MESSAGE FROM LEADERSHIP
As we reflect on the past year and look ahead to the future, I am proud to share our annual impact report with all of you. The unwavering hard work, dedication, and passion of our team have been instrumental in positively impacting the lives of our communities and driving our success. I am deeply grateful for each one of you. Furthermore, none of this would be possible without the support of our partners – investors, developers, business owners, and CDFI partners. They have been invaluable external teammates on this journey, and they too should share in the pride of our accomplishments.
The market trends of 2022 presented unique challenges, including tightening credit, high construction costs, cost of living increases, and the ongoing recovery of small businesses from the impacts of COVID-19. Despite these challenges, we remain resilient, adaptable, and focused on impact - prioritizing investments that align with our mission and values, while also delivering strong financial performance.
I am thrilled to share that LISC Strategic Investments currently stewards more than $900M in impact capital with the support of 105+ investors and funders. Our commitment to making a positive impact is evident in our 2,968 investments, totaling $587 million in deployed capital since inception. The impact of those dollars multiplied by co-invested capital in our real estate assets amounts to $2.9 billion in total development. In addition, we have created or preserved 6,754 housing units. These achievements are a testament to our dedication to driving change and creating lasting impact.
I am also excited to announce the launch of the Capital Innovation Lab (CIL), which highlights the growing importance of advances in finance and equity, particularly in increasing access to capital for diverse business owners. The CIL reflects our belief that driving positive change through finance requires innovation and creativity. The CIL has already raised more than $15M in growth equity this year and is embarking on new initiatives in micro equity investments and growing diverse suppliers for large corporations.
Additionally, I am proud to mention the successful launches of the Dallas Housing Opportunities Fund and the Entrepreneurs of Color Loan Fund. These new funds continue to expand on the impact mandate both geographically and by market function. We are also happy to report that we have fully deployed the New York Forward Loan Fund and the Southern Opportunity and Resilience Fund, along with the complete allocation of Charlotte Housing Opportunity Investment Fund capital. These achievements are a testament to our team’s ability to execute our strategies and deliver tangible results.
Looking ahead, the demand for impact-first investing is only growing, and we are well-positioned to meet this demand. Despite economic uncertainty and recent news in the banking sector, I am confident in our team’s ability to thrive. We will continue to launch new funds, service existing funds, and replicate successful fund models, further advancing our mission to create positive and lasting change.
In conclusion, I want to extend my heartfelt thanks to all of you for your exceptional work, support, and dedication. Together, we have achieved significant milestones and made a meaningful impact in the communities we serve. I am excited about our future and look forward to another successful year ahead.
With gratitude, George Ashton Managing Director, LISC Strategic Investments
WHO WE ARE
LISC Strategic Investments (SI) is LISC’s national team of experts charged with designing, launching, and managing successful place-based impact funds and innovative capital vehicles across the country. We believe in the transformative power of capital to create better communities through working closely with local LISC leaders and national resources to maximize the impact of our financial vehicles. We can proudly say that we continued to grow in 2022, launching five new Capital Innovation Lab programs and two investment funds. As we continue to grow our team and expand our reach, we are dedicated to being responsible stewards of our investors' capital and ensuring that our investments make a real difference in the lives of the people we serve.
Focused on impact
We are pleased to unveil our 2022 annual report, which showcases our commitment as an impact-first, mission-driven organization led by a team of passionate professionals from diverse backgrounds. At our core, we believe that investments should not only generate financial returns but also drive positive social and environmental impact.
We invest in both real estate and businesses, leveraging a unique and innovative combination of public, private, and philanthropic investments. Our approach brings all partners to the table, ensuring that we are creating a sustainable and equitable future for everyone. Our investment team specializes in creating and deploying innovative products that maximize impact outcomes, minimize risk, and optimize double-bottom- line returns.
At the heart of our investment strategies is our community-centric impact framework, which aligns impact strategies and desired outcomes with our partners. Over the years, we have worked on major impact themes that guide our daily efforts including:
- affordable housing
- racial wealth equity
- inclusive economic development
- transit-oriented development
- COVID recovery support.
We remain committed to making a difference in these areas and are continuously exploring new ways to drive positive impact. We are excited to share with you our latest through:
- LISC Fund Management
- Capital Innovation Lab @ LISC
- Venture investment initiatives.
