Australian Communities Foundation (ACF) is pleased to announce the appointment of Koda Capital as the new investment manager for our 100 per cent responsibly invested portfolio.

As Australia’s largest independent wealth management firm, Koda manages over $12 billion of client assets, including $3 billion for non-profit and philanthropic clients.

The announcement comes after a rigorous and comprehensive tender process, where Koda emerged as the clear choice from a pool of highly qualified candidates, said Daniel Brugaletta, ACF’s Chief Financial and Operations Officer. 

“Koda’s credentials as investment advisors and stewards of philanthropic capital are exemplary. Throughout the tender process, Koda stood out for their deep expertise and strong alignment with our values and mission. 

Daniel also took the opportunity to thank the Brightlight team for their exceptional service as ACF’s investment advisors over the past five years. “We are grateful to Brightlight, who oversaw the successful transition of our portfolio to 100 per cent responsible investing.” 

The Australian Communities Foundation Board has also endorsed the partnership with Koda, recognising the firm’s leadership in responsible and impact investing.

Chris Wilson, Partner at Koda Capital’s Philanthropy & Social Capital division, said the firm was excited to bring its expertise to further bolster ACF’s position as a responsible investing leader. 

“We are thrilled to be partnering with Australian Communities Foundation to manage its investment portfolio, with a strong emphasis on responsible investment and impact. This partnership is a testament to our longstanding relationship and alignment in values towards philanthropic giving, which has always been a fundamental part of Koda’s DNA,” Chris said.

With this new partnership marking an exciting chapter for our responsible investing journey, there will be opportunities for our giving community to meet the Koda team and learn more about our shared approach to responsible investing.

“Through a rigorous investment approach aligned to the values of ACF, Koda is committed to playing an active role in the organisation’s vision for a fairer and more sustainable Australia,” said Koda Partners Farren Williams and Victoria Lindores. “We look forward to meeting with the ACF giving community in the months ahead.”

Australian Communities Foundation (ACF) has announced its latest impact investment – this time in the booming climate-tech sector.

Launched in 2021 by early-stage venture capital firm Investible, the Climate Tech Fund capitalises on the tailwinds generated by the growing awareness of climate change and evolving consumer and business preferences and has already raised $30 million for start-ups working to decarbonise our economy.

The Climate Tech Fund is ACF’s fourth impact investment and an important next step in the organisation’s responsible investing journey according to award-winning financial adviser and Chair of ACF’s Investment Committee, Sue Dahn.

“Impact investing is a desired destination in a journey of responsible investing that starts off taking into account environmental, social and governance aspects in investment decision making (to help ensure that investment portfolios ‘do no harm’) and ideally ends with more and more investments that can actually ‘do good’,” Sue explains.  

“The journey starts by excluding ‘harm doing’ activities and achieving neutrality of impacts and then finding investment opportunities that can do good as well as provide a financial return.  

We look forward to sharing with donors and other stakeholders the impact outcomes we will achieve together

“I like to think of this as a triple play with the capital pool achieving three outcomes:

  1. the capital generates an impact return when it has been used productively in line with ACF values and priorities
  2. the capital generates a financial return so that donors can grant more to grant recipients and
  3. grant recipients can deploy their grants knowing that the source of their grant is not in conflict with their values.”

ACF’s impact investment portfolio also includes Side by Side Social Impact Bond, Infradebt and Conscious Social Housing.

“Impact investments are typically medium to longer-term endeavours,” Sue explains, “and ACF has already well diversified its investments across key areas such as vulnerable and disadvantaged children, community infrastructure, social housing and climate technology.  

“We continue to seek out opportunities in areas that align to key ACF priorities and look forward to sharing with donors and other stakeholders the impact outcomes we will achieve together.”

Responsible Investment Leader

For the second year in a row, Australian Communities Foundation has been named a Responsible Investment Leader by the Responsible Investing Association of Australia.

ACF has already well diversified its investments across key areas such as social housing and climate technology

Sue Dahn says the recognition is an important reflection of ACF’s work to ensure its investments match its values.

“It is terrific to get this external endorsement from RIAA and the credit goes to successive teams of ACF staff and advisers who have been steadfast in their pursuit of our goal of leadership in responsible investment,” Sue says.

“We hope our donors and grantees are as thrilled as we are that we are progressing well on the responsible investment and impact investing journeys.

“There is always more to do, so acknowledgement like this helps ACF stand out as a prospective partner and collaborator in future responsible and impact opportunities.”

Read more about Australian Communities Foundation’s responsible investment journey here.

Australian Communities Foundation has been named a Responsible Investment Leader by the Responsible Investment Association Australasia (RIAA) for the second year running.

Launched this month, RIAA’s 2022 Benchmark Report shows the value of Australian assets managed using a responsible investment approach has hit $1.54 trillion, now accounting for 43% of the total market.

