Impact investing by community foundations is not a new thing. Back in 2012, for example, the Council on Foundations brought together leaders from the worlds of impact investing and community foundations to help more local funders get going with impact investing. That effort led to a handy field guide to this topic in 2013, produced by COF and Mission Investors Exchange. A year later, the Democracy Collaborative released a study, "A New Anchor Mission for a New Century," which analyzed how 30 innovative community foundations were engaged in impact investing, often around housing and economic development, two areas where larger amounts of capital are needed to move the needle.
Since then, impact investing has drawn ever more attention from foundations of all kinds, and we've seen some major forays into impact investing by community foundations. Most notably, the Chicago Community Trust helped to catalyze Benefit Chicago, a $100 million effort to mobilize nonprofit impact investments in the city.
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All that said, impact investing is hardly taking the community foundation world by storm. These institutions tend to face greater constraints than private foundations, starting with the fact that much of their wealth is often tied up in donor-advised funds, as opposed to unrestricted endowments. Also, for all the hype around impact investing, plenty of foundation presidents and board members remain skeptical about this strategy, and for some understandable reasons. Across the country, most community foundations stick to tried-and-true strategies involving grants and outright gifts.
But new impact investing initiatives by community foundations keep popping up. Last month, we reported that the Coastal Community Foundation (CCF) in Charleston, South Carolina, was putting aside $3 million for impact investments. Also last month, the Community Foundation of Greater Atlanta (CFGA) launched an impact investment fund—one that has similarities to Benefit Chicago.
Using $10 million of the community foundation’s unrestricted assets, CFGA seeded a new fund that will also be open to other donors who’d love to do something good and see a financial return at the same time. There’s been a steady increase in charitable donors in the Atlanta area and throughout the Southeast in recent years. And here, as elsewhere, there's a growing slice of donors—often younger folks from business—who are keen to advance change through market-based strategies as well as traditional grantmaking.
The GoATL Fund is the first local impact investing fund in Atlanta, and the idea is to bring new capital to key challenges facing the city by lowering the barriers to making social investments.
The GoATL Fund’s first investment is going toward the Atlanta Neighborhood Development Partnership (ANDP) to expand housing affordability and single-family home revitalization programs. That reflects a big movement lately around impact investing related to affordable housing.
Interestingly, though, CFGA’s new fund ultimately aims to address all five of the foundation's grantmaking areas: the arts, community development, nonprofit effectiveness, education and well-being. Development authorities, nonprofits, and for-profit entities will all be considered for these investments.
The point person for this effort is Mark Crosswell, who serves as CFGA’s managing director of social impact strategy and oversees the GoATL fund. He’s optimistic that future investment capital will come from the foundation’s many donors, and that the fund will be able to ramp up and grow. In 2017, CFGA raked in more than $144 million donations, bringing its total assets up over $1.1 billion—another sign of the boom in regional philanthropy that we report on often.
Not only has CFGA become really interested in impact investing lately, but it’s also working to educate other funders about it across the state. Crosswell and his team are helping to lead a group of stakeholders in the Georgia Social Impact Collaborative, aiming to catalyze a regional movement.
Like many apostles of impact investing, Crosswell is keen to tap into new reservoirs of capital in an era when there's acute limits on the traditional resources available for making change.
Our metro area communities have the same social ills that they had 30 and 40 years ago. Though our population has exploded and the economy is booming, disparities continue to grow among income levels, and many lack access to quality healthcare, education or opportunity. With public funding on a continual decline and with insufficient philanthropic assets to address all these issues, one of the best hopes is the emergence of impact investing.
At this time, CFGA does not provide details about how to apply for impact investing support through the GoATL Fund. Beyond the city of Atlanta, the community foundation serves a 23-county region in Georgia.