Impact Investing
The Global Impact Investing Network defines impact investments as investments made in companies, organizations and funds with the intention to generate social and environmental impact alongside a financial return. The term “impact investing” was coined by the Rockefeller Foundation in 2007, creating a movement and bringing together a community of investors that were already working to address social and environmental challenges through investments that also deliver financial returns. Over a decade later, there has been significant growth in the industry with more individuals and institutions entering the space and large amounts of capital flowing into the market.
Impact investing challenges the established view that investments should focus solely on achieving financial returns, while social and environmental issues should be addressed only by philanthropic capital or public support. The most critical problems faced by society have become increasingly complex and entrenched and it is now apparent that financial capital alone will be insufficient to advance solutions to global, social and environmental challenges. The impact investing market now offers a diverse set of high-quality investment opportunities that can be successfully implemented across most recognized asset classes, sectors and geographies. Impact investing attracts a broad spectrum of investors, from individual to institutional, with a diverse set of impact goals and financial return expectations. For foundations in particular, impact investing can enable them to utilize more of their assets in service of mission and be a powerful tool for creating greater impact.
Over the years, the Laidlaw Foundation has provided support for organizations beyond grants. It has taken loans on behalf of theatre and arts groups, provided loan guarantees, and supported mortgages investing in bricks and mortars. It has invested in the building of physical infrastructure for arts and culture organizations. Laidlaw was, in essence, engaged in impact investing well before it became a field of practice.
The 2014-2019 strategic plan included a clear call for the Foundation to “consider any other means by which the finical resources of the Foundation can be put to the service of our vision” and to “develop and impact investment plan that allows the investment of capital for a return, in investment vehicles that further our vision”.
To begin the process of activating the Board desire to align investments decisions with the mission and vision of the Foundation, the Foundation developed a strategy and an implementation plan for impact investing that supports the purpose of the Foundation. The first step was a review of the Foundation’s responsible investing practices to incorporate environmental, social and governance factors and ethical considerations into the management of the Foundation’s Assets.
The Foundation continues to explore ways to utilize its assets to better serve its mission and purpose.
RAVEN INDIGENOUS CAPITAL PARTNERS
Raven is a purpose-driven venture capital firm that invests in innovative, scalable Indigenous-led and owned enterprises. Raven takes an active, hands-on approach that leverages entrepreneurial and stage expertise. Raven partners with entrepreneurs to increase their chance of success by applying our extensive operational knowledge and providing capacity building and market access support through our extensive domestic and global networks. The combined effects of increased government spending, legal settlements, revised procurement policies, Indigenous sovereignty over land and resources, and favorable demography will deliver non-correlated and superior returns in the Indigenous enterprise space over the next decade. Reconciliation is the responsibility of all Canadians.
COMMUNITY FORWARD FUND
Based in Toronto, Community Forward Fund (CFF or the Fund) is an evergreen loan fund that provides flexible debt financing to charities, non-profit organizations and social enterprises committed to creating impact in their local communities. CFF also provides financial capacity building services to its borrowers. CFF currently manages a $10.2 million loan portfolio. The portfolio’s current gross yield is 5.7% with cumulative write-offs of less than 1% of cumulative loans deployed to date. Since inception, CFF has deployed a cumulative $19 million in loans to over 46 organizations across seven sectors and eight provinces and territories. CFF provides loans exclusively to non-profit organizations, charities and social enterprises committed to serving their communities. CFF seeks to tailor its loan offering to the needs of the individual borrower and, as such, CFF’s products range from fully amortizing to interest only loans and from second mortgages to shorter bridge loans.
ARTSCAPE LAUNCHPAD COMMUNITY FUNDS
Laidlaw’s $500,000 investment in Toronto Artscape’s Launchpad Community Bonds was funded on November 1, 2018. Proceeds from the bonds were used to finance the development and construction of its Artscape Daniels Launchpad Project, an entrepreneurship centre for arts and design professionals within the City of the Arts development on Toronto’s waterfront. Founded in 1986, Toronto Artscape Inc. (Artscape) is a non-profit urban development organization that makes space for creativity and transforms communities. The new Launchpad space opened on November 1, 2018. The center provides arts and design professionals with tools, training, resources and mentorship to build successful careers; fills a gap in entrepreneurship development for creative professionals in the Greater Toronto and Hamilton Area; strengthens the business incubation ecosystem in Canada; and supports the revitalization of Toronto’s central waterfront, enhancing the cultural richness and vibrancy of the city. Artscape is working to create a new impact reporting tool aimed at testing if, by virtue of access to the supports offered at Launchpad, Artscape’s members achieve measurable improvements in their financial empowerment; access to professional opportunities; and satisfaction in their practice/artistic fulfillment. This new tool, the Thriving Artist Index, will be fully embedded in the membership intake and follow up process for Launchpad. The creation of the Thriving Artist Index reflects Artscape’s belief that the impacts of supporting creativity and creative enterprises and access to arts and culture infrastructure are not currently well captured in existing standardized tools.
COPOWER GREEN BONDS
Laidlaw’s $350,000 investment in CoPower’s 4-year, 4.0% compounding green bonds was completed with an effective issue date of December 1, 2018. Proceeds from the bonds were used to refinance loans made to clean energy projects which have been warehoused by CoPower’s credit facility. This refinancing replenishes the capital available within the credit facility to invest in additional distributed renewable energy and energy efficiency projects – such as solar photovoltaic (PV), LED lighting, energy storage, geo-exchange, building retrofit and waste-to-energy projects – in North America. Through January 2019, CoPower invested over $21 million in a residential geo-exchange project in Quebec; three operational rooftop and ground-mounted community solar projects in Hamilton; a portfolio of LED lighting retrofits in over 300 condo buildings in BC, AB and ON; a community solar project in Ontario; a portfolio of 658 geothermal projects in British Columbia; and a geothermal installation in a Toronto townhouse complex. Geothermal systems operate at 250-380% efficiency – for every unit of electricity used, 2-3 units of heating energy is provided by the system. This latest geothermal project in ON will result in 82 tonnes of carbon pollution avoided each year and 55 homes saving energy and money. As of December 31, 2018, Laidlaw’s investment in CoPower’s green bonds had resulted in the avoidance of 10,655 kgs of greenhouse gas emissions; generated 78,453 kWh of clean energy; and delivered $9,869 in energy savings.