The report recognises 74 Responsible Investment Leaders, with Australian Communities Foundation being the only public charitable foundation on this year’s list.

This recognition comes off the back of the Foundation completing its transition to 100% responsible and ethical investing in 2021.

“We are proud to be recognised for our commitment to responsible investing,” says Australian Communities Foundation CEO Maree Sidey. “We will continue to lead the way on investing that provides both financial returns and positive outcomes for people and planet.”

Building on our ethical approach to investing, Australian Communities Foundation also announced its first impact investments in late 2021. Through these investments, the Foundation is contributing to positive social and environmental outcomes across our Impact Areas.

Read more:

Investing at Australian Communities Foundation

Impact Investments

The head of an Australian community foundation recently recognised as a responsible investment leader is encouraging other foundations to follow its footsteps and commit to investing more ethically.

Australian Communities Foundation (ACF) has successfully met a pledge for 100 per cent of its investment portfolio to be responsibly invested, as part of a six-year journey to align the investments of its corpus with its mission and values.

ACF CEO Maree Sidey told Pro Bono News that with a corpus worth around $140 million, it was a major achievement to transition entirely to responsible investments.

Based on its performance in 2020, Responsible Investment Association Australasia (RIAA) named ACF a responsible investment leader in its annual benchmark report released last month.

“We didn’t expect to get this recognition from RIAA, so we’re absolutely delighted,” Sidey said.

“But it’s bittersweet to be the only foundation on the list because while it’s a fantastic achievement, there are a lot of private and public foundations out there that are really interested in seeing their capital used for positive social and environmental outcomes. 

“So we know that we’re not the only ones making moves in this space, and we’re hoping that others are going to follow.”

A landmark study by the Responsible Investment Association Australasia (RIAA) has recognised Australian Communities Foundation for its leadership and commitment to responsible investing.

The recognition is based on assessed performance in 2020, using RIAA’s Responsible Investment Scorecard

Launched on 1 September, the Responsible Investment Benchmark Report Australia 2021, produced in collaboration with KPMG, shows the market for responsible investments in Australia continued to soar in popularity to $1.2 trillion in 2020. Moreover, responsible investment assets are growing at 15 times the rate that overall Australian professionally managed investments have grown.

“This dramatic shift of capital is being fuelled by changing consumer expectations, strong financial performance and the rising materiality of different social and environmental issues – from climate change to racial inequity,” says Nicolette Boele, Executive, Policy and Standards for RIAA.

“It reflects the sustained effort made over many years as we have invested in building strong credentials and leading practice in this area.”

The Report reinforces that responsible investments make good financial sense.

In 2020, responsible investment funds performed on par with, or better than, the market, even though overall fund performance was down largely due to the impact of COVID-19 on economies worldwide. 

Being named a Responsible Investment Leader is yet another milestone in Australian Communities Foundation’s journey towards 100 per cent responsible investing. Earlier this year the organisation became the only foundation in Australia to be a signatory to the UN Principles for Responsible Investment (UNPRI).

“It’s fantastic for Australian Communities Foundation to be recognised as a Responsible Investment Leader in 2021,” says Michael Gilmore, Director and Chair of Australian Communities Foundation’s Investment Committee.

“It reflects the sustained effort made over many years as we have invested in building strong credentials and leading practice in this area.”

“Thanks to all who have been involved in this journey, especially members of the Investment Committee both past and present, supporting staff and to our investment adviser, Brightlight.”

Michael says the successful alignment of the organisation’s investments with its mission has been achieved with the help of like-minded supporters and partners.

“ACF is fortunate to have an energised group of staff, Directors and advisers who are aligned in their commitment to ensure the corpus is managed sustainably and in a way that leverages our impact across our communities,” Michael explains.

“Thanks to all who have been involved in this journey, especially members of the Investment Committee both past and present, supporting staff and to our investment adviser, Brightlight.”

-The RIAA report highlights that the gap between responsible investment leaders and others is particularly pronounced in the area of stewardship activity, the reporting of outcomes, and specific allocation of capital to target social and environmental outcomes.

There are rapid developments taking place across countries, regions and markets that are resetting expectations of responsible investment. New standards and regulations are moving the investment managers in the industry towards best standards of practice that contribute measurably to a more sustainable world, with Australia being no exception to this trend.

“As the market matures and retail investors continue to grow their understanding of the different responsible investing approaches available, more focus will apply on the substance of activity behind the label,” Michael says.

“This will accelerate the adoption of systematic approaches to ESG integration, risk management and stewardship and continue to grow the proportion of assets in the Responsible Leaders category.

“It will also be exciting to see more managers allocating capital in line with the UN Sustainable Development Goals and further aligning portfolios to support causes that retail investors are passionate about.”

