WHAT A GIFT CAN DO
THE MACKENZIE SCOTT $40 MILLION GRANT | YEAR 3 IMPACT
The Power of Trust
MacKenzie Scott’s 2020 gift to LISC of $40 million has proved transformational. This vital aid has allowed LISC to achieve more, right now, for and with low-income communities of color across the country. And it has helped us to develop new organizational capacities that will serve these communities for decades to come. It’s a gift that truly does keep giving.
This unrestricted grant provided our organization a rare opportunity to take a step back, reflect, and bring fresh perspective to our work. To have honest dialogues and take calculated risks. To be forward-looking and audacious. And it provided us the fuel to push forward in our work to help close racial equity gaps—to have more impact, on a wider scale, reaching more people and places.
As LISC navigates its fifth decade of community development leadership, we do so with renewed clarity of purpose for our next 50 years. We thank you for your trust in us—for helping us be more creative, become more sustainable, and harness the flexibility to improve on what we do best.
In this third and final grant report, LISC is pleased to share highlights of work made possible by this remarkable investment, as well as the unlimited ripple effect this gift will have. We welcome the opportunity to discuss continued partnership.
THE POWER OF TRUST
Flexibility
Ms. Scott’s grant came with the generous gift of flexibility in how LISC deploys the grant dollars. This has allowed us to depart from business as usual to meet a defining challenge of our times—to row more vigorously toward racial equity in all our activities, including financing. We’ve been able to invest in people and communities that too often are excluded from opportunity. The grant has helped our money go farther to:
Bring a racial equity lens to all we do
Under the banner of Project 10X, LISC’s most ambitious and urgent initiative to date, we will raise and invest at least $1 billion over ten years to help upend the racial health, wealth, and opportunity gaps that keep tens of millions of people from sharing in our country’s prosperity. Ms. Scott’s gift has been the rocket fuel behind Project 10X, making it possible to scale proven solutions and seed new ideas in four program lanes: generating wealth and equity, strengthening opportunities for economic mobility, reimagining community safety, and improving community health and resilience. Nearly three years into this commitment, LISC has mobilized cross-sector partners to raise $848 million and deployed $312 million. The work of 10X has just begun, and we look to enlist new partners who share our commitment to this long-term, comprehensive work.
Get more money into the hands of BIPOC borrowers, with better terms
Leveraging our own capital by a factor of six, LISC has established a series of evergreen, revolving pools of credit enhancement (totaling roughly $27.5 million) that allow us to extend financing on favorable terms to projects that advance racial justice but that might not otherwise have access to flexible and low-cost credit. This improves the likelihood of loans being repaid, and allows for more inventive and far-reaching investment in small businesses, development projects, anchor institutions, and other entities owned and led by people of color.
In the first quarter of 2023, 75% of our closed loans, totaling $67 million, went to BIPOC-led organizations and their BIPOC sponsors. This was a direct result of Ms. Scott’s grant, which is 100% dedicated to BIPOC led or owned organizations to address the racial wealth gap. Moreover, an assessment using LISC's Impact Matrix showed that loans with MacKenzie Scott funding had an impact score that was 9.95 points higher than those without that funding, a statistically significant bump in performance (the Matrix looks at six impact factors in each loan project including community-centeredness, risk and environmental sustainability).
Credit-enhanced projects include La Union Buena Vista Apartments in the Columbia Heights neighborhood in Washington D.C., where longtime tenants were able to buy their building, preserving its affordability for decades to come. In Boston, a credit enhancement made possible by this grant helped the Asian American Development Corporation acquire and develop a building on Beach Street, protecting and maintaining the tenancy of current Chinatown residents and businesses.
THE POWER OF TRUST
Creativity
The grant sparked creativity in program design, helping us to:
Bring promising grassroots ideas to the forefront
LISC has seized the opportunity to test and scale new ideas that will influence the future of community development. One example is LISC’s Innovation Challenge, a competitive internal grant process that spurred LISC’s 38 local offices to explore promising, locally driven strategies to advance racial equity—ideas that might not be realized but for this grant. More than a dozen of these Innovation Challenge projects are underway.
LISC Indianapolis, for instance, is piloting a novel land acquisition fund to help BIPOC urban farmers lease and eventually purchase disused city lots, a project that integrates LISC Indy’s work in small business, food access, and land development.
LISC Houston and LISC Milwaukee are supporting visionary Black developers with specialized training and access to capital—initiatives that aim to redress the unacceptable lack of Black representation in real estate development, open a pathway to Black ownership and wealth-building in the sector, and increase the local supply of desperately needed affordable housing. Houston’s unique program focuses specifically on Black women developers.
In Milwaukee, Innovation Challenge funding is being used to provide seed capital to Black graduates of LISC’s longstanding Associates in Real Estate (ACRE) training program. To date, the funding has helped these dedicated Milwaukee developers create some 150 new housing units, representing hope and stability for hundreds of residents.
