On Sunday, January 22, the Capital Impact family lost a dear friend and colleague, Brad Frost. He will be remembered as an individual of integrity, thoughtfulness, sharp wit, and dedication. Brad wore his passion for Detroit on his sleeve and was an unceasing supporter, critic and advocate for the city and all its residents.
By Ellis Carr, President and CEO
I am excited to kick off 2017 with the news that Capital Impact Partners has earned a ‘AA’ issuer credit rating with a stable outlook from S&P Global!
S&P Global’s analysis recognized our strong asset quality and liquidity, minimal risk profile, and consistent growth in loans and assets. I invite you to read more detail in our press release and S&P’s full analysis report.
By Ellis Carr, President and CEO
As I close out my first year as Capital Impact Partners’ president and CEO, I find myself incredibly humbled and inspired to be part of a movement that is focused on improving the lives of those in communities across this country.
While we continue to make meaningful progress, the results of our Presidential election highlighted incredibly important issues. Individuals across this country – on both sides of the political aisle – made clear their feelings of disenfranchisement. These concerns about equity, opportunity, and access to quality social services touch all of us.
It is certainly a sentiment we share, and one that we’ve been working to address for the past three decades. Yet, as the political landscape changes and policies evolve, we must continue to challenge ourselves to find new ways to push farther and go deeper.
By Olivia Rebanal, Director of Loan Programs
California may be an agricultural center of the nation, but more than one million Californians live in neighborhoods without easy access to a full service grocery store. This lack of access to fresh foods can lead to poor health outcomes and diet-related diseases, including diabetes, heart disease, and obesity. Communities of color are disproportionately affected. Capital Impact Partners has worked for years to address this issue, and to help more communities get access to grocery stores or mobile markets.
By Abigail Suarez, Business Development Officer
A child’s access to education is the stepping stone to a lifetime of successes. Limited or inadequate access can put a child on a path toward a lifetime of struggle. In some communities, access to stellar facilities and a first-rate education is a given. In other communities, it’s a daily struggle against many factors: poverty, crumbling buildings, crime, and lack of resources among them. A community can want its children to have access to a first class education, but without the financial means to build and maintain schools, many places struggle to provide even adequate school facilities.
By Candace Baldwin, Director of Strategy, Aging in Community
Wouldn’t we all like to age in our homes and communities, surrounded by what is familiar, supported by a health care team that really understands who we are and how to serve us as individuals with unique needs? This kind of age-friendly health system has generally been an anomaly in the United States, particularly for low-income, older patients. Coupled with the fact that 90 percent of older adults want to age in their own homes, integrated care models are best supported at the community level.
By Scott Berman, Director, Policy and Development
The lack of capital for real estate projects, community facilities, and small businesses in low-income communities is a problem that spawns a host of other problems. When there is limited access to capital, there are fewer businesses and jobs, fewer sources of affordable housing, and fewer chances for these communities and their residents to enter the economic mainstream of American life. In short, the lack of capital perpetuates the lack of opportunity.
By Katherine Groves & Daniel Ramirez, Loan Originations Team
When Tri-City Health Center (TCHC) opened in Fremont, CA in 1970, it was one of just a handful of clinics serving low-income, minority women from Fremont and the neighboring Alameda county cities of Union City and Hayward.
Since its founding more than 40 years ago, the Tri-City has expanded to include four health clinics, a dedicated dental site, and a mobile health clinic. Together, these sites serve more than 23,500 patients from Fremont, Hayward, Union City, Newark, and San Leandro. As a Federally Qualified Health Center (FQHC), the clinic’s mission is to provide medical and behavioral health care for patients covered by MediCal and other programs under the Affordable Care Act (ACA) umbrella.
Implementation of the ACA has required FQHCs in California to meet a growing demand for services. Tri-City saw an opportunity to meet that demand, but that effort required a significant expansion of its clinic.