The RIAA Benchmark Report is the most comprehensive review of the responsible investment sector in Australia. Read the report here: https://responsibleinvestment.org/resources/benchmark-report/

Australian Communities Foundation’s journey towards 100% responsible investing has reached two new milestones: the first, as the only foundation in Australia to become a signatory to the UN Principles for Responsible Investment (UNPRI) and the second being the announcement of the Foundation’s first impact investments.

Michael Gilmore, Director and Chair of Australian Communities Foundation’s Investment Committee says the two impact investments make a significant contribution to positive impact in alignment with the organisation’s mission.

“For the first time we are making investments that are not only beneficial to society but are actively contributing to solutions to some of society’s great challenges,” Michael says, adding that the journey has been years in the making.

“Over the past few years, we’ve taken a much bigger step by embarking on the journey to 100 per cent responsible investing by 2021…”

“In the early years of our responsible investing journey we commenced by implementing negative screens, for example not investing in companies that participated in tobacco or gambling,” he explains.

“Over the past few years, we’ve taken a much bigger step by embarking on the journey to 100 per cent responsible investing by 2021 and signing up to the Divest/Invest pledge to remove fossil fuels from our portfolio and invest in clean energy solutions.

“Along the way we’ve changed our governance structures, investment policies, Investment Adviser and also added expertise to our Board and Investment Committee, to support our focus on responsible investing.”

Using the ABC framework (Avoiding harm, Benefiting society and Contributing to solutions), Australian Communities Foundation now strives to have the majority of its investments in the B or C categories.

Mark Ingram, Chief Impact Officer at ACF’s investment advisory firm, Brightlight, says the move is a significant one because it “means that Australian Communities Foundation is now positively moving capital in its portfolio in order to create intentional and measurable social and environmental impact in sectors of the economy that are underserved.”

The impact investments

Tim McCready, Chief Investment Officer at Brightlight, says impact does not come at the expense of financial performance.

“What we’re looking for with these investments is strength in both financial prospects and impact outcomes,” he says.  “Both of these investments offer that.”

The two selected impact investments, Infradebt Ethical Infrastructure Fund and Side by Side Social Impact Bond, closely align with Australian Communities Foundation’s mission, and align with two of our four impact areas: environment and First Nations self-determination.

Side by Side blends the public sector and private investors to allow social service providers to create innovative programs address entrenched social challenges in the Australian schooling system,” Mark explains. 

The Side by Side Social Impact Bond has been developed as a partnership between Berry Street Victoria and the Victorian Aboriginal Child Care Agency (VACCA).

Adjunct Professor Muriel Bamblett, CEO of VACCA says, “Investing in families and strengthening communities is key to preventing disadvantage and building better education outcomes for our children. Side by Side is a multifaceted program that supports children where they need it most and attempts to address systemic barriers Aboriginal children face when attending school.”

The second impact investment, Infradebt, will build new solar and wind energy infrastructure that aligns to the safeguarding the environment focus area.

“Finance for renewable energy infrastructure in Australia is an underserved market so this investment contributes to the flow of capital to solve our global climate challenge and also provides a proof point in the trust and foundation market of zero trade-off between risk adjusted market rate returns and positive impact contributions,” Mark says.

“The more we can demonstrate the demand for investments of this type, the faster the opportunities will develop and the more we will be joined by other like-minded investors.”

Looking ahead

With the help of Brightlight, Australian Communities Foundation will continue to look for investments that deliver both financial and impact outcomes.

For long-time Australian Communities Foundation supporter, sub-fund holder and Director, Sue Dahn, the Foundation’s journey to 100 per cent responsible investing will pay tremendous dividends.

“At Australian Communities Foundation we are committed to donors’ contributed capital not only NOT doing harm in the places it is invested but, wherever possible and as opportunities become available, actually DOING good by being applied to solving the community’s pressing problems and challenges,” Sue says.

“The more we can demonstrate the demand for investments of this type, the faster the opportunities will develop and the more we will be joined by other like-minded investors.”

“We are extremely proud to be the first Australian philanthropic foundation to become a signatory to the Principles for Responsible Investment.”

UNPRI: Principles for Responsible Investment

The United Nation’s Principles for Responsible Investment encompass six investment principles that incorporate ESG issues into investment practice.

In a process convened by the United Nations Secretary-General, the Principles for Responsible Investment were developed by an international group of institutional investors reflecting the increasing relevance of environmental, social and corporate governance issues to investment practices.

“We are extremely proud to be the first Australian philanthropic foundation to become a signatory to the Principles for Responsible Investment,” says Australian Communities Foundation CEO, Maree Sidey.

“We hope that other organisations in our sector will also consider becoming signatories.”

