Over the last few years, MakeWay has been working to increase transparency around our investment practices, including disclosing who manages our funds and our investment portfolio.
Alongside this internal work, we’ve partnered with researchers at Carleton University to better understand the opportunities and challenges related to investment transparency across Canadian foundations more broadly. We’re pleased to share that one of the research papers emerging from this collaboration was recently published in the Canadian Journal of Nonprofit and Social Economy Research.
The article, authored by Melissa Wilson and Susan D. Phillips, builds on an earlier survey of the investment reporting practices of Canada’s top 100 foundations. The researchers interviewed a small group of foundation leaders about the benefits of greater transparency and the challenges of increasing public disclosure of investment information.
Research Highlights
- Canadian foundations value transparency in general and see it as an important part of building trust, but few disclose their investments publicly.
- About half of the largest 100 foundations in Canada share information about their boards and 40% share their financial statements; however, only one foundation in the study sample posted its investment holdings on its website.
- Foundation leaders perceive a variety of risks associated with disclosing investments and expressed that there is a lack of demand from stakeholders and the public for greater transparency.
- Boards tend to be more cautious about investment transparency than foundation staff.
- Boards are concerned with balancing their fiduciary duties with their foundations’ missions.
- Foundation leaders are concerned that greater scrutiny of their investments poses a reputational risk if investments are disappointing or do not align with their foundation’s mission.
The results of this study highlight significant opportunities to increase transparency in the philanthropic sector, as well as the need for greater awareness of how to navigate investment transparency—including understanding the real risks and those that are perceived.
We hope these findings will provide practical value to the sector. MakeWay will continue to share resources and our experiences with investment transparency to support peer learning—stay tuned!
Read the full study findings in the Canadian Journal of Nonprofit and Social Economy Research.