That two-step process began with purchasing an existing two-story, 20,000 square foot property in downtown Fremont. To secure the necessary financing, we worked with the Nonprofit Finance Fund (NFF), a partner Community Development Financial Institution. Each organization put in half of the needed $6 million loan in December of 2015.
Now that TCHC owns the building, it needs to complete a major renovation to turn the building into a state-of-the-art medical clinic. Once again we joined with NFF to provide another $2 million in financing to support that effort, with each of us contributing $1 million.
Our Healthier California Fund loan was a perfect source for the capital we needed. We debuted this fund in early 2016 to support health centers and clinics serving low-income patients in California, and to bolster the state’s efforts to meet ACA requirements in new and innovative ways. This project represents our first transaction through the fund!
As a bonus, using the Fund to deliver the Tri-City Health Center financing allowed us to provide a lower interest rate, and helped them put more of their money into services instead of paying off the loan. This deal is win-win-win for them, their patients, and Capital Impact’s mission-driven lending efforts.
There is a lot to like about this project: the new clinic will have ten exam rooms and ten dental exam rooms, and the expansion will allow TCHC to see 8,000 new patients annually. Almost all of these patients are low-income and approximately 70% are Medi-Cal beneficiaries.
The clinic is strategically located near Five Corners, where many people in the area already shop and work. With free parking and access to multiple public transit routes, the clinic will be easily accessible.
This increase in clinic capacity can only improve the care for patients like Maria Guizar, who sought treatment at TCHC for her son Armando’s asthma after several trips to the emergency room failed to provide him relief.
“They referred him to a specialist and thanks to all the treatment, now Armando can play and be a healthy kid. I am very happy with services of TCHC. All the staff has treated me and my family well. Dr. Mogri even tries to speak Spanish and I like that she makes an effort to communicate with me.”
Staff at the clinic speak 20 languages, a necessity in the ethnically-diverse Bay Area. More than a third of the clinic’s patients speak a language other than English, including Maria, who is a native Spanish speaker. Her appointments are attended by a translator so that Maria and Armando get the best health care possible.
“Armando’s condition was making me lose sleep. His condition would have worsened if I had not found Dr. Mogri and TCHC. Dr. Mogri has helped me to improve the life of my family.”
Tri-City has already had a tremendous impact on the area’s low-income residents who otherwise would not have access to quality health care. This expansion makes them that much stronger. That is why all of us at Capital Impact are proud to be part of this project.
At Capital Impact, we’re committed to building stronger communities. While we do this primarily through financing, we also recognize the importance of giving back to the communities in which we live and work.
Capital Impact staff celebrate our commitment to our communities throughout the year with individual contributions and volunteer activities. An annual volunteer event has also been part of Capital Impact’s summer all-staff retreat. This year we took our retreat to Detroit, MI, where we visited several of our project sites and learned more about our place-based strategy in the city.
Driven by another year of strong lending, Capital Impact ended 2015 with a solid financial position. The organization’s overall portfolio increased by $22 million or 11 percent. This growth was matched with continued strong credit performance, as our delinquency rate was just 0.4 percent. Once again, our focus on financial strength and social impact was rewarded with AERIS’ highest possible rating of AAA+1. This honor pleases us greatly.
Top-line revenue continued to grow as well. Net income rose by $11 million — a year-over-year increase of 213 percent. Net assets saw an expected decline as a result of launching our Green House and Cornerstone Partnership programs and the accompanied grant revenue that was used to fund those activities.
We will continue efforts to strengthen our financial position by bringing our lending more on balance sheet, actively managing expenses and implementing capitalization strategies to improve margins.
We will continue to develop and diversify our capital base by building on our Federal Home Loan Bank of Atlanta membership to scale access to flexible capital. Also, we will explore ways to attract impact investors as a means to bolster our social impact while allowing for the ability to provide relevant returns to investors.
We have seen incredible success with these types of programs that raise capital for international projects. And, we intend to harness that same interest domestically as a means of creating access to the critical services that communities need to thrive. Ultimately, we believe these efforts will help us in expanding our reach and impact by 2020.
