Financials
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Financials
All numbers as of December 31, 2023
At Toronto Foundation we’re committed to leveraging our financial assets for maximum community impact through a socially responsible investment strategy that aligns with our values, while also generating strong returns. This allows us to drive positive change beyond granting. On this page we’re providing updates on the realization of that strategy and the financial returns. In 2023 we saw a 9.9% net return. At the bottom of the page, you’ll find our summary financials as well as our financial statements.
We’re equally thrilled by both the financial and social impacts of our impact investing pool. Find more on that, as well as how donors can contribute to the Vital Social Impact Investment Fund, here.
INVESTING: BALANCING SOCIAL RESPONSIBILITY WHILE OPTIMIZING RETURNS
RockCreek (Canada) Advisor, Inc., acts as our outsourced chief investment officer (OCIO), with the mandate to meet both our return objectives and socially responsible investment goals. With oversight by our investment committee, RockCreek considers factors such as environmental, social & governance (ESG) criteria, equity, diversity and inclusion standards, human rights practices as well as active ownership, impact investing and climate risk management at the time of an investment across the portfolio.
Optimizing Returns
We prioritize stable investment returns over the long run, while maintaining the value of capital within acceptable risk parameters. This approach generates returns that enable fundholder grants and also cover administrative and philanthropic fees. Guided by our investment policy, we target an absolute real net return (after inflation and investment management fees) of an average of 4.5% per annum over a five-year period to cover granting and expenses. As of the end of 2023, the annualized five-year net return was 4.7%.
Putting more of our assets to use for good
- 29% (nearly $97M CAD) of our main pool was invested in socially responsible investment products. This is up from 22.5% from 2022.
- 57% of the portfolio was invested with fund managers that are signatories of the United Nations’ Principles for Responsible Investment or have environmental, social & governance (ESG) policies
- Less than 4%: Our exposure to non-renewable energy and utility companies (a decrease in the total portfolio)
- Less than 1%: Our portfolio’s exposure to alcohol, tobacco and firearms (ATFs)
Note that the transition from a traditional portfolio to one invested responsibly typically spans several years. This gradual shift is in part due to certain investments having been locked in for extended periods, so it takes time to divest. Later in 2024, expect to see a deeper report back on the social impact of our main investments and more on our long-term strategy.
Expand each of the sections below for a report back on the 2023 fiscal year.
Assets
Financial Summaries
Financial statements
INVESTING Policy
Our investment policy statement steers the management and investment strategy of our main investment pool. Both fundholders and other contributors, including other charities, pool their investments with us for maximum returns. This new simplified investment policy (effective March 2024) reflects the transition to the Outsourced Chief Investment Officer (OCIO), RockCreek, onboarded in 2021. In the policy you’ll find an updated minimum net return goal from an average of 4.5% to 7% over five to seven years (a market cycle). This change reflects the increase in the disbursement quota to 5%, as well as our ambitions to grow our return on investment.
Find the policy here.
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We acknowledge we are on the traditional territories of the Huron-Wendat, the Anishinabek Nation, the Haudenosaunee Confederacy and the Mississaugas of the Credit First Nation. While Indigenous communities in Toronto remain strong, vibrant, and resilient, they need support to address and overcome the impact of colonialism and systemic inequalities. Furthering Indigenous reconciliation and sovereignty are integral to achieving a more fair and just society where everyone can thrive.
We aim to be an ally and to fund local Indigenous organizations.