Foundation North review strengthens impact investment strategy
The Foundation has reviewed how it deploys investment capital, signalling a broader approach to generating social impact.
Foundation North has confirmed through this review process it will not make any further new investments from its flagship impact investment fund, Te Pae ki te Rangi, and that management of the fund for its remaining life will be handed over from Soul Capital to Foundation North.
The move marks the latest stage in the trust's evolution as we consider how best to achieve our purpose of enhancing lives across Tāmaki Makaurau and Te Tai Tokerau. Since our inception in 1988, our endowment (or pūtea) has grown to more than $2 billion and more than $1.4 billion has been distributed to a range of community organisations (including social enterprises) within our region. The Foundation’s pioneering foray into the impact investment sector five years ago formed a small part of our overall community funding. The shift back towards funding social enterprises through a granting model (rather than an investment model) highlights an increasingly mature conversation about how philanthropic organisations can balance grants, investments and other funding mechanisms to maximise community benefit.
Chair Philip Crump says the review was part of the Board’s ongoing responsibility to consider how the trust’s capital can best deliver the greatest benefit for communities in Auckland and Northland.
“The trust has been a significant player in New Zealand's impact investment landscape since establishing Te Pae ki te Rangi in 2021. At a time when impact investing was still emerging in Aotearoa, Foundation North was among the first philanthropic organisations to commit substantial capital to the sector, creating a vehicle designed to deliver both social impact and financial returns.”
Since the inception of Te Pae ki te Rangi, more than $30 million of Foundation North capital has been invested into 19 purpose-led businesses aligned with our goals of increasing equity, social inclusion and environmental regeneration. The investments have also helped attract approximately $150 million in additional funding from other investors, amplifying the overall impact of the initiative.
Philip Crump says Foundation North remains proud of its contribution in helping establish and grow New Zealand's impact investment ecosystem, notwithstanding the challenges the sector has faced in developing and maturing.
Chief Executive Dylan Lawrence explains, "Five years ago, we extended our commitment to social enterprise through an innovative partnership with Soul Capital. We recognise what the partnership has pioneered and the contribution it has made to growing understanding and capability in the social enterprise sector. With every innovation comes learnings - both from our philanthropic and investment experiences. These insights tell us that social enterprises vary in their structure, scale, and investment readiness, and more is needed to support early-stage social enterprises to grow and scale, including grant-making and capability building”.
While Foundation North will not be investing in any new projects through Te Pae ki te Rangi, it will, as manager going forward, directly work with the existing investments that have been made.
