Hamilton’s “Rileys” pre-date Confederation. Their HCF endowment will support community impact forever
The Royal Hamilton Light Infantry’s long and rich history in this community now has another tie: a permanent endowment fund at Hamilton Community Foundation.
Known as the “Rileys,” RHLI is a professional, combat-capable army reserve regiment. It is the oldest combat infantry regiment in the Hamilton-Burlington area.
“The regiment’s history is Hamilton’s history,” says Honorary Colonel Peter Young, noting that the RHLI began in Hamilton in 1862 — before Confederation. Through every conflict since then, and many humanitarian crises, Hamilton families have sent soldiers overseas and across Canada with the RHLI.
The RHLI Endowment Fund will, in perpetuity, “look after the regimental family,” says Honorary Lieutenant Colonel Don Cranston. “And that family includes not only soldiers and their families, but also our two cadet corps, ceremonial guard, our band, our museum, our veterans association and our historical artifacts.”
As an agency fund, the RHLI endowment will support its wide-ranging programs such as bursaries for returning soldiers to pursue post-secondary education, loans and help with job transitions, a variety of family support services, maintaining the regiment’s archives, and other crucial services. Over time, the RHLI hopes to build the fund with legacy gifts and other contributions from families who share a history with the regiment.
The RHLI chose Hamilton Community Foundation to house its fund because of the “depth and breadth of the Foundation,” says Don. “Its great governance, its professionalism and track record, its brand recognition in Hamilton — all this is a huge assistance to the RHLI.
Ray Cunnington wants to protect the principles of peace through his fund at HCF
Ray Cunnington’s passion is peace. And he believes that individuals, not just nations, create the conditions for peace both locally and around the world. He’s a perfect example of putting that idea into practice.
Ray has a long history of peace initiatives. At age 96 he recently published a book on peace called Towards Less Adversarial Cultures. The previous year he was awarded the Hamilton-Burlington-Brantford YMCA Peace Medal. Three years ago, he established a fund at Hamilton Community Foundation to provide support for Culture of Peace Hamilton, a United Nations-backed group which works with others in the community to promote non-violence locally. The group holds monthly meetings, sponsors a public peace lunch and discussion twice a year, and has made significant donations to the city’s Peace Garden. It continues to uphold the UN doctrine that peace involves individual commitment.
In 2000 the UN proposed six practical suggestions for people who wanted to promote peace — clear, straight-forward acts like rejecting violence and preserving the planet. More than 75 million people around the world pledged to follow them in their daily lives.
Six principles of peace in everyday life:
But times change. The world has gradually shifted away from personal responsibility back to governments and nations. Concerned that these very good suggestions might get lost or forgotten, Ray looked for a way they could be preserved and protected.
He found a home for Culture of Peace at HCF. He saw Terry Cooke on television, and “Terry made it seem so simple to set up a fund for a good purpose” Ray says. “The Foundation is a respected organization of thinking people who want to do something good for the world.” Ray is certainly one of them.
Excerpt from 2017 Annual Report
A striking new project near the intersection of Parkdale and Barton promises to transform both a local landmark and the lives of the people who will live there.
The site is currently occupied by George & Mary’s Tavern, a long-standing fixture on Melvin Avenue in east Hamilton, but one that has fallen into disrepair. Supported by a mortgage loan from Hamilton Community Foundation’s impact investing fund, the property will be completely revitalized over the next year by Indwell, a creator of affordable housing communities that “support people seeking health, wellness and belonging.”
“Hearing the stories of vulnerable people who’ve experienced trauma due to their housing situations is overwhelming,” says Indwell executive director Jeff Neven. “We’re transforming a site that has always been an anchor for this community from a place of dereliction into one that people will want to call ‘home.’”
The rejuvenated property will provide a minimum of 56 affordable, accessible, energy-efficient apartments, 3,000 square feet of retail space and a large-scale teaching kitchen. Most of all, it will offer immense potential to improve the lives of its future residents. Results from Indwell’s other projects show a number of improvements in tenants’ situations, including an increase in housing stability by an average of 3.5 years, fewer required emergency services, improved mental and physical health, rebuilt family connections and an increase in community participation.
“This project is about so much more than bricks and mortar,” says Terry Cooke, HCF President and CEO. “We’re thrilled to be able to use our assets in new ways to support this kind of positive change.”
Excerpt from Spring 2017 Legacy Newsletter
Into every life a little rain must fall—and managing it where it goes helps both homeowners and the environment.
