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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