A decade ago, the board of Toronto-based Inspirit Foundation committed 100% of its portfolio, in public and private holdings, to impact.
In 10 Years Later, a report released today, the foundation says the bet has paid off.
Inspirit says its fully impact-aligned, $33 million portfolio has outperformed a benchmark composed of traditional public and private market indexes over the past decade, despite experiencing greater volatility.
“We made the commitment before we had a detailed plan to move forward, but we were very confident in our hypothesis,” Jory Cohen, who has managed Inspirit’s private investments in-house for the past decade, told ImpactAlpha. “Our hypothesis was that if we invested with the lens for impact, we’d increase the probabilities of higher returns, especially over the long term.”
The board of the foundation, endowed by the sale of the multifaith broadcaster Vision TV, made the decision to apply the foundation’s mission of pluralism and inclusion to its investments, not only its grantmaking at a board meeting at the Canadian Museum for Human Rights in Winnipeg in 2016. The board was acting on a discomfort common among mission-driven endowments: its grants advanced its mission while its investments, in some cases, may have detracted from it.
Inspirit spent the following year rewriting its investment policy statement, redefining fiduciary duty as the pursuit of both risk-adjusted financial returns and risk-adjusted positive impact. Inspirit had fully re-allocated its portfolio by 2022.
The foundation now has a decade of performance data to test its original hypothesis. According to the report, its portfolio outperformed a benchmark of conventional indexes by a cumulative 0.7% over the period. A hypothetical $10,000 invested in the Inspirit portfolio in 2016 would have grown to $20,876 by the end of 2025, compared with $20,731 for the benchmark, a weighted composite of conventional indexes, including the S&P/TSX Composite for Canadian equities and the MSCI World for global equities.
The performance was anything but smooth. Results swung more sharply against the benchmark than the foundation expected, Cohen says. Holding the line through that volatility tested the organization’s discipline.
“This is undeniably a harder way to invest. It takes more effort, it takes more care, it takes more intention,” he says. Peers have abandoned impact strategies, not because of disappointing returns, but because of the higher demands on investment teams and advisors.
100% club
Inspirit joins a small club of institutions aligning their entire balance sheets with their missions. World Education Services, which manages roughly $300 million, formalized a 100% mission-alignment commitment in late 2023 and has moved from a carve-out of 4% or 5% of its balance sheet to about 60% aligned.
The Rockefeller Brothers Fund announced fossil-fuel divestment more than a decade ago and is now nearly fossil-fuel-free, with about one-fifth of its portfolio in impact investments, though it stops short of full alignment.
As part of the portfolio shift, Inspirit had to find managers capable of implementing impact strategies across each asset class. It selected Addenda Capital for fixed income, CI for global equities, PCJ for Canadian equities, and Global Alpha for global small-cap equities.
Public equities account for roughly three-quarters of the portfolio. Across the mandates, managers screen holdings for carbon intensity and revenue linked to the United Nation’s Sustainable Development Goals. In Canadian equities, the foundation chose an all-cap strategy to reach smaller companies.
About a quarter of the portfolio sits in private markets, managed in-house. Over the decade, Inspirit has made roughly 30 private investments, recording 12 exits and, it says, no losses. It was the first investor 13 times across its public mandates and private investments. Along the way, it reduced the portfolio’s emissions by 80%.
Inspirit was the first investor in the Raven Indigenous Impact Fund, an Indigenous-led fund backing Indigenous enterprises, and in BKR Capital’s Catalyst Fund, the first Black-led venture firm in Canada, which helps seed emerging Black fund managers.
It has also provided zero-interest financing to the Afro Caribbean Business Network’s microloan program for Black entrepreneurs, Windmill Microlending, and the Community and Cultural Spaces Trust, whose loan helped finance the first acquisition by a cultural land trust in Canada.
Other investments support affordable housing through New Commons Development, sustainable food systems through the InvestEco Sustainable Food Fund, and low-carbon businesses through Renewal Funds.
Even the foundation’s cash is held at Vancity Community Investment Bank, a values-based lender.
“We are partners in the transformation of the world,” says Mitchell Anderson, who joined Inspirit’s board at 21 and chaired it from 2021 to 2024. Rather than approaching investments as a simple exercise in accountability, he says the foundation asks: “What can we learn together, and how can we be in good relationship together?”
One thing Inspirit has learned, he says, is to question the yardsticks themselves. “I think we need a healthy skepticism of benchmarks that are built on extractive business models,” Anderson tells ImpactAlpha.
Catalytic capital
From the start, Inspirit measured success by its ability to bring in catalytic capital. The foundation often acts as a first in investor in funds, regularly shares due diligence with peers, and convenes other foundations to invest alongside it.
“It’s incumbent on the leaders in this space to do more, and to make it easier and more simple for other investors to follow suit,” Cohen says.
Windmill Microlending, which lends to skilled immigrants seeking Canadian professional accreditation, offers one example. Inspirit first backed the organization as a guarantor on its credit line, then anchored its inaugural community bond. Windmill has since raised more than $60 million through its bond program.
What Inspirit supplied, says Windmill Microlending’s Claudia Hepburn, was early conviction. “It’s 10 or 20 times the impact of somebody else who comes later,” she says of capital that arrives before a model is proven.
The approach has influenced larger institutions as well. The McConnell Foundation, one of Canada’s largest foundations with nearly $1 billion in assets, later committed to a fully impact-aligned portfolio and cited Inspirit as an inspiration. “We hope to build on the momentum they started, and that other Canadian foundations will consider embarking on this journey alongside us,” the McConnell Foundation says.
Inspirit also pushed beyond traditional investing. In 2020, it transferred part of its endowment outright, with no restrictions attached, to two newly created organizations: the Foundation for Black Communities and the Indigenous Peoples Resilience Fund. The gifts were sized to reflect the Black and Indigenous shares of Canada’s population.
“This isn’t our money. We are temporarily the stewards of this, but this money exists for the common good,” Anderson says. “The mission is bigger than all of us. The mission transcends any one of us, and the time comes for all of us to pass it on to the next generation of leaders.”