With support from HCF’s Dougher Fund, a home visit program from Green Venture offered Dundas residents a personalized 90-minute assessment of their property and basement by a certified RAIN Home Guide.
Homeowners learned three simple principles—slow it down, soak it up and keep it clean—and specific techniques to manage stormwater and reduce water consumption, including rain harvesting and rain gardens. A customized report highlighted each homeowner’s five most pressing areas to address. A follow-up survey with participants showed 100 per cent of participants had taken or were preparing to take action on the recommendations.
Managing storm water means more flood-resistant communities, fewer wet basements and mould problems, more green spaces and cleaner local waterways. The Dundas program will help reduce the amount of water entering Spring, Sulphur and Spencer Creeks from the storm water system and overland drains during the extreme weather events that are becoming more common with climate change.
Excerpt from Spring 2017 Legacy newsletter
Caring Dads is a program offered in Canada, the U.S. and Europe that has shown significant success in working with fathers at-risk of using abusive behaviour with their families. Now, the program will be offered in Hamilton for the first time, filling an urgent local need identified by agencies addressing family violence.
Thanks to an HCF grant, Hamilton fathers will no longer have to be referred to Caring Dads programs in other cities. Offered by Catholic Family Services, Caring Dads emphasizes helping fathers to build strong, supportive relationships with their children. It works to increase a father’s ability to respond appropriately to kids’ misbehaviour, co-parent with their children’s mothers and put their kids’ needs first.
Excerpt from Spring 2017 Legacy Newsletter
The Hamilton Philharmonic continued its tradition of bringing classical music to new ears with a complementary invitation for families living in City Housing Hamilton to attend its Family Concert Experience.
Supported by an HCF Creative Arts Fund grant, the program aims to introduce families to their local professional symphony, create a sense of belonging in their community’s arts organizations and build a special family experience. It included pre-concert activities such as create-your-own-instrument crafts and an instrument “petting zoo”.
As an early “welcome to your symphony,” HPO representatives attended tenant meetings to promote the concerts. Of City Housing Hamilton’s 13,000 residents, almost half are children.
Excerpt from Spring Legacy 2017 newsletter
Essential Aid, a Hamilton organization focused on nutrition for children under four, is filling a critical gap in the food bank system by stocking a wide range of infant formulas.
The nutrition needs of infants are unique and many formula-fed infants can’t tolerate a change. Traditional food banks are unable to provide a selection of formula as it is expensive and product donations are difficult to acquire. By offering multiple formulas, Essential Aid assists families in immediate need – no proof of income is required as the organization believes that an emergency can happen to anyone. The infant food bank is seeing an ever-increasing demand; HCF’s grant will help to meet the needs of an average 200 children monthly.
Essential Aid also offers a breastfeeding support program which provides education, one-on-one support from a volunteer nurse and supplies. Last year, the organization provided emergency formula, diapers and breastfeeding equipment to 1,765 children, many of whose families were referred by other local food banks.
Exceprt from 2016 Fall Legacy newsletter
ABACUS is HCF’s initiative to improve graduation and post-secondary access rates by focusing on students in the middle-school years. To support the critical role of teachers in this goal, Hamilton Community Foundation launched a new small grants program – up to $500 – for Grade 6, 7 and 8 teachers to provide enrichment activities that support overall ABACUS objectives.
Including exciting ventures like a hands-on opportunity to design, test and build pneumatic and hydraulic systems, to experiencing pre-1850 Canadian history at Battlefield Park, to publishing a student-produced community newspaper, the first round drew almost 70 applications from teachers across the city, reflecting a wide range of projects that share an academic focus and a goal to improve student achievement.
Teachers take note: the next application deadline for ABACUS Teacher Grants is March 1, 2017. Check it out at ABACUSatHCF.ca
Exceprt from 2016 Fall Legacy newsletter
A new program at the Ellen Osler Home in Dundas is helping women ease back into the community, before, during and after their release from serving a federal sentence.
Supported by an HCF grant, the program provides “in-reach” staff who accompany and assist the women during stressful times such as parole board hearings, and the transition to Ellen Osler which can happen on short notice. Once they arrive at the home, it supports a smoother transition in practical ways, such as helping to pay for transportation to work commitments or reconnecting with family. It also enables the women to participate in community activities – recreational classes for example – that help them build stronger relationships and support beyond their involvement with the correctional system.
Excerpt from the 2016 Fall Legacy newsletter
A recent Hamilton Community Foundation grant to a new partnership project called the City of Hamilton Home Improvement Project (CHHIP) is like making two grants in one.
