Donors and foundations are seeking new ways to increase the impact their funds have on pressing social and environmental issues, leading to innovative and integrated solutions.
Climate change, the COVID-19 pandemic, and inequality are accelerating and causing destructive effects on communities and our environment. Charities, investors, and philanthropists recognize the need to deploy as many resources as possible to develop solutions to these pressing issues. Although philanthropy and impact investing have roles to play here, it used to be difficult to blend these two vehicles toward a united goal.
A new take on ROI
Impact investing has grown exponentially in the past decade, indicating that people want to do more with their money by integrating economic, social, and environmental returns. The global impact investing market is currently worth an estimated $715 billion, having effectively tripled in size since 2018. Many high-net-worth individuals are taking an increasingly integrated approach to the full spectrum of their wealth.
“Although we’ve embraced responsible investing practices for 20 years, we sought a new way to maximize philanthropy for social and environmental good by bringing charitable giving and impact investing together in a single fund,” says Joanna Kerr, CEO of MakeWay. Formerly known as Tides Canada, the organization builds partnerships and solutions that enable nature and communities to thrive together. In 2019, MakeWay launched a new initiative with the support of the Genus-SVX Impact Investment Counsel, the MakeWay ImpactDAF, to advance integrated approaches to addressing our most pressing issues.
Investing to make the change you want to see
ImpactDAF at MakeWay is the first customizable donor-advised fund (DAF) in Canada to be invested entirely for impact. “Typically with a DAF, impact is limited to grant-making dollars while the underlying investments often have neutral or negative impacts. With this new impact-invested fund, positive impacts are created through both grants out and invested funds,” says Kerr. Individuals and institutions can both open funds, which are then invested with a customized strategy that ensures individual mission and values fit, and provides impact measurement using a methodology aligned with the UN’s Sustainable Development Goals.