Auditors have revealed that a federal "Equality Fund" established with a $300 million taxpayer grant quickly lost 10% of its value due to poor investments. Blacklock's Reporter says the fund was intended to aid women in developing countries.“Poor market conditions impacted the early returns on gender lens investments, though the Fund has since rebounded,” noted a Department of Foreign Affairs audit. “Progress was uneven,” it added.The Equality Fund was designed to address “the funding shortfall for women’s rights and feminist organizations in developing countries,” the auditors wrote. “It was meant to provide a sustainable, predictable, and flexible source of funding that would enable women’s rights and feminist organizations to advance gender equality and empower women and girls.”However, fund managers spent $5 million on start-up costs and lost a tenth of the remaining amount in bad investments. “The Equality Fund investment portfolio has an unrealized loss of 10%,” according to Formative Evaluation. “Performance has since improved.”“Most of this funding served as an endowment-style fund that was meant to provide a long-term, sustainable source of revenue to fuel grant-making activities in perpetuity,” the auditors wrote. Taxpayers’ $300 million was intended as “seed capital” to be “invested with a 100% gender lens.”The Equality Fund did not disclose where it invested its money. Income from the $300 million was supposed to finance Third World programs for the next 15 years.Uneven stock performance is rare but not unprecedented for agencies funded by federal endowments. For example, the subsidized Canadian Race Relations Foundation lost $3.7 million by hastily selling stocks at the onset of the 2020 pandemic.“On March 13, 2020, the Foundation’s board of directors, in order to address the uncertain risk to the value of the Foundation’s equity financial assets posed by the COVID-19 crisis and to preserve the value of the Foundation’s endowment fund, decided to liquidate,” staff wrote in a 2022 Inquiry Of Ministry tabled in the Commons.Directors sold all the stock they could and opted to “retain the proceeds in cash and cash equivalents, which caused the investment loss,” the Inquiry reported. Losses totaled $3,785,525 on shares sold within 48 hours of the World Health Organization’s declaration of a global pandemic.The day the Foundation sold out, the Toronto Stock Exchange Composite Index closed at 13,716. It closed Friday at 22,674, marking a 65% gain.The Race Relations Foundation had also suffered a $5.1 million loss during the 2008 financial panic, which led to laying off 40% of its staff. Parliament created the Foundation with an initial $24 million endowment.
