Social Finance October 17, 2018 Brian Coburn, Director, Finance and Administration

Agenda OCF Background Definitions, beliefs, benefits & challenges OCF Path Current & Proposed Impact Investments

Ottawa Community Foundation $150 million in assets $12 million granted in 2017 $115 million granted since inception 900 individual funds

A Two-Pronged Approach Social Finance A Two-Pronged Approach

Responsible Investing Best in Class Approach Proxy Voting ESG environmental social governance

ESG Best in Class Approach Choose among the best players rather than negative screening Influence as an owner to encourage good corporate behaviour Proxy Voting Shareholder Association for Research & Education (SHARE) Undertake a study of how investment managers vote For or against management – benchmark against other institutional investors

PRI United Nations (UN) Principles for Responsible Investing (PRI) Principle 1: We will incorporate ESG issues into investment analysis and decision-making processes Principle 2: We will be active owners and incorporate ESG issues into our ownership policies and practices Principle 3: We will seek appropriate disclosure on ESG issues by the entities in which we invest

PRI United Nations (UN) Principles for Responsible Investing (PRI) Principle 4: We will promote acceptance and implementation of the Principles within the investment industry Principle 5: We will work together to enhance our effectiveness in implementing the Principles Principle 6: We will each report on our activities and progress towards implementing the Principles

Impact Investing Definition Core Belief Benefits Challenges Type of Investments

Definition The RIA uses the Global Impact Investing Network’s definition of impact investment: “Impact investments are investments made into companies, organizations, and funds with the intention to generate a measurable, beneficial social and environmental impact along with a financial return.”

Core Belief A blended “value” that multiplies the impact on our community while generating financial returns with an acceptable risk portfolio. Not choosing between financial return and social benefit.

Benefits Align assets with our mission Multiplies impact Invests, where possible, in local community Reasonable return with reasonable risk

Challenges Charitable sector readiness Large scale investors and small scale enterprises Skill set required for due diligence CRA restrictions on business income generation

Ottawa Community Foundation – Our Path 1987 Inception ($500K local community leaders) 2010 Responsible Investing 2013 Impact Investing

OCF -Our Path Responsible Investing (Became a PRI Signatory, incorporated ESG in our investment policy, began questioning new managers on ESG, instructed managers how to vote proxies) Impact Investing (Established strategy both inside endowment and in a separate fund to provide debt/equity financing for charities and non-profits)

OCF -Our Path Established committee comprised of Board members, Investment Committee members and experts on social finance Set target of 10% of Endowment now of AUM - 5% Market (Mission-Aligned), 5% Direct (Program-Aligned) Committee has delegated authority of $250,000.

Current and Proposed Impact Investments

Market Investments (Mission-Aligned) Readily available in public financial markets Expectation of market returns Positive social or environmental impact, on a global scale

Direct Investments (Program-Aligned) Made to agencies in the form of loans, patient capital, or guarantees Generally fixed term and illiquid Target market or below-market returns

Climate Change/Sustainability Global Direct Investments – Impact Investing Fund Market Investments – Endowment Community Forward Fund Raven Indigenous Impact Fund OCF Social Enterprise Reserve Fund Mercer Sustainable Opportunities Fund New Market Funds Affordable Housing Fund $5,000,000 US ($6,500,000 CDN) Climate Change/Sustainability Global

$1,000,000 Affordable Housing 75% BC and AB, 25% ROC Direct Investments – Impact Investing Fund Market Investments – Endowment Community Forward Fund Raven Indigenous Impact Fund OCF Social Enterprise Reserve Fund Mercer Sustainable Opportunities Fund New Market Funds Affordable Housing Fund $1,000,000 Affordable Housing 75% BC and AB, 25% ROC

Loans to NFP and charities Ottawa and national Direct Investments – Impact Investing Fund Market Investments – Endowment Community Forward Fund Raven Indigenous Impact Fund OCF Social Enterprise Reserve Fund Mercer Sustainable Opportunities Fund New Market Funds Affordable Housing Fund $1,280,000 Loans to NFP and charities Ottawa and national

$55,000 Social Enterprise Ottawa Direct Investments – Impact Investing Fund Market Investments – Endowment Community Forward Fund Raven Indigenous Impact Fund OCF Social Enterprise Reserve Fund Mercer Sustainable Opportunities Fund New Market Funds Affordable Housing Fund $55,000 Social Enterprise Ottawa

Indigenous Social Enterprise Ontario Direct Investments – Impact Investing Fund Market Investments – Endowment Community Forward Fund Raven Indigenous Impact Fund OCF Social Enterprise Reserve Fund Mercer Sustainable Opportunities Fund New Market Funds Affordable Housing Fund $50,000 Indigenous Social Enterprise Ontario

Social Enterprise Platform

Social Enterprise Platform OCF advocated for the Social Enterprise platform at the Innovation Centre at Bayview Yards Social Enterprise incubator is a one-stop shop with business case development and other professional services Micro-finance grants/loans in partnership with Alterna and the Centre for Social Enterprise Development (CSED) Pilot with City, Ottawa Community Housing (OCH), and the Somali Centre

Resources ocf-fco.ca unpri.org riacanada.org communityforwardfund.ca newmarketfunds.ca share.ca gresb.com csedottawa.ca

Brian Coburn Director, Finance and Administration bcoburn@ocf-fco.ca