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December 11, 2014

 

VCC Forum Discusses Impact Investing

4/30/2013

Virginia Community Capital (VCC) has a new partner and an important new role. In 2012, the Richmond-based Cabell Foundation challenged VCC to spread the word about impact investing, an investment opportunity in the philanthropic world receiving new attention. We never pass on a worthwhile challenge and on March 27th, VCC convened a gathering at the Virginia Museum of Fine Arts where representatives from health care conversion foundations, family foundations, large endowments, and investment advisors learned from experts engaged in this innovative approach to philanthropy.

Sometimes called mission or social investing, impact investing could potentially tap enormous resources in the nonprofit sector. Needs far outweigh traditional grant distributions from foundations. Putting portfolios to work through direct investments with qualifying nonprofits expands potential impact in targeted areas of concern while supplying at or below market-rate returns. Specific investment vehicles can include PRIs (program-related investments) and MRIs (mission-related investments). 

AttendeesAttendees (from left) Karl McTaggart, Jane Wilson, Ed Gerardo and Mark Walker

The three panelists at the March event were: Tracy Kartye, Director of Social Investments at the Annie E. Casey Foundation; Mark Constantine, Senior Vice President at the Jessie Ball duPont Fund; and Charles Cabell, former President of the Board at the Cabell Foundation. All three entities have first-hand experience with mission investing.

 Charles Cabell shared candid observations of the process. Considering use of a foundation’s assets is no small task. Each investment requires a particular underwriting strategy. Finding the correct partner to leverage the investment is an important consideration.

The Cabell Foundation’s board looked carefully at VCC and liked what they saw on three counts. First, VCC had worked consistently and successfully with a Cabell beneficiary, the Better Housing Coalition. Second, the VCC mission of building stronger communities across Virginia matched Cabell’s priorities. Finally, the investment promised a four percent return.

Cabell’s first MRI includes a preferred stock purchase from VCC. The partnership supports ongoing work at VCC. The Jessie Ball duPont Fund has awarded its second PRI to VCC for work in Virginia’s Northern Neck.   

Guest Speakers(Click to enlarge)

VCC has joined the Mission Investors Exchange, a community where philanthropic innovators exchange ideas, tools, and experiences to increase the impact of their capital (missioninvestors.org). Jessie Ball duPont Fund is also a member, and one of our panelists, Tracy Kartye, is on the Mission Investors Exchange Steering Committee. 

“Impact investing offers value for both sides of the partnership—for foundations and for nonprofits engaged in community and economic development,” notes Jane Henderson, VCC President and CEO. “We look forward to building new partnerships with Virginia foundations looking to multiply impact and transform communities in the process.”

Impact investing can work for foundations of all sizes, from multi-million-dollar funds to local family foundations. VCC has resources and knowledge to help you navigate this space.

Contact Teri Lovelace, Vice President of Corporate Development, at tlovelace@vccva.orgor 804.344.5484, Ext. 125, to learn more.

About Virginia Community Capital:
With offices in Christiansburg, Richmond, and Springfield, Virginia Community Capital (VCC) is dedicated to the prospect of building wealth for all through our lending, deposits, and advisory services. As a community development financial institution (CDFI), our mission is to offer innovative, flexible financial products designed to support housing and community development ventures, increase jobs, and encourage sustainable communities. In partnership with our for-profit bank, Community Capital Bank of Virginia (CCB), the non-profit VCC offers loan capital broader and more flexible than bank lending in low-to-moderate income communities in underserved geographies and markets. Learn more at  vacommunitycapital.org.