President & CEO, Philanthropic Foundations Canada
Jean-Marc Mangin, President and CEO of Philanthropic Foundations Canada, shares his insights on the integral role that impact investing plays in creating social impact for Canadian charitable foundations.
What does the current landscape of impact investing look like for Canadian foundations?
Impact investing is a burgeoning area of focus for foundations in Canada. Foundations understand that what they grant out each year is a fraction of what social impact their resources are having, and so increasingly they’re looking to align more of their capital with their respective charitable missions. The economy is also changing. Investment opportunities that address critical social and environmental issues, from affordable housing to green tech, are rapidly growing.
How can Canadian foundations incorporate impact investing practices into their frameworks? Why is it important that they do so?
Impact investing is a broad term that encompasses different types of investments and results. Some impact investments are high-yield from a financial perspective and some are less so, yet yield critical high social returns. Each foundation needs to assess what’s possible depending on its own unique situation and charitable mission. Philanthropic Foundations Canada’s latest survey indicated that impact investing represents about eight percent of foundations’ portfolios. There are many resources available to guide foundations in their choices. One new opportunity is the Canadian Philanthropy Commitment on Climate Change, which is supported by Canada’s largest funder networks to support foundations’ activities, such as their investment practices, toward greater climate action.
What role does policy play in relation to impact investing for foundations?
It plays an enormous role. Through their tax and fiscal policies, governments can encourage more impact investing that will yield greater social impact. Impact investing should be considered in all policy decisions for our sector — whether it’s in regard to how the disbursement quota might affect future impact investing, how impact investing should be considered in disbursement quota calculations, or how the government can help cultivate impact investing opportunities and the broader industry, with initiatives like the Social Finance Fund and the Investment Readiness Program.
What excites you about the future of impact investing?
There are over 10,000 charitable foundations in Canada, with close to $100 billion in assets, and so there’s massive potential for Canada’s foundations to make an even greater social impact with their investments, in addition to their granting, which helps support Canada’s non-profit and charitable sector. It’s critical that we explore and encourage new, innovative operating models to address immediate needs as well as to confront systemic challenges and avert future crises.