Center climate resilience
LISC is intensifying its work and investments in climate resiliency and green projects, especially in low-income communities of color that bear the brunt of climate change and ecological degradation. Advancing environmental justice is mission-critical to LISC’s efforts to promote racial and economic equity in American cities, towns, and rural areas. Ms. Scott’s grant increased LISC’s bandwidth to create a strategic climate resiliency framework, which will impact all our work in this space moving forward.
With all the urgency these times demand, we are supporting equitable disaster response and recovery in in Puerto Rico and the Texas Gulf region, building and retrofitting resilient affordable housing in communities across the country, connecting underserved BIPOC entrepreneurs and untapped BIPOC talent to opportunities in the green economy, and financing green infrastructure in under-resourced communities like Queens, NY and Phoenix, AZ.
A leading example is LISC Boston’s Bridges to Green Jobs pilot, launched through the Innovation Challenge. While the clean energy sector has grown by 89% in Massachusetts since 2010, only 13% of the energy-efficiency workforce are women, and a mere 3.6% are Black. The Bridges program readies adult learners for living-wage jobs they might not otherwise access by addressing educational gaps and delivering industry-specific technical training in specialties like weatherization. LISC has already replicated this program model in Detroit and New Jersey and leveraged our early success to attract new partners to invest in the work.
In Detroit, LISC’s zero-interest loan program for home repair has impacted over
homeowners
so far and is considered a national best practice.
Think differently about BIPOC wealth creation and preservation
Ms. Scott’s gift has helped LISC to develop and scale innovative programs that reduce barriers to homeownership and home preservation for families of color, who’ve long been denied equitable access to this key source of stability and generational wealth-building.
In an effort to address San Diego’s racial gap in homeownership rates, LISC and cross-sector partners are offering down payment assistance to qualified buyers (30+ to date). The program has been held up as a model for collaboration, and LISC is providing thought leadership and program-design insight to other geographies considering a similar initiative.
In Detroit, LISC’s zero-interest loan program for home repair is a proven means to stabilize BIPOC homeownership. The program has impacted over 675 homeowners so far and is considered a national best practice. LISC is working to develop similar programs in the Puget Sound region of Washington State; Charlotte, NC; Cincinnati, OH; Cleveland, OH; and Memphis, TN.
LISC is also conducting research to identify markets ripe for expansion of our Family Wealth Creation initiative, an approach piloted in Jacksonville, FL, that has implications for BIPOC communities from coast to coast that experience discriminatory home devaluation, equity loss, and displacement. Through an integrated strategy of title clearing, estate planning, consumer education, and access to bedrock legal services, LISC and our partners are working to preserve hard-earned wealth in communities of color.
THE POWER OF TRUST
Sustainability
Ms. Scott’s unrestricted funds helped LISC improve its internal infrastructure, making the organization more resilient and adaptable to change, and able to take important steps toward building equity and diversity within the community development field. We are now better positioned to:
Cultivate the community development leaders of tomorrow
A newly launched LISC initiative, the National HBCU Talent Development program, is fostering a pipeline of Black community development professionals to ensure the CDFI workforce better reflects the people and places it serves. The program is placing 40 students from historically Black colleges and universities (HBCUs) in part-time, paid internships with local LISC offices and other community development financial institutions (CDFIs), to bring new insight and energy to the industry.
Meet Marsi Hailu, an HBCU intern at Howard University.
Use data to inform decisions and assess impact
LISC’s national infrastructure supports our 38 local offices with administrative services such as IT, human resources, legal, and communications, as well as invaluable national community development expertise. Ms. Scott’s gift allowed us to make very significant improvements to our IT systems, integrating all LISC grant and loan activities in a single, efficient platform. This powerful tool gives us a clearer picture of impact, helps us see where we can do the most good, and lets us examine how we deploy resources. With this platform in place, we can better gauge success against goals.
Deploy resources in communities more efficiently and equitably
LISC’s systems improvements also support rapid deployment of funding. During the COVID-19 pandemic and in the wake of disasters like hurricanes and wildfires, we’ve prioritized speedy assistance to grassroots partner organizations, small businesses, residents, and local governments, because we know that those hit hardest in these emergencies cannot wait for slow-moving bureaucratic processes to play out. LISC is now poised to respond even more expeditiously in times of crisis.
Ms. Scott’s grant has been of pivotal importance for LISC as we take stock following years of pandemic, racial reckoning, growing inequality, increasing impacts from climate change, and a sharpening affordable housing crisis. It has given LISC breathing room to plan, augment our systems and tools, and refocus our mission for the decades ahead.
Ms. Scott’s $40 million will be felt for generations in the diverse communities where we work. Together with our thousands of hardworking grassroots partner organizations, we thank you for your generosity and commitment to equity.
