June 25, 2024
A 25-year history of collaboration in Essex County paves the way for new investment in the region

Foundation, investors and social innovators learn more about impact investing together

By Michelle Xiarhos Curran

Over the course of three days in May, more than 120 investors, innovators and cross-sector community leaders gathered at Smith Hall at Essex North Shore Agricultural and Technical School in Danvers.

Invited by ECCF, they were there to take part in the critical first step of building and supporting an ecosystem that could increase the social investment in Essex County and significantly contribute to the equitable economic development of the region.

ECCF’s Stratton Lloyd explains the investment continuum while Dr. Stephanie Gripne of Impact Finance Center looks on.

For the last 18 months, ECCF, in partnership with Colorado-based Impact Finance Center (IFC), has been exploring the concept of place-based impact investing, a strategy that involves investing in organizations, funds or programs to pair financial returns with significant and positive social or environmental impacts. In May, ECCF and IFC – an organization that helps build impact investor communities and connect them with leaders who will use those resources to solve big challenges – collaborated to help conference attendees better understand the impact this type of investment could have on the cities and towns of Essex County.

“If we invested in solving our social challenges the way we invest in the stock market – even at a small percentage of the region’s wealth – we’d have enough money to fix our problems,” said Stratton Lloyd, ECCF’s executive vice president and COO.

The ultimate goal of this work is to identify, educate and activate thousands of investors while simultaneously preparing nonprofits and social innovators to become “investor ready.” The magic happens when the two sides connect to elevate the social good taking place every day across the region in areas like arts and culture and affordable housing: two focuses of the May conference. ECCF’s exploratory journey into impact investing – and the role the foundation could play in this new ecosystem – is a natural evolution of ECCF’s systems-philanthropy approach to problem solving, based on data and trusted partnerships.

“Throughout ECCF’s 25-year history, one of our strengths has always been our ability to convene and connect people,” said Lloyd. “Time and time again, we’ve leveraged this ability to expand our collaborative impact.”

“We envision a future in which ECCF acts as the impact investing hub of Essex County, and we believe this can make a positive difference in our region,” he added.

The work to explore these new possibilities has been made possible by funding from the Gilson Family Foundation and the Barr Foundation.

ECCF and Impact Investing

Dr. Stephanie Gripne, founder and CEO of Impact Finance Center, said during the conference opening that community foundations are so critical to building this ecosystem because they are among the places people go to thoughtfully and compassionately break bread with others in the community.

“If you think about community foundations and other anchor institutions, they are places where people show up in community across the aisle and show up across difference,” said Gripne. “I think of community foundations as the root system of civil society.”

And within the context of a community foundation, impact investing – which sits directly in the middle of an investment continuum that

Fr. Jarred Mercer of The Resettlement Project, Andrew DeFranza of Harborlight Homes and Jessica Andors of Lawrence CommunityWorks discuss current housing initiatives that would benefit from impact investments.

starts with pure philanthropy and ends with traditional investing – can play a vital role, not only in amplifying the work of individual nonprofits and social ventures, but in creating a sustainable system of support for permanent change.

The first two days of the conference focused on gathering investors interested in arts and culture and affordable housing and examining national case studies in which impact investments – in the form of recoverable grants, low-interest mortgages or program related investments repaid at below-market rates – transformed the work and capacity of a nonprofit.

Then, each of the first two days ended with a selection of local nonprofit leaders who presented current opportunities for investors interested in supporting their work with an impact investment.

“If you want us to be able to produce in scale, we need to be able to have our own capital or very low-cost capital,” explained Jessica Andors, executive director of Lawrence CommunityWorks (LCW), a nonprofit community development corporation, and one of three organizations attending the conference to talk about housing projects ripe for impact investments.

LCW is currently working on projects to add hundreds of affordable housing units and tens of thousands of square feet of commercial space to neighborhoods across Lawrence, with plans to increase access to food and healthcare included. But planning and funding this vital neighborhood revitalization work is complicated, often requiring LCW to purchase and hold buildings – for months or even longer – before construction can begin.

“If I had more investors at low interest rates, I could save hundreds of thousands of dollars,” said Andors. “That kind of money is really big for us.”

The LCW story was similar to other stories told by leaders of local nonprofits – including Harborlight Homes, The Resettlement Partnership, Creative Haverhill and Western Avenue Studios – during the conference. And it represents one of many investment opportunities across Essex County that highlights the demand for innovative funding to help move our region forward.

In fact, in a sampling of just 75 local nonprofits, ECCF and Impact Finance Center identified 128 potential impact investment opportunities across the region.

Calling all Social Ventures

ECCF’s Beth Francis talks about developing an impact investing ecosystem in Essex County.

On May 23, the third day of the conference, dozens of nonprofit leaders and social innovators – people and organizations working hard every day to improve the quality of life in Essex County – filed into Smith Hall at Essex Tech. There was a buzz in the air as Dr. Gripne, from Impact Finance Center, wowed them with a fact: that nearly $140 billion in untapped wealth exists right now in our region.

What if just 5% of that wealth was used to make impact investments in arts and culture, affordable housing, workforce development programs or food access?

“You have enough money in Essex County to solve your problems,” Gripne said. “We absolutely need to get you more grant funding. But can we use impact investing to help reduce your expenses? Yes!”

The Museum of Contemporary Art in Denver, Gripne held up as an example, had an expiring adjustable-rate mortgage at 10.5 percent. With the support of impact investors, the museum was able to refinance the loan at one percent. This resulted in $565,000 in savings each year.

“It’s as if the museum was receiving a $500,000 unrestricted grant each year,” Gripne said.

ECCF wants to find out if we can build a robust, vibrant place-based ecosystem that would make investments like this increasingly possible right here in Essex County. The foundation is working with Impact Finance Center to find the “easy button” with which to do that.

“As a community foundation, we care about the thrivability of the 34 city and towns of Essex County,” said Beth Francis, president and CEO of ECCF. “And we’re on a journey to explore what the sector needs, what our role is and how we can structure something that works.”

“Showing up here today is the first step,” Lloyd told attendees.

Next, ECCF hopes to create a catalog of local impact investment opportunities, while continuing to widen the circle of donors and investors who understand and value the transformative impacts this form of funding could have on nonprofit work, capacity and innovation in Essex County.

“I can see the ripple effect this can all have,” said Julie Barry, arts and culture planner for the City of Salem. “I’m leaving with seedlings of ideas that give hope.”

To become part of this impact investment exploratory journey, please contact Stratton Lloyd at s.lloyd@eccf.org.

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