Open Mic: Lending Practices for Community Foundations to Advance Racial Equity
This Open Mic explored ways for community foundations to evolve and leverage lending practices to advance racial equity. Participants discussed how to align lending practices with racial equity goals in what a community foundation does (the investments it makes) and how it does it (the application process, interactions with applicants, etc. ). We also explored how loan programs for social entrepreneurs are serving as catalytic capital. Read on for some highlights from the Open Mic and scroll down to access a recording.
- Patricia Chandler, Baltimore Community Foundation (retired) / Board Chair, Ignite Capital
- Dwayne Marshall, Vice President, Community Investment, Community Foundation of Greater Chattanooga
- Sarah Abbe Taylor, Senior Program-Related Investment Officer, San Francisco Foundation
Open Mic Highlights
Community foundations are finding different ways to align their investments with their racial equity goals, such as…
- Using various sources of capital, such as unrestricted funds, and funds in collaboration with private foundations, to fund their impact investing programs that advance racial justice in their communities.
- By being more proactive, working with the entrepreneurial ecosystem (such as accelerators) to identify opportunities for investment rather than waiting for people to seek capital from them. exploring or already investing in new types of entities that build community wealth, such as co-ops and the New People’s Fund in Oakland that is governed in part by advocacy organizations rooted in communities.
Community foundations are thinking how they can advance racial equity in ways beyond their investment capital…
- Investors can provide reputational and intellectual capital that can further a business’s development and growth. Through business mentoring initiatives, investees have access to advice, social capital, and previously inaccessible networks.
- Through local media efforts and consulting services for their investees and even internally, community foundations are working to change the narrative about what makes a successful entrepreneur, what access to resources certain entrepreneurs do or do not have, and how that impacts their ability to reach their fullest potential.
Community foundations are re-thinking their own internal strategies and practices by…
- Building their own networks out more fully in order to support their investees and their programs — from local government, grassroots organizations, to international programs.
- Examining their current intermediary and service provider relationships and in general working with financial institutions to streamline the application and underwriting processes for more equity centered lending practices. Foundations are hearing that investees have been intimidated in the past by the process of applying for a loan and many don’t have a bank account for their business.
- Creating systems and tools in the toolbox internally that mitigate any risks community foundations see and adopting flexibility on their criteria (e.g., cash reserves).
- Internally creating cross-cutting teams and committees on impact investing that mirror some of their cross-team work on racial equity. Many community foundations are building internal collaboration among teams, not just for decision-making, but for cross-functional learning about impact investing.
MIE members, log in to view a recording of this Open Mic. If you have questions or challenges accessing the recording, please contact Zineb Touzani at [email protected].