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, usually within 45 days of the end of the quarter; for the fourth, audited annual statements will be required within 90 days of year end
- 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 social finance intermediaries (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 Social Finance Fund (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, SPOs) that SFIs invest in need to report on impact.
Each spring, we will reach out to our investees and request impact data. 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 seniors management teams
Regarding demographic data: All SFF investees are required to report some organizational-level demographic data to help support transparent disclosure of the SFF capital flow, contribute to measurement of SFF performance 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 collect data in alignment with the protocol.
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.
Data Collection Overview:
We collect data to help us track progress on our portfolio goals. 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.
When we collect data: We use these assessments first as part of our due diligence process to gain a deep understanding of impact intentions. And then, after investment, we use these assesments to help measure impact performance and create portfolio reports for Employment and Social Development Canada (ESDC) and for LPs, as well as for our own portfolio management purposes. It is important to note that investment decisions and monitoring practices are informed by the mandates and priorities set by our clients. The suitability assessment of an investment for a portfolio and its performance are based on many factors. We do not base our decisions solely on any diversity metric.
Data sharing: We may share post-investment annual assessments, in whole or in part, with ESDC.
How we use the data: We will use the data to support impact assessment and portfolio management activities.
How ESDC uses the data: ESDC will use the assessments to support performance measurement activities for the SFF and for related policy analysis, research and evaluation purposes. The SFF’s performance results will support development of future Government policy, funding, and programming proposals related to supporting social innovation, social finance, and/or social development in Canada.
Demographic data may be used to support assessment of progress towards achievement of SFF’s objectives related to broadening the reach of social finance and to enhancing social equity practices in the social finance market.
Contact information may be used to support departmental evaluation activities for the SFF (e.g., to reach out to participating organizations for surveys, interviews, case studies).
Information that has been aggregated at the program-level (that is, for the entire SFF) may be made publicly available alongside other aggregated program information to support public understanding of Canada’s social finance market (for example, representation of equity-deserving groups on the management teams and boards of directors of market actors).
Data received by ESDC will not be shared outside ESDC and access within ESDC will be limited to employees with the need to know for the purpose of completing their work. Information will be retained for the duration of the SFF program, which is set to end on March 31, 2039, and for three years after to give time for completion of program evaluation activities. After completion of program evaluation activities, and by March 31, 2042 at the latest, information will be disposed of according to departmental protocols.
ESDC follows data collection standards and principles established by Statistics Canada. Personal information is protected and managed in accordance with the Privacy Act and the Department of Employment and Social Development Act, Part 4.