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New Investments Help Fuel Change

The California Wellness Foundation and The Sierra Club Foundation Join
the Community Investment Guarantee Pool with Million Dollar Commitments

New investments will help fuel change in the fight against climate change, and for environmental justice and health equity

October 4, 2022 – Today, the Community Investment Guarantee Pool (CIGP) welcomed two new guarantors: the California Wellness Foundation and the Sierra Club Foundation. The CIGP is a first-of-its-kind platform that allows foundations and other impact investors to combine resources and expertise by establishing a one-stop-shop for intermediaries and other market participants in the climate, affordable housing and small business sectors to access highly flexible guarantees. The addition of the California Wellness Foundation and the Sierra Club Foundation will increase the Pool’s capacity to backstop innovative affordable housing, small business and climate change finance solutions.

 

The California Wellness Foundation has joined the CIGP with a $5 million guarantee commitment.

 

“Through both our grantmaking and our mission-aligned investment strategy, the California Wellness Foundation is committed to advancing health equity by promoting affordable housing and entrepreneurship opportunities,” said California Wellness Director of Investments, Anabel Giron. “Our $5 million investment in CIGP will help us advance our goals in these areas and bring much needed capital to under-resourced communities. We appreciate CIGP’s expertise and capacity to execute on its mission.”

 

The Sierra Club Foundation has joined the CIGP with a $1 million guarantee commitment.

 

“The Sierra Club Foundation is deeply committed to finding all tools of impact and finance to address climate change and environmental justice, and our $1 million investment in CIGP is one of the ways we are doing that,” said Sierra Club Foundation Executive Director, Dan Chu. “This is an emerging area of impact investing and we’re excited about the ways our early investment will act as a catalyst to attract other investors to support climate justice."

“Whether we’re talking about accessing capital for small businesses or being able to transition to cleaner sources of energy, we know that opportunities have been distributed in ways that reflect the inequities embedded in our society, and that addressing these challenges will require bringing to bear all of the resources and tools at our disposal,” said CIGP Executive Director, Jim Baek. “Together, this group of guarantors is making more and new types of community development transactions possible by putting more of their balance sheet strength to work in service of impact and equity. We are thrilled to have the California Wellness Foundation and the Sierra Club Foundation join us on our mission and look forward to working together.”

 

About CIGP

The Community Investment Guarantee Pool (CIGP) is a financing tool launched in December 2019 by impact investing organizations to create a pooled commitment of financial guarantees for intermediaries in affordable housing, small business and climate finance. CIGP accelerates community investments by more fully leveraging philanthropic balance sheets for mission. The initial guarantors that helped make CIGP possible are The Kresge Foundation, The Annie E. Casey Foundation, The California Endowment, Chan Zuckerberg Initiative, Common Spirit Health, Gary Community Investments, Jessie Ball duPont Fund, Phillips Foundation, Seattle Foundation, Virginia Community Capital, and Weingart Foundation. Since launch, the Robert Wood Johnson Foundation, Arnold Ventures, Winthrop Rockefeller Foundation have also joined as guarantors. Learn more about CIGP by watching this short video produced by The Kresge Foundation.

 

About LOCUS Impact Investing

LOCUS serves as program manager for the Community Investment Guarantee Pool. LOCUS is a national non-profit consulting organization and registered investment advisor that works with foundations and mission-driven investors wherever they are on their local impact investing journey to help them create lasting, meaningful change in their communities. LOCUS partners with mission-driven institutions to unlock more of their assets and deploy dollars to catalyze equitable economic development and make community-informed investments guided by innovative, effective and equitable practices. LOCUS is a wholly owned subsidiary of the non-profit, VCC Social Enterprises. For more information about LOCUS visit: https://locusimpactinvesting.org/.

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Leading Impact Investors Join CIGP

CIGP Welcomes Arnold Ventures and Winthrop Rockefeller Foundation to the Pool

 

In January 2022, the Community Investment Guarantee Pool (CIGP) welcomed two new guarantors: Arnold Ventures and the Winthrop Rockefeller Foundation. CIGP is a new, collaborative vehicle for impact investments that pioneers the use of guarantees in unlocking catalytic capital for community development projects. The addition of Arnold Ventures and the Winthrop Rockefeller Foundation will increase the Pool’s capacity to backstop innovative affordable housing, small business, and climate change finance solutions.

