When new investment occurs in low-income neighborhoods, families reap the benefits. Local residents are housed and hired. Small businesses succeed. And communities are transformed.
Now donors of The San Diego Foundation can create hope through education and build homes in low-income communities through innovative philanthropic investments — or impact investing — from their donor-advised funds.
What is Impact Investing?
Impact investing is defined as investments made into companies, organizations and funds with the intention to generate social and environmental impact alongside a financial return.
With growing interest from donors and investors to better align their philanthropic resources with their values and a rising interest in place-based investing, The San Diego Foundation founded the Impact Investing Program more than five years ago to identify and offer investment opportunities to donors who traditionally would not have access due to barriers such as high minimums. The Foundation’s minimum investment requirement is less than an institutional investment fund due to its ability to pool funds from multiple donor-advised funds.
Impact investing makes community-connected capital available to nonprofits and small businesses committed to local economic opportunity and puts donor-advised funds to work for the San Diego community and donors at The Foundation.
With impact investing, community foundations like The San Diego Foundation are going above and beyond grantmaking for social good by facilitating investments from donor-advised funds which benefit as the investment return on capital recycles back to the fund to make future impact investments and grants.
Local Partners Making Progress
The Foundation has partnered with Mission Driven Finance, an impact investment firm and Certified B Corporation empowering community through new models of investing in social change with the goal of making it easy to invest in the San Diego community with funds designed to close financial and opportunity gaps.
“Impact investing with Mission Driven Finance provides donors at The San Diego Foundation with an innovative opportunity to address major community needs with social investment that is recoverable and re-invested for even greater community benefit,” shared Brian Zumbano, Vice President and Chief Development Officer at The Foundation.
The San Diego Foundation and Mission Driven Finance believe that investments in creating inclusive, safe, and sustainable built environments for underserved areas – including community facilities and infrastructure – establishes the foundation for generating economic prosperity and increasing quality of life through physical places and shared spaces.
How to Invest
San Diego Foundation donors can currently invest in two Mission Driven Finance private debt fund opportunities through their donor-advised funds: The Advance Fund and The Homebuilding Investment Fund.
The Homebuilding Investment Fund has raised more than $1 million to support the construction of affordable homes for local low-income families and provide a social return that increases economic opportunity.
In May, Mission Driven Finance announced the Homebuilding Investment Fund will accelerate nonprofit San Diego Habitat for Humanity’s plans to build at least 30 affordable homes within 5 years to support self-reliance for families whose household income falls at or below 50-80 percent of the area median income (AMI) in San Diego County, primarily in Logan Heights, El Cajon, National City and Encinitas.
Habitat for Humanity believes strong and stable homes help build strong and stable communities.
President and CEO of San Diego Habitat for Humanity Lori Holt Pfeiler: “For over 30 years we’ve been building and selling homes to help families thrive. Working with Mission Driven Finance was the first time someone reimagined a financial structure to make sweeping local impact with us. Their support not only meets our current needs but positions us for future growth.”
With the average cost of a San Diego home now close to $600,000 and rent for a 2-bedroom apartment nearing $2,000 a month, the initiative and its anticipated impact to advance inclusive economic opportunity and enable more San Diego residents to realize home ownership have won the support and attracted donor-advised fund investment from the Beyster, Hervey and other family funds at The San Diego Foundation.
The Advance Fund supports nonprofits, social enterprises and small businesses with project financing to advance economic opportunity in San Diego. Projects are too big for microfinance, yet too small for traditional bank financing.
Recently, Foundation impact investments made in the Advance Fund helped local nonprofit Access Youth Academy acquire land to build a new, nine-court squash and academic learning center in southeastern San Diego. The funding and project will enable Access to grow and serve more students, including 250 youth annually enrolled in its after-school enrichment program and 1,250 youth annually enrolled in physical education programs through school partnerships.
Access is a nonprofit that engages with students through scholarship and sportsmanship to transform their lives and help them realize their full potential starting in 7th grade and continuing beyond college. Students develop squash skills to qualify for scholarships. To date, Access has helped secure $6.3 million in scholarships for their students with 100 percent of alumni graduating from high school with acceptance to college.
Be a Savvy Donor
Innovative, local impact investing vehicles like the Advance Fund and Homebuilding Investment Fund create new opportunities for philanthropic investment and contribute to transformative social change in San Diego.
Interested current or prospective donors can learn more by contacting Foundation Vice President Brian Zumbano at BrianZ@SDFoundation.org or 619-235-2300.
