Within the past five years, impact investing has emerged as a powerful tool to encourage community and economic development. Broadly defined, impact investments represent financial resources passed to community development partners who then deploy the funds in projects that build or bolster communities. The investors receive an at- or below-market-rate return.
Sometimes called mission or social investing, impact investing taps significant resources previously preserved in endowments. As needs far outweigh traditional grant distributions from foundations, putting portfolios to work through direct investments with qualifying nonprofits expands potential impact in targeted areas of concern. Specific investment vehicles can include PRIs (program-related investments) and MRIs (mission-related investments).
Virginia Community Capital (VCC) has recently engaged in a PRI with one of America’s most celebrated foundations, the Jessie Ball duPont Fund. Founder Jessie Ball duPont grew up in Virginia’s Northern Neck, attending a one-room school house. She transformed her life through education, working as an assistant principal, and beginning a personal tradition of philanthropy, eventually providing support for needy students through college scholarships. When she married industrialist Alfred I. duPont, she continued the practice of giving while also advising on her husband’s vast business pursuits. When Mr. duPont passed away in 1935, Mrs. duPont created three foundations to honor his work and continue their charitable activities. At her death in 1970, her will established the Jessie Ball duPont Fund, which supports those organizations and communities that were important to her.
Known for its innovative practices, the Jessie Ball duPont Fund expanded potential for impact in 2011 when it launched a first PRI. A white paper entitled “Deploying New Strategies in Pursuit of the Mission of the Jessie Ball duPont Fund” describes the emergence of this new approach. The Fund’s trustees specifically identified partnerships with Community Development Financial Institutions (CDFIs) as a fundamental criterion for the PRI program. Further, underserved communities, affordable housing, and job creation were among the designated focus priorities.
“Across all of our work, we are interested in increasing access and providing opportunity, so that all people can participate fully in community life,” said Sherry Magill, president of the Jessie Ball duPont Fund. “Jobs and decent housing are fundamental needs and where they exist, communities are obviously healthier and more vibrant.”
The Jessie Ball duPont PRI strategy aligns perfectly with the mission at VCC and is especially well-suited for our recent emphasis on place-based economic development. Conversations about past work in numerous underserved communities between VCC and Jessie Ball duPont staff evolved into more specific discussions, resulting in the Fund’s PRI. In an almost uncanny synchronicity, the project will help underserved communities where Mrs. duPont was born—Virginia’s Northern Neck—along with other places of interest to the foundation.
Guidelines for a two-year project were drawn up in 2013 with the following scope:
Mission/ Purpose: To provide VCC with capital for financing to nonprofit organizations or other community development organizations.
The two major specific range of activities includes:
Intending to maximize impact from this important collaboration, VCC staff quickly identified several potential projects for application of the Fund’s support. The first project combines a VCC loan with an Affordable Housing Program grant from the FHLB of Atlanta to catalyze a renovation project in Lynchburg. Armstrong Place provides 28 apartments for people with disabilities and low incomes through the historic adaptive reuse of the Armstrong Elementary School combined with new construction. Fifty percent of the apartments will be fully accessible to Section 504 standards and the remainder will be adaptable for people with disabilities. Fifty percent of the tenants served will have incomes less than or equal to 40 percent of the area median income and the remaining units will serve households up to 60 percent of the area median income.
“Creating and preserving affordable housing in Virginia is one of VCC's core principles," explains Monique Johnson, Senior Loan Officer who worked on the Armstrong Place project with developer RUSH Lifetime Homes. “Leveraging the loan through the Jessie Ball duPont Fund PRI advanced this project with uncommon speed. Residents will soon have safe, affordable housing available, and RUSH has converted an abandoned school into a community asset.”
“The Jessie Ball duPont Fund investment in VCC has already had a direct impact in the lives of some Lynchburg residents,” notes Teri Lovelace, Community Investments & Impact Manager. “We look forward to future projects associated with this PRI, knowing that empowerment of underserved residents fulfills goals for institutional partners, for the communities where we work and live, and for our country at large.”
Learn more about the Jessie Ball duPont Fund at www.dupontfund.org
Read the complete “Deploying New Strategies in Pursuit of the Mission of the Jessie Ball duPont Fund” here.
Contact Teri Lovelace, Community Investments & Impact Manager, at email@example.com 804.344.5484, Ext. 125, to learn more.