“We are thrilled to have Arnold Ventures and the Winthrop Rockefeller Foundation as the newest members of the Pool. First, because their commitments will grow the Pool and allow us to support more initiatives that advance more equitable economic development. Second, their investments confirm philanthropic support of CIGP’s vision for unlocking catalytic capital.” CIGP Executive Director Jim Baek said.

Winthrop Rockefeller COO & CFO Andrea Dobson shared, “we are committed to bringing a full range of resources on behalf of the Foundation to advance economic and racial equity. Investing in CIGP through unfunded guarantees enables us to add a unique tool for leveraging more of our resources towards this purpose. In addition, it allows us to introduce like-minded investors to opportunities in Arkansas that address the gaps in capital access.”

2021 was a milestone year for CIGP. The Pool issued its first set of small business guarantees – one for entrepreneurs unable to access working capital from traditional banks and another focused on affordable credit products for underserved immigrant business owners. The team capped the year by building a housing portfolio of over $15 million in guarantees which are expected to leverage another $131million of catalytic capital for a range affordable rental housing use cases.

Chris Hensman of Arnold Ventures said, “Affordable housing is an important new issue area for Arnold Ventures. We are encouraged by the range of new solutions that we see emerging in the sector. We’re excited to participate in the Pool and explore financial guarantees as a highly leverageable tool for helping to launch, test and scale the most promising of these housing strategies.”

The CIGP team too is very much looking forward to building on this progress. According to Jim Baek, “There’s still so much more we want to test and explore. For example, we are working to close our first climate guarantee which was approved late last year and that seeks to bring the benefits of community solar to low-and moderate-income households. We are also exploring guarantees that can drive homeownership access for households of color and entrepreneurship opportunities for people of color and women.  Our pipeline currently totals over $100m. To get these solutions across the finish line, we’re seeking partnerships with even more guarantors looking for new ways to use  their balance sheets for impact.”

About CIGP

The Community Investment Guarantee Pool (CIGP) is a financing tool formed in December 2019 by impact investing organizations to create a pooled commitment of financial guarantees for intermediaries involved in affordable housing, small business, and climate lending. CIGP accelerates community investments by leveraging balance sheets for impact to make more and new types of community development transactions feasible. The initial guarantors that helped make CIGP possible are The Kresge FoundationThe Annie E. Casey FoundationThe California EndowmentChan Zuckerberg InitiativeCommonSpirit HealthGary Community InvestmentsJessie Ball duPont FundPhillips FoundationSeattle FoundationVirginia Community Capital, and Weingart Foundation. Since launch, the Robert Wood Johnson Foundation, Arnold Ventures, Winthrop Rockefeller Foundation have also joined as guarantors. Learn more about CIGP by watching this short video produced by The Kresge Foundation.

About unfunded guarantees

Unfunded guarantees are a financial tool in which a guarantor provides a beneficiary with assurances to compensate them for financial losses under specific circumstances. Importantly, in these transactions, the guarantor can use their balance sheet for the benefit of the recipient without expending any capital until the guarantee is called. While unfunded guarantees are not new to community development finance, CIGP is novel in providing guarantors with infrastructure though which to deploy guarantees and potential guarantee users with a single point of contact through which to access the balance sheets of multiple guarantors.

About LOCUS Impact Investing

The program manager for CIGP is LOCUS Impact Investing, a national social enterprise launched by Virginia Community Capital (a CDFI) to empower place-focused institutions to invest their capital locally to build prosperous, vibrant communities. LOCUS works with investors, underwriting guarantee commitments as well as monitoring and managing the portfolio for both impact and risk.


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Guarantees Making a Difference

Where We Started

In 2019, a team of national and local impact investors came together to create an innovative way to advance community impact in affordable housing, climate, and small business with particular attention paid to advancing equity. These investors saw tremendous potential in creating a guarantee pool that could backstop promising projects and allow capital to flow to borrowers who faced challenges in accessing the resources needed to launch and sustain their projects. The result of this vision, the Community Investment Guarantee Pool (CIGP), is a platform for guarantors to deploy financial guarantees jointly and efficiently in the affordable housing, climate, and small business sectors. Two years later, CIGP is already proving itself a unique tool for impact, one that unlocks vital “but-for” dollars for projects headed by diverse stakeholders.

