Impact Investing

The East Bay Community Foundation is finding new ways to engage donors and partners in impact investing opportunities. We intend to lead the way for community foundations to pursue impact investing, starting with our own asset management. By investing through a racial equity lens, we are bringing all of our assets into mission alignment on all fronts to advance economic justice, change systems, and expand opportunity in the local community and beyond.

EBCF is developing the following four categories of impact investing.

  • Advisor-Managed Portfolio Impact Investing: EBCF is committed to investing with funds that are BIPOC- or women-owned enterprises and/or founders with disabilities (MWDEs). EBCF has rewritten our investment policy to codify this commitment as well as to commit to racial equity/ESG strategies in all positions. Specifically in the Opportunity Pool EBCF aims to achieve a quadruple bottom line by giving priority to (1) diverse (women, disabled and/or minority-owned) managers, (2) alignment in investment strategy including racial equity ESG/impact (shareholder activism where applicable), (3) Bay Area, community place-based opportunities, and (4) financial returns that are competitive with the market. Diverse fund managers lead to creative investments, and our Opportunity Pool, which is solely invested in MWDE managers, consistently outperforms their other pools both in terms of market returns and mission alignment.
  • Donor Impact Investing: Many of the DAF holders at EBCF are eager to make mission-aligned investments (also known as PRI’s – Program Related Investments, typically at lower than market terms), which can be structured as low-cost or zero-interest loans, loan guarantees to nonprofit organizations or as loans or equity investments in for-profit, mission-driven diverse entrepreneurs. EBCF has developed this as another opportunity for donors to unlock capital into the East Bay and build economic power in diverse priority communities.
  • Local East Bay Impact Investing. EBCF is designing new East Bay-based programs focused on impact investing in the local community with non-extractive terms for East Bay-based founders, especially women and BIPOC, who are creating a just and inclusive economy. In April 2021, we celebrated the launch of our place-based investing efforts at EBCF’s first Inclusive Economy Showcase (watch the event video) where we facilitated connections between entrepreneurs and local investors. Several East Bay entrepreneurs have already received funding as a result of this event. EBCF relied upon community leaders to assist on the selection committee and we are planning to produce two showcases annually. Register now for the September 30, 2021 showcase.
  • Kaiser Permanente/EBCF DAF Impact Investing: Kaiser Permanente is the largest DAF holder at EBCF. In 2021, due to the collaborative teamwork of EBCF and Kaiser staff, and with a vetting/due diligence process developed with the input of mutual advisors, EBCF supported Kaiser’s first targeted impact investment from a DAF in the form of a $5M low-interest loan to the National Housing Trust to support affordable housing along the Purple Line (a predominantly BIPOC neighborhood) in Maryland. Perhaps the most outstanding note in regards to this investment is the ability to leverage matching funds (which is true of most impact investments). In this case, NHT anticipates a 30 to 1 match increasing the impact 30 fold. As a result of the experience of preparing for and facilitating this investment with Kaiser, EBCF codified and streamlined our internal process in line with IRS regulations and legal guidance to facilitate this program for all donors.

 

Eventually, EBCF hopes to create its own impact investing fund to support diverse founders and organizations alongside our donors and other investors and to act as an anchor investor (which we believe is essential to properly expand and accelerate the program). In relation to all categories of impact investing, EBCF is sharing best practices with many other community foundations.

In relation to all categories of impact investing, EBCF is sharing best practices with many other
community foundations.

For more information about Impact Investing at EBCF, please contact Valerie Red-Horse Mohl, CFO, at vredhorsemohl@eastbaycf.org, or Elizabeth Burger, program manager, at eburger@eastbaycf.org.