Looking for ‘the good way’: Definity Insurance Foundation aims for systems-level change

A driving force behind the newly minted Definity Insurance Foundation was a determination to create a “responsive and relevant foundation that meets the needs of the people we’re serving” and to address the root causes of inequity.

A driving force behind the newly minted Definity Insurance Foundation was a determination to create a “responsive and relevant foundation that meets the needs of the people we’re serving” and to address the root causes of inequity.

It’s the early 1980s and nine-year old Arti Freeman sits in The Oberoi, one of Mumbai’s most luxurious hotels, “enveloped in a sea of glass” overlooking the Marine Drive promenade. She’s just ordered her favourite dish. As the waiter sets down the bowl of mangoes and cream, a little girl on the street outside presses her face up against the window. Freeman takes stock of the girl’s tattered clothing, the look of desperation in her eyes. “I couldn’t eat,” she remembers. “I started crying.” She made her future self a promise that day: “I said, ‘Don’t worry. When you grow up, you can fix this. You’ll do something to fix this.’”

Freeman, the inaugural CEO of the newly minted Definity Insurance Foundation (DIF), has kept her word. From obtaining a master’s degree in poverty reduction and development management, to volunteering and working for nearly two decades in the non-profit sector, most recently as manager of partnership investments at the Ontario Trillium Foundation, Freeman’s thoughts have returned to that little girl at The Oberoi “all the time,” she says. Thinking of her fuels Freeman’s drive as a grantmaker to “get it to the people,” a drive steeped in the understanding that equality doesn’t mean equity, that helping those looking in from the outside takes more than handing out mangoes; it means funding with the intent to create systems-level change to remove that barrier entirely.

With $100 million in seed money from the proceeds of the 2021 demutualization of Economical Mutual Insurance Company, now a subsidiary of Definity Financial Corporation, one of Freeman’s main goals is to ensure that this new foundation embraces strategies aimed at addressing root causes of inequity to achieve such a mission. She comes well-versed in systems-change theories and models, from Howard White’s theory of change, to Peter Senge’s The Fifth Discipline, to Marilyn Darling and emergent learning – a process that stresses that “the funder’s best thinking is only a starting point, that the most powerful elements of a solution could arise from somewhere outside the foundation’s walls.”

I think that how we show up is as important as what we fund, and especially in the moment we find ourselves.

Arti Freeman, CEO, Definity Insurance Foundation

Shortly after taking the reins in February 2022, Freeman began looking beyond DIF’s walls, consulting with the leaders of 50 Canadian foundations and non-profits. She and DIF’s board members have distilled what they’ve learned into a vision to create a “responsive and relevant foundation that meets the needs of the people we’re serving.” In the realm of foundations, she knows this statement is not unique, but “being able to be bold and courageous while doing that is what makes us different,” she says. “I think that how we show up is as important as what we fund, and especially in the moment we find ourselves.”

The authors of Philanthropic Foundations in Canada note that philanthropy has reached “a turning point,” with observers asking what role foundations should play in addressing today’s many pressing issues. With the number of public and (especially) private foundations increasing in the last decade, from just over 10,000 to more than 11,000, along with their assets – from $36 billion to nearly $92 billion – they question whether philanthropy is now more of “a collective issue” rather than “just an individual choice and a moral commitment.”

The Muttart Foundation’s Intersections and Innovations: Change for Canada’s Voluntary and Nonprofit Sector notes a shift in foundations’ operations, “grantmaking for societal change rather than settling for comfortable causes.” An article in the Stanford Social Innovation Review stresses that a “shift from a framework that grounds giving in ‘charity’ to one that grounds giving in ‘justice’” is imperative for any organization that champions equity. For some critics, this shift needs to happen yesterday; in a podcast discussing private versus public wealth, Liban Abokor, co-founder of the Foundation for Black Communities, says that “to see these changes actually happen we must be impatient.” “To put it charitably,” he writes elsewhere, “the paralytic procrastination that calls for a learning journey is akin to a fire truck taking the scenic route to a house fire.”

As a board, we were very committed to not compromising any of those principles that got us to where we were.

