The Hutton Family Fund will engage multiple generations – including nine-day old Nicola –in community philanthropy.
For John Hutton, establishing the Hutton Family Fund at Hamilton Community Foundation is a way to engage future generations of his family in giving back to the community. John and his wife Eileen, daughters Camille and Jane, and their son Ray and his wife Caroline are all involved in deciding the purposes of the newly-formed fund.
“We’ve decided on two directions to start,” says Ray. “Women’s health, with a focus on maternal health in particular, and neighbourhood development.”
The family is especially interested in Hamilton Community Foundation’s work with neighbourhood hubs. Both Ray and John are engineers with McNally Construction, a family business with a 60-year presence in the McQuesten neighbourhood. They appreciate the Foundation’s focus on neighbourhood vitality and its approach to defining neighbourhood needs.
“We like that it’s not a top-down approach,” says Ray. “People in the neighbourhood are encouraged to identify what they need, what they feel will help. That’s quite unusual.”
A portion of the Hutton fund’s grantmaking will also support the Community Fund to meet other community priorities.
John points out that establishing the fund at HCF gives the family all the benefits of a private foundation, without the administrative headaches of setting one up. And to do it now, rather than through bequests, allows Eileen and John the pleasure of engaging in community philanthropy with their children today.
But the long-term legacy is uppermost in all their minds. While the third generation of the Hutton family is still too young to participate in the fund, the opportunity will be there for them in the future.
“Eileen and I like that the next generation can have some influence over the fund,” says John. “And the next generation and the next,” adds Ray.
Excerpt from 2010-2011 Annual Report
Elsie Mona Madeline Husband lived in Hamilton all her life and for the last sixty years of her life on Hess Street South in a house designed by her architect husband, Lester. The daughter of a County Court judge, Mrs. Husband was a lifelong member of the Church of The Ascension and interested in the Royal Botanical Gardens and the Art Gallery of Hamilton.
She was also a generous contributor to the Hamilton Foundation over many years.
Excerpt from 1987-1988 Annual Report
Mildred Evelyn Clark was born September 22, 1910 in Bridgeburg, near Fort Erie. When her mother died and her father remarried, Mildred, then 11 years of age, went to live with her aunt in Caledonia. Norma Cheadle, a cousin with whom Mildred grew up, remembers her as self-assured, optimistic and intelligent.
While training at Hamilton General Hospital, Mildred nursed John Hunter, a young fruit farmer who had been injured in a fall. They married in 1929 and went to live in Vinemount in the house John had named Morsgail Lodge after his childhood home in Scotland. John eventually gave up farming to open an insurance agency in Beamsville, and served as a councillor in Saltfleet township and as a Justice of the Peace.
Mildred was an active volunteer with Easter Seals, the Society for the Prevention of Cruelty to Animals and numerous health organizations. She had a life-long interest in health care and education influenced, in part, by her earlier training and by the fact that her younger sister suffered hearing loss. “As a result, her sister received limited schooling and this always bothered Mildred,” Norma remembers.
After John’s death in 1980, Mildred continued to handle her own financial affairs and make wise investments, Norma recalls. “She was very feisty and independent. She lived in her own apartment at Atrium Villa on Main Street East.” At close to 90 years of age, Mildred died on October 15, 2000 after a fall.
Mildred remembered various family and friends in her will, and made bequests to Caledonia Presbyterian Church Memorial Fund and St. Peter’s Hospital Foundation in addition to a generous gift to Hamilton Community Foundation.
Excerpt from 2001-2002 Annual Report
Clare Hunter had been a sewing teacher in her Home Economics Department at Westdale Secondary School from 1935-1959. She is remembered by a student and colleague as “elegant, intelligent, immaculate and very stylish”. Miss Hunter died in 1979.
Excerpt from 1990-1991 Annual Report
The Lee Hepner Music Award Fund was established in 1986 in memory of Dr. Lee Hepner, founder and conductor of the McMaster Symphony Orchestra and co-founder of the Hamilton Philharmonic Youth Orchestra.
Hugh Fraser, a writer for The Hamilton Spectator, stated that Dr. Hepner “provided the environments in which our best young musicians learned the great music of our civilization.”
The fund honours Dr. Hepner’s dedication to the development of young musicians and singers.
After remembering several family members, friends and two hospitals in his Will, Donald Henderson generously left the residue of his estate to the Foundation for the needs of the Hamilton community.
A long time Hamilton resident (and brother of prominent community leader Nora Frances Henderson for whom one of the civic hospitals was named), Don Henderson was a businessman with a great interest in politics, finance and history. He was President and subsequently Vice-Chairman of Steetley Industries Limited until his retirement in 1974, and his business acumen was highly regarded by several other corporations on whose boards he also served. He and his late wife Dot were avid golfers and curlers.
Excerpt from 1992-1993 Annual Report
Barbara and Bob Harwood’s generosity has been inspired by the blessings of a lifetime.
