{"id":24234,"date":"2019-03-04T14:43:10","date_gmt":"2019-03-04T19:43:10","guid":{"rendered":"https:\/\/test.greenmoney.com\/2025\/?p=24234"},"modified":"2020-07-31T15:46:49","modified_gmt":"2020-07-31T19:46:49","slug":"the-capacities-foundations-need-to-embark-on-place-based-impact-investing","status":"publish","type":"post","link":"https:\/\/test.greenmoney.com\/2025\/the-capacities-foundations-need-to-embark-on-place-based-impact-investing\/","title":{"rendered":"The Capacities Foundations Need to Embark on Place-Based Impact Investing"},"content":{"rendered":"
>> Back to March 2019<\/a><\/div>\n

\"\"Place-based impact investing is a burgeoning<\/strong><\/a> strategy to spark community development projects, create more just, equitable local economies, and build prosperous, vibrant communities. Place-focused foundations, like community foundations, family foundations and healthcare conversion foundations, are exploring ways to complement their traditional grant making with local investments that can catalyze positive community change. The LOCUS Impact Investing<\/a><\/strong> team has partnered with nearly 30 place-focused foundations \u2013 large and small \u2013 as they explore their role in community economic development, unlock more of their assets, and deploy dollars to amplify their impact and catalyze economic development in their communities. In many ways, their journey has become our journey, and we are learning along the way.<\/p>\n

Through this work, we\u2019ve observed a pattern to this place-based impact investing journey that we have incorporated into our fundamentals for designing and implementing an effective place-based impact investment strategy. These fundamentals include exploring <\/strong>a foundation\u2019s place, opportunities and capacities for local impact investing; unlocking<\/strong> a foundation\u2019s assets for this type of investing, ensuring the right ecosystem partners are aligned and the internal policies and processes are in place; and smartly deploying <\/strong>investment dollars to enhance mission while also mitigating risk. While this seems like a linear path, it is really an iterative journey.<\/p>\n

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Foundations step into local impact investing for many different reasons \u2013 a leadership change, an opportunistic investment, a donor push, encouragement from peers, or an endowment assessment. Whatever the genesis, exploring local impact investing requires education and learning with board, staff and community partners. Often that includes learning what others have done and connecting with like-minded foundations through peer learnings like the BALLE Local Economy Foundation Circle<\/strong>or through Mission Investors Exchange<\/strong><\/a> bootcamps. Regional area grantmakers may be a resource; both the Council of Michigan Foundations<\/a><\/strong> and the Minnesota Council on Foundations<\/strong><\/a> have internal resources dedicated to impact investing that are available to members. Place-focused foundations can also learn from the experiences of private foundations like the Surdna Foundation<\/a>, Russell Family Foundation<\/a><\/strong> and the KL Felicitas Foundation<\/strong><\/a>, many of whom have documented their journeys<\/a><\/strong> and lessons learned<\/a><\/strong>.<\/p>\n

An important step in this exploration phase is to understand the local impact investing ecosystem and build relationships with community investment partners, like community development financial institutions CDFIs<\/strong><\/a>, affordable housing organizations and developers, Community Development Corporations CDCs<\/a><\/strong>, microlenders, accelerators and incubators. LOCUS has helped several foundations and regional funders explore local impact investing, including the Greenville Partnership for Philanthropy, to broaden awareness of the area\u2019s investment landscape and possibilities. We are also partnering with The Aspen Institute Community Strategies Group<\/a><\/strong>, with support from the Kansas Health Foundation<\/a><\/strong>, to facilitate a statewide peer learning cohort of Kansas community foundations to explore together how they can strengthen their role in economic development, including use of place-based impact investing.<\/p>\n

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A few years ago, the predominant question foundations asked about place-based impact investing was \u201cwhy<\/strong>?\u201d<\/em> Today, the question is \u201chow<\/strong><\/em>?\u201d Once a foundation asks this question, there\u2019s both internal and external work needed to unlock more of their assets. Internally, investment policies and processes need to be crafted, resources need to be allocated, and internal capacities built. Often, a foundation will engage an impact investment advisor, as Surdna did, to help them look introspectively and answer some tough questions: <\/strong><\/em><\/p>\n