The Kresge Foundation announced today $16 million in impact investments to nine Community Development Finance Institutions (CDFIs) and Development Finance Agencies (DFAs) working to expand opportunity for low-income people in America’s cities through an initiative called Kresge Community Finance (KCF).

More than 130 organizations submitted proposals for funding, representing more than $280 million in capital requests. The resulting investments from Kresge’s Social Investment Practice pair standardized loans, available for up to 10 years, with equity grants equivalent to 5 percent of the amount of each loan. The grants were made to highlight the need, and difficulty, of these community lenders to raise sufficient equity to grow their lending programs.

In this round, program-related investments through KCF include:

• $3 million to Nonprofit Finance Fund to support the AIM Healthy™ fund and unlock new payers and new relationships at the intersection of health and human services in California.
• $3 million to Self-Help Ventures Fund to support community-led and sustainable food systems nationally with a focus in North Carolina and Illinois.
• $3 million to Saint Paul Port Authority to finance energy-efficiency and renewable-energy projects in low-income communities in Minneapolis-St. Paul.
• $2.5 million to National Housing Trust for the East of the River Opportunity Fund to create and preserve energy-efficient affordable housing in Wards 7 and 8 of Washington, D.C.
• $1 million to Forward Community Investments for Healthy Equitable Communities in the most disinvested neighborhoods of Milwaukee.
• $1 million to the National Federation for Community Development Credit Unions to support CUs transitioning to CU Impact, a community-impact-focused processing system.
• $1 million to Capital Impact Partners in support of its partnership with the Memphis Medical District Collaborative to finance and promote community development, residential density and walkability. This takes the total KCF investment for $2 million for this work.
• $1 million to EDGE for Memphis and Shelby County for Memphis Creative Corridors.
• $500,000 to Council for Native Hawaiian Advancement to expand opportunities for native Hawaiians and the organizations that serve them.

In total, the foundation invested $30 million in financing and up to $1.5 million in grants through KCF to 14 organizations. The first round of $14 million in funding was announced in late 2016.

“By using a standard loan structure, we aim to demonstrate to newcomers in the social investing space that driving capital to the communities they care about does not have to mean expensive transactions that are difficult to structure and manage,” said Joe Evans, the foundation’s portfolio manager in the Social Investments Practice. “We also paired these investments with equity grants to highlight the essential need nonprofit lending programs have for that type of support.”

Kresge’s Social Investment Practice uses a variety of financial tools to invest in projects that bring both a social and financial return. The foundation has committed to investing $350 million in social investments by 2020.

“To move that amount of money, we need to balance investments that advance our mission with risk and portfolio considerations,” said Kimberlee Cornett, managing director of Kresge’s Social Investments Practice. “The demand for KCF proved to us that there is a market for this type of product, and we’re thrilled to invest in such a range of capable, community-driven lenders.”

CDFIs are private and nonprofit community-based investors that leverage private sector investment to provide financing and technical assistance for a range of community development activities, including job creation, small business development, housing and other community development.

DFAs are public, private and nonprofit development entities that provide financing for programs that foster job creation and economic development with a focus on growing housing and employment opportunities in low income communities.