RMHF’s Impact Investing Journey

January 26, 2021

Even with decades of experience working to prevent, reduce and end homelessness, the leaders at Homeward had never encountered conditions like those created by the COVID-19 pandemic. “We had to implement new safety protocols to continue to serve people experiencing homelessness during the crisis,” explains Kelly King Horne, Homeward’s executive director. “Couple that with the fact that unsheltered individuals may be at increased risk of disease transmission and it was an urgent situation.” The federal government granted Homeward emergency funding through the CARES Act in March, but by August, the organization still hadn’t received it. So, RMHF stepped in.

RMHF made a $500,000 zero-interest program-related investment (PRI) to Homeward to bridge the CARES Act funding for new housing needs early in the pandemic. This PRI investment was a first for RMHF, but it’s one of many examples that illustrate our commitment to impact investing.

In 2016, we embarked on a journey to learn about and begin implementing impact investing. Led by Trustee and Investment Committee Chair, Bobby Thalhimer, we selected Northern Trust as our outsourced Chief Investment Officer (CIO). Debby Kasemeyer of Northern Trust has served as an advisor to many organizations in the region and has been instrumental to this effort. In addition to supporting our learning journey, Northern Trust has brought $5.7M in capital to Richmond and recently joined the Virginia Funders Network, further demonstrating their commitment to our region and the Commonwealth.

We are proud of our accomplishments, eager to share what we’ve learned, and aware that we have more work to do. Since 2016, we have:

  • Aligned our mission and money. We now allocate 40% of our investments to Environmental, Social and Governance (ESG) funds. This is one of many ways to maximize our impact.
  • Integrated our Board committees. We integrated our Investment Committee with our Program & Evaluation Committee, led by Dr. Bill Nelson and Dr. Vanessa Walker Harris, to align our grantmaking and investment work and explore areas of intersection. Today, one person from each committee attends the other committee’s meetings. This approach improves communication and enhances cross-functional collaboration.
  • Cultivated an impact investing learning community in Virginia and beyond. In April 2017, we sponsored a Mission Investors Exchange event attended by more than 65 foundation leaders from across the Southeast. We also supported the exploration of the Virginia Impact Investing Forum, which recently found a home as part of UVA’s Social Entrepreneurship program led by the Batten School of Leadership and Public Policy.
  • Invested in Community Development Financial Institutions (CDFIs). “CDFIs are community-based institutions that leverage resources from other capital holders,” explains Kasemeyer. “With CDFIS, the capital investment is made within the region or community — not outside,” she continues. “These investments are intended to benefit those that are most underserved.” In order for CDFIs to grow and provide greater access to capital, they need to attract funding beyond banks that have traditionally funded them for Community Reinvestment Act (CRA) purposes. “We need support from others who control capital resources, including foundations and anchor institutions who share our mission of community development,” adds Kasemeyer. We’ve invested in Virginia Community Capital and Enterprise Community Partners using this leverage and community accountability model to begin ceding control of capital to the communities we’re committed to serve.
  • Invested in health and housing strategies. People experiencing homelessness have an average life expectancy of around 50 years of age, almost 20 years fewer than people with stable housing. In addition, they often experience chronic health conditions that lead to recurrent emergency department visits. To improve these statistics, we invested in Virginia Supportive Housing (VSH). VSH collaborates with VCU Health to provide stable housing and supportive services to patients experiencing complex health issues – such as sickle cell disease – coupled with housing instability. For more details, read our December 2019 article about the VSH/VCU collaboration.
  • Invested in strategies to explore the intersection of health and the social determinants of health. One great example of this strategy is our investment in HumanKind in collaboration with the Jessie Ball duPont Fund and Northern Trust. This investment helped HumanKind establish their own CDFI so they can better leverage capital and further their mission of strengthening individuals and families. HumanKind’s Ways to Work program provides character-based, fair-interest auto loans that enable people with poor or no credit to access and maintain employment. Our vehicle loans improve lives by addressing the social determinants of health,” explains Bob Dendy, HumanKind’s president/CEO. We know that 80% of LendingKind’s loans are to women of color, which is an important piece of our equity work. The results, says Dendy, are encouraging. “In addition to improving credit scores, borrowers report improved access to employment, education, skills training, health care, housing, child care and more nutritious food options.”
  • Made our first-ever Foundation-directed Program Related Investment (PRI). As mentioned above, RMHF made a $500,000 bridge loan to Homeward. “The PRI funds allowed us to continue to deliver safe programming, facilitate inclusive community planning, and continue to build a coordinated response to homelessness in the midst of the COVID crisis,” explained Homeward’s executive director, Kelly King Horne.
  • Heightened our commitment to exploring the intersection of impact investing and racial equity. As part of this commitment, we asked Connie Lindsey, Northern Trust’s Executive Vice President and Head of Corporate Social Responsibility and Global Diversity, Equity and Inclusion to speak to RMHF’s investment committee. “Recognizing and addressing racial inequity is key to fostering sustainable practices that address diversity, equity and inclusion,” Lindsey explained. “Creating an environment where all are welcomed, respected and supported allows full participation, which contributes to overall success. Impact investing is a powerful way to achieve that.”

“As we begin the New Year, I look back with gratitude on our initial forays into impact investing. I congratulate RMHF’s Board on implementing smartly and courageously some of the strategies that we first explored with Mission Investors Exchange near the beginning of our journey,” says Thalhimer. “We can now say, with the benefit of experience, that impact investing adds an important array of tools to the RMHF toolbox. I look forward to seeing how we can best use these tools in 2021.”