June 28, 2013
TACOMA, Wash. June 26, 2013 – In keeping with its goal of advancing positive social change in Pierce County, The Greater Tacoma Community Foundation proudly announces the launch of a $1.5 million impact investment program to increase access to flexible, affordable funding for small businesses.
Through impact investing—a tool that allows foundations to make recoverable investments by tying the discipline of the market with the social mission of philanthropy— the Community Foundation aims to generate positive social and financial returns while spurring economic development and job creation.
“Impact investing allows us to make a difference in the community that we cannot make through traditional grantmaking,” said Rose Lincoln Hamilton, President & CEO of the Community Foundation. “By directing a portion of our philanthropic dollars toward impact investing, we’re expanding our lens of impact and strengthening economic opportunity in Pierce County.”
The Community Foundation has partnered with two nonprofit Community Development Financial Institutions (CDFIs)—National Development Council’s Grow America Fund (GAF) and Craft3—to implement the program. GAF and Craft3 were each awarded $750,000 to identify, evaluate, underwrite and administer investments in small businesses within Pierce County, working closely with the Community Foundation to further its objectives. Both GAF and Craft3 have strong financial and impact performance ratings from CARS™, an independent ratings service for CDFIs.
NDC’s Grow America Fund – Grow Pierce County
As one of the oldest national nonprofit community development organization in the U.S., GAF makes small business loans to create jobs and build economic opportunity in underserved communities throughout the country. For more than 30 years, NDC’s Grow America Fund has worked in the Pierce County region, managing the City of Tacoma’s revolving small business loan fund called the Grow Tacoma Fund.
With a $2.0 million investment from the City of Tacoma, the Grow Tacoma Fund expanded to a $17 million small business development loan fund to foster entrepreneurship and create jobs and investment in Pierce County. To date, it’s lent in excess of $13.5 million to 36 businesses in Tacoma, leading to the creation and/or retention of 693 jobs, including 30 jobs with Stadium Thriftway—Tacoma’s only independent grocery store serving downtown Tacoma.
“In the early 1990s The National Development Council was hired by the City of Tacoma to assist with evaluating business and housing investments in Pierce County and our relationship evolved to include small business lending and project financing,” said John V. Palyo, President of NDC’s Grow America Fund. “We are honored to partner with The Greater Tacoma Community Foundation and Craft3 in launching the impact investment program—a program that is sure to be a catalyst for growing the presence of small businesses in Tacoma, Washington.”
NDC’s Grow America Fund will use the $750,000 investment from the Community Foundation to create a community investment pool—the “Grow Pierce County Fund”— to attract additional very low-cost financing to make SBA guaranteed loans to healthy, growing small businesses, thereby creating permanent jobs. By leveraging SBA guaranteed private capital, the Community Foundation’s $750,000 investment will create a Pierce County loan pool of $3–4 million.
Craft3 is a non-profit CDFI serving the Pacific Northwest. Over the past 19 years, Craft3 has invested more than $251 million in 3,537 people and businesses across the region. It strengthens economic, ecological and family resilience by providing loans and assistance to entrepreneurs, non-profits, individuals and others who don’t normally have access to financing.
It believes businesses have the opportunity to make a significant impact on the resilience of our region by creating jobs, bringing revenues into the region, and providing much-needed products and services. Craft3 offers an array of capital products including business, community development, and conservation loans. It also provides competitive loan products to individuals for septic system or energy efficiency upgrades.
Over the last two years, Craft3 has invested $2.7 million in Pierce County businesses, creating and/or retaining 220 jobs and assisting twenty low-income families. Craft3 will use Community Foundation’s $750,000 investment to fuel further lending activities in local entrepreneurs and non-profits.
Catalyzing Community Impact
Unlike grants, impact investments use charitable assets to invest in projects that can generate revenue as well as community benefit by providing inexpensive capital—often in the form of a loan—to mission-driven businesses that wouldn’t normally have access to traditional financing. These investments provide a return through repayment or equity. Once repaid, the funds are then ‘recycled’ back into the community as new loans, thereby allowing for maximum community benefit.
“With impact investments, we can leverage our initial investment to provide community loans over and over again in perpetuity,” said Lincoln Hamilton.
“With shrinking government resources and unemployment at 9.1% in Pierce County, this type of investment is needed more than ever. And each of these loans will track exactly how these dollars catalyze community benefits.”
The $1.5 million impact investment program is expected to be fully invested in Pierce County within 12-24 months. Visit NDC’s website at www.NationalDevelopmentCouncil.org and Craft3’s website at www.craft3.org to learn more about its loan products.
About The Greater Tacoma Community Foundation
The Greater Tacoma Community Foundation is a philanthropic organization and trusted partner with the Pierce County community, fostering generosity by connecting people who care with causes that matter. By pooling community funds, the Community Foundation provides effective, long-term social investment strategies to donors and people of Pierce County in order to address emerging issues facing the community. Building a safe, vibrant, engaged community is central to the mission of the Community Foundation. The Community Foundation awarded over $3.7 million in grants and scholarships during FY2012. Over the last 31 years, the Community Foundation has distributed more than $87 million in grants and currently manages $91 million in assets. For more information, visit: www.gtcf.org.
About National Development Council and The Grow America Fund
Founded in 1969, the National Development Council is a national non-profit organization that has evolved into one of the most progressive and innovative community and economic development organizations in the country. From a seminal role in the earliest days of the community development movement, NDC has grown into one of the most comprehensive providers of financing, development expertise, technical assistance and training for community revitalization efforts throughout the U.S. One of its signature programs is the Grow America Fund (GAF), which operates as a community development lender to support the creation of jobs and the expansion of eligible small businesses in underserved areas, particularly minority and women-owned businesses. GAF has lent over $144 million to over 450 businesses across the country, creating or retaining over 10,000 jobs and leveraging over $200 million in the process.The financing provided is partially guaranteed by the U.S. Small Business Administration under GAF’s Small Business Lending Company license, and GAF has Preferred Lender status nationwide. For more information, go to www.NationalDevelopmentCouncil.org or http://nationaldevelopmentcouncil.org/index.php/site/programs/category/small_business_lending/
Craft3 is a non-profit community development financial institution with a mission to strengthen economic, ecological and family resilience in Pacific Northwest communities. We do this by providing loans and assistance to entrepreneurs, non-profits, individuals and others who don’t normally have access to financing. We then complement these financial resources with our expertise, personal connections and other advocacy for our clients. Craft3 manages $166 million in total assets and has invested $251 million in 3,537 people and businesses since 1995. Learn more at www.craft3.org.