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When Mark Constantine stepped into his role as president and CEO of the Richmond Memorial Health Foundation, his directives from trustees were clear: Create positive social change through sustainable, socially responsible funding strategies.

“One of the expectations from the Board was for me to think about what we could do at the intersection of health equity, the social determinants of health, and impact investing,” he recalls. RMHF’s trustees and stakeholders were interested in the idea of investing dollars for a social and financial return but had questions on how the process worked. It was 2016, and with the help of the team from the organization’s newly selected investment advisor, Northern Trust, they spent the first six months learning about impact-investing tools and strategies and began identifying potential partners and portfolio options that would fulfill its mission-aligned investment criteria.

In December 2016, RMHF made its first investment into VCC: a $250,000, two-year solar certificate of deposit, or CD. 

RMHF’s role in the Richmond community

RMHF has been through a number of changes since its founding in 1998.

When it began, the Foundation was part of Richmond Memorial Hospital and made contributions back to the hospital. After an acquisition by Bon Secours, RMHF became an independent entity and early grants focused on nursing education, support for older adult programs, and funding for health safety net clinics, among others. In addition to serving as a catalyst and convener, the RMHF of today makes grants to a variety of nonprofits committed to fostering and equitable and healthy Richmond Region.

The organization’s work seeks to address broader social, economic, and structural conditions that contribute to poor health outcomes. These conditions are often referred to as the Social Determinants of Health (SDH), those specific environmental factors impacting an individual’s health. For example, a person with asthma may frequently visit the Emergency Department if their apartment is riddled with mold. A family that lives miles from a grocery store with fresh produce will likely find it more difficult to eat healthy foods. A parent may restrict her child’s exercise time outdoors if she doesn’t feel her neighborhood is safe.

Simplified: The conditions in which we live explain why some Richmonders are healthier than others and why, according to life expectancy data from the VCU Center for Society and Health, residents in other neighborhoods die up to 20 years sooner.

Despite the current realities, Constantine is hopeful about our region: “While Richmond has deep and profound equity issues, it is an extraordinary southern city. It is complex and hopeful – a place with tremendous strength and diversity across all its neighborhoods.”

RMHF deploys its dollars to a number of local, mission-aligned nonprofits, and does so with a recognition of the role that race plays in health disparities. RMHF provides grantees with opportunities for racial equity training and holds space for non-traditional collaborations.

Growing with VCC

When it expanded its funding strategy to include impact investing, RMHF collaborated with VCC to deploy dollars for high-opportunity projects — particularly those addressing affordable housing.

With Trustees’ approval, RMHF directed $200,000 into a Program-Related Investment (PRI) with VCC. PRIs to VCC’s certified loan fund support specific community development programs, such as healthy food access, affordable housing, or expanding clean energy. In the case of RMHF, the funds are targeted to create more affordable housing in Richmond, because where we live has such a dramatic impact on our health. Tools like PRIs give VCC the flexibility to provide affordable rates to borrowers and support partners that are also focused on improving the quality of life in our communities.

“My hope is that investors of all types — institutional, individuals, health care systems and religious organizations — understand that at this particular moment in Richmond’s history and in Virginia’s history, we need affordable housing more than ever,” Constantine says. “This community has incredible resources and can leverage an organization like VCC to create economic opportunity for all.”

Northern Trust, RMHF’s asset manager, was inspired by the nonprofit’s actions and invested $1 million into a VCC PRI.

“When we learned more about Richmond Memorial Health Foundation’s mission, and the goal of VCC’s PRIs, we believed it was important for our own institution to invest and leverage additional resources to positively impact communities in Virginia,” says Deborah Kasemeyer, senior vice president and director of community development and investment at Northern Trust. “Program-related investments such as those from VCC allow institutions like ours to create true impact in the communities we care about.”

A relationship beyond the capital

There’s more to RMHF than grants and investments. It’s about convening, catalyzing, educating and building capacity, too.

RMHF, with the support of many peers and partners, brought Mission Investors Exchange to Richmond to educate a full house of fundraising professionals in Virginia about impact investing. With the support of the Robert Wood Johnson Foundation, RMHF also commissioned a Market Value Analysis on the need for housing. The analysis was done to support its theory that access to affordable housing was critical to improving access to health care. The “MVA” study reinforced the fact that housing-choice vouchers and other subsidized housing rentals are concentrated to the East End, and highlighted additional concerns — like how households with annual incomes as high as $72,000 are still limited by the lack of affordable living options in the area.

The report was one of RMHF’s first forays into tackling the issue of affordable housing. It helped the foundation connect with housing partners in the region, and create a strategy for improving access.

Expanding RMHF’s role in housing

In 2018, RMHF was selected as the coordinator for Connect Capital initiative by the Center for Community Investment (CCI). Constantine and Caroline Nowery, VCC’s Vice President and Director of Community Investments, serve on the “travel team,” a core group of six representatives from RMHF, VCC, public-sector agencies, and both nonprofit and for-profit developers. Connect Capital is a national initiative that assists communities in attracting and deploying capital in low-income and disinvested areas to improve residents’ health and increase access to opportunity. Connect Capital Richmond is seeking to build healthier, more economically and socially diverse neighborhoods in Richmond through the provision of increased housing options for low-income families and individuals.

 

“RMHF is a perfect case study of how a place-focused foundation can utilize an intermediary like VCC to make an evengreater impact in the community through impact investing and technical advisory services,” says Jane Henderson, president and CEO of VCC. “Mark and RMHF have successfully demonstrated how a nonprofit can take a limited number of resources and pair grantmaking strategies with an impact-investment strategy to invest in their mission and improve their community.”

Looking at funding strategies from a holistic standpoint is particularly important as there are increasingly limited dollars available for housing, and federal sources of funding are on the decline. Still, the need for affordable housing continues to increase.

“Deeper impact investing allows us to leverage our portfolios in more robust ways,” Constantine says. “We have to figure out new and innovative financing strategies, and the experience of CDFIs like VCC is critical to that. If they are not at the table, it is exponentially harder to execute our mission.”