Our Work:
Impact Investing
Investing for social and environmental progress.
Aligning our investments with our values to drive social and environmental progress
Foundations fund their activities through the proceeds of endowments. For many public-good organizations, the vast majority of their portfolio is invested in the market - predominantly the stock market – sometimes with little consideration of how profits arrive and the implications for the environment or workers. That money needs to work harder and smarter.
At Catherine Donnelly Foundation, we aim to leverage our capital to serve the causes we care about. It starts by overseeing our endowment money so we don’t fund the activities we work hard to eradicate, such as the burning of fossil fuels. We are committed to investing in corporations that embrace positive social change and to use our position as a shareholder to encourage companies to uphold practices and policies consistent with our values and mission.
CDF has strong environmental, social, and governance (ESG) screens related to how we invest; exclusions we believe also bring better returns. In early 2020, amid unprecedented market volatility related to the Covid-19 pandemic and unstable political conditions in the United States, 83% of responsible investing funds with strong ESG screens outperformed their average asset class.
To really maximize the positive change an endowment creates, foundations can align each dollar of their investments with the good of their charitable mission. Impact investing provides one way of doing this by generating specific social or environmental benefits with financial gains. As the quality and range of beneficial investment options increase, so too does the logic of investing more in these causes.
“The Catherine Donnelly Foundation has not only worked with SHARE to align its activity as an investor with its values as a foundation, it has consistently been willing to take the lead on issues that matter and use its leverage as a shareholder to push both individually and collectively for a sustainable, inclusive and productive economy. CDF has been an outspoken advocate for making finances and investments serve people, not the other way around.”
Kevin Thomas
CEO, Shareholder Association for research and Education (SHARE)
Impact investing at a glance
Since 2014, The Catherine Donnelly Foundation has made 20 impact investments.
These investments total $3.6 million.
We have pledge to invest 10% of our assets in impact investments.
Objectives and approach
Our Investment Objectives
Engaging with our capital and fully understanding its power is a matter of ethical integrity for The Catherine Donnelly Foundation; there is an inherent contradiction in granting for a healthier environment and a more equitable and just society with funds from investments that may pollute our communities or treat our residents unethically.
Our Approach
The Catherine Donnelly Foundation believes how we invest our endowment is an extension of our mission to transform the lives of those most in need. Our responsible investment approach takes environmental, social and governance factors into account and excludes profit from companies that support fossils fuels, the manufacture of weapons or benefits from human rights abuses, among other screens.
We work to enact positive change in the corporate partners we invest in through direct engagement and initiating shareholder proposals at annual meetings.
What We Look For
Our Impact investing actively seeks positive social and or environmental objectives delivered with a financial return. Foundation investments range between $50,000 and $500,000, with funds in any individual entity not to exceed $1,000,000 and can include, but are not limited to, social impact bonds, community bonds, loans, direct private debt, private debt funds, private equity funds, loan guarantees, and Letters of Support.
Factors considered in our analysis include: a balance between achieving targeted investment returns and strong social impact; financial and operational sustainability of the business and the business model; and the track record, reputation, and credibility of the business and key personnel.
Managing our capital to produce positive and sustainable change
The Catherine Donnelly Foundation has pledged to invest 10% of our assets in impact investments and since 2014 has made, approved or committed to 13 investments totalling $2.4 million. This includes “exited” investments.
CDF and other impact investors are motivated to make investments because of – not in spite of – financial return. We are also motivated by the belief that the success of our investments will encourage others to follow our example and generate more capital to produce positive and sustainable change.
In 2018, the Toronto-based Responsible Investment Association (RIA) recognized the Catherine Donnelly Foundation for being part of a trend toward “publicly seeking to make an impact with their endowment … [and] aligning portfolios with organizational values.”
Most of our impact investments are aligned to our core funding areas, so we provide guarantees for operating loans to non-profits impacted by COVID-19, help create new clean, renewable energy projects in Latin America or access to capital and financial inclusion for newcomers across Canada.
The Catherine Donnelly Foundation was among the earliest of investors in Raven Indigenous Impact Fund I, the world's only purpose-driven Indigenous venture capital fund providing financing to early-growth Indigenous businesses who otherwise wouldn't have access to capital. Our $250,000 investment has helped Raven offer expertise and capital not otherwise available to support the ongoing revitalization of Indigenous entrepreneurs and the Indigenous economy in Canada.
In 2020, we invested $300,000 in the Saint John Community Loan Fund to assist in building their capacity. SJCLF provides community loans ranging from $50 to $50,000 to help people grow a business or social enterprise, return to work, go to school or increase the availability of affordable housing or commercial spaces that rejuvenate neighborhoods. This investment adds resources at a grassroots lender and encourages a social enterprise ecosystem in New Brunswick that works with creative and enterprising partners to scale innovative solutions to reduce poverty and strengthen community wellbeing.
The Catherine Donnelly Foundation is also committed to leveraging our investments in companies to improve governance, operational practices and conditions for workers. In the third quarter of 2020 alone, SHARE (Shareholder Association for research & Education) brought proxy votes before annual meetings and engaged directly with 12 companies on behalf of the Foundation in the areas of civil rights, reconciliation and climate change, among other areas.
CDF’s findings, learnings, successes and failures are documented in Impactful Investment Capital as a Force for Good: Moving from Theory to Practice.
Find a complete list of our impact investments below.
Our Impact Investments
Resources and Reports
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