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.
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.
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.
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.
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.
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.
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.
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 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.
More than 14 percent of our long-term assets are in impact investments. Chart 1 illustrates HCF’s impact investing progress over the past five years, with $31.6 million currently placed or outstanding and another $21 million committed. This brings the total commitment to $52 million, up from $45 million last year. Impact investments cover areas including affordable housing, arts, environment, sustainable development and investment in programs supporting Truth and Reconciliation.
Local loans since inception total $11.9 million, with $8.8 million outstanding at year-end and an additional $4.1 million committed. Chart 2 shows the impact areas our loans have supported. Since the loan program’s 2012 inception, $3.1 million in loan principal has been repaid and recycled as new loans.
In addition, the interest from these loans supports HCF granting. The Foundation’s ongoing intention is to focus on developing our local investments, which will happen as the local landscape evolves and opportunities arise.
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 3 identifies the investment areas, with $22.8 million placed and a total commitment of $39.5 million across 25 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.