Foundation lessons in Impact Investing Erica Barbosa Director

Background Established in 1937, the J.W. McConnell Family Foundation engages Canadians in building a more innovative, inclusive, sustainable, and resilient society. From scaling initiatives to systems intervention 15 years of work in Social Innovation and Social Finance ~ $22M / year

Foundation Definitions Mission Related Investments (MRI) Investments that are in line with our mission, with an expectation of market or above-market financial returns. Program Related Investments (PRI) Investments that further the Foundation’s specific program objectives, with a tolerance for below-market financial returns. Impact Investing “direct investments and investment strategies that intentionally create positive social, environmental and/or economic impact beyond generating financial return”.

Where does impact investing sit? Impact Investing

Impact Investing Timeline 2007: 1 st PRI– Quest U $10M 2009: 5% target allocation to Impact Investing 2010: 1 st MRI – Renewal Funds 2012: Policy Objectives Increase outcomes (social & environmental) Support community organizations Financial Innovation Across Asset classes Expected rate of return: 0%-market rate

Portfolio evolution over time * non-RI: investments that do not follow explicit RI policy other than negative screens for Tobacco companies.

Portfolio Fonds d’aide à la renovation de l’habitation communautaire

Portfolio Breakdown

Some lessons Impact Investing can be applied across asset classes, across domains and through multiple organizations. No inherent trade-off between financial and social return Integrating assets allows for system’s approach PRI’s are powerful tools for leverage MRIs market is more mature Fiduciary Duty is not incompatible with impact investing

Challenges Regulatory o Charity law, Business legal structures, Minimal incentives Fragmentation of the market, mismatch between supply and demand Weak intermediary market Language, definitions: better system understanding Risk understanding and evaluation  Fiduciary responsibility Metrics & measurement: utopic expectations Tools & governance: how to implement

Moving Forward

Contact: Erica Barbosa, Director