Living Cities Launches Innovative Loan Fund to Revitalize America's Cities
Living Cities, a collaborative consisting of 20 of the nation's largest foundations and financial institutions, today announced the first closing of the Living Cities Catalyst Fund, a new vehicle to pool and invest flexible capital to revitalize America's cities.
"The Catalyst Fund meets an important need in the community development field," notes Frank DeGiovanni, Director of Economic Development at the Ford Foundation. "It will look beyond real estate and housing development to finance organizations expanding their innovative activities in sectors such as workforce development, education, and access to healthy foods, among others. Financing for these activities often is difficult for organizations to obtain."
Investors in the first round include The Ford Foundation, The Annie E. Casey Foundation, MetLife Foundation, Robert Wood Johnson Foundation, The Kresge Foundation, and DeutscheBank Americas Foundation. These founding investors have committed $20 million to the Fund in the form of Program-Related Investments (PRIs). PRIs are investments made by foundations that are intended to generate both social returns as well as financial returns.
The Fund will seek out highly innovative organizations and change agents acting in low-income urban communities and provide them with below-market rate loans and guarantees. Specifically, Living Cities notes four priority areas for these investments: improving education, building individual income and prosperity, promoting health and wellness, and enhancing neighborhoods.
With a pipeline of initiatives already under review, the Fund is slated to start making loans in the fall and expects a future portfolio of approximately 20 loans ranging in size from $250,000 to $2 million.
"The Living Cities Catalyst Fund will play a key sector-building role," according to Doug Nelson, CEO of The Annie E. Casey Foundation. "Many foundations are exploring the use of PRIs to advance their agendas. The Fund is an excellent vehicle for new PRI-makers, enabling them to invest alongside the institutions that pioneered these investments and create a PRI portfolio without having to build specialized staff to underwrite and monitor individual investments."
"Living Cities is about making markets work for underserved urban communities and their residents. The Fund will bring new capital to cities by providing a convenient vehicle for philanthropic investors who care about cities and, in turn, enabling organizations to expand their impact on the ground and leverage additional investment," says Living Cities CEO, Ben Hecht.
About Living Cities
Living Cities is the most enduring philanthropic and private sector collaborative in the world, with investments in America's cities totaling a half billion dollars over the past 15 years, leveraging over 15 billion dollars to revitalize urban America. Living Cities supports bold, promising approaches that take advantage of cities' unique roles in America's economic prosperity and that have the potential to transform the lives of low-income people and the communities in which they live. For more information, please visit: http://www.livingcities.org.
Living Cities members include: AXA Community Investment Program, Bank of America, The Annie E. Casey Foundation, J.P. Morgan Chase & Company, Citigroup, Deutsche Bank, Ford Foundation, Bill & Melinda Gates Foundation, Robert Wood Johnson Foundation, The Kresge Foundation, John S. and James L. Knight Foundation, John D. and Catherine T. MacArthur Foundation, The McKnight Foundation, MetLife, Inc., Prudential Financial, The Rockefeller Foundation, Surdna Foundation, U.S. Department of Housing & Urban Development. Affiliate Members: The Cleveland Foundation, The Skillman Foundation.
