Why Impact Investing Can Make a Difference
Baltimore is a city of opportunity. And opportunity requires investment.
Impact investing, which generates positive social returns alongside financial returns, is proving a valuable tool for spurring inclusive economic growth and advancing equity in Baltimore communities. By providing patient capital for visionary projects, foundations, philanthropic asset managers and socially-minded individuals and corporations can help pave the way for other investors seeking market-rate returns. Impact investments can take the form of low-interest loans, venture capital, or municipal bond investments, for example, all with the goal of addressing critical social needs. It’s a way to create and nurture new opportunities, as well as to broaden access to them.
The Baltimore Community Foundation (BCF) brings together residents, businesses, and community groups who are passionate about Baltimore, purposeful in their philanthropy, and tenacious about progress. In this role, we have a front row seat to dozens of innovative impact investments in our town that are drawing national attention. Local foundations, such as the Abell Foundation, Annie E. Casey Foundation, Deutsch Foundation and Straus Foundation, have been pioneers, deploying a portion of their assets to support small businesses, job growth, and community development projects locally. And the momentum is growing. That’s why, on December 5-7, over 600 leading philanthropic impact investors from across the country will gather here for the Mission Investors Exchange National Conference. I am proud to co-chair the conference alongside Lisa Hamilton, President and CEO of the Annie E. Casey Foundation.
Baltimore was chosen as the host city because it is a beacon of diverse impact investments that center residents’ visions for their neighborhoods and catalyze public and private co-investment. Representatives from foundations of all sizes and philanthropic asset owners will visit to learn from what we are doing here and share ideas and insights that could advance progress. Among the projects they will see:
- The transformation of Lexington Market. A BCF impact investment in Baltimore Community Lending provided low-interest loans for minority-owned, women-owned, and city-resident-owned businesses to become vendors. Beyond the benefit for individual businesses, who might otherwise rely on high interest credit cards for start-up expenses, this investment ensures that the nation’s oldest public market reflects the rich diversity of the community it serves.
- Revitalization without displacement. ReBUILD Metro began as a coalition of residents and faith leaders who wanted to revitalize the Oliver community in East Baltimore. Residents developed a partnership with national community development leader TRF Development Partners, and they have since cracked the code on revitalization without displacement—investing in affordable housing, commercial space and community-identified assets like parks and schools that reinforce residents’ sense of place. They’ve reduced vacancy by 85% and 91% respectively in the Oliver/Broadway East and Greenmount West communities and are now working to transform nearby Johnston Square. BCF made a $100,000 investment in this work, which has enabled our donors and fundholders to co-invest an additional $1 million through BCF into affordable housing construction and rehabilitation, mixed-use developments, commercial and manufacturing space and a network of parks.
- Targeted capital and technical assistance for small, minority-owned businesses. Morgan State University’s Baltimore Means Business received funding from the Baltimore Small Business Support Fund, a partnership of local and national foundations, banking institutions and the Baltimore Development Corporation. Among the beneficiaries is the Cube Cowork, co-founded by two Black women to provide affordable office and event space and on-site childcare for working parents in the midst of the pandemic. It has been a critical resource for start-up entrepreneurs and has become a valuable community hub.
These projects and others will be in the national spotlight next week thanks to the support of companies like Brown Advisory, BG&E, and T. Rowe Price and they should also be on your radar. If you are an asset manager, purposeful in your investments, and engaged or interested in impact investing, I hope you will join this powerful movement for creating change and investing in communities. We have seen progress—in financial returns and in neighborhoods that are more vibrant, inclusive, and resilient.
The benefits that impact investing brings to our city are already making a difference, and we are just getting started.
Shanaysha Sauls is President & CEO of the Baltimore Community Foundation. This piece was originally published in the Baltimore Business Journal on December 2, 2022. You can read the original here.