John Bowey, board member, DIF

Coincidentally, the origin story of DIF can be traced back to fire. Economical Mutual Insurance Company was founded in 1871 by a group of citizens in Berlin (now Kitchener), Ontario, “to protect themselves and their neighbours from fire and lightning.” (This explainer outlines the history of the mutual, a co-operative-type structure controlled by policyholders, from Roman times to the first modern-day models that sprang up in the aftermath of the Great Fire of London in 1666.)

“A motto of the day was neighbour helping neighbour,” says John Bowey, board chair of Definity Financial Corporation and a DIF board member, of Economical’s early days. Bowey sees DIF as a continuation of this spirit of “community-mindedness” and a way to respect the contributions of generations of policyholders. “As a board, we were very committed to not compromising any of those principles that got us to where we were.”

In November 2021, Economical celebrated its 150th anniversary by becoming a publicly traded company, with gross proceeds of approximately $2.4 billion in its initial public offering, one of the largest Canadian IPOs in recent times. But this celebration was hard won; the long journey to the Toronto Stock Exchange, and hence the creation of DIF, had plenty of twists and turns.

When Bowey was approached by Economical to sit on the board, little did he know he’d be joining a firm about to “make history” as Canada’s first federally regulated property and casualty (P&C) insurance company to demutualize. When the company announced this intent in 2010, Bowey thought “we’d be on our way” within a year or two. “Well, here we are 12 years later, and we’ve just finished the process.”

The process was “a bit unusual” for two main reasons, Bowey says: the absence of a government framework to demutualize P&C insurance providers and Economical’s dual class structure: around 900 mutual policyholders (members with voting rights) and, at the time, nearly one million non-mutual policyholders.

The crux of the matter was this: when you demutualize, who’s entitled to the value of the company? Some thought all proceeds should go to charity. Others thought only mutual policyholders should benefit. Because there were no existing regulations, “nobody was quite sure who owned a mutual,” Bowey says.

This question caused an industry-wide stir, and Economical’s demutualization process was described as everything from “a series of conceptual and practical problems” to “a robbery of past generations” to “a long-running saga driven by greed of the few.” That 900 mutual policyholders could potentially divvy up a $1.3-billion surplus prompted the Financial Post to compare having house insurance to holding a winning (to the tune of a million dollars) lottery ticket. According to the Canada Gazette, during a 30-day public consultation in 2011 about developing a “fair and equitable” demutualization framework, the federal government received more than 80 submissions.

When the government entered the fray, “it was clear from the beginning that they weren’t going to allow a small group of people to be the exclusive beneficiaries of contributions made by generations of policyholders,” says Bowey. Hence, the decade-long process, which included government-mandated negotiations, overseen by the courts, of two committees representing 878 eligible mutual policyholders and 630,000 eligible non-mutual policyholders.

What emerged from the negotiations was not only an agreement about who gets what, but a foundation. While Policy Options warns of “substantive social values at stake” when an insurance company demutualizes, they note that the foundation created from Economical’s demutualization proceeds is a step in the right direction, a reflection of “the board’s recognition that the value of a mutual insurer does not belong to present-day members alone.”

I’m thrilled to step aside when we get a board that’s going to be more representative of the community we’re serving.

W. G. (Willy) Robinson, board chair, DIF

“Maybe I’ll back up the bus a little bit,” says board chair W. G. (Willy) Robinson. The story of DIF is “one of a kind in Canada, and probably in the world,” she begins. Robinson, whose career spans decades of both corporate and co-operative experiences, was encouraged to apply for the non-mutual policyholders’ committee by her vast network of connections. The CV she brought to her interview with the law firm appointed by the Ontario Superior Court of Justice included an MBA, stints coaching co-operative boards and CEOs in East Africa, and 13 years’ experience as general manager of Halifax’s iNova Credit Union. She also brought an “open mind,” she says, steeped in a belief in co-operatives and mutuals and keen to express this by negotiating in a demutualization process.

The formation of DIF “spoke to my heart in every way,” she says – championing values like equity and community. For Robinson, DIF’s $100 million reflects such values, representing a group of people who, for the 150 years Economical existed, may have died or left town or no longer had a policy but had nonetheless contributed to the company’s $2.4-billion price tag. “The fund is to honour them and the employees both past and present who greatly contributed to this legacy,” she says.

