If you’re unfamiliar with the term “Impact Investing,” you’re not alone. As an approach to investments, it’s relatively new, but for the Catholic Community Foundation of Minnesota (CCF), it’s an idea whose time has come.

Simply put, Impact Investing refers to investments made with the purpose of generating a measurable social benefit along with a financial return. “The measurable component is key,” explained CCF Director of Professional Outreach and Investments Mike Ricci. “We provide this capital to partners, who identify mission-aligned projects. They are required to tell us how many people received health care that might not have had any, or how many people received housing that would have otherwise been displaced. This way, we can know our investments had a real, measurable impact.”

Julie Gerend, Sales Director at Wells Capital Management and CCF’s Investment Committee Chair, has worked in the investment management industry for 30 years and is excited about the potential. “We can align our mission with our investing and have a meaningful impact,” she stated. “It’s just a portion of our portfolio, and the returns need to be in line with our performance expectations, but this approach is consistent with our Catholic faith and helps us serve those in need.”

The Foundation has always screened its investments for mission-alignment. Now, it’s taking the additional step of Impact Investing a total of $3.5M – 1% of the $350 million in charitable assets held by CCF – with both CommonBond Communities and the Ascension Investment Management Group.

Preserving Affordable Housing

Minnesota-based CommonBond is the Midwest’s largest nonprofit provider of affordable housing. Founded in 1971 in partnership with the Archdiocese of St. Paul and Minneapolis, CommonBond currently manages over 6,000 affordable rental apartments and townhomes across Minnesota, Wisconsin, and Iowa.

CCF has invested $1M in CommonBond’s Housing Opportunity Fund, a new initiative that helps working people with low to moderate income who don’t qualify for other housing assistance.

“We’re talking about teachers, social workers, mechanics, receptionists, and recent college grads,” explained Vice President of Major Gifts and Impact Investments Ann Ruff, who’s been with CommonBond for 19 years. “The rental market is hot right now, so investors are buying older properties, upgrading them with amenities such as granite countertops and stainless steel appliances, then raise the rents. That’s pricing out families already living there, and in the current market, affordable options are shrinking.”

The Housing Opportunity Fund will provide the initial capital CommonBond needs to preserve affordable units. “CCF’s investment is huge for us,” Ruff said. “Because they’re an institutional investor, other investors will give us a good look. That’s important to us now.”

Performance with a Purpose

The philosophy of Ascension Investment Management (AIM) is declared boldly on its website: “We do not accept that you have to sacrifice returns in order to invest with socially responsible guidelines.” Headquartered in St. Louis, AIM is a subsidiary of Ascension Health, the largest Catholic nonprofit healthcare system in the U.S. It was established to help faith-based organizations meet their investment and mission goals.

CCF has invested in AIM’s second Impact Fund, which includes a number of investments in developing markets like Africa, China, and India. Mike Ricci describes a project in Kenya he’s enthusiastic about. “In Nairobi there aren’t enough doctors, so AIM is investing in health clinics similar to our Minute Clinics.” he said. “For a modest fee, people can get access to medical care that’s otherwise not available. The clinics have been well-received, and AIM plans to invest in the expansion of more than 100 of them across the region.”

CCF’s Impact Investments reflect its ongoing commitment to be a creative and thoughtful steward. “People come to us to align their philanthropy with their Catholic faith,” Gerend observed. “We’re taking this a step further and using our investments to make a difference in people’s lives. That’s pretty powerful.”

Photo by Philip de Leon on Unsplash

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