In addition to helping financial intermediaries manage risk and increase equitable access to capital for businesses on the ground, CIGP is committed to working with beneficiaries to develop insights and share learnings about the impact of this guarantee pool. For investor guarantors, the pool enables them to realize more transactional efficiencies and risk sharing benefits than they would issuing guarantees on their own. As a financial innovation and learning pilot, CIGP continually tests its own effectiveness as a model in the hopes that the lessons learned can inspire more philanthropic investors to leverage financial guarantees for mission-advancement.

A full theory of change has been developed that articulates the CIGP model, its expected outcomes, and its impacts. A key feature is to deploy financial guarantees that will catalyze additional investments totaling at least five times the guarantee amounts in the affordable housing, small business, and climate change sectors with a core focus on racial, gender, and economic equity. However, the CIGP model faced several early unknowns that would require intentional learning. Would there be a market need for guarantees in these sectors? How would this be impacted by the pandemic? How should the pool operationalize its racial, gender, and economic equity focus? Would beneficiaries be willing to pay for the guarantees and secure the CIGP model’s sustainability? Would guarantees truly shift behavior and help the community development marketplace advance equity?


Where We Are Today

As CIGP enters its third year, it is too early to definitively answer many of these questions, but an active evaluation and learning program is in place. Some of the unknowns are being illuminated such as the demand for the guarantees, its potential for leverage, and its effect on advancing racial equity in community lending practices. To date, CIGP has deployed $16.6M of its $38.1M guarantee pool across five affordable housing and two small business guarantees. These guarantees are expected to support up to $146M of underlying financings – well more than CIGP’s target of unlocking 5x additional capital. Moreover, the guarantees are already enabling projects to move forward that will ultimately provide 1,200 affordable homes and the retention/creation of over 550 small business jobs. There are also early signs of promise with respect to CIGP’s racial equity objectives. For example, all affordable housing lending enabled by CIGP’s guarantees have gone to BIPOC-led or owned developers.


A Case Study in Guarantee Use

MoFi Thrive Recipient

For MoFi, one of two small business beneficiaries in CIGP’s current portfolio, the $500,000 guarantee extended from the Pool provided this Montana-based CDFI with additional downside protection for a new working capital loan called Thrive that the organization developed for small businesses damaged by the pandemic who lacked access to bank financing. With two years of interest-only payments at an affordable rate along with a six-to-seven-year term, these loans provided entrepreneurs with a longer runway for recovery. In addition, MoFi focused outreach to communities that had the least access to conventional financing: businesses in low-income communities, and businesses owned by low-income people, women, and entrepreneurs of color. To better access these markets, MoFi partnered with Native CDFIs and used outreach strategies adapted from other lenders with success lending to Latinx business owners.

Early results are encouraging. Since launching Thrive in the spring 2021, MoFi has made 87 loans totaling nearly $5M through October – ahead of its own projections and about halfway to its overall volume target of $10M for the program. Approximately 33% of borrowers are female entrepreneurs and 20% of borrowers are BIPOC entrepreneurs. In describing the role of the guarantee,MoFi CEO Dave Glaser noted, “the value proposition the guarantee provides is clear; it enables CDFIs to be more of who they need to be. When we launch new products, having a guarantor come in and work with us to mitigate some of the risk is empowering on many levels. Most importantly, it allows us to reach further, and help underserved communities across the country through innovation.”


Opportunities for More Impact

In addition to its current portfolio of guarantees, CIGP has developed a pipeline of over $100M in future deals across all geographies and sectors including climate change, where it has adopted a more deliberate opportunity sourcing strategy. To meet this overall demand, CIGP plans to substantially increase the Pool’s capacity by adding new guarantors in 2022 and 2023.

These early successes demonstrate how CIGP can be a valuable resource for community development finance; however, there is still work to do. While all guarantees have been to Community Development Financial Institutions (CDFIs) so far, the CIGP team is now working with other types of beneficiaries to explore potential guarantee use cases, particularly in the climate change space. Additionally, the use of unfunded non-governmental guarantees has less precedence in the climate sector and will require continued market education. With the prospect of meaningful federal investment to accelerate the transition to a low carbon economy, CIGP’s guarantees could enable community development organizations to play a more leading role in this transition and to help leverage public dollars for greater climate justice.


