“We realized it simply wasn’t good enough for a mission-driven organization to invest only 5 percent of its assets in its mission,” said Luther Ragin, Vice-President for Investments of the F. B. Heron Foundation. “We decided we had to do better.” Ten years later, the New York City-based Foundation has used its program funds to invest nearly $20 million in below market-rate loans to community development financial institutions for affordable housing, minority business and urban revitalization.At the same time, Heron has invested another $55 million from its endowment in market-rate deposits, bonds and equity funds that strengthen low-income and moderate-income communities. The Heron Foundation’s overall investment performance is ranked in the second quartile of all American foundations. “Aligning our investing with our mission hasn’t hurt us at all,” said Mr. Ragin.

This was one of the experiences presented at the Symposium on Program-Related Investments in Canada’s Communities organized on March 22, 2007, by the School of Public Policy and Administration at Carleton University, in partnership with Human Resources and Social Development Canada.

Other speakers from the United States included Steven Godeke, a New York City consultant who helps foundations use PRIs to lever commercial financing for non-profit real estate projects that house and support the homeless.

Stephen Rathgeb Smith, Professor of Public Affairs at the University of Washington, noted that American tax-credit programs for community development, urban redevelopment, historical preservation and brownfields cleanup drive commercial and philanthropic capital alike towards community-oriented projects.

On the Canadian side, Edmonton lawyer Laird Hunter pointed out the limits and potential of doing PRIs in Canada under the terms of our charities law and the Income Tax Act, as did Blaine Langdon, Senior Policy Officer at the Canadian Revenue Agency.

Hilary Pearson, President of Philanthropic Foundations of Canada, said that only a very small number of Canadian foundations presently do program-related investing. “There is room to do more in this area,” she said. Peter Warrian, Chair of PFC, pointed out that university endowments are important pools of capital that should be engaged, as well.

HRSDC Deputy Director Johanne Mennie, who recently chaired a federal advisory committee on community finance, observed that there is a range of policy levers, including tax incentives and regulatory frameworks, that are available to governments at all levels to encourage foundations and endowments to invest in ways that are consistent with their missions.

Carleton faculty members who addressed the symposium included Susan Phillips and Edward Jackson of the School of Public Policy and Administration, and Tessa Hebb of the Carleton Centre for Community Innovation.

Symposium participants agreed that further research on PRIs is needed in Canada. This research should be action-oriented, multi-disciplinary and involve a variety of stakeholders, especially foundations, government departments, non-profits and universities.

“At Carleton University, we are fully committed to participating in research partnerships that make a difference in the lives of Canadians,” said Kim Matheson, Carleton’s Acting Vice-President (Research and International), in her address to the meeting. “We look forward to working with you and learning from you as we build knowledge that will strengthen our communities.”

The meeting was attended by senior representatives of the Laidlaw, Lupina, Maytree, McConnell, Muttart, and Tides Canada foundations, as well as Community Foundations Canada, the Ottawa Community Foundation, venture-philanthropy group Social Capital Partners and Celtic House, a venture fund. The federal departments of Finance, Industry and Western Diversification were represented, together with the Privy Council Office, Treasury Board and the Business Development Bank.

Among the non-profits attending were Alterna Credit Union, Caledon Institute of Social Policy, Canadian Community Economic Development Network, the Fiducie Economie Sociale of Quebec, Imagine Canada, Ottawa Community Loan Fund and Queen’s University.

The Financing Civil Society Research Group, a multi-disciplinary research team in the Faculty of Public Affairs, will prepare the proceedings of the symposium and develop a follow-on research project on program-related investing. The Group comprises professors in Public Policy and Administration, International Affairs and the Sprott School of Business, as well as researchers in the Carleton Centre for Community Innovation and the Centre for Voluntary Sector Research and Development, two major FPA research units.


For More Information:
Dr Susan Phillips, School of Public Policy and Administration: 613 520-2600 Ext 2633 (susan_phillips@carleton.ca)

Dr. Edward Jackson, School of Public Policy and Administration: 613-520-2600 Ext 2257 (Edward_jackson@carleton.ca)

Dr. Tessa Hebb, Carleton Centre for Community Innovation: 613-520-2600 Ext 1217

Monday, March 26, 2007 in
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