Donors Forum

Impact Investing Locally

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On May 20, 2024, The Community Foundation for Northeast Florida hosted a Donors Forum at the Jessie Ball duPont Center on Impact Investing Locally, to discuss impact investing and examples and opportunities in the Northeast Florida region. The program opened with an introduction by Tom Caron, who introduced the keynote speaker – Zineb Touzani, Senior Associate with Mission Investors Exchange (MIE) of Tampa, Florida. Mission Investors Exchange has more than 250 member organizations and is an impact investing network for foundations, philanthropic asset owners, and their partners, dedicated to deploying capital for social and environmental change. MIE provides resources, educational programming, inspiration, and connections that help organizations increase the scale and impact of investing work.

Following Ms. Touzani, Chris Crothers, Director of Impact Investing for the Jessie Ball duPont Fund, shared a private foundation perspective on impact investing. Following that, Executive Vice-President and Chief Financial Officer Grace Sacerdote, Senior Director of Finance Erin Broderick, and Senior Director of Grant Making & Impact James Coggin of The Community Foundation discussed impact investing at the Foundation.

The forum concluded with a question-and-answer session.

Overview of Zineb Touzani’s keynote remarks:
  • The term impact investing was coined in 2007, but the practice has been around for a long time. It is a way of thinking, rather than a method of investing.
  • Some of the most important aspects of impact investing are intentionality and the ability to pursue multiple objectives at the same time.
  • There is a spectrum of impact investing that includes:

    • Responsible impact investing – focused on screening out “sin” stocks and eliminating negative factors from investing (closest to traditional investing with financial return emphasis)
    • Sustainable impact investing – building on responsible impact investing, but focusing on positive screening for environmental-social-governance (ESG) factors
    • Thematic impact investing – moving more toward philanthropy, with thematic investment decisions driven by both financial returns and social/environmental factors
    • Impact-first investing – prioritizing social/environmental impacts over financial returns, and the closest to philanthropic giving; can include piloting new initiatives
  • Impact investing takes place in multiple asset classes, with varying degrees of risk – with below-market and above-market investments having the greatest risks, and assets like cash or guarantees having the least risk.
  • There are many players in the space of impact investing, including impact investors, impactees, many supports and tools, and collaborators such as government entities, civic/community-based organizations, and grant partners.
  • Two important terms in the space are:

    • Program-related investments (PRIs) – Primary purpose is to accomplish a charitable goal; no financial-first endeavors
    • Mission-related investments (MRIs) – Further an organization’s mission while generating financial capital; positive impact, while contributing to financial stability and growth
  • Impact investing achieves many possible outcomes, including innovation, common-wealth building, racial equity, and economic mobility.
  • It allows for recycling of capital and the ability to fund or invest in typically underfunded areas, and it can attract other forms of capital.
  • Impact investing can allow for the scaling of solutions.
  • Grants play an important role in impact investing and can be used to build an investment pipeline, build capacity, and measure impact.
  • First national impact investing example: ReBUILD Metro’s Johnston Square Impact Notes, Baltimore MD

    • Used to revitalize the neighborhood by redeveloping blighted homes and converting vacant lots into greenspace
    • The Baltimore Community Foundation made a $100K lead investment, which led to $1M in co-investment from the donor network
  • Second national impact investing example: Dearfield Fund for Black Wealth, Denver CO

    • Provides down payment assistance to first-time Black homebuyers to help build generational wealth; assistance is paid back when homeowners sell or refinance their homes
    • $4.5M ($2.5M seeded by Gary Community Ventures and joined by other partners), which was deployed to more than 100 families in the first year
  • In a survey of more than 47 different types of foundations across the country, the top mission/thematic areas considered for impact investing included community and economic development, racial equity and inclusion, local/place based, housing, environment, employment, education, and health.
  • While many think of impact investing as a new idea and a means for innovation, it has the potential to meet basic needs of communities and to reach those who may not be reachable through the mainstream market – for example, lifting people out of poverty, helping people get loans who do not have access to big banks, etc.

Overview of Chris Crothers’ remarks:

  • It is important to align investing with an organization’s mission and values. At the Jessie Ball duPont Fund, there are two investment line items:

    • Equity – “Access to” affordable housing, affordable capital, health care, etc.
    • Place-making – “Sense of belonging”; the organization’s largest impact investment is $20M in the Jessie Ball duPont Center, which offers office space and state-of-the-art technology for 21 area non-profits
  • Fifty-two percent of the organization’s portfolio is in intentional investing, and that is positioned to grow even more.
  • The most important things that the Fund has done to encourage more impact investing are:

    • Engaging trustees by providing learning experiences and experimenting with different kinds of impact investing
    • Utilizing experts to help learn about the field, including hiring a new advisor specifically for the field of impact investing
    • Collaboration with other like-minded organizations (like The Community Foundation) to mitigate risk and have a greater impact

Overview of remarks from The Community Foundation executives:

  • In 2018, the Foundation embarked on its first donor-recommended PRI.
  • By the end of 2018, the board had created and approved recommendations for PRI investment. These include the understanding that strategically invested capital can achieve both a social outcome and a financial return, an eye on sustainability, and measurable results.
  • The Foundation’s role is often to fill a gap where an organization may not be able to quality for traditional financing, and it focuses on impact-first investing.
  • A local capital pool has been created that is designed to identify places in the market where there are capital gaps and capital access issues. The goal is to provide a bridge from communities to capital sources.
  • To date, there have been six closed PRIs, with three more in the pipeline. At a minimum, these investments involve a return of the principal.
  • These investments are also next-generation investing, in that the return of capital will be used for further investing down the road.
  • Initiatives have included:

    • Loan to a non-profit to develop single-family housing, including capital for acquisition, pre-development, rehabilitation, and construction
    • A $1M loan to LISC, which also provides a loan guarantee to mitigate risk, both strengthening the non-profit and the families who are able to move into homes in the neighborhood
    • A $1M loan to the Black Business Investment Fund, to allow it to build a pool of capital to further assist in small business growth
  • In partnership with the Jessie Ball duPont Fund, examples of collaborative initiatives include:

    • The Foundation and the Fund purchased CDs to allow Self-Help Credit Union, which focuses on underserved clients, build up its depository so it could provide more loans in the area.
    • The Jacksonville Affordable Housing Fund is a public-private partnership created to help with both acquisition and a longer-term financing component to help entities put affordable housing units into the market.

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