Reporting Requirements
Investees in Realize Fund I have certain reporting requirements. The financial and commercial reporting requirements are quite standard but the impact reporting may be new to you. Please contact us if you have any questions.
Financial and Commercial Reporting
A quarterly requirement
We aim to follow market norms and good practice for private-market investment financial reporting. We will set out financial reporting requirements in either the main investment agreements or in a binding side letter but here are general guidelines of what to expect if we invest in you.
Quarterly, you will provide:
- Financial statements, including applicable details on the portfolio. For the first three quarters you’ll submit unaudited quarterly statements; for the fourth, audited annual statements
- A capital account or net asset value (NAV) statement regarding our investment position
- An overview of your investment performance, with information on material events such as write-ups, write-downs, write-offs and delinquencies
- An overview of your investment activity, such as origination and deal flow, investments in progress and market conditions
Where holdings are expected to be revalued over time, we expect all SFIs to develop an appropriate valuation policy. As a starting point, we look to the International Private Equity and Venture Capital Valuation Guidelines, but expect SFIs will consider the cost and feasibility of revaluing the portfolio holdings in their particular case.
Often, SFIs will work with a third-party fund administrator to support fund accounting and the creation of investor statements. This may also be done in-house depending on the complexity of a given fund’s situation and the type of investment provided.
Impact Reporting
We request impact information at due diligence; as well, all investees must report on impact annually
All participants in SFF need to collect and report on impact in a common way, so that the results can be aggregated across hundreds of investments and sent to the Government of Canada. And by all, we mean all! All fund-of-funds managers, all SFIs and all investees (social purpose organizations) that SFIs invest in need to report on impact.
Each spring, we will reach out to our investees and request impact data on the previous calendar year. Broadly speaking, this involves using the common impact data standard (see side box) to provide:
- Data on your impact goals and performance
- Data on the impact performance of your investees
- Data on your operations
- Data on the operations of your investees
- Demographic data regarding your board and management team
- Demographic data regarding the board and management team of each investee
Regarding demographic data: All SFF investees are required to report some disaggregated demographic data to help support transparent disclosure of the SFF capital flow and assist with the Government of Canada’s policy decision-making. A demographic data collection protocol was created based on the consensus of an expert group with representation from demographic data collection experts, a community facilitator, SFI and SPO representatives who identify as belonging to equity-deserving groups, wholesalers’ representatives, and Common Approach. The protocol’s recommendations considered data privacy, trade-offs between data quality and anonymity, data burden, and power dynamics, among other considerations. We will be collecting data in alignment with the protocol.
As the Social Finance Fund is still quite new, some impact questions, including those around demographic data, are still being finalized between the Government of Canada and the three fund-of-funds managers. The web forms below contain current questions. We expect these to change within the next several months.
SUPPORT
We offer several services to help SFIs with impact measurement and management. We offer these programs to all SFIs that have received SFF funding, from any of the three fund-of-funds managers, whether us, Boann Social Impact or Fonds de Finance Sociale – Cap Finance.
IMPACT DATA STANDARD
Common Approach to Impact Measurement is a key partner of ours on SFF. Common Approach is working with all SFF participants to ensure we all collect and report data using the Common Impact Data Standard. The data standard helps to make impact data flexible and shareable between SPOs, SFIs and fund-of-funds managers. This standard was developed to complement SFIs’ existing impact measurement practices in ways that investees will appreciate. Aligning to this standard is mandatory for all Social Finance Fund Participants.
Operations
Exploring the impact of your practices.
Outcomes
Exploring impact intentions and outcomes.
Our Commitment to Data Privacy and Fair Practice
We recognize that our position as stewards of capital and impact data garners us both influence and access to private information. We take that seriously and are committed to using our position for positive change.
We are keenly aware of how data can be and has been used to harm and disenfranchise groups. But conversely, we also see how data can be used as a positive force for change through impact management. Data can be an important tool in creating a more equitable, just and sustainable society. We believe in honest, transparent engagement with Indigenous people and other marginalized communities to ensure agreement with our use of the data. Several of our employees have completed the First Nations Principles of OCAP and where applicable, we work to comply with these principles.
If you have concerns about sharing data or about our intended or actual use of data, please reach out and we will discuss appropriate accommodations.