May 20, 2021
by Karen Andrews, AAACF Board Secretary
On April 30, 2021, we held our first-ever Investors Salon. Community members, investors, financial professionals and business leaders attended to share thoughts and grow our collective wisdom on Impact Investing.
Impact Investing refers to investments placed into companies, organizations or funds with the intention of generating a measurable social or environmental return as well as a financial return on investment. It is a means of directing financial capital to firms that generate social or environmental benefit. In simpler terms, it is the choice to make investments that do well (ROI) and do good (make the world a better place).
Since our formulation over 50 years ago, the AAACF has endowed funds for the community with a rigorous focus on serving as a fiduciary for community capital. We have been privileged to have brilliant financial experts serve on our Board and Investment Committee, and our endowment funds have been managed to ensure safety and longevity. We have impacted the community through grant making and alliance building, and have sought ways to “be bold” in advancing our mission to enrich the quality of life in Washtenaw County.
Recently, we have pursued a deeper exploration of the purpose of capital, and asked ourselves the question of whether we are leaving extra financial value or impact on the table, thus missing an opportunity to marry purpose with ROI. As a Board, we studies Impact Investing. We heard from subject matter experts and fund managers across the country. We had group and individual conversations with community foundations actively investing a portion of their endowment into targeted impact investments, such as CDFIs, affinity funds, community development organizations or private ventures. From these learnings, we crafted an Impact Investment policy, launched a committee, and dedicated a percentage of our endowment for board-approved investments.
In the past 2 years, we have placed 1% of our endowment into investments focused on enriching quality of life in Washtenaw County, with an emphasis on racial and social equity. We are proud to have thoroughly researched, through in-depth due diligence, 4 investments:
- Michigan Women Forward: a community development organization expanding economic opportunity for women and creating an inclusive economy for women to reach their full potential
- IFF Impact Connection: a fund meeting the long-term credit needs of nonprofits through affordable loans
- Fair Food Fund: supporting food system entrepreneurs to provide healthy food products for all areas of the community
- Community Capital Management Bond: an investment grade bond focused on local, positive environmental and societal impacts
During our Investors Salon, we heard presentations/updates from Michigan Women Forward, IFF and the Fair Food Fund. We also came together to share thoughts, ask questions and inspire ideas to put our capital to work in our community. We left feeling inspired, aligned and committed to advance our definition of the purpose of capital – not to simply generate more capital, but also to function as a catalyst for quality of life and racial/social equity in our community.