The program brings together the City’s Neighbourhood Action Strategy, CityHousing Hamilton, Threshold School of Building and the Foundation, and works toward a dual purpose: providing job skills to unemployed young people aged 18 to 29, while improving social housing space.
The participants are drawn primarily from the City of Hamilton’s priority neighbourhoods. They receive two weeks of training in basic construction skills, and then put knowledge into practice helping to renovate some of CityHousing’s units over the course of six months. The improvements allow the units, vacant due to disrepair, to eventually be used again as social housing.
One of CHHIP’s goals is to break down barriers to quality employment training opportunities. Along with providing the practical short-term supports that are often needed to work in construction– things like boots, a hard hat and a bus pass to get to the site – CHHIP also helps participants look to the longer term. It offers the opportunity to obtain high school credits and connects participants with resume preparation, job search and employment counselling services once the program is completed.
There’s also an intrinsic value to the work, as participants have reported increased self-worth and self-confidence to enter the job market. As participant Robin Pringle recently told the CBC, “you get to see your hard work at the end of the day and you can say ‘look at what I did’. And that’s a good feeling.”
Excerpt from Legacy Fall newsletter
Donations to the Foundation are invested for the long term in public markets and in alternative investments. Investment income is then allocated annually to support granting, community leadership and operations. The summary and charts presented here provide both a financial snapshot and a history of recent activity that underlies the grants and community leadership activities represented in this annual report, made possible by remarkable donors.
Donations to the Foundation are from individuals, corporations and other charities. Donors may contribute to named endowment or flowthrough funds, to the Board-directed Community Fund, or to HCF’s community leadership projects.
The $35.1 million in donations this year is the second highest total in HCF’s history. Annual donations are influenced by the timing of the realization of donations in wills and significant one-time donations like the $27.7 million in donations of property and private equity. As illustrated in Chart 1, annual donations have ranged between $3.2 and $35.1 million over the past eight years. The five-year rolling average of donations ranges from $5.0 million to $13.3 million over the past eight years.
The five-year rolling average number of donations is 1,787 with 2019-20 at 1,853. The number of donations fluctuates based on “in memoriam” donations and the number and nature of events sponsored by donors to raise money for their funds.
Chart 1
Grants are made annually from both endowed and flowthrough funds. Because flowthrough fund balances are distributed in a shorter time period, granting from these funds can materially influence HCF’s total annual amount granted.
As illustrated in Chart 2, grants and community leadership project spending over the past eight years has ranged from $4.7 million to this year’s historic high of $11.5 million. Granting from endowment funds was reduced in 2013 as a result of the decline in investment returns in 2012 which a) lowered the asset base used for the granting calculation (currently four percent of the fund balances), and b) resulted in less income available to grant. Flowthrough granting and expenditures on community leadership projects has ranged from 22 to 56 percent of total granting in any given year and is dependent on the timing and nature of flowthrough and project activity. At 893, the number of grants for this year is 37 percent higher than the eight-year average.
Chart 2
Investments traded in active markets are reported at fair market value. Investments not actively traded are recorded at their cost less any impairment of their value.
To support our strategy of aligning our assets with our mission and to provide a more diverse and robust portfolio, HCF has committed to investing in alternative asset classes including loans to charities and not-for-profits, private debt, real estate, infrastructure and private equity. These alternatives are consistent with the Foundation’s long-term investment horizon and liquidity requirements. Since these investments are not actively traded, they are valued at cost in the investments. These alternatives total $25.8 million.
HCF invests according to policy guidelines established by the Board of Directors. Two committees of the Board oversee investments to ensure compliance with the policy:
As an endowment builder, HCF’s policy focuses on long-term investing and is supported by reserve accounts that are currently at their policy maximum.
The investment policy sets out a total portfolio target asset mix, as well as a range around these targets. The public market investment managers have mandates within this targeted asset mix and use their discretion to invest the portfolios within this range. Chart 3 reflects the current and target asset mix. Note: $25 million of private equity relates to a fund established by a donor and is not part of the asset mix or the consolidated portfolio results.
Chart 3
Two long-term portfolios are invested in the public markets with Jarislowsky Fraser, and Connor, Clark & Lunn. Chart 4 compares those portfolios against benchmarks as follows:
Benchmarks reflect the performance of each market index based on HCF’s specific target asset mix. Comparing actual results to the benchmark measures the value added by investment managers compared to the average market performance. HCF’s investment policy target is a long-term investment return in the 6.5 to 7.5 percent range.