DIF’s story is unique because it’s the product of a demutualization and also because it’s independent. For both committees, this was “really key” Robinson says. Independence from Definity Financial Corporation means more freedom, she says, because “you can do many magical things.” There are, of course, some “inextricable” corporate links – the name, for example. But these “naming rights” come with a commitment made by DIF to give 1% of their pre-tax profits annually, the bulk as restricted gifts, but “we have the right to say no if it doesn’t fit our values,” says Robinson. Definity also has the right to appoint two directors – one of whom is John Bowey. So far, this association has been “phenomenal,” says Robinson, with Definity exceeding their 1% commitment.

We don’t want DIF to go on forever. We want to give the money away, to where it helps, not park it in a bank account.

Willy Robinson

In 2018, Robinson and the board started setting up the foundation, waiting for their $100-million cheque (figuratively speaking). She says their six-member board is “too small and we’re all whiter than white, but of course we understand that needs to change.” This process has already begun, with a recent call for “diverse candidates.” “I’m thrilled to step aside when we get a board that’s going to be more representative of the community we’re serving,” Robinson says. Meanwhile, she’s keen to collaborate, to help strengthen the sector, to give away the money. “We don’t want DIF to go on forever. We want to give the money away, to where it helps, not park it in a bank account.”

Maybe this all sounds “Pollyanna,” Robinson says, even “arrogant,” given that only a few on the board have any significant non-profit-sector experience. “But the other good news is that everybody understands that it’s okay if we stumble and fall. We want to learn and understand the sector and not be afraid to take some risks.”

We wanted to challenge ourselves to figure out how we can really make a difference.

John Bowey

Bowey circles back to Economical’s origin story, to a community “piling on” to put out a barn fire. In a summer where large swaths of the world were on fire, the time for helping out and listening to those with solutions – from climate change to equity – has never been more critical. “We’re not doing this to feel good or have people think well of us,” he says. “We wanted to challenge ourselves to figure out how we can really make a difference,” beginning with hiring Freeman: “We needed an ambassador, somebody who can really carry the flag.”

Currently, Freeman is carrying the flag for “calling it out,” replacing language such as “underserved populations” for specific priority populations DIF intends to serve: Black, Indigenous, other racialized communities, women, and youth. “Data tells us if we’re interested in equity, the best way we can address equity is by providing more support to Black and Indigenous populations, and calling it out,” she says.

DIF already seems to be walking the walk, really working to push their edges.

Wanda Brascoupé, Indigenous Peoples Resilience Fund

Wanda Brascoupé, connector for the Indigenous Peoples Resilience Fund (IPRF) and former executive director of The Circle on Philanthropy, welcomes such a move, noting DIF already seems to be walking the walk, “really working to push their edges.” First, because they reached out to Indigenous communities, asking, “How can we do this better?”; second, because “right off the bat they hired Arti” – a racialized woman with significant experience and a great network – “and they’re trusting her. This alone provides insight into where they want to go,” she says. Third, they have a willingness to be open and transparent in the application process, indicating “they’ve understood that they have the money and what power that brings.”

For Indigenous communities, this last point is key. The Indigenous relationship to money is a new concept, says Brascoupé, and has been used as a tool of oppression by governments and to create false narratives. “The narrative around Indigenous Peoples in Canada is that we are a debt society, and that’s just not the truth. We are a people of abundance,” she says. By prioritizing Indigenous communities, foundations are prioritizing “the brilliance and ingenuity that exists in our communities.” DIF is listening to this, she says, and strategizing for “a more human approach.”

At IPRF, more human means a “high touch” strategy, Brascoupé says – talking to people, answering questions, allowing for video and oral interviews and applications. It means infusing Indigenous ways of knowing into every step, starting with “a deep-rooted humility that every applicant that writes to us is valid and true and necessary to that community.” It means adhering to the principles of an overarching, global, Indigenous worldview: “We are here to walk softly and be amongst the land. Take what you need and leave some for those behind you,” she says.

This worldview is an open invitation. According to the International Institute for Environment and Development, “undoing years of racial injustice that lie at the root of poverty and inequality requires structural reform across economic and environment sectors,” and the Indigenous worldview, one shared by many of the world’s 476 million Indigenous people, offers solutions. Brascoupé distills all the sector jargon into three little words: the good way – Indigenous language, she says, to inform everything we do. She recalls Freeman asking, “How does Definity do it in a good way?” A question she’s likely been honing since the early 1980s at The Oberoi, and one she may just be on the brink of answering.


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