Chair's Report

Tēnā koutou katoa. I te tuatahi, me mihi atu ki
tō tātou kaihanga. Ko ia te timatanga, ko ia te
mutunga. Nāna nei nga mea katoa.
E tangi ana ki a rātou mā, kua wehe atu ki te po.
Haere, haere, haere atu ra. Rātou ki a rātou, tātou
ki a tātou. Ko tātou te hunga ora.
Nō reira, tēnā ano tātou katoa

Two key areas of strategic emphasis have defined the 2022/23 year from my perspective. Our stated intentions around Te Tiriti o Waitangi and climate action are overarching obligations for the Foundation, overlapping and intertwining with our commitment to our priority communities and our four funding focus areas.

As Trustees we are part of the Foundation’s haerenga/journey with Te Tiriti, and it was with a sense of humility and pride that, as a Board, we gathered with our kaumātua Kevin Prime, fellow Trustees and leadership of other Community Trusts on Waitangi weekend 2023. Manawanuitia Te Tiriti o Waitangi was a three-day learning wānanga to deepen our understanding of Te Tiriti o Waitangi, and to explore together ways that the Community Trusts can give better effect to Te Tiriti across our granting, governance and investment activities.

Foundation North recognises that the growing climate emergency is a grave risk to our communities and planet. The scale of the climate threat and solutions needed reflect this critical issue facing every community. As a community funder, whose assets are held for the public good, we play an important role. The way we invest and partner with communities to support a just transition to a low carbon society, with increased equity, climate resilient communities and better outcomes for our environment, is a critical responsibility.

We acknowledge and thank our philanthropic whānau with whom we are able to collaborate across the rohe, these include the likes of our fellow Community Trusts, the Tindall Foundation, Todd Foundation, J R McKenzie Trust, Rule Foundation, Spark Foundation, Fisher & Paykel Healthcare Foundation and the Hugh Green Foundation. Through our collaborations we can extend our collective impact, and working together is much needed, as we head into a tighter economic climate and reducing funding environment in 2023/24.

In closing, I offer my congratulations to our three Trustees who have been reappointed to the Board for a second four-year term – Romy Udanga, Ngaire Rae and Michelle Tsui. It has been a period where governors of community groups large and small have been challenged, and Foundation North is no exception. The complexities around the Board table now include increased compliance, widening fiduciary duties for investments through climate change and social considerations, plus dealing with emergency situations and events. I thank all our Trustees for their ongoing commitment to Foundation North and our vision of enhanced lives.

Piki te ora!
Manawanuitia ki Te Tiriti, hei oranga mo te katoa

The Foundation’s investment portfolio is well diversified across different asset classes and across multiple geographies.

This means it is designed to be resilient and withstand financial shocks - however it is not immune to short-term global market volatility like we have seen in the last 12 months.

Our global listed equity (growth) investments performed in line with their benchmarks, which saw reductions over the year due to rapid rates of global inflation and associated uncertainty in economic growth outlooks. Our private equity (growth) investments unsurprisingly reacted with more volatility, some continuing to show strong gains, while others have seen some downward revaluations.

Our inflation-proofing asset class performed positively as intended during times of high inflation, while our deflation-proofing (cash and fixed income) investments reduced in value, predominantly due to rapid and repeated central bank cash rate increases.

At year end the value of our portfolio was $1.616 billion and our investment return was -3.2%. This is only the second negative return we have seen since the Global Financial Crisis in 2008, and notwithstanding this loss, we have confidence our portfolio is well positioned to continue its growth over the long term.

Due to the Foundation’s robust reserving policy, we have a sufficient buffer at year end within our portfolio, meaning we can continue to operate in line with our spending policy. Importantly we are able to maintain granting programmes broadly in line with the last few years.

The Foundation has also been active in extending our investing for good by launching an impact investment fund, Te Pae Ki Te Rangi. The fund is capably managed by Soul Capital based in Auckland and is actively seeking impact investments that align to our granting focus areas. The fund has undertaken four investments to the 31st March 2023 which we are encouraged by, and we have a strong pipeline of opportunities.

Foundation North continues its commitment to being a responsible investor and a signatory to the Community Trusts’ Funders Commitment on Climate Action. The Investment Committee and Board are currently focused on working towards our net zero portfolio carbon emission target by 2050 or before. Likewise, we are investigating how to demonstrate our commitment to Te Tiriti o Waitangi when undertaking our investing activities. These initiatives are at the early stages and progressing all the same.

I would like to thank the Foundation North team for their ongoing work on our investments and also welcome Alexandra Corbett to the team as Head of Investments and Finance. Lastly, appreciation to my fellow Trustees and Committee members and our committee advisor Aaron Drew from Fi360. Together we continue our mahi maintaining a resilient portfolio irrespective of rain or shine in the global markets.