Community
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In Depth: Impact Investing (Part 3 of 5)
The time has come! I have shared with you my understanding of impact investing, and why it is important for the Greater Tacoma Community Foundation to explore this new investment tool. Now I want to dig into the commitments we have already made. We are proud that they illustrate the diversity of ways we can make our community even stronger. This post will focus on our first investment, with the National Development Council.
National Development Council
Our most substantial investment to date is with the National Development Council (NDC). NDC is a nonprofit organization, deeply involved in community development around the country since 1969. NDC’s mission is “increasing the flow of capital to underserved urban and rural areas for job creation and community development.” In the 1990’s, NDC launched the Grow America Fund (GAF) with the support of the Small Business Administration, intended to provide favorable financing to small, local businesses in underserved areas.
One of NDC’s first place-based loan funds under the GAF umbrella was the Grow Tacoma Fund, launched in 1995. Since that time, seeded with a $2 million grant from the City of Tacoma, the Grow Tacoma Fund has invested $13 million in our city. These investments have benefitted many locally owned, long-time members of our community, including Stadium Thriftway, Puglia Engineering, and Stacy Plumbing.
Grow Pierce County Fund
Last year, the Greater Tacoma Community Foundation (GTCF) allocated $750,000 to NDC to enable the launch of the Grow Pierce County Fund, intended to fuel small business lending activity in the region beyond Tacoma. The Fund’s first investment was to Curbside Motors in Lakewood, in partnership with the City of Lakewood. The impact sought with this investment was 3-fold:
- Allow an existing local business to expand to a new location.
- Redevelop a vacant site and abandoned motel.
- Create 25 new and permanent full-time jobs.
Currently, Curbside is under construction and plans to open for business in the first quarter of next year.
The Grow Pierce County Fund’s next likely borrower, Gibraltar Senior Living, cares for extremely low-income, underserved elderly people, many of whom are veterans. It was long owned by a remote and passive owner who saddled the facility with high-interest, short-term debt. Gibraltar has recently changed hands, and its new minority owner sought financing to make long overdue facility improvements. Fortunately, NDC stepped up.
With a loan from the Grow Pierce County Fund, NDC intends to have the following impact:
- Provide access to capital (a very competitive, long-term loan) to a traditionally underserved constituent, a minority borrower.
- Improve services for historically underserved populations, including extremely low-income individuals and veterans.
What NDC didn’t anticipate is how instrumental they would be in helping Gibraltar close the loan. During the facility’s inspection, environmental issues were found on site. NDC connected Gibraltar with the appropriate resources to navigate these complex issues. As a non-profit, NDC has flexibility to offer potential borrowers technical assistance and services that traditional banks are prohibited from providing. As Michelle Morlan of the NDC says, “We are not just a bank, we are much more – we are a mission-driven organization.” NDC anticipates the loan will close before the end of the year.
GTCF Vision
Curbside and Gibraltar exemplify the reasons GTCF has chosen to become an impact investor: our funds target communities historically overlooked in economic development schemes. With these investments we seek to empower small business owners, create new jobs, and care for neglected spaces and our neighbors who inhabit them.
Would you like to become more involved in impact investing? It would be my pleasure to speak with you about the opportunities GTCF is able to facilitate. Please do not hesitate to contact me.
Gina Anstey, VP of Grants & Initiatives
gina@gtcf.org