Social Investments
Social investing is part of a wide range of strategies that Casey Foundation implements in its effort to improve outcomes for vulnerable children and families. Our social investments program uses the Foundation’s endowment dollars to generate a financial return and support our investment strategies. Through social investments, we can increase resources dedicated to our programmatic work and create ways by which the same money can be reinvested over and over again.
Social Investing at foundations can include a range of approaches. The Casey Foundation focuses a large portion of its social investing activity in three areas:
- Program-related investments: Investments that support charitable purposes aligned with the Foundation’s mission. Program-related investments at the Foundation are generally structured as loans, loan guarantees, or equity investments.
- Mission-related deposits: Deposits made to federally insured depository institutions including traditional banks, community development financial institutions, credit unions, etc. They are generally structured as insured certificates of deposit or share certificates.
- Mission-related investments: Investments that are intended to generate market rates of return but have a programmatic and/or social benefit as well. The Foundation makes limited mission-related investments.
A well established process is used to evaluate current and potential investment activities. Casey also provides coaching, technical assistance, and consulting support to assist our investment sites. We also document the lessons learned to help other philanthropies initiate and pursue social investment strategies.
By 2002, the Foundation established a formal Social Investments portfolio, and in 2004 Trustees increased the social investing allocation to $100 million. Today, the Foundation employs a wide range of social investments to benefit both its endowment and its programmatic activities.
Casey Funding in Action
- Our work in Oakland, California strives to empower families and create economic opportunity in the city’s Lower San Antonio neighborhood, where residents have a median household income that is 68 percent of Oakland’s overall median -- but home prices exceed the national average by 72 percent. Our $2 million program related-investment, structured as a five-year loan with a 2.5 percent annual interest, provides partial capital for a $10 million fund administered by the Northern California Community Loan Fund. This fund enables developers to acquire property in Lower San Antonio and build low- and moderate-income housing. Through this project, at least 300 affordable housing units are expected to be created in the community.
- Our work in San Antonio, Texas is focused on increasing access to community supports and economic opportunities for low-income families in a large section of San Antonio’s West Side, the 11th poorest neighborhood in the nation. In 2005 the Foundation made a program-related investment that would enable ACCION Texas, the largest microlender in Texas, to lend to micro, small and mid-size businesses in the West Side, as well as in neighboring communities. The $500,000 investment is structured as a five-year loan at three percent annual interest. ACCION deployed the first disbursement of $250,000 in just seven months, creating 48 full-time and 15 part-time jobs in the San Antonio and El Paso border regions.
- In 2004, the Foundation made a $100,000 mission-related deposit in Seattle, Washington’s Boeing Employees Credit Union (BECU). Structured as a 12-month insured certificate of deposit, the deposit was intended to increase financial services in White Center, one of the city’s most culturally diverse neighborhoods. The partnership has yielded a number of significant outcomes including the opening of a BECU Express Service Center in the community. Other results of the partnership include a collaborative homeownership strategy, a partnership with United Way to provide account and deposit services to Earned Income Tax Credit recipients, and plans for additional financial services and community involvement. Following the initiative, bank accounts in White Center increased by 16 percent.
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