More Indiana Foundations Embrace Local Impact Investing
A growing group of Indiana foundations are moving portions of their investments back to the state to be invested in childcare, housing, small businesses, and quality of life. Leaning into their role as community leaders, these foundations are taking steps to engage in community conversations, leverage partnerships, and bring more and different resources to bear on priorities and needs in their place. Local impact investing is proving to be an important tool in this effort.
Last year, LOCUS Impact Investing and Indiana Philanthropy Alliance (IPA)—through the IPA GIFT Technical Assistance Program—launched the Indiana Local Impact Investing Accelerator. Four community foundations joined the Accelerator to explore the potential for local impact investments and build the understanding and capacity to invest their endowments in their home communities. The result was a pledge by each foundation to build a local impact investing program unique to needs and opportunities in their place: a commitment that will infuse new dollars—in addition to their traditional grant and scholarship programs—into their local communities.
One example is the Community Foundation of Grant County, which is using a portion of its endowment as collateral for individuals needing personal loans. Working with Afena Federal Credit Union, this alternative to payday lenders provides Grant County residents the capital they need at rates and repayment timelines that reduce the potential for nonpayment while building credit for the individuals and families borrowing the funds.
Inspired by the success of their peers and desire to do more, in 2022 five additional community foundations have joined the Indiana Local Impact Investing Accelerator. Designed by LOCUS Impact Investing, this Accelerator builds the understanding and capacity of the participating foundation staff and board members through a “learn by doing” curriculum and individualized coaching. The result will be a locally relevant strategy based on the values, assets, and opportunities of the counties served by each foundation.
“The Accelerator engages board members, in addition to foundation staff – building their understanding and language to be advocates for this new approach. That is really powerful,” shared Amy Haacker of Indiana Philanthropy Alliance.
2022 participants include Blue River Community Foundation, Community Foundation of Noble County, Community Foundation of Wabash County, Huntington County Community Foundation, and Wayne County Community Foundation.
Throughout the year, the Accelerator participants will learn from experienced local impact investing guides and field leaders. They will ask questions of themselves and their community. They will discover the necessary steps to identify and evaluate potential investments, and build policies and processes for their program.
“We are excited to take this journey with other community foundations as we strive to be a catalyst for positive change in Noble County, " said Brad Graden of Community Foundation of Noble County.
In the most recent workshop, the Accelerator cohort explored what it takes to design an effective and equitable place-based investing program. They heard first-hand from the CEO and board chair of the Topeka Community Foundation about their motivations for becoming local investors, as well as their approach to communicating this new role to the community.
In 2021, the Topeka Community Foundation committed 5% of their investment portfolio to local impact investments. Since that time, they have invested in an early learning center located in a childcare desert and have partnered with a housing nonprofit to eliminate Contract for Deed mortgages, a predatory lending product that impedes homeownership in low-income neighborhoods.
With IPA’s successful partnership with LOCUS Impact Investing and the launch of a second Accelerator cohort, Indiana foundations are catalyzing an impact investing movement with potential to bring more than $200 million currently invested in financial markets back to Indiana communities. That would more than double the amount of dollars circulating locally to improve the quality of life for all residents.
“Over the years, BRCF has played the role not only of funders, but also of leader, connecter, and convener within our community. After discussing the Accelerator with members of the first cohort, it was obvious that impact investing is the next step in advancing our community impact,” shared Jennifer Jones of Blue River Community Foundation.
As a result of the success of the Indiana Accelerator, LOCUS Impact Investing is exploring the launch of additional Accelerators in the Midwest and Southeast, and a national sector-focused Accelerator for health legacy foundations. To learn more about the Accelerator model or how LOCUS may help your foundation build or grow its placed-based impact investing program, contact Lisa O’Mara. Indiana community foundations interested in the next cohort can contact Sarah Origer, IPA's director of GIFT Techical Assistance.