Seattle Foundation has been on the lookout for more opportunities to support new investment tools that help people who have been locked out of traditional capital by investing in lenders that are experienced and committed to expanding opportunity through responsible financial products.
Recently we have had a chance to take part in something that’s never been done before: a new finance vehicle called the Community Investment Guarantee Pool (CIGP). Led by The Kresge Foundation, the CIGP is the first-ever philanthropic guarantee pool in the U.S., created to accelerate community investment nationwide. In essence, the CIGP leverages money sitting idle on balance sheets to centralize a source of credit enhancement for people and projects that need it most. By banding together, guarantors can mitigate their losses by sharing them pro-rata across the pool.
The pool will support businesses and enterprises whose intermediaries and/or end users are women or people of color. To start, it has identified three areas of focus for guarantees: affordable housing, small business, and climate solutions. Potential guarantees could include housing projects designed to reduce CO2 emissions and save low-income people money on energy bills, support for developers of color who are growing the size of their projects, and start-up food co-ops that will create access to healthy food while creating jobs and generating economic activity.
Read the full article about a community investment by Kris Hermanns at Seattle Foundation.