Impact Investing: A new initiative

Impact Investing: A new initiative

For the McPherson County Community Foundation (MCCF), initiatives are how the Foundation can interact with the community and spur positive change. From surveying the communities in the county to celebrating the people who have gone above and beyond, our commitment is to the continued betterment of our community. A new addition to MCCF’s initiatives now includes impact investing.

What is impact investing?

Impact Investing focuses on local development for McPherson County. The Foundation has set aside funds that will be given out to organizations as loans. These loans, as opposed to grants, will be paid back with interest over time. An expected financial return to the ‘McPherson County Impact Investment Change Makers Fund’ is 3-5% over initial investment.

An investment that is compounded by social return. All of the dollars will be going towards making an impact in McPherson County communities.

This fund will be treated as a growing wheel. As soon as funding from one loan is repaid, it will immediately be reinvested into another organization.

How will the Foundation make decisions on investments?

Since these loans are considered long-term investments, MCCF will employ an extensive review process for applicants. The Foundation does currently have an impact investment committee that will review, and rate applications based on: County impact, risk and vision alignment.

Why is this a focus of the Foundation now?

MCCF has a commitment to the betterment of McPherson County, and we always are looking for new opportunities to make an impact.

The idea of impact investing has been growing in popularity at community foundations all over the country and has been a topic of discussion at the Kansas Association of Community Foundations National Conference for the last few years.

Our Foundation staff members have already completed a year-long extensive training on impact investing and, through our work in the community, have already identified many areas of opportunity.

Private markets often are limited in their ability to loan at an affordable rate to non-profit organizations. While we may not be able to loan as often as a private lender our rates will fit what we know our organizations can sustain.

When will this initiative make its debut?

It already has! After completing training and receiving board approval in October of 2022 the Foundation released its first loan. The loan, totaling at $190,000, acquired a house in McPherson to place an Oxford House for Men. This house provides a low-cost and sober living facility that is self-supported by its occupants.

The Foundations most recent loan is one that recently broke ground on construction. The McPherson Housing Coalition received a grant to build permanent housing, but the grant did not cover acquirement of the land. A loan of $70,000 was released from the fund to acquire the land across the street from their Oak Harbor Cottages.

Why would I as a donor want to be involved?

Especially for larger projects such as expansion and acquisition, the upfront costs for these organizations can be a deal breaker stunting the growth potential of these organizations. MCCFF ability to provide capital will directly affect the impact in the community.