Vital Healthcare Capital (V-Cap) is a Boston-based social impact fund formed in late 2014 that serves a niche market—providing financial assistance to health care providers in low-income communities. V-Cap is focused on a niche that excites a lot of funders these days: improving health care in low-income communities while also bolstering job opportunities, working to build ladders of upward opportunity in a health care sector that is slated to expand in coming years.
The organization evolved after a few years of research and development with seed money supplied by the Robert Wood Johnson, Ford, and Rockefeller Foundations, as well as support from the Service Employees International Union (SEIU), a union that includes many health care workers. And it got a big boost out of the gate last year when Atlantic Philanthropies awarded it $12.5 million.
V-Cap offers three basic products:
- Business loans are for a quality organization to expand or offer more services. The money can be used for information technology or other infrastructure, as working capital, or as the cash reserves demanded by regulators.
- Facilities loans are to build, renovate, acquire or meet startup costs in low-income communities.
- Gap financing and bridge loans are to tide over health care providers as they take advantage of market opportunities.
Additionally, V-Cap consults with borrowers, offering financial advisory assistance regarding assessing prospective markets and workforces while aiding its clients in development planning.
As Steven Weingarten, the CEO of V-Cap, told the Robert Wood Johnson Foundation (RWJF), "We’re looking for three things. One is strong financial and management competencies, two is a health care impact—we’re looking for organizations that will improve health care outcomes and quality of care for local communities—and three is a jobs focus. We are particularly looking for organizations that are committed to enhancing the job quality of the frontline health care workers who often are critical to a better model of health care delivery.”
V-Cap stresses that it’s not in the grant making business itself. “Borrowers must have strong organizational and financial management and a sustainable business model. All loans must meet Vital Healthcare Capital’s due diligence and underwriting standards and be approved by its Loan Committee.”
A good example is the very first loan that V-Cap made, to Commonwealth Care Alliance, which built a network of health centers in low-income communities across Massachusetts incorporating care for dually eligible Medicare/Medicaid patients, and which “pioneered an array of care delivery innovations that improved the lives and independence of the frail, sick, and disabled.”
As Vital Healthcare Capital states, “We invest in care that works for communities in need.”