On March 31, 2016, the Kresge Foundation today launched Kresge Community Finance, a $30 million program-related investment (PRI) finance offering available to two key organizational types working to expand opportunities for low-income people in America’s cities.
The foundation will select applications through a competitive Request-for-Proposals (RFP) process. The RFP is open exclusively to certified Community Development Finance Institutions (CDFI) and quasi-public or private Development Finance Agencies (DFA).
Funded projects will support work that aligns with Kresge’s six programs – Arts & Culture, Detroit, Education, Environment, Health and Human Services – and their strategic focus areas.
Successful nonprofit applicants also will receive a net asset grant equal to 5 percent of the amount of their loan.
“Too often, the capital markets don’t work for the people and places who need it most – low-income and vulnerable people in our country,” said Kimberlee Cornett, managing director of Kresge’s Social Investment Practice. “Through this RFP, we are looking to work with financial and development institutions on the ground, that know their communities’ needs, to fund projects that will make a direct impact on those populations.”
Selections will be made through a two-step process. Eligible organizations can submit a Letter of Inquiry (LOI) through April 29. After internal review, selected applications will be invited back for the second round. Selected projects will be announced in the summer.
Loans offered through Kresge Community Finance will be similarly structured with a minimum interest rate of 2 percent and a maximum repayment period of 10-years.
“By offering a standard product, we can work efficiently to overcome capital barriers in cities,” said Joe Evans, the social investment team’s portfolio manager. “A key hindrance to wider investor participation in community development is a lack of standard investment products, so we also hope to demonstrate that there is demand at the community level for a standard approach.”
Kresge’s Social Investment Practice works to influence and advance how markets work on behalf of low-income people, and those who serve them, in partnership with practitioners, investors, policymakers and government.
In 2015, Kresge committed to invest $350 million by 2020 through social and mission-related investments and to leverage $1 billion toward the expansion of opportunities in America’s cities.
The foundation will hold two webinars for interested applicants to learn more and have questions answered:
- At 2 p.m. on April 13, the foundation will co-host a webinar with the Council of Development Finance Agencies. Members of the CFDA network can sign up for the webinar at http://bit.ly/KCF_CDFA_webinar.
- At 1 p.m. on April 15, Kresge is hosting a webinar geared toward interested CDFIs, but any interested person is welcome to attend. You can sign up for this webinar at https://attendee.gotowebinar.com/register/6544347458206811651