Barbara and Bob Harwood have been generous supporters of many Hamilton charities over the years, so their response was immediate and positive when their financial advisor, Dan Wynnyk at CIBC Wood Gundy suggested they might wish to set up a permanent fund with Hamilton Community Foundation.
“Thinking about the future, a fund at HCF made perfect sense,” says Barb. “We can focus on alleviating poverty and also give the Foundation flexibility to meet community needs as they change over time.” They plan to build the fund during their lifetimes and then add to their legacy through bequests.
Both Barb and Bob grew up in families that valued giving back to the community. Bob recalls a seminal incident in World War II when half his B.C. high school classmates disappeared overnight as Canadians of Japanese origin were arbitrarily relocated. During and after the war, Barb’s father gave many needy families free coal until they got on their feet. Decades later, one relocated Japanese-Canadian family attended his funeral in Burlington and expressed gratitude for his generosity. Barb remembers her father saying‘no one will go without heat because they can’t pay.’ “That stays with you,” she says.
The couple’s tradition of giving back is strong. Interested in outreach and interfaith dialogue, they are long-time volunteer leaders in the United Church. Barb spent her career in various nursing roles at McMaster while Bob’s terms as chair in the early days of Wesley Urban Ministries cemented his commitment to his adopted city.
Barb is a fourth-generation Hamiltonian and both sides of her family have made distinguished contributions to the community. Retired from his career in marketing, Bob has published two books and numerous articles on social issues. He still writes a monthly column on world affairs. The Harwoods were attracted to Hamilton Community Foundation for various reasons. Barb cites the Foundation’s breadth of work and its impact on poverty. Bob highlights its commitment to working collaboratively and its strong fiscal management. But their incentive to give is the same.
“We both feel very blessed and very fortunate, therefore we need to share,” says Barb. Through the Barbara and Bob Harwood Fund at Hamilton Community Foundation, that sharing will continue in perpetuity.
Excerpt from 2010-2011 Annual Report
Christine Hamilton embodied many of the best characteristics of this city. She arrived here as an immigrant in 1949. (She put a hatpin in a map and “it stuck in Hamilton. So did I,” she was fond of saying.) Unpretentious, resilient, with a big heart, a raucous sense of humour and a flair for storytelling, she is best known for inventing The Geritol Follies in 1976 and guiding its growth from a recreational choir for seniors into a much-loved Hamilton institution.
Audiences in Hamilton, as well as in Mississauga, Glasgow, Edinburgh, Toledo and Florida, have been roaring with laughter and applauding the song and dance antics of the Geritol Follies ever since. Hundreds of seniors in their 60s, 70s and 80s have had the joy of performing. Our attitude to aging has been forever changed.
Christine Hamilton’s legacy will live on – not only through the continuing performances of the Follies, but also through scholarships established in her honour at Hamilton Community Foundation for students in Gerontology at McMaster University.
Christine Hamilton may have left us in March 2002, but her spirit and her legacy will continue to shape the community she helped to build.
Excerpt from 2001-2002 Annual Report
Gladys and Edward Halloran
Edward and Gladys Halloran were hard-working, down-to-earth people with a love for Hamilton and for helping others. They quietly left an extraordinary estate legacy to a number of local charitable organizations, including a substantial gift to Hamilton Community Foundation.
The Hallorans lived a modest but rewarding life. Edward was a naval veteran with a passion for invention, registering a number of patents in the U.S. He also owned and operated several Hamilton taxi cabs. Gladys ran a hairstyling business, loved people and animals, and had a keen interest in local politics. Gladys passed away in 2002 and Edward two years later. They left behind extended family but no direct descendants.
It was Colin Corner, CFP, the Hallorans’ financial advisor, who learned of their passion for giving and suggested they consider the Hamilton Community Foundation. “The Foundation met their need to have a local focus and the ability to reach many charities and important community programs,” says Colin, who was a co-executor for the Hallorans’ estates along with their nephew, Michael Melitzer. “They found the Foundation was well-managed and took comfort in its high-profile Board of Directors.”
Through their estates, the Hallorans left donations to nearly 20 local organizations, with HCF as the residual beneficiary. “Michael and I feel they were two very special people with hearts of gold, who had a great love for the city of Hamilton and its people,” Colin says affectionately. “Their gift to Hamilton Community Foundation was made to benefit the city for years to come.”
Excerpt from Spring 2006 Newsletter
John Milton Walter Hahn, born in Mildmay in 1903, lived in Kitchener until he came to Hamilton in 1927. He was employed at the G.T. French Paper Company and later became a partner in the company with his brother, Edward. Mr. Hahn was an active charter member of the Westdale United Church a Director for 22 years of the Hamilton and District Association of the Mentally Retarded, a 32nd Degree Mason and Past Grand Counselor of United Commercial Travelers of Ontario-Quebec.
He was a quiet, helpful man who enjoyed his home and golfing in his spare time.
Excerpt from 1992-1993 Annual Report
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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