The private investment pools sponsored by LISC are available only to eligible investors, are offered only pursuant to their official offering documents, and are managed by LISC Fund Management, LLC (“LFM”), a wholly owned subsidiary of LISC. LFM is an investment adviser registered with the U.S. Securities and Exchange Commission (“SEC”). Registration of an investment adviser with the SEC does not imply any level of skill or training. Please visit the SEC’s website at www.adviserinfo.sec.gov to see LISC Fund Management’s Form ADV, which contains important disclosures, including further disclosures about material conflicts of interest, risks, and limitations associated with LFM. (Additional disclaimer at the end of this report)
BY THE NUMBERS
LISC Strategic Investments
The investment strategies we manage are designed intentionally to deploy capital on behalf of our investor and funders into impactful projects and organizations that are building stronger communities across the US. Within the first three years of the launch of the first LISC-managed private investment fund, we are proud to have grown a portfolio of this magnitude, both in terms of financial and impact numbers:
*All numbers are as of 12/31/2022
total capital managed
investors and funders
housing units created or preserved
total development costs
Our parent company, the Local Initiatives Support Corporation (LISC) is one of the US’s largest Community Development Finance Institutions (CDFI) with 38 local offices, a rural program reaching 2,200+ counties in 45 states, and LISC-founded affiliate and entities. Since 1979, LISC has been supporting projects and programs to revitalize communities and bring greater economic opportunity to residents.
*All numbers are for the year 2022.
affordable homes and apartments
square feet of commercial space
We are thrilled to bring attention to the incredible individuals we have worked with. Their exceptional levels of motivation, entrepreneurial spirit, and natural talent have left us continuously impressed. Their diverse backgrounds and unique stories make us proud to feature them.
BLACK ECONOMIC DEVELOPMENT FUND (BEDF)
Willow Brook Animal Hospital
Black veterinarians make up just 1.2% of the total number of veterinarians, and the percentage of veterinarian practices that are Black-owned or led is even smaller. The Black Economic Development Fund (BEDF) provided a loan to Dr. Barfield and Adrian Barfield, enabling them to purchase the Willow Brook Animal Hospital. This financing has allowed them to better serve the needs of their community, which consists predominantly of Black or African American individuals, and has also provided hope for diverse individuals aspiring to become in the veterinarian field.
CHARLOTTE HOUSING OPPORTUNITY INVESTMENT FUND
Nathaniel Carr Senior Community
The Charlotte Housing Opportunity Investment Fund (CHOIF) has invested in Nathaniel Carr Senior Community, a 120-unit garden-style development providing senior housing to low-income residents in Charlotte, NC. As the community broke ground for the development, nonprofits, financial leaders, city council members, and residents gathered to celebrate the importance of senior housing for long-term members of the community. The event featured a performance by a local poet and demonstrated the creative support for the project.
ENTREPRENUERS OF COLOR LOAN FUND
Johnnie Akons, an award-winning barber in Chicago, Illinois, is now the proud owner of his barbershop, Legacy Cutz, thanks to support from The Entrepreneurs of Color Loan Fund (EOCLF). Johnnie was unable to secure funding from other sources, but EOCLF provided the support he needed. Having demonstrated his ability to grow his business and create more jobs, he has received additional support from LISC for expansion with a second location.
BAYS FUTURE FUND
Coliseum Place is a new 59-unit building in Oakland, California, with affordable housing thanks to the help of the Bay’s Future Fund. The transit-oriented development is positioned across the street from a BART station and within walking distance to an AC Transit bus-rapid transit route. The six-story building is affordable to extremely low- and low-income households, with some units reserved for formerly homeless households. The developer RCD pursued a full-Zero Net Energy design centered around an innovative and inexpensive shared heat pump hot water system and a roof-mounted solar array.
Alchemy Ritual Goods
Alchemy Ritual Goods is a retail store in downtown Denver that specializes in ceremonial tools, books, and accessories. Founders Lalania Carrillo and Flor Marquez wanted to create a welcoming, accessible space for individuals to access spiritual services. Recognizing the struggles of gentrification and rising costs of living, they sought capital from the Capital Innovation Lab to help fund BIPOC community members, wellness practitioners, and artisans. This support enabled them to expand into a larger space, create a wholesale program, and launch an online marketplace.
CAPITAL INNOVATION LAB
The Capital Innovation Lab @ LISC is dedicated to creating and developing innovative finance models that better serve underestimated communities by providing unique capital support. The lab focuses on implementing capital programs with flexible, patient funding options, enabling more individuals to access the resources they need to succeed in their businesses and communities.
