The Kresge Foundation in Troy, Michigan, has announced $16 million in impact investments in community development finance institutions (CDFIs) and development finance agencies (DFAs) working to expand opportunity for low-income people in cities across the country.
In the second and final round of funding through the $30 million Kresge Community Finance initiative, the program-related investments — which pair standardized loans with equity grants equivalent to 5 percent of the loan amounts — were awarded to nine community lenders. Recipients include the Self-Help Ventures Fund, which was awarded $3 million to support community-led and sustainable food systems, with a focus on North Carolina and Illinois; the National Housing Trust, which will receive $2.5 million for a fund that supports the creation and preservation of energy-efficient affordable housing in the District of Columbia's Wards 7 and 8; Capital Impact Partners, which was awarded $1 million in support of its partnership with the Memphis Medical District Collaborative to finance and promote community development, residential density, and walkability; and the Council for Native Hawaiian Advancement, which will receive $500,000 to expand opportunities for native Hawaiians and the organizations that serve them.
"By using a standard loan structure, we aim to demonstrate to newcomers in the social investing space that driving capital to the communities they care about does not have to mean expensive transactions that are difficult to structure and manage," said Joe Evans, portfolio manager in Kresge's Social Investment Practice. "We also paired these investments with equity grants to highlight the essential need nonprofit lending programs have for that type of support."
In 2015 the foundation announced that it would make $350 million in social investments by 2020. "To move that amount of money, we need to balance investments that advance our mission with risk and portfolio considerations," said managing director of Social Investments Practice Kimberlee Cornett. "The demand for KCF proved to us that there is a market for this type of product, and we're thrilled to invest in such a range of capable, community-driven lenders."