A Focus on Learning

To help address these and other questions, a team of experienced evaluators and learning leaders led by impact evaluation expert and field builder, Jane Reisman, will provide a five-year emergent learning assessment to evaluate CIGP’s impact, make real-time adjustments to improve positive impact, and ultimately share formal learnings with the field. Additionally, work is underway to engage a consultant to help CIGP fully build its racial equity vision into its processes and procedures. And finally, CIGPs has established Financial Advisory Teams consisting of over two dozen experts in climate change and affordable housing (a small business advisory team may be launched pending funding). These teams bring diverse experiences and perspectives to CIGP, helping the pool be inclusive and expansive in its approach. As with the evaluation work, these teams will produce learnings that will inform the field about the role of guarantees in community development and their respective sectors.


Looking Ahead

CIGP is excited about its early progress and enthusiastic about the future. By deepening its understanding of how guarantees can lead to equitable community development and refining its operating model to more efficiently source, deploy, and service guarantees, CIGP aspires to engage more organizations in utilizing guarantees to advance impact goals and deliver a thoughtful, effective new economic development financial resource for communities.

CIGP has bold expansion goals for 2022, both for guarantor pool growth and guarantee deployment. See below for contact information if you would like to be a part of growing CIGP or learn more about the program:

Inquiries from potential investors/guarantors: Jim Baek

Inquiries from potential guarantee users/qualified beneficiaries: Fran Lutz

General inquiries: David Newsome


About CIGP

The Community Investment Guarantee Pool (CIGP) is a financing tool formed in December 2019 by a dozen impact investing organizations to create a pooled commitment of financial guarantees for intermediaries involved in affordable housing, small business, and climate lending. CIGP accelerates community investments by leveraging balance sheets for impact to make more and new types of community development transactions feasible. The initial guarantors that helped make CIGP possible include The Kresge FoundationThe Annie E. Casey FoundationThe California EndowmentChan Zuckerberg InitiativeCommonSpirit HealthGary Community InvestmentsJessie Ball duPont FundPhillips FoundationSeattle FoundationVirginia Community Capital, and Weingart Foundation. Since launch, the Robert Wood Johnson Foundation has also joined as a guarantor. Learn more about CIGP by watching this short video produced by The Kresge Foundation.

About unfunded guarantees

Unfunded guarantees are a financial tool in which a guarantor provides a beneficiary with assurances to compensate them for financial losses under specific circumstances. Importantly, in these transactions, the guarantor can use their balance sheet for the benefit of the recipient without expending any capital until the guarantee is called. While unfunded guarantees are not new to community development finance, CIGP is novel in providing guarantors with infrastructure though which to deploy guarantees and potential guarantee users with a single point of contact through which to access the balance sheets of multiple guarantors.

About LOCUS Impact Investing

The program manager for CIGP is LOCUS Impact Investing, a national social enterprise launched by Virginia Community Capital (a CDFI) to empower place-focused institutions to invest their capital locally to build prosperous, vibrant communities. LOCUS works with investors, underwriting guarantee commitments as well as monitoring and managing the portfolio for both impact and risk.


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Requesting Proposals for Climate Guarantees

The Community Investment Guarantee Pool (CIGP) is publishing an RFP to solicit potential use cases for its climate change guarantee product. Proposals are due October 29, 2021.

CIGP is a first of its kind platform allowing philanthropies and other impact-driven institutions to combine resources and expertise to establish a one-stop-shop for issuing guarantees in support of lenders, intermediaries, and other innovative actors in the climate, affordable housing, and small business sectors. CIGP has deployed over $16M in guarantees since 11 philanthropies founded the Pool in December 2019 and hopes to expand upon this success in the climate sector. This pooled commitment of financial guarantees aims to unlock capital and accelerate investments that would not otherwise be possible across the United States.

New tools like guarantees are needed to de-risk, mobilize, and most importantly, accelerate private capital flows for climate change solutions. This pressing need for new financial solutions for climate change challenges led CIGP to issue this RFP and seek qualified beneficiaries to submit proposals to receive its committed unfunded guarantees to support financing for climate mitigation, adaptation, and disaster recovery.