We are excited to share some innovative programs launched this year:
Colorado BIPOC Micro Equity Program
The Colorado BIPOC Micro Equity Program empowers BIPOC small business owners with innovative and flexible financing for expansion, diversification, and wealth creation. The program's patient, equity-like investments are designed to feel like friends and family capital. Alchemy Ritual Goods and Taco Block are the program's first two investments, announced in December 2022.
Black Restaurant Fund
Investing in the growth and success of Black-owned restaurants and food service businesses is crucial to building a more equitable and diverse food industry. The Black Restaurant Fund understands this. By bridging historic capital gaps, the fund helps Black-owned restaurants and food service businesses build wealth, create jobs, and attract future investments. We officially launched this program in early 2023!
Massachusetts Small Business Growth Fund
The MA Small Business Fund supports minority-owned businesses in Massachusetts by providing accessible, innovative growth capital investments similar to friends and family financing. The program encourages diversification, expansion, and job creation through addressesing the limited access to capital for BIPOC entrepreneurs. The program is funded by BayCoast Bank, Boston Children’s Hospital and Dana-Farber Cancer Institute, landing it among Massachusetts' top healthcare stories in 2022.
JPMorgan Chase Supplier Diversity Grant Program
The Diverse Supplier Grant Initiative is dedicated to empowering diverse-owned suppliers to take advantage of opportunities to work with large corporations. Through this initiative, LISC provides innovative financing that covers the necessary costs of business improvements and growth expansions. Since its launch in 2022, the program has already made investments in several businesses such as Bottom Line Construction and Nemovi Law Group.
Abbott-LISC Initiative to Support Diverse Businesses in Health
The Abbott-LISC Initiative addresses the equity barriers for diverse businesses in the healthcare industry by providing growth capital, loans, and coaching to businesses. By promoting the growth of diverse-led businesses, the initiative aims to foster a more inclusive healthcare supply chain and drive broader economic opportunity. In its first year, the collaborative partnership with Abbott made investments in several businesses, all of which were women- and minority-owned such as Cedar Concepts.
LISC FUND MANAGEMENT
We are proud of the work we have done and recognize that it is a rare occasion to take a minute for self-reflection. From starting up new initiatives which helped shape who we are today as an organization, or celebrating the successes of our borrowers - it is incredible seeing the highlights of these activities come together in one place.
*All numbers listed below are inception to 12/31/2022.
Black Economic Development Fund
Since the close of the $250 million Black Economic Development Fund in June of 2021, we are proud to share that we have invested $158 M in 100% Black-led businesses and institutions in 14 different states. These investments support 5,729 units of housing, and 770,000 sq. ft of mixed-use and commercial space, contributing to $60.5 million in annual estimated revenue by Black-led businesses and $2 billion in total development costs.
Charlotte Housing Opportunity Investment Fund
We are thrilled to share the 3- year Charlotte Housing Opportunity Investment Fund (CHOIF) Impact Report. CHOIF has already created or preserved 1,047 housing units for working families – and demonstrated the value of investing in areas of opportunity. By breaking down the longstanding segregation of housing that is so intricately linked to access to transportation, education, and healthcare, CHOIF is making a positive impact on the community. The numbers speak for themselves, and we could not be prouder of our progress.
Detroit Housing for the Future Fund (DHFF)
In the world of affordable housing, 2022 was a year of remarkable achievement for The Detroit Housing for the Future Fund. Now with 10 investments in affordable housing developments, the Fund has enabled the revitalization of abandoned buildings into homes. From The Charlotte to the Belnord, every ribbon-cutting ceremony was a testament to the Fund's relentless commitment to Detroit's future. Groundbreaking events and announcements such as Le Chateau Apartments (7 Mound Apartments) and 3 buildings on Hazelwood Street will re-energize neighborhoods with safe, quality, and affordable housing.
Partnership for the Bay’s Future (PBF): Family of Funds
Since its inception, the PBF – Family of Funds has invested $155 M + in affordable housing projects in the Bay Area. We are happy to share insights through two reports published this year. Advancing Economic and Racial Equity with the Family of Funds shares insight from the funds’ 31 investments focusing on Equity Impact Indicators framework and methodology that is setting the pace in the CDFI field. The second report, Lessons Learned: How Affordable Housing Loan Funds Further Equity, examines the journey to this achievement, case studies on what's possible, and recommendations for critical next steps.
Southern Opportunity and Resilience Fund (SOAR) - Fully Deployed
A big ‘thank you’ to all our 45+ SOAR fund partners and investors who have helped us support over 1,148 small businesses and nonprofits, with 69% receiving technical assistance in 15 states and