โ have prevented at-risk seniors from being evicted from their homes and living in shelters or on the street.
โA lot of our clients are estranged from families and isolated, whether thatโs because of past mental health needs, addictions or incarceration, and theyโre navigating the world on a very low income,โ says program manager Andrew Matthews.
โBeing $200 behind on rent can be almost impossible to come back from.โ
HOPES also helps clients โ many of whom exhibit hoarding behaviour โ learn the skills to manage their living spaces, which improves mental health and helps prevent eviction, hospitalization and premature moves to long-term care. The program also provides assistance with funding applications, subsidized housing supports, medical appointments and income supports.
HOPES is fully integrated with other programs at St. Matthewโs House, including the food box program. โItโs rare that a client ever needs one program,โ Andrew says. โIf theyโre being evicted because of rental arrears, odds are theyโre facing food security issues as well.โ
This wraparound approach is appreciated by clients. โSt. Matthewโs House delivers top-notch, quality service right at my door with a smile,โ says one senior. โThe frozen meat is so appreciated with the high cost of groceries now.โ
A new addition to the long-standing program, funded in part by HCFโs Martin Foundation Fund and Mary L. Cassidy Fund, is a paralegal who will work with the Hamilton Community Legal Clinic to represent clients at the Landlord and Tenant Board. โThat will really level up our participation at the board,โ Andrew says.
HOPES currently supports 44 individuals, with the caseload expected to rise significantly in the future.
โMany of these issues are preventable and can be solved for a relatively low cost,โ Andrew says. โBy helping vulnerable seniors maintain their housing, HOPES saves their health, dignity and even their lives.โ
Program puts middle-schoolers on the path to STEM careers
Three cute cartoon characters dance on the screen at the front of the Grade 6/7 class. Instructor Bryan Williams has explained the steps to program the game, and now itโs the studentsโ turn to drag and drop the pieces of code to get their own characters to dance.
Bryan is with STEAM Engine, the flagship program of Hamilton non-profit Mathstronauts. In five weeks of in-class lessons or 10 weeks after school, students learn project-based computer programming, 3D modelling and graphic design. Instructors, mentors and curriculum materials reflect the diversity of the students. The program ends with an inspiring visit from a General Motors engineer.
The goal is to help those who are traditionally under-represented in science, technology, engineering and math, to see themselves in a STEM career.
Its work is sorely needed. Demand for STEM talent is growing exponentially, says executive director Sehrish Zehra, and the income of STEM graduates is $15,000 more a year than their non-STEM counterparts. But financial and structural barriers are keeping lower-income, racialized and female students from accessing programs.
โNot every person will love this stuff, but every person should have the opportunity to try it out,โ Sehrish says. โWe want to plant the seed early.โ
HCFโs ABACUS initiative has funded STEAM Engine from its humble beginnings in one Hamilton school in 2016. Since then, itโs grown to serve 600 middle-schoolers in 17 high-priority schools in both the public and Catholic boards, with plans to expand to 29 schools and an additional 600 students by June 2024. ABACUS also supports a numeracy program for elementary students developed by Mathstronauts.
Back in the classroom, the students program the game on their own iPads, with bursts of dance music and whoops of excitement signalling success. โThereโs this moment when they realize they have the tools to make things,โ Bryan says. โIf they play, they will learn.โ
New impact investment supports a hospice for children and their families
Danielle Zucchet was living the dream: a loving husband, two children, a successful career. Then came the darkest of news: her son Keaton would die of cancer before he turned eight.
โMcMaster is one of the worldโs elite childrenโs hospitals. But unlike other childrenโs hospitals in Canada, end of life and respite care is very limited,โ she says. โFamilies like mine have to choose between the impossible: a death at home or in hospital.โ
Danielle is now the chief executive officer of Dr. Bob Kemp Hospice and is working hard to change those options with a new pediatric hospice, slated to open in Hamilton in late 2025. The facility will serve a catchment of 2.3 million people, with 500 at any one time being children with serious illnesses that will cut their lives short.
โItโs about choice for families and meeting them where they are,โ says public affairs and pediatric hospice project director, Doug Mattina. โWeโre offering medical excellence and also dignity, comfort and even joy in that last chapter, so a mom or dad or sibling or grandparent can be just that, not a 24-hour caregiver.โ
The 10-bed, 35,000 square-foot hospice will provide respite care, pain and symptom management, help with the transition between hospital and home, end-of-life care, and psycho-social support for grief โ all at one-fifth of the cost of hospital care โ in a multi-disciplinary, home-like, enriching environment. All services will be free to families.
Through its impact investing portfolio, HCF provided a three-year loan to support their capacity to fundraise for the hospiceโs
$25-million capital campaign, and to cover pre-construction costs.
โThe Foundation has been providing loans to the charitable sector for over a decade and we understand how challenging it can be to pursue new and capital-intense opportunities,โ says Annette Aquin, HCFโs executive vice-president of finance and operations. โWe know itโs hardest to raise funds at the beginning of a project โ which is also the most important time โ so were thrilled to be able to support the hospice in this way.โ
Greenestyle Fund fulfills a passion for philanthropy
Growing up in the southwest/Locke Street area of Hamilton, John Greene never imagined he would be part of transforming the city he loves. But as a contractor and as landlords, he and his wife Sue Stewart-Greene have rejuvenated a score of small multi-residential properties in the core over the last 30 years. The couple moved closer to downtown too, and feel a strong commitment to Hamilton. โI donโt want to be anywhere else,โ says John, โexcept maybe for a few weeks vacationโฆโ
Concerned about the growing homelessness problem โ โthe issue has gotten more and more evident all around us,โ says Sue โ they are hoping to be part of the solution and launched the Greenestyle Fund at Hamilton Community Foundation with a focus on affordable housing innovation, the arts, and other issues. Longtime supporters of First Unitarian Church on Dundurn, their fundโs goals also include social justice outreach led by that church.
