Baltimore Community Foundation creates impact investing program to help the city and generate returns

The Baltimore Community Foundation is dedicating a new investment pool toward companies, organizations and funds that are helping Baltimore.
Invest for More, which was announced by the foundation’s board last week, embraces the impact investing model.
Traditionally, foundations are split into two sides. One focuses on making investments that will generate returns and the endowment, while a separate arm makes decisions around the grants that support its mission. The idea is that the money generated by the investment side would provide more for funds for grants.
“My view is that model isn’t enough. We really need to take some more money from the investment side..and put it directly into the community,” said Patricia Baum of RBC Wealth Management, Baum Jackson Group, a BCF trustee who chairs the foundation’s Investment Committee and Impact Investing Subcommittee.
With impact investing, money from the foundation’s assets can go to help the community, providing returns both in the social and financial realm.
BCF plans to commit up to four percent (or about $6 million) of its $148 million in assets toward Invest for More, with $4 million already approved. The investment pool is expected to yield financial returns of three percent.
The foundation’s impact investing subcommittee is looking to identify experienced intermediaries to support.
One of the three investments made so far is designed to help startups and small businesses. The BCF board approved $500,000 for Baltimore Business Lending, which provides loans of $5,000-$50,000 to entrepreneurs.
“One of the things we heard loud and clear from donors and prospective donors was that there is a real limit in terms of access to capital for people in underserved areas of Baltimore,” Baum said.
BCF also invested $500,000 in a community loan fund created by the community development financial institution Enterprise Community Partners to build multifamily affordable housing in Baltimore. It also invested in a bridge loan to Healthy Neighborhoods that will fund various projects like design for an expansion of the St. Francis Outreach Center and greening projects in Reservoir Hill.
Among other philanthropic organizations in Baltimore, the Annie E. Casey Foundation and Abell Foundation (which invests directly in startups) also apply the impact investing model. Baum is also hoping BCF can show local leadership on the community foundation level.
“What we’re hoping is it starts a process where more and more people understand it is the wave of the future,” Baum said.