On Tuesday, June 21, 2016, The Denver Foundation welcomed some very special guests—an envoy from the White House that studies innovative and effective solutions to social challenges on behalf of President Barack Obama.
In Denver, they visited the Renaissance North Colorado Station development, which opened in February and provides housing and supportive services to formerly homeless families and individuals.
“This is a remarkable coming together of partners to address a huge challenge,” said David Wilkinson, Director of the White House Office of Social Innovation and Civic Participation. “If the President were here he would be so excited to see that you’re implementing a solution that’s working much better than business as usual.”
The Denver Foundation is part of the collaborative effort behind the development, which is the first in a series of projects addressing chronic homelessness for 250 of the city’s most high-risk adults through a newly created Social Impact Bond (SIB) for Permanent Supportive Housing. The Foundation will provide $500,000 in funding for the $8.7 million dollar SIB program, a partnership among private, nonprofit, and public entities. The Denver Foundation is the first community foundation to invite individual donors to contribute to this kind of investment.
“These projects tend to be many things at once. They serve Basic Human Needs by providing housing; they support Economic Opportunity by creating jobs and creating wealth. It’s a very exciting opportunity to employ a sort of hybrid approach to creating change.”
According to donor Rhondda Grant, the SIB reflects the creative thinking that makes The Denver Foundation unique.
“My husband Peter and I are very grateful we can support this project through our donor-advised fund,” says Grant, who once delivered meals for Project Angel Heart to the low-budget hotel that sat on the corner of 40th and Colorado, where Renaissance North Colorado Station is now located. “The homelessness situation is very serious. Being part of this solution is something we could never have done on our own. One of the exciting things the Foundation does is make us aware of these types of opportunities.”
Renaissance North Colorado Station is an example of Impact Investing in action. As its name suggests, this emerging form of philanthropy is designed to create meaningful systemic change by supporting result-driven initiatives, sometimes on a major scale. Using a “pay-for-success” model, these investments produce a return (often below market) when certain goals are met, both social and financial.
Impact Investing allows The Denver Foundation to do big things—like helping to ensure that low- to moderate-income families benefit from the regional expansion of mass transit. Through the Transit Oriented Development (TOD) Fund, the Foundation has contributed $250,000 toward the development of two major projects that sit near the FasTracks rail line and heavily trafficked bus corridors: 5800 Alameda, a refurbished office building that will house 155 affordable and market-rate housing units as well as the New America School; and Terraza del Sol Apartments in southwest Denver, which will provide 42 affordable units and a new home for Mi Casa Resource Center.
Impact Investments sometimes referred to as PRIs or program-related investments, are a growing area for The Denver Foundation. Over the past two years, the Foundation and its donors have committed $200,00 in low-cost loans from an Impact Investment Pool to six projects that make a positive impact on the community.
One of those, Prodigy Ventures, will employ youth from low-income communities to run a full-service coffee shop when it opens near the North Colorado RTD light-rail stop in July. The Foundation invested $25,000 to help get the start-up business off the ground; Prodigy Ventures also received an Economic Opportunity grant of $20,000.
Other projects in the Foundation’s Impact Investment portfolio include Rocky Mountain Finance Institute, which provides emerging entrepreneurs with skill-building, mentorship, and microloans to get their ventures off the ground; graduates can apply for capital loans that fuel the continued success of their businesses. Another supported effort is Aurora-based Community Enterprise Development Solutions, which supports entrepreneurs with refugee and asylee status who face unique challenges as they start new businesses. These professionals can apply for loans in the $5,000-$15,000 range.
All Impact Investment opportunities are vetted to ensure they align with the Denver Foundation’s three Community Objective Areas of Economic Opportunity, Basic Human Needs, and Education. “These projects tend to be many things at once,” says Patrick Horvath, the Foundation’s Deputy Vice President of Programs, Director of Economic Opportunity. “They serve Basic Human Needs by providing housing; they support Economic Opportunity by creating jobs and creating wealth. It’s a very exciting opportunity to employ a sort of hybrid approach to creating change.”
The Denver Foundation’s Impact Investing Fund helps the Foundation leverage its responsive and directed Community Grants with Impact Investments. The fund is designed to enhance The Denver Foundation’s impact in its focus areas of Basic Human Needs, Economic Opportunity, Education, and Leadership & Equity and create learning opportunities for the Foundation on alternative funding options for nonprofits and other groups that further the foundation’s mission. If you are interested in contributing to the fund, or in making your own Impact Investments, please contact Kate Lyda, firstname.lastname@example.org.
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