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Giving Compass' Take:
• More healthcare companies are addressing the social determinants of health by investing in things like community land trusts and affordable housing developments.
• How will impact investing benefit the health sector?
• Learn more from this impact investing guide from Grantmakers in Health.
Last spring, Kaiser Permanente, one of the US’s largest nonprofit health systems, announced an impact investment of $200 million to address the affordable housing crisis in markets that it serves.
This move by Kaiser shows how some nonprofit hospitals and health systems are rethinking what it means to be a charitable institution and reimagining their definitions of community benefit activities to include community health–promoting investments, rather than charitable donations.
As a society, we’re growing more aware of how social and economic factors, known as social determinants of health, contribute to people’s health status.
Homelessness and housing instability are associated with anxiety, depression, and other negative health outcomes (PDF). Housing unaffordability (PDF) is linked to families lacking funds to cover other health-related living necessities, such as food, utilities, and medical care.
Broadly, philanthropy is shifting away from an exclusive focus on grantmaking toward portfolios that include both grantmaking and impact investing instruments. Impact investments are investments made in projects or entities that generate a social or environmental return alongside a financial one.
This trend, spearheaded by several major foundations like the John D. and Catherine T. MacArthur Foundation and the Kresge Foundation, are emphasizing the role such impact investments, typically deployed as program-related investments, have in catalyzing innovative solutions.
For the health sector, impact investing can enable nonprofit hospitals and health systems to address social determinants of health while maintaining their financial bottom line. These entities are investing in projects like community land trusts and affordable housing development that can have significant effects on health outcomes for the populations they serve.
Read the full article about health systems turn to impact investing by Kathryn Reynolds, Martha Fedorowicz, and Matthew Eldridge at Urban Institute.