Click here for the full RFP, and for more information, please see our RFP FAQs here or e-mail cigp_rfp@sustainablecap.com. For non-climate related inquiries, please e-mail CIGP@locusimpactinvesting.org.


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Jim Baek Joins LOCUS Impact Investing as Executive Director of The Community Investment Guarantee Pool (CIGP)

Experienced Community Development and Housing Finance Practitioner Will Scale the Use of Guarantees to Help Lenders Unlock Additional Investment Capital

Richmond, VA —July 22, 2021LOCUS Impact Investing (LOCUS) has announced that Jim Baek has joined The Community Investment Guarantee Pool (CIGP) as Executive Director. LOCUS is a registered investment advisor, consultancy, and servicing organization that works with mission-driven organizations to accelerate investment that builds more equitable, prosperous communities. LOCUS is the program manager for CIGP, a first-of-its-kind platform that enables impact-aligned guarantors to unlock their balance sheets by pooling resources and sharing risk in financial guarantees to catalyze greater investment in structurally underserved or excluded communities. Mr. Baek reports to Sarah Stremlau, President of LOCUS, and will work closely with CIGP guarantors to refine and execute on the vision for the Pool.

Mr. Baek joins CIGP from Deutsche Bank where he served as Head of U.S. Community Finance as well as the Community Reinvestment Act (CRA) Officer. As Executive Director of CIGP, Mr. Baek will scale the guarantee program by attracting more guarantors to the pool and strategically deploying those guarantees around the country. To date CIGP has secured more than $38m of guarantee commitments from a dozen of the nation’s leading national and regional philanthropic institutions and health systems.

CIGP provides customized, unfunded loan guarantees to intermediaries throughout the United States in the affordable housing, small business, and climate sectors. These guarantees enable organizations to increase their lending capacity to more businesses and groups that have traditionally lacked equitable access to capital, in particular BIPOC- and women-led organizations. LOCUS became the program manager for CIGP in 2019.

“I am very pleased to welcome Jim to the CIGP team. Jim’s 20 years of experience working in community development finance and affordable housing, his deep transaction skill-set across the capital stack and knowledge of impact investing will be critical to building on the foundation CIGP has already established,” said Sarah Stremlau. “Jim brings a reputation as a changemaker as well as a demonstrated commitment to driving investment in lower-income and BIPOC communities across the country, an essential part of the LOCUS mission. He also brings a proven ability to foster a more equitable workplace, and we look forward to Jim supporting our efforts to embed DEI into our services and across the organization.”

LOCUS provides a range of consulting and investment services to current and potential impact investors through stakeholder education, investment strategy and policy development, strategic capacity building, community and economic development assessment, due diligence, fund aggregation, deal sourcing, and investment servicing, monitoring, and tracking. Clients include private foundations, community foundations, funder associations and collaboratives, fund sponsors, CDFIs, health systems and corporations. LOCUS is a wholly owned subsidiary of the non-profit, Virginia Community Capital (VCC), a regulated, certified CDFI with over $500 million in assets under management.

Ms. Stremlau added: “Whether you’re a mission-driven organization curious about how impact investing can advance your community-oriented mission or you already have a robust program in place, LOCUS’ customized, one-stop approach meets you where you are on your impact investing journey. Because we are specialists in impact investing as well as experts in community development in both rural and urban communities, we have a unique capacity to help organizations find ways to accelerate investment that builds thriving, more equitable communities. At the same time, we continue to innovate and champion new types of investment solutions like Invest Appalachia and CIGP. We believe CIGP’s novel approach has the potential to increase the use of guarantees at the national and regional levels to drive systemic change, and ultimately to change perceptions of risk when it comes to lending to BIPOC and women-owned and led businesses.”

“This is an exciting time to join the LOCUS organization. I am already impressed with the entrepreneurial and innovative foundation the organization has established in community development, and we are ready to push the boundaries even further to build more resilient communities in underserved markets across the country,” said Jim Baek. “For CIGP to be situated at the unique confluence of LOCUS as a one-stop shop for impact investment and VCC as a leading CDFI is exciting as it expands CIGP’s ability to influence systems change across the marketplace for affordable housing, small businesses and climate finance solutions.”

