Ask the Expert: Diversifying Endowments

Endowment are one of the most effective tools for donors to provide long-term support to causes that are important to them. However, for some donors, traditional investment practices don’t align with their values. This means that some cultural groups have been left out of fully participating in this impactful way to give.

In 2022, Edmonton Community Foundation’s (ECF) CFO, Chris Quinn, partnered with Riad Assaf of TD Wealth to develop a Shariah Compliant Investment Portfolio for Muslim donors. This was the first of its kind in Canada and last year, the pair was recognized for this work by the Al Rashid Education Foundation.

We spoke with Quinn and Assaf about this new, inclusive way for donors to support the charitable sector and what makes a Shariah Compliant Investment Portfolio unique.

Q&A

ECF: What is an endowment fund, and how does it work at ECF?

CHRIS QUINN: An endowment fund is a permanent fund established by donors to support causes they care about. At ECF, these funds are invested, and a portion of the value of the fund is granted to charities every year. The rest of the earnings are reinvested to ensure the fund continues to grow and support the community for generations.

ECF: What is ECF’s Shariah Compliant Investment Portfolio?

RIAD ASSAF: A Shariah Compliant Investment Portfolio is an investment approach that aligns with Islamic principles. For Muslim donors who want their charitable giving to reflect their values, ECF offers a dedicated portfolio that invests according to these guidelines.

ECF: How is the Shariah portfolio different from other ECF endowments?

CQ: The only difference is in how the funds are invested. The granting process and long-term goals of supporting communities are exactly the same.

ECF: What makes an investment Shariah compliant?

RA: Shariah investing follows two main types of screenings. The first is sector-based screens. These exclude investments in industries such as alcohol, tobacco, pork, conventional banking, weapons, gambling and certain forms of entertainment. Companies earning more than 5 per cent of their income from these sectors are excluded.

CQ: The second is accountingbased screens. These limit investments in companies with high levels of debt or interest income. Specifically, a company must meet strict financial ratio requirements, with thresholds no higher than 33 per cent in three key areas: total debt to market capitalization, cash and interestbearing securities to market capitalization, and accounts receivables to market capitalization.

ECF: How does ECF ensure its Shariah Investment Portfolio meets these criteria?

RA: ECF has created a separate investment policy for Shariah compliance and follows standards used by globally recognized index providers. This ensures the investments meet both sector and f inancial screening guidelines.

ECF: Why did ECF create this option?

CQ: As part of our commitment to diversity, equity, and inclusion, ECF introduced the Shariah Endowment Fund to provide more inclusive giving opportunities. This allows Muslim donors to participate in endowment giving in a way that aligns with their beliefs, helping build stronger and more inclusive communities

This story comes from the Summer 2025 Edition of Thrive Magazine.

Read the full issue.