The Heron Foundation expands philanthropy's reach

Contrary to the perception of trade-offs between financial return and social impact, the F.B. Heron Foundation demonstrates that it’s possible to achieve competitive returns while incorporating mission-related investments into an overall portfolio and asset allocation.Community development

Capital markets for community development lenders: questions & answers

Southern New Hampshire University professor Michael Swack answers basic questions about capital markets and explains how community development lenders can raise their capacity by tapping into these markets.Community development ; Capital market ; Loans

Expanding Philanthropy’s Reach

When New York’s F.B. Heron Foundation, a private, grant-making institution, was created, it had a mandate to invest assets and donate 5 percent of returns annually to help low-income people and communities to help themselves.1 The year was 1992, the cusp of one of the greatest economic booms in U.S. history. But as Heron’s asset base swelled, 5 percent for community work began to look insufficient to help the many Americans who were missing out on the boom. In a 1996 meeting, directors realized they were spending too much time reviewing a particular investment manager’s performance and too little time discussing Heron programs. It was time to reevaluate priorities. The foundation’s social mission and tax-exempt status suggested that it should be more than a private investment company using excess cash for charitable purposes. It needed to be different from conventional investment managers. Heron concluded that the 5 percent payout requirement was the narrowest expression of its philanthropic goals. The other 95 percent of assets, the corpus, could give the board the tools it needed for greater social impact. Staff members were encouraged to explore ways in which Heron could engage more of its assets through a combination of grants and mission-related investment strategies.2 The foundation decided to leverage an increasing amount of its resources to pursue its mission and to maximize its impact in low-income communities

Scaling U.S. Community Investing: The Investor Product Interface

"Community investing" is investment that seeks to deliver social benefits to low-income or marginalized communities while also generating a financial return. This report provides an overview of the U.S. Community Investing (USCI) field: the types of intermediary organizations raising investments and deploying them in underserved communities, the range of investment products that are available, and the types of investors active in the space. In so doing, this study surfaces several key barriers and opportunities for scaling private investment in the USCI space

The Potential Role For CDFIs in the Opportunity Zones of the Investing in Opportunities Act (IIOA)

The Opportunity Zones legislation was designed to mobilize new levels of capital into low- and moderate-income (LMI) communities – areas that have historically been overlooked and underserved by mainstream capital markets. As longstanding financial partners to LMI communities, Community Development Financial Institutions (CDFIs), it would seem, are positioned to play a pivotal role in the Opportunity Zones ecosystem. Yet the legislation presents a challenge on that front. As the law dictates, the mechanism through which Qualified Opportunity Zone Fund investments must be made are equity instruments, while CDFIs tend to operate more on the lending side. For this reason, the CDFI industry has struggled to determine exactly how it can harness the potential power of the Opportunity Zones tax incentive to advance their efforts to support LMI communities. This report, then, is timely. As our partners at the University of New Hampshire’s Center for Impact Finance show in the pages that follow, there is indeed a role for CDFIs in the emerging Opportunity Zones space – or, more accurately, several potential roles, both financial and non-financial alike. Enterprise is proud to support this report and is grateful for its contribution to the field. It is now up to us, as CDFIs and mission-aligned partners, to convert the ideas held within this report into action. In so doing, we can help realize the original intent of the Opportunity Zones legislation: to responsibly direct significant capital into communities that have been financially marginalized for too long

Financial Innovations Roundtable: Developing practical solutions to scale up integrated community development strategies

Essays from experts affiliated with the “think-do” tank , the Financial Innovations Roundtable, housed at the Carsey Institute at the University of New Hampshire

The experience of the New Hampshire Community Loan Fund in mainstreaming of acquisition loans to cooperative manufactured housing communities

This study aimed to provide evidence of the extent to which a financial product―land acquisition loans for manufactured home parks―performed well and was adopted by mainstream financial institutions. The study hypothesized that The New Hampshire Community Loan Fund’s effective introduction of the new loan product, coupled with excellent loan performance, led banks to adopt the loan product

CDFIs Stepping into the Breach: An Impact Evaluation—Summary Report

This report summarizes research undertaken by the Carsey School of Public Policy to evaluate impacts of the Community Development Financial Institutions (CDFI) Fund on CDFIs and of the CDFI industry on the people and communities it serves. In summary, we find a variety of evidence indicating that CDFIs are advancing the statutory purposes of the CDFI Fund to promote economic revitalization and community development through the provision of credit, capital and financial services to underserved populations and communities in the United State

CDFIs and Online Business Lending: A Review of Recent Progress, Challenges, and Opportunities

The report, authored by Jack Northrup, Eric Hangen, and Michael Swack, looks at some of the issues CDFIs face as the fintech industry (technology companies involved in lending) grows and begins to target markets served by CDFIs