News & Event
May 12, 2017
With the creation of a new $500,000 loan fund, Washtenaw County nonprofits will soon have access to a new source of capital. During its 2017 Annual Community Meeting, the Ann Arbor Area Community Foundation (AAACF) announced an enhanced “impact investing” effort made possible by a social-impact strategist and donor.
Fran Loosen no longer lives locally, yet continues to direct even more family resources into a donor-advised fund (the Revolver Fund) she established at AAACF because of the foundation’s innovative new directions. A former knowledge officer with the Kellogg Foundation holding two Master’s degrees from the University of Michigan, Loosen wants neither her gift nor the impact investing program to focus on her, but rather on the outcomes it will make possible for the local community.
Neel Hajra, AAACF President & CEO, told the more than 400 event attendees that the Community Foundation wants to find additional ways to convert charitable capital and to leverage the power of AAACF’s $80M endowment into local impact. Hajra said, “We view nonprofit loan-making as an enhancement and supplement to our core grantmaking and scholarship work. Following further development this spring and summer—including hearing from nonprofits on where they see opportunities—we’ll be announcing our nonprofit loan program parameters this fall.”
AAACF successfully piloted a loan program with the Ann Arbor Art Center, a partnership that has been well documented and publicized and was also funded by the Revolver Fund. Impact investing has many possible directions, with direct loans to nonprofits at below-market rates (otherwise known as “program-related investments”) being the most conventional and lowest risk. Hajra cautions, “This nonprofit loan program in no way replaces banks and, in fact, AAACF sees this extension beyond its grantmaking as a way to potentially partner with other financial institutions in order to advance the nonprofit sector.” With grants, funds are distributed with no expectation to pay them back; by contrast, nonprofit loans require a low interest repayment of funds. Thanks to Ms. Loosen’s support through the Revolver Fund, AAACF will not be utilizing any of its permanent charitable funds to issue loans.
The unveiling of AAACF’s new nonprofit loan followed announcements of other impact for Washtenaw County, including the completion of a $250,000 matching program for the continued growth of its Community Scholarship Program, which provides multi-year scholarships and a dedicated success coach to local students from low-income families, students of color, and first-generation college students.
The Ann Arbor Area Community Foundation (AAACF) is dedicated to enriching the quality of life in our region through its engaged grantmaking, knowledgeable leadership, and creative partnerships with donors. Founded in 1963, AAACF has awarded more than $45 million in grants and scholarships that have changed thousands of lives. AAACF currently manages more than $100 million in total assets and 550 charitable funds on our community’s behalf.