At Deutsche Bank, Mr. Baek was head of the Community Development Finance Group and oversaw the bank’s lending, investing and philanthropy for community development and impact in the U.S. As the CRA Officer he was also responsible for the bank’s performance under the Community Reinvestment Act regulation. Prior to joining Deutsche Bank in 2007, he underwrote affordable housing and community facility loans for the Low-Income Investment Fund and structured mortgage revenue bonds for Salomon Smith Barney. Mr. Baek is a graduate of Grinnell College (BA Political Science) and the University of Michigan (MBA). He serves on the board of IMPACCT Brooklyn, Restored Homes, and Project Rebuild, and is a former board member of Living Cities.

About CIGP:

The Community Investment Guarantee Pool (CIGP) is a first-of-its-kind platform that enables mission-driven guarantors to unlock their balance sheets by pooling resources and sharing risk in financial guarantees to catalyze greater investment in structurally underserved or excluded communities. Created in 2019, CIGP currently pools financial commitments from a dozen of the nation’s leading philanthropic organizations and health systems including The Kresge FoundationThe Annie E. Casey FoundationThe California EndowmentChan Zuckerberg InitiativeCommonSpirit HealthGary Community InvestmentsJessie Ball duPont FundPhillips FoundationRobert Wood Johnson FoundationSeattle FoundationVirginia Community Capital, and Weingart Foundation. Learn more about CIGP by watching this short video produced by The Kresge Foundation.

About LOCUS Impact Investing:

LOCUS Impact Investing is a registered investment advisor, consultancy, and servicing organization that works with mission-driven organizations across the country to accelerate investment that builds more equitable, prosperous communities. Our unique one-stop-shop model offers a comprehensive approach to community-oriented impact that includes stakeholder education, investment strategy and policy development, strategic capacity building, community and economic development assessment, due diligence, fund aggregation, deal sourcing, and investment servicing, monitoring, and tracking.. Ultimately we seek to increase the number of investors committed to community investing and to advance more effective, equitable investment practices that catalyze greater deployment of capital in lower-income and BIPOC communities across the country. LOCUS is a wholly owned subsidiary of the non-profit, Virginia Community Capital (VCC), a regulated, certified CDFI with over $500 million in assets under management.

 

Media Contact:

Chance Lee

Communications Coordinator, LOCUS Impact Investing

804.793.0980

chance@locusimpactinvesting.org


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Guarantee Pool Deploys Over $7M in its First Year

Guarantee Pool Deploys Over $7M in First Year

Innovative use of philanthropic balance sheets unlocks new community development capital

RICHMOND, V.A. – December 17, 2020 – The Community Investment Guarantee Pool (CIGP), a program of LOCUS Impact Investing, has deployed $7.1M in guarantees since 11 philanthropies founded the Pool in December 2019. Providing a central depository of philanthropic guarantees, the Pool allows qualified beneficiaries to access multiple philanthropic balance sheets in one place while providing flexible guarantee terms to meet the specific needs of guarantee-users. This year, three Community Development Financial Institutions (CDFIs) utilized CIGP guarantees to support the development and preservation of affordable housing.

CIGP’s first guarantee for $1.5M went to Genesis LA to bolster financing of public-supported supportive housing and naturally-occurring affordable housing in LA County, CA. “We’ve been specifically targeting new developments that can be built without relying on tax credits, as well as the acquisition of existing ‘naturally’ affordable housing that has lower rents but lacks covenants to preserve affordability,” Genesis LA President & CEO Tom De Simone said. “To make these projects work, we are extending more flexible financing to fill gaps and account for the fact that these projects are not leveraging the conventional equity financing from tax credits. CIGP has been critical to our ability to not only provide such financing, but to do so on a larger scale than we could otherwise do.”

CIGP has also provided a $2M guarantee to Low Income Investment Fund (LIIF) to support a $20M fund that will provide liquidity to affordable housing developers who have been adversely impacted by the COVID-19 pandemic. This funding will fill gaps created when fees are stalled in phases of LIHTC development, allowing critically needed affordable housing projects throughout the United States to continue despite pandemic-related headwinds.

Local Initiatives Support Corporation (LISC) will be using a $3.6M guarantee for their $36M Diverse Developer Loan Fund to provide loans for minority-owned or -led developers with limited balance sheets. These loans will help them conduct pre-development, acquisition, and construction of affordable housing projects throughout the United States.

With a robust pipeline of additional affordable housing opportunities, as well as use cases for small business and climate, CIGP looks forward to accelerating its deployment of guarantees in 2021, and interested parties are invited to reach out to discuss if a guarantee can be a helpful tool for unlocking new capital. Additionally, CIGP is establishing Finance Advisory Teams in each of its three focus areas (affordable housing, small business, and climate) to convene national thought leaders and identify opportunities for guarantees to address current financial gaps. This will help ensure the Pool is maximizing its impact and truly unlocking capital that would otherwise not flow to community development projects.

A collection of both funders with national scope (e.g., The Kresge FoundationThe Annie E. Casey Foundation) as well as local and regional funders (e.g., The California EndowmentSeattle Community Foundation) founded CIGP in order to mobilize more community development capital in low-income communities and communities of color. For these funders, CIGP allows for risk sharing with other institutions while also providing back office infrastructure and an opportunity to learn how to leverage their balance sheets in new ways. This increases the diversity of thought and allows for philanthropies of varying size and scope to have equal power in shaping the direction of the Pool while learning how guarantees can unlock capital in the communities they care about. To support this learning journey, CIGP is launching a five-year evaluation effort to understand the impact of the Pool and regularly incorporate lessons learned to improve the Pool’s performance.

Since CIGP’s launch in December 2019, The Robert Wood Johnson Foundation (RWJF) has joined as a guarantor, bringing the total number of philanthropic guarantors to 12. Additionally, the Rockefeller Foundation has provided operating support, and The Hewlett Foundation and Wells Fargo Foundation have provided programmatic support for specific sectors (climate and affordable housing, respectively). Kimberlee Cornett, RWJF director of impact investments and chair of the Guarantor Advisory Council, says, “In 2020, we’ve seen low-income communities face health and economic challenges previously unimagined and the severity and complexity of the challenges requires new solutions. I believe CIGP is one way to activate new resources from foundations and family offices and provide intermediaries with an efficient, reliable source of credit enhancement so they can move quickly in response and take more risk when necessary. As with any new tool, the CIGP model is still being perfected. But this is important work for the field and investors to do together toward our shared goal of delivering more capital to communities.”

Looking ahead, Sarah Stremlau, president of LOCUS Impact Investing, says, “This is an exciting time for CIGP. Our early successes confirm there is a need here, and we are on a learning journey to determine how we can best meet that need. As we grow the Pool, establish our Finance Advisory Teams, and refine our internal processes, I believe we will create a powerful resource for mobilizing capital in new ways.”

2021 holds a lot of promise for CIGP. Conversations are already underway with philanthropies interested in joining the Pool as new guarantors and there is a robust pipeline of guarantee use cases in all three sectors. As the evaluation begins and the Finance Advisory Teams begin to meet, CIGP will continue to hone its ability to mobilize capital where it has been previously painfully absent.

To join in CIGP’s mission as a funder or a guarantee user, or to simply learn more, please visit www.guaranteepool.org.

About CIGP

Community Investment Guarantee Pool (CIGP) is a financing tool formed in December 2019 by a dozen impact investing organizations to create a pooled commitment of financial guarantees for intermediaries involved in affordable housing, small business, and climate lending. CIGP accelerates community investments by leveraging balance sheets for impact to make more and new types of community development transactions feasible. The initial guarantors that helped make CIGP possible include The Kresge FoundationThe Annie E. Casey FoundationThe California EndowmentChan Zuckerberg InitiativeCommonSpirit HealthGary Community InvestmentsJessie Ball duPont FundPhillips FoundationSeattle FoundationVirginia Community Capital and Weingart Foundation. Learn more about CIGP by watching this short video produced by The Kresge Foundation.

About LOCUS Impact Investing

The program manager for CIGP is LOCUS Impact Investing, a national social enterprise launched by Virginia Community Capital (a CDFI) to empower place-focused institutions to invest their capital locally to build prosperous, vibrant communities. LOCUS works with investors, underwriting guarantee commitments as well as monitoring and managing the portfolio for both impact and risk.