Casey Advances Social Investments in Philanthropy

Posted November 14, 2013, By the Annie E. Casey Foundation

It takes tremendous resources to achieve Casey’s vision: a society in which low-income families can become financially secure and raise healthy, well-educated children in stable, permanent families in supportive communities. The Foundation has always exceeded the minimum requirement for philanthropic organizations to pay out at leas t5% of their assets per year. But in the late 1990s, Casey leaders began exploring social investing as a way to put even more of the Foundation’s assets to work for its mission. Besides traditional grant making, Trustees and senior leadership wanted to use all the philanthropic tools available and devote as much of the Foundation’s assets as possible to reach its goals.

In 1998, the Foundation authorized up to $20 million of its endowment for program- and mission-related investments aimed at improving the lives of vulnerable children and their families. Based on the early success of its investments, the Foundation increased the amount reserved for social investments to $100 million in 2003 and to $125 million, almost 5% of the endowment, in 2010. In 2013, more than $100 million was devoted to social investments spanning affordable housing development and community facilities; job creation through micro and small business financing; and development of services aimed at improving outcomes for vulnerable children and families. The Foundation’s social investment staff works hand in hand with Casey experts to ensure that the investments closely align with program objectives.

Casey, Social Investments and Philanthropy

In 2002, the Foundation brought together a group of foundations in Baltimore so that those already making social investments, particularly program-related investments (PRIs), could share their experiences and advice. The foundations involved eventually formed a network called the PRI Makers Network. In 2007, leaders from the Annie E. Casey Foundation, the F.B. Heron Foundation and Meyer Memorial Trust launched a “More for Mission Campaign,” challenging foundations to increase social investing by $10 billion within five years. In 2008, a More for Mission Campaign Resource Center was launched in Boston. Meanwhile, Philanthropy Northwest, a regional association of grant makers, agreed to house the PRI Makers Network, and a home base was established in Seattle.

In 2012, the PRI Makers Network and More for Mission Campaign formally merged to form the Mission Investors Exchange. This network represents more than 200 foundations and organizations interested in using mission-related investing as a strategy to accomplish their philanthropic goals. The group offers a central point of information for foundations looking to access social investing resources. It works with other affinity groups such as the Council on Foundations, Global Impact Investing Network and Confluence Philanthropy, and also hosts workshops, webinars and conferences for foundations interested in program-related and mission-related investing.

The Casey Foundation continues to play a leadership role in encouraging greater use of social investing. It provides financial support to the Mission Investors Exchange and also supports the field through grants for such activities as:

  • Supporting networking activities involving Community Development Financial Institutions (CDFIs) and other social investing entities in our civic sites of Baltimore and Atlanta.
  • Providing training in Results-Based Leadership for “next-generation” leaders of CDFIs.
  • Funding research and documentation on the impact and performance of social investments.

An Example of a Social Investment

To complement its work to help families in poor, rural communities build savings and assets, the Foundation in 2007 made a Program-Related Investment in Coastal Enterprises, Inc., a private, nonprofit Community Development Corporation and Community Development Financial Institution serving rural communities in Maine. The PRI helped capitalize a $10 million economic and affordable housing loan fund, called the Northern Heritage Development Fund (NHDF), to help develop housing, businesses, jobs and community services targeted to six counties in the poorest and most rural region in the state. The return on investment has far exceeded the goals of the original proposal, resulting in the creation or retention of more than 1,500 jobs and support for numerous businesses, community facilities, affordable housing developments and community services, leveraging a total of about $6.2 million to date. “The NHDF is meeting its goal of providing resources to businesses and communities seeking to diversify their historic, natural-resource-based economies while valuing and maintaining their culture, history and natural environment,” Coastal Enterprises concluded in a recent report to the Casey Foundation.

This is just one example. To give a sense of the overall impact of all of Casey’s social investments, consider that the Foundation’s more than $100 million in loans, deposits and equity investments in 2012 have raised an additional $686 million through co-investments and the leveraging of additional funds. In addition, Casey’s investment of $45 million in loan guarantees has leveraged a total of $130 million, primarily in support of the redevelopment of East Baltimore.

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