Growing calls for equity and accountability are pushing philanthropy to become more transparent. Some foundations now share more about their operations, governance, and grantmaking. But the largest share of foundation wealth—investments—has been largely left out of the conversation.
A few foundations have started to disclose aspects of their investing, often around impact investing, but unfortunately these glimpses usually represent only a small slice of foundation portfolios.
At MakeWay, we’re working to move toward greater openness about our investments. So far, we’ve shared our investment policy, the names of the people on our investment committee, the investment managers we work with, and a list of the funds we invest in. Each of these funds includes dozens of individual companies (or “holdings”), and our next step is to share those holdings publicly. We’ll also share more about the questions we’re asking and the lessons we’re learning.
Along the way, we’ve been trying to understand the bigger picture. With researchers from Carleton University’s Master of Philanthropy and Nonprofit Leadership (MPNL) program, we explored how Canadian foundations are approaching investment transparency: why it’s important and what gets in the way. This work included a scan of what information foundations currently disclose and interviews with foundation leaders about their experiences. It’s helped us get a clearer sense of where things stand today and how we, as a sector, might begin to do better.
The State of Foundation Investment Transparency
Canadian foundations are not legally required to disclose how they invest. Besides basic numbers, like overall investment totals, there’s little public information available about portfolios or investment practices.
As part of our research, we looked up the top 100 public and private foundations in Canada (ranked by total financial assets, using 2021 data from the CRA). Here’s what we found:
- Only 13% disclosed their investment policy.
- Just 8 out of 100 provided any details about who manages their investments.
- Only 14% publicly shared information about their investment or finance committees.
- 51 foundations shared no investment information at all.
These numbers underscore just how opaque our sector is and how much room there is to change that.
Why does investment transparency matter?
Foundations hold most of their wealth in investments. In 2023, Canadian foundations held $193 billion in long-term investments, while granting $13.7 billion. Details about grants are publicly available through the CRA; however, there is almost no public information about the $193 billion sitting in investments. The CRA doesn’t even collect this information.
This lack of visibility matters. Foundations benefit from tax privileges because their assets are meant to serve the public good. Communities should be able to see not only how grant dollars are flowing but also how their money is invested.
Foundations already have a reputation for being closed-off institutions; many don’t even have a website. Without access to information about investments, community partners can’t fully understand the impact of the dollars they’re connected to or make informed choices about whether to accept support.
Investment transparency is an opportunity. By looking more closely at our portfolios and sharing what we find, foundations can begin to align our investments with our missions. Most foundations don’t engage with investments at this level, often relying on external managers and investing in broad funds without knowing exactly what they contain. Even funds labeled “sustainable” or “ESG” may include companies whose practices clash with a foundation’s stated values.
Committing to greater transparency can push us to engage more thoughtfully with investing and align our portfolios with our values.
Barriers to Investment Transparency
This fall, we’ll share more from the research conducted by Carleton University scholars Dr. Susan Phillips and Melissa Wilson, who interviewed foundation leaders across Canada about their views on investment transparency. They explored questions like:
- Why does transparency matter?
- How are foundations currently reporting their investments?
- What barriers stand in the way of greater openness?
These interviews surfaced a wide range of perspectives, along with real and perceived challenges. We believe these findings will be valuable to boards, staff, investment managers, and policymakers who are beginning to think about investment transparency.
Over the next several months, we’ll also share some of the knowledge we’ve gained and insights from our own process, including the sticking points and questions we’ve had to work through.
Looking Ahead
Transparency can feel overwhelming when it’s not clear where to start or what steps to take. But it’s also a chance for foundations to better align their money with their missions. By being open about how we invest—not just where we give—we can help unlock philanthropy’s full potential.