A case for foundations playing a bigger role in affordable housing

Malcolm Burrows, Executive Director

Foundations, Build Canada Homes, and the Next Chapter in Housing Affordability

Canada has a housing affordability crisis and the solutions to it will be multi-faceted, involving a variety of traditional and non-traditional players.  The crisis is no longer a cyclical challenge—it’s a structural one. Decades of underbuilding, fragmented delivery systems, rising construction costs, and uneven access to capital have converged to push safe, appropriate housing beyond the reach of too many Canadians. 

As governments and markets work to close the supply gap, the country needs institutions capable of bridging silos, aligning incentives, and scaling what works. This is where public charitable foundations in partnership with national and local housing charities —working alongside initiatives like the Government of Canada’s Build Canada Homes initiative and local community builders—can play a catalytic role.

Why donations alone won’t solve the supply gap

Foundations historically have played a limited role in housing.  This is primarily due to the limitations of charitable giving.  Philanthropy is essential for innovation and inclusion, but charitable donations are an inefficient source of capital for building housing at scale. Grants are precious—and finite. 

Donations and grants are best used to de-risk early models, fund pre-development, enable community engagement, and address the human supports that make housing successful.  Foundations need to embrace social finance models that are sustainable and scalable.  The heavy lift of construction requires patient, low-cost capital at significant scale and duration. Relying on grants to build units can undershoot the market need by orders of magnitude.

Impact investment funds: a better tool for building

Foundation-held impact investment funds provide a more efficient way to finance affordable housing.  Creating affordable housing impact funds should be a priority of Build Canada Homes. By mobilizing endowment capital for mission-aligned investments, foundations can offer low-cost construction and take-out financing that reduces the overall cost of delivery. This approach preserves grant dollars for services and innovation while unlocking larger, repeatable projects. Crucially, repayments can be recycled—turning one pool of capital into a long-term engine for affordability rather than a one-time spend.  

The partnership model that works

The most resilient model pairs (1) local registered charities and non-profit organizations—the builders and stewards closest to families and communities—with (2) public charitable foundations—the risk managers, convenors, and long-term capital partners. 

Local organizations bring lived context: they understand land opportunities, household needs, and the wraparound supports that sustain tenancies and ownership. A major actor in this space is the Habitat for Humanity Canada federation, which has both national scope and over 40 local affiliated charities.  

In this model, public foundations contribute professional investment management, but more important they provide underwriting discipline, governance, and the checks-and-balances that keep projects on time, on budget, and mission-aligned.  There must be a commitment to deploy capital to build homes.  The healthy tension between community priorities and fiduciary rigor drives results: homes delivered at lower cost with stronger, measurable outcomes.  Using modular and factory-built homes, the outcome will be lower cost housing for more Canadians.

Ownership is key to affordable homes

In the past two years there has been increased policy attention and market activity focused on rental apartments, especially so-called “missing middle” housing stock that best serve families.  While this is an important shift, the policy maker and registered charities should not forget the importance of home ownership as an enabler of family and community stability.  Home ownership remains a goal for most Canadians, even as affordability limits access for individuals and working families with more modest income.  

If foundations and housing charities are to be effective, a third partner is essential: Canadian banks.  We need committed lenders providing mortgages targeted at the affordable housing segment.  Foundations can finance, charities can build and identify homeowners, but reliable access to affordable mortgages is needed to free up capital to be reinvested in more homes.  That’s where the scale comes from.  Valuable capital for affordable homes needs to be constantly recycled, back to the foundation-held impact fund, and then into the hands of charities who build the new homes.  With repetition come faster timelines and lower per-unit home costs.   

Build Canada Homes as civic infrastructure

In partnership with foundations and housing charities, Build Canada Homes can function as civic infrastructure rather than a stand-alone program. Anchored by an ecosystem of foundations, governments, financial institutions, and manufacturers, it can:

• Leverage public lands for high-impact projects, reducing the largest line item in many pro formas.
• Unlock private lands through targeted donations to foundation partners.
• Offer flexible financial incentives— grants for patient debt, guarantees, and layered capital—to close viability gaps.
• Attract private capital by standardizing underwriting, aggregating pipelines, and de-risking at scale.
• Attract and aggregate philanthropic capital by working with foundations and housing charities.
• Facilitate large portfolio projects that bring down per-unit costs through repeatable design, modern procurement, and shared services.
• Support modern manufacturers—including modular, mass timber, and panelized builders—who can deliver speed, quality, and cost certainty.

In this model, foundations are not sideline donors; they are partners, convenors, and long-term stewards of social change. They can operate pooled impact funds, standardize diligence, and broker multi-party agreements that align municipal planning, provincial policies, federal instruments, and private-sector capacity. They can leverage significant cash and land donations that supplement the model. 

Innovation, collaboration, experimentation—on purpose

Aqueduct Foundation is uniquely positioned to serve this role and to take smart risks. As one of Canada’s largest and most innovative public foundations, Aqueduct has reach and experience with real estate, loan funds and complex charitable programs.  Aqueduct sees opportunities to contribute by focusing on home-ownership model of affordable housing.  Aqueduct has a strong collaboration model with local charities, organizations and a national network of high-net worth donors.  Together these elements matter: time to permit, cost per unit, access to capital, and long-run affordability.

Most importantly, Aqueduct Foundation would bring public accountability. Transparent reporting, independent governance, and longitudinal evaluation ensure that incentives don’t drift and that affordability remains protected over time. By grounding investment decisions in community voice and evidence, Aqueduct could help ensure projects serve real needs—not just produce unit counts.

A practical call to action

1. Stand up pooled, foundation-led impact funds dedicated to low-cost construction and take-out financing for non-profit and community-led projects.
2. Pre-approve portfolio pipelines with standardized underwriting to speed capital deployment and reduce transaction costs.
3. Partner with local charities to integrate housing with supports—childcare, employment, health—so households can thrive.
4. Leverage public and private lands with clear affordability covenants and long-term stewardship structures (e.g., land trusts).
5. Scale modern manufacturing through predictable demand, framework agreements, and outcome targets.
6. Publish open metrics to keep the system honest and continuously improve.

Canada can build its way out of this crisis—but not with fragmented capital and one-off projects. By combining community-led delivery with foundation-held impact investment funds within a Build Canada Homes framework, we can deliver more homes, faster, at lower cost—while strengthening the civic infrastructure that sustains affordability for generations.