Social Impact Fund- Where we came from

Apr. 25, 2018

A challenge from our previous Governor General, based on a recommendation from the Federal Government’s National Advisory Board, recommended that all foundations (public and private) invest a minimum 10% of their assets in impact investments by 2020.

With that motivation, LCF started its Social Loan Fund in 2012 with $650,000 in unrestricted funds (1% of assets). That same year, our Vital Signs report identified a dire need for affordable housing in our community, as wait times were almost eight times the national average. In response to that gap, the priority of the fund was focused on providing financing for affordable housing projects. 

Over the last five years, the landscape in social impact investing has changed considerably, with successful models at the global, national, regional and local level. The Government’s continued focus and support in the creation of resources and tools has further increased the opportunities available for social enterprises.

LCF is proudly committed to the area of social finance, as we continue to align our investments with our mission. Foundations exist to improve the community, and when we increase our investments, we are able to magnify our impact. Canadian foundations are required by law to disburse a minimum of 3.5% of income earned on endowment. LCF has always tried to surpass that by granting between 4.0% and 4.5%. This means for most foundations, 95% to 96% of Canadian foundation assets are not currently being used to make any kind of intentional social impact. This is what we believe is so exciting about impact investments - the opportunity for a foundation to invest more of its assets to have a much larger impact on Canada’s health and well-being.

Where we are today

In 2017 we created the Social Impact Fund - a rebrand and expansion of the loan fund that reflects the increased allocation of assets to impact investments. The board approved an allocation of up to 5% of assets towards this fund, approximately $4 million to $5 million. While the priority of the fund continues to be the creation of local, affordable housing, the Social Impact Fund will now also have an allocation to provide financing or investment in all types of social enterprise projects and organizations that are looking to improve the community and demonstrate social value. We currently have $2.7 million in loans out in the community supporting various initiatives with additional committed dollars in 2018.

Line of Credit Guarantee

In 2017, the Foundation entered into an agreement with an organization to provide a guarantee on a revolving TD Canada Trust line of credit. This line of credit was to be made available in case additional funds were needed by the organization as they expand their operations in a newly acquired facility. The Foundation is providing unconditional and irrevocable guarantees on all debts and liabilities associated with the line of credit up to $50,000. As of December 31, 2017 the organization had not needed to access the line of credit. 

          

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