By Barbra Murray, Contributing Editor
Seattle–Enterprise Community Loan Fund gets a substantial commitment for the Enterprise Community Impact Note, a mission-aligned investment product that Enterprise Community Partners formed last year. The Seattle Foundation is the first philanthropic partner to step up to the plate, making a $1 million investment for development projects in low-income neighborhoods in the King County area of Washington State.
“We’re very excited that Seattle Foundation has made an early commitment to Enterprise Community Impact Note, as they’re bringing low-cost capital to the Loan Fund so we can continue to lend out funds specifically in the King County area,” Liz Sessler, investment marketing manager for the Impact Note, tells MHN. “It’s really demonstrating to their peer organizations that you can use an investment to further your mission in addition to just making grants on a day-to-day basis.”
The Impact Note, which the Loan Fund makes available in 25 states and the District of Columbia, provides investors with a fixed rate of return and annual interest payments ranging from 2 to 3.5 percent. Monetary commitments are utilized to help finance affordable housing development endeavors of non-profit and mission-driven organizations.
With its million-dollar contribution, Seattle Foundation, as is the case with entities that make Impact Note investments exceeding $500,000, has the privilege of choosing its target market, as well as the type of “programmatic investment” that the Loan Fund will consider. Projects that will benefit from Seattle Foundation’s financing are already being identified, and a plan by Technology Access Foundation is among them. The Seattle-based organization provides increased educational opportunities to underserved youth, with the goal of preparing them for college. “They’re trying to build a facility to tie together a lot of their programs and help them expand,” M.A. Leonard, vice president and market leader for Enterprise’s Pacific Northwest Market, tells MHN. “They’re trying to get the last of the financing together for the project. Assuming that happens, we will be offering them a loan, so the Seattle Foundation funds would be used as a part of a lending package that we would make available to them to complete the financing of the project. Hopefully that will happen by this fall.”
To date, a total of $2.1 million has been invested in the Impact Note. Other organizations that have committed include Bronx, N.Y.-based developer Fordham Bedford Housing Corp., the Manekin family, which runs the Seawall Development Co. in Baltimore, and Washington, D.C.’s National Housing Trust. “A lot of affordable housing developers have really picked up on this idea and decided it’s a good place to invest some of their funds,” Sessler notes. “We’re talking to a number of philanthropic organizations. We have a $50 million offering out, and we’re aiming to raise $5 million by the end of 2011.”
One of the special features of the Impact Note is its reach among the investment community. “It has a minimum investment of $5,000 so you and I and anyone else with $5,000 are able to participate,” Leonard says. “Community development has typically been very restricted to banks and philanthropic organizations and this tool makes it easier for everyone to get involved.”