This blog also appears on the Engage R + D blog. You can find it here.
How can foundation dollars be more powerful in a time of crisis? As COVID-19 continues to disproportionately impact communities that have long experienced economic disinvestment, many are asking how to leverage philanthropic funding differently for more immediate impact and greater social good. One solution comes in the form of impact investing, which includes a range of financial tools for both individuals and institutions seeking to do greater good with their dollars. While impact investing is not new, it is a powerful tool that many foundations seek to better understand and that remains relatively underused in philanthropy. ,
Grants vs. PRIs: What’s the Difference?
Grants are most foundations’ bread and butter. They support a foundation’s charitable mission and are limited to 501(c)3 tax-exempt organizations. Grants do not require repayment.
PRIs are an IRS designation that allow private foundations to make charitable, mission-aligned investments. These investments typically take the form of low-cost financing and loans, which require repayment within a specified time. While many require a return or accrue interest, they are not expected to produce market-rate returns.
We are excited to announce that Capital Impact Partners and CDC Small Business Finance are formally coming together to launch a transformative new enterprise and innovate how capital and investments flow into historically disinvested communities to advance economic empowerment and equitable wealth creation.
Leveraging our 80 years of experience, nearly $3 billion in assets, and strong ties to both large financial institutions and community-based organizations, Capital Impact Partners, and CDC Small Business Finance, the nation’s leading mission-based small business lender are now operating as one under Capital Impact’s current President and Chief Executive Officer Ellis Carr.
By Ellis Carr, President and CEO
At Capital Impact Partners, we condemn the recent and ongoing acts of violence against our Asian-American and Pacific Islander (AAPI) community, and are fervently opposed to any language or thoughts that justify or lend themselves to such terrible acts.
In February, our President and CEO Ellis Carr sat down with the Greater Washington Partnership’s CEO J.B. Holston for a conversation about economic power and inclusive growth in disinvested communities, and the role that Community Development Financial Institutions (CDFIs) play in transforming communities nationwide into places of opportunity, including in the Washington Metro area.
CDFIs have long operated hand-in-hand with our neighbors, living and working in close proximity to the communities in which we invest; community investment is at the center of our work. Working shoulder-to-shoulder with communities, we help foster the future they see for themselves, using inherent community assets to build an equitable and prosperous future. That community-centric approach helps us create tools and solutions that both work for communities and foster transformative change.
As of April 1, 20210, Ellis Carr, is now the president and CEO of Capital Impact Partners and CEO of CDC Small Business Finance. Kurt Chilcott, formerly president and CEO of CDC Small Business Finance, is transitioning to Board Chair of both organizations.
With a mission to empower equitable community growth, CDC Small Business Finance and Capital Impact Partners recently launched three place-based pilot programs as part of our new alliance. The pilots are in Detroit, Los Angeles, and Washington, D.C. Metropolitan (D.M.V). Cross-organizational teams have been engaging with these communities to identify the unique issues of each city.
As part of the alliance’s focus on Detroit, CDC Small Business Finance’s CEO, Kurt Chilcott, and Capital Impact Partners CEO, Ellis Carr recently wrote an op-ed about their holistic approach to community and economic development that was published in The Detroit News.
Since COVID-19 began, times have been incredibly trying for many across the country. Schools and teachers have been particularly hard-hit, having to figure out what education looks like in this new reality. It has been grueling, the hours have been long, and all of this has taken place as teachers and school staff fear for the health and safety of their students, loved ones, and themselves.
By Ashlee Cunningham, Senior Specialist, Housing and Community Development
In Detroit, long-term disinvestment in the city’s neighborhoods has led to unequitable barriers to opportunity. Systemic racism and disenfranchisement limited opportunities for many Detroiters, more than 80 percent of whom are Black. That has kept many people from securing equitable access to safe, affordable housing; starting businesses; and other pathways to wealth building. As Detroit has worked to overcome bankruptcy, investment in the city has compounded these issues by leaving people living with low incomes with little ability to keep up with the pace of growth and gentrification for the neighborhoods they have called home for decades.