“This is another pioneering, trailblazing effort by ACF,” Mark Ingram from Brightlight adds. “Their commitment to these stringent principles is to be applauded.”

Details of the signatories’ commitment can be found here.

As we approach the end of what has been a very unusual 2020, it provides an opportunity to reflect on the changes that have been made across the investment portfolio.

Since this time last year, we have focused on increasing the alignment of the investment portfolio with ACF’s values and preparing the portfolio to include targeted impact investments.

Firstly, this has involved focussing on improving the sustainability credentials of the portfolio’s listed equities, which make up roughly 55% of total assets.  The equities part of the portfolio has been more closely aligned to values, by shifting to products that have lower ethical and ESG (environmental, social and governance) risk, and then by beginning to include a range of listed equities portfolios with specific positive ESG attributes.

One of the ways that we measure progress is the percentage of assets that are invested by managers with a focus on benefiting stakeholders and incorporating active engagement strategies into their approach.  In the last year, we have increased the percentage of the portfolio using these higher-sustainability focused approaches from 10% to 26%, while reducing the percentage of the portfolio using only basic screening strategies with low sustainability and engagement focus from 33% to 12%.

Some of the products we have introduced in the last twelve months include:

  • Melior’s Australian Impact Fund, which invests in listed Australian and New Zealand companies whose businesses are aligned with the Sustainable Development Goals, while simultaneously engaging heavily with those companies to further improve sustainability.
  • Betashares’ Global Sustainability Leaders ETF, which invests in global companies who have been identified as climate leaders.

We’ve also taken the opportunity to increase our level of shareholder engagement and have been speaking to our investment managers about a range of issues, including the protection of First Nations heritage, climate change and workplace sexual harassment. ACF also continues to support, through our granting activities, the work of the Australian Centre for Corporate Responsibility.

ACF’s decision to align its portfolio with its values has also created numerous opportunities to share the ACF story.  With audiences as diverse as the Asian Venture Philanthropy Network, the Australian Institute of Superannuation Trustees, and Australian Community Philanthropy, ACF representatives have been able to share the story of the journey that we are on towards a values-aligned portfolio that delivers meaningful impact, in ways that we hope inspire many others to take a similar journey.

With the reorientation of the listed equities portfolios nearing completion, we are turning our attention to opportunities to allocate capital for direct impact. The Investment Committee has approved investment into one healthcare fund, and over coming quarters will be considering a range of opportunities to allocate capital for tangible impact.  We look forward to keeping you updated on these impacts as the portfolio continues to develop.

Earlier this year our Finance and Investment Committee formed a specialist working group to oversee the tendering of our investment advisory services. Australian Communities Foundation’s (ACF) investment advisory services are re-tendered at regular intervals to ensure good governance and were last put to market six years ago. Fourteen leading investment advisory firms were invited to submit proposals, thirteen proposals were received, and the committee shortlisted the top five.

Based on feedback from our 2018 donor survey, the successful firm needed to demonstrate that it had the expertise to support ACF to strengthen its ethical investing approach by including investments that have a positive social and environmental return, without compromising financial return.

After a rigorous process, we are delighted to announce that Brightlight Advisory has been appointed as ACF’s investment advisers.

As one of Australia’s foremost ethical and impact investment firms, Brightlight will support ACF to:

  • Actively seek out investments which have a positive social or environmental impact and strong financial return.
  • Complete a full audit on our current investments to ensure that we have completely eliminated any holdings in firms associated with corporations that have a detrimental social or environmental impact (e.g. firearms, tobacco, fossil fuels, gambling, alcohol, modern slavery, etc).
  • Map our impact using the UN Sustainable Development Goals, ensuring that each investment is making a positive contribution to global development.
  • Offer impact investing options for ACF donors, not-for-profits and other trusts and foundations, to support a greater shift towards responsible investing.

We are very pleased to have the support of the ACF community behind this decision. The Australian Communities Foundation Board has also endorsed the partnership with Brightlight, recognising that it positions ACF as one of the leading foundations in Australia in relation to responsible investing.

Please don’t hesitate to get in contact with our Chief Financial Officer, Daniel Brugaletta, on (03) 9412 0412 or at daniel@communityfoundation.org.auor Maree Sidey on 0417 385 208 or at maree@communityfoundation.org.au if you have any questions.

We would also like to take the opportunity to thank the team at JBWere for the prudent financial management and great service they have provided for the past six years.

We look forward to introducing the Brightlight team to you in the near future.

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Level 6, 126 Wellington Parade, East Melbourne VIC 3002

We acknowledge Aboriginal and Torres Strait Islander peoples as the first inhabitants and Traditional Custodians of the lands on which we live, learn and work. We pay our respects to Elders past and present.

Australian Communities Foundation is a proudly inclusive organisation and an ally of LGBTQIA+ communities and the movement toward equality.