Chart 4
The effect of the global pandemic has materially affected investment returns, resulting in a -8.4 percent public market return for the year. The seven-year annualized return at 6.8 percent is within the targeted investment policy range and is 1.2 percent higher than the 5.6 percent benchmark. As noted in the financial highlights, the current 10-year annualized return of 7.0 percent is in the target range and is higher than the benchmark by 1.2 percent.
Impact investments enable donations to endowed funds to drive positive change beyond granting, because they represent investments of capital that deliver financial returns coupled with positive social and/or environmental outcomes. In addition, these investments provide a pool uncorrelated to the public markets which, in turn, buffers the portfolio from the volatility currently experienced.
More than 15 percent of our long-term assets are in impact investments. Chart 5 illustrates HCF’s impact investing progress over the past five years, with $25 million currently placed or outstanding and another $15 million committed. This brings the total commitment to $40 million, up from $34 million last year. Impact investments cover areas including affordable housing, arts, environment and sustainable development.
Chart 5
Local loans since inception total $9.7 million with $7.1 million outstanding at year end. Chart 6 shows the impact areas our loans have supported. Since the loan program’s 2012 inception, $2.6 million in loan principal has been repaid and recycled as new loans. In addition, the interest from these loans supports HCF granting.
Chart 6
IRP is a Government of Canada program being delivered nationally by partners including Community Foundations of Canada. As the first phase in the government’s long-term investment in social finance, the IRP’s goal is to make social-purpose organizations “investment ready” so they can make a difference in new and innovative ways through their participation in the social finance market. HCF has partnered with community foundations in London and Niagara, and the McMaster Innovation Park to manage the program regionally on behalf of Community Foundations of Canada. The first request for proposals for funding in January created enormous interest nationally and garnered 65 submissions to our regional partnership. Approved funding is expected to be released in June 2020. As an additional benefit, the IRP brought a growing number of potential opportunities for local loans to HCF’s attention.
These investments include private equity, private debt and real estate investments. Many of these investments are long term in nature, are maintained at cost and do not have a regular income stream. As these investments are maintained at cost, their results include interest income and realized gains, but not unrealized gains. Results for these investments are closely monitored and are reported when realized. Chart 7 identifies the investment areas, with $18.0 million placed and a total commitment of $33 million across 21 investments.
Chart 7
Operating expenses for the fiscal year ended March 31, 2020 total $2.5 million and were 2.5 percent higher than last year. Staffing costs related to the Foundation’s 22 employees represent 70 percent of HCF operating costs.
In addition to breaking out cost by type, operating costs are allocated to each of the Foundation’s operating areas: grants administration, community and philanthropic leadership, community relations and knowledge dissemination, development activities, and administration and governance. Examples of community and philanthropic leadership include convening around the city’s critical issues and fostering the growth of philanthropy by sharing staff time and knowledge to support other charities. Charts 8 and 9 illustrate these costs by operating area and by expense type.
Charts 8 and 9
The Foundation’s annual development expenses are not necessarily attributable to the donations received in that year. The nature of donations to the Foundation can result in costs preceding the receipt of the donation by several years (for example, donations through wills). As a result, consistent with the community foundation sector, operating costs are evaluated by a ratio of total operating expenses to average total assets. Ratios fall within a range depending on the size and stage of the community foundation’s development.
Management considers the ratio of 1.26 percent (1.25 percent in 2019), as illustrated in Chart 10, to be within an acceptable range for a foundation of HCF’s size, stage and level of community leadership, compared against benchmarks established in the community foundation sector. We continue to monitor both the actual results and the benchmarks on an ongoing basis.
Chart 10
Hamilton Community Foundation’s total assets of $201 million at March 31, 2020 include balances of HCF funds and funds held on behalf of others at $1.7 million.
Hamilton Community Foundation’s fund balances, illustrated in Chart 11, represent accumulated donations plus the net investment earnings on these donations, minus granting and operating costs. Funds include both endowed and flowthrough funds. Endowed funds are held permanently and grant from investment earnings. Flowthrough funds are fully distributed as grants over a pre-determined term.
Chart 11
The fund balances have grown 55 percent to $198 million at the year ended March 31, 2020 from $128 million in 2013. Donations of $35.1 million included $4.4 million in flowthrough donations that were largely distributed as grants in the year and, as a result, do not remain in the fund balances at year end. This results in a modest total funds balance growth of 4.8 per cent for the year. The number of funds has grown 19 percent to 377 from 318 in 2013.
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