John and Sue, who was Burlingtonโs first female firefighter, love bringing folks together. They are known for hosting large music events that introduce strangers to new friends. โItโs fun to connect people,โ Sue says.
Referred by their accountant, the couple came to HCF because it is โsolid, trusted, grounded in research,โ says John. โIt fits with our valuesโ and the donor-advised fund option lets them โdirect without having to manage.โ
They have been deeply moved by setting up the fund. โAfter years of modest giving, we are now in a position to do more,โ says John. โWe are still learning and developing a plan, but weโve been amazed at how great it feels to give back in this way.โ
โWalking home from HCF after setting up the Greenestyle Fund,โ adds Sue, โwe just felt incredibly joyful.โ
New family fund is a gift to Hamilton
Longtime Hamilton residents Irene and David Buckley have started a named fund โ the Buckley Family Foundation โ within the Community Fund at HCF.
Irene first learned about Hamilton Community Foundation through her volunteer and paid work with Big Sisters. Davidโs 35 years as a Rotarian also brought him into contact with the Foundationโs leaders. Since retiring from a successful business career in 1991, he and Irene have enjoyed travel, walking and tennis. Their three children have also had very productive careers and have reached retirement age.
โWe were able to help them early in their lives, when they needed it,โ says Irene, โand we have a comfortable life ourselves today.โ Now entering their 90s, the Buckleys felt the time was right to endow a fund at HCF and have also made provisions for the Foundation in their wills.
David explains that good advice from a financial planner early on, along with careful management over the years by both of them, has left the couple with unexpected opportunities to support their philanthropic interests, which include children, music and medicine. โIt makes sense now to gift more than we have been giving over the years to the causes we care about,โ he says. Making a gift to HCF of long-held shares reduces the capital gains tax they would otherwise face, and contributing to the Community Fund enables them to help key local organizations.
They are confident that Hamilton Community Foundation provides support to organizations that are well vetted. โWe have really good things in Hamilton, world-class programs,โ says David. โThey donโt get enough credit.โ HCFโs Community Fund, including the Buckley Family Foundation, will help sustain those initiatives.
Milli Fund expands familyโs philanthropic impact
The extraordinary entrepreneurs behind Hamiltonโs iconic โMilliโ womenโs boutique, the Gould family, have a long tradition of philanthropy. Even in the early days of the store in the 1960s, founders Milli and Allen Gould provided support to the community in small, quiet ways. As the store flourished and the Milli brand took hold, Allen and Milli extended their philanthropy to a host of causes involving women, children, the Jewish community, and mental health. They left a tremendous legacy of generosity to Hamilton.
The next generation โ Milli and Allenโs sons Mark and Ben and their families โ has continued the tradition of giving back, managing a private foundation and other significant charitable endeavours. Recently, they established the Milli Fund at Hamilton Community Foundation.
โWeโve had our eye on HCF for quite some time,โ says son Ben. โAs entrepreneurs, we are interested in impact, efficiency, and effectiveness. The community foundation is impressive in its research, its understanding of community challenges, and its disciplined approach to addressing problems. We wanted to be more directly involved with that.โ
The donor-advised Milli Fund endowed at HCF will focus on similar granting priorities to the Allen and Milli Gould Family Foundation. But Ben sees the HCF fund as an opportunity to benefit from the community foundationโs expertise. โWe appreciate what HCF brings to the table,โ he says. โTheir skill in impact investing, their depth of knowledge, their enthusiasm for seeking solutions to Hamiltonโs bigger problems โ we have things to learn from the community foundation as we continue giving back to the community that is so supportive of the Milli brand.โ
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 HCFโs community leadership projects.
The $35.1 million in donations this year is the second highest total in HCFโs 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 โin memoriamโ 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 HCFโs 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 yearโs 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 Foundationโs 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, HCFโs 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 re๏ฌect the performance of each market index based on HCFโs speci๏ฌc target asset mix. Comparing actual results to the benchmark measures the value added by investment managers compared to the average market performance. HCFโs 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.ย 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 ๏ฌnancial 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 HCFโs 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.ย Chart 6 shows the impact areas our loans have supported. Since the loan programโs 2012 inception, $2.6 million in loan principal has been repaid and recycled as new loans.ย 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 governmentโs long-term investment in social finance, the IRPโs goal is to make social-purpose organizations โinvestment readyโ 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.ย The first request for proposals for funding in January created enormous interest nationally and garnered 65 submissions to our regional partnership.ย Approved funding is expected to be released in June 2020. ย As an additional benefit, the IRP brought a growing number of potential opportunities for local loans to HCFโs 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.ย 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 Foundationโs 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 Foundationโs 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 cityโs 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 Foundationโs 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 foundationโs 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 HCFโs 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 Foundationโs 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 Foundationโs 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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