The Community Foundation of Grant County announced yesterday their intentions of adding a new investment tool for local growth.

Reiterating their commitment to building a new way to accelerate positive social outcomes, they are introducing a local impact investing program as an extension of its community leadership efforts. The Foundation recognizes that its assets, over 90 percent of which are endowed, positions the organization to bring new tools, such as local impact investing, to address the needs and opportunities of Grant County.

The purpose of the Impact Investing program is to make socially impactful loan investments that provide a financial return and measurably advance a prosperous Grant County via the social return on investment. The program will invest in people, projects, businesses and nonprofit organizations that address economic prosperity, quality of life and access to opportunity for residents of Grant County.

“What we currently do, as many people know, is we we raise a lot of money from very generous people in the community and we invest that money in the stock market,” Dawn Brown, President and CEO of the Community Foundation, told the Chronicle-Tribune over the phone. “We grow it and then we take a portion of that and do a lot of grantmaking to all kinds of nonprofits in Grant County that serve the citizens of our community.”

“We believe that philanthropic capital can further the betterment of Grant County through grants as well as investments,” Brown said in a news release provided to the Chronicle-Tribune. “More than any nonprofit organization, community foundations have the ability to deploy a diverse set of tools to address community needs, including grantmaking, donor engagement and loan investments. As community foundations seek innovative ways to build community wealth and health, more are adopting impact investing strategies to meet growing needs.”

“Basically,” she clarified over the phone, “we’re going to be looking at projects that promote economic prosperity.”

She went on to explain that they hope to support things like small business ideas that focus on “critical issues” – such as Food Insecurity, Financial Wellness, Early Childhood Education or Career Readiness and Workforce – that may be having trouble getting off the ground financially.

“Looking ahead,” she continued, “the Foundation aims to expand and leverage impact investing to unlock additional capital in the form of loans and thus, in turn, more opportunity to pursue and achieve large-scale, lasting positive change... It can aid in growing and strengthening our local small business community.”

The Foundation intends to seek investments that provide social impact and financial return, and that express leadership by growing skills and capacity of local organizations and individuals, collaboration by working in relationship with (and not in competition to) other local capital partners and providers, innovation by addressing community needs and opportunities in creative and new ways and access to opportunity by increasing access for systemically marginalized individuals and organizations including, but not limited to, people of color and women.

The Foundation stated that social impact investing will not replace or diminish the traditional grantmaking efforts of the Foundation, which last year granted more than $1.1 million to nonprofit organizations and charitable causes. The expansion of the Impact Investing Loan Program will only add to the Foundation’s efforts to strengthen the community, they said in the release.

“It’s one of those win-win scenarios where financial return on investment is there, but social return on investment is equally important,” Brown added.

The Foundation plans to allocate up to 10 percent of its investable assets – a current value of approximately $2.8 million – in loan capital for impact investments that advance and address:

• Economic prosperity, especially opportunities to support innovation, entrepreneurship and small business growth and development, specifically including Early Childhood Education and Career Readiness & Workforce Development.

• Quality of life through improved and revitalized neighborhoods and community infrastructure, specifically initiatives that address Food Insecurity and Financial Wellness.

• Access to opportunity, especially for systemically marginalized individuals, businesses and organizations and those overlooked by existing capital providers in our community.

They believe these investments will complement the Foundation’s current investment policy, programs and grantmaking activities, and present creative solutions to widely-understood community challenges or critical gaps in the existing market. The Foundation will continue to follow its investment policy and these impact investments will allow further diversification of the portfolio.

According to the release, investment applications must meet the program guidelines approved by the Foundation’s Board of Directors and will facilitate the local investment of additional charitable capital in response to community needs. Additionally, the potential investment must prove how it accomplishes and relates to the Foundation’s mission and strategic plan. Applications must meet baseline criteria and provide a business plan that includes a plan for repayment. Furthermore, applicants must prove that the request cannot be fully met by existing local capital providers.

“We’re not seeking applicants whose needs can be met by current lenders,” Brown added. “Instead, we’re hoping to partner with other lenders as well as seek referrals from them as a way to fill the gap for social impact projects that might have gone unfunded in the past. In fact, we’ve spent the past month communicating this new program to local lenders and nonprofit organizations that work in this genre and the idea has been well received.”

Finally, the potential investments must build on efforts by the Foundation and/or strategic community stakeholders, and all applications will be subject to a due diligence process.

“90 percent of the money that we have invested is in the stock market through our endowment. So we started thinking, ‘That’s great, but maybe we should take some of that out and just invest in our own local people,’” Brown shared over the phone. “It’s still an investment. It’s just an investment in our own backyard instead of an investment in Wall Street ... it’s an equal type of an investment but it will make a bigger splash that will have a bigger impact.”
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