In an attempt to increase investment to address the social determinants of health in low-income communities and communities of color, and give a new tool for the community development finance system, the Robert Wood Johnson Foundation (RWJF) provided a guarantee of up to $10 million to the Community Investment Guarantee Pool (CIGP).
Created by the Kresge Foundation, CIGP, a first-of-its-kind vehicle within community finance, pools more than $42 million in investments from 14 investors including 12 philanthropies, one health system (Common Spirit), and LOCUS’ parent company—VCC. Through the aggregation of unfunded guarantee commitments from philanthropic organizations, CIGP utilizes the strengths of their balance sheets to unlock capital for affordable housing, small business, and climate. More guarantor commitments are expected in the next year, with the intention of increasing the pool to over $50 million.
Why It Is Needed
At RWJF, we envision a future where everyone—no matter who they are, where they live, or how much money they make—has safe housing that is affordable; equitable access to parks, recreation, and clean water and air; and good jobs with fair pay.
Yet more than one in five U.S. residents live in a low-income community, which are more likely to have barriers to good health and opportunity.
Through these guarantees, we hope to support initiatives that improve economic and environmental factors that shape our health and empower communities. Specifically, this guarantee aims to:
Accelerate investment in low-income communities to support affordable housing development, small businesses, and investments that increase climate resilience.
Ensure more efficient access for guarantee users.
Demonstrate that through a pooled model, foundations can better manage financial risk, find new ways to collaborate, and give intermediaries a one-stop-shop for credit enhancement.
Use the power of foundation's balance sheets—a relatively untapped resource—to unlock capital.
Progress to Date
In its first full year of operation in 2020, CIGP made some significant loan guarantees:
The deployment of $1.5 million to Genesis LA to bolster financing of public-supported supportive housing and naturally-occurring affordable housing in Los Angeles County, California.
A $2 million guarantee to the Low Income Investment Fund (LIIF) in support of a $20 million fund that aims to provide funds to affordable
housing developers who have been impacted by the COVID-19 pandemic.
A $3.6 million guarantee to the Local Initiatives Support Corporation (LISC) for its $36M Diverse Developer Loan Fund to provide loans for minority- owned or -led developers with limited balance sheets.
In addition to RWJF, guarantors include the Chan Zuckerberg Initiative, Annie E. Casey Foundation, and CommonSpirit Health System. The Rockefeller Foundation, Hewlett Foundation, as well as the Wells Fargo Foundation have provided grant support to the effort.
RWJF uses grantmaking, policy change, and impact investing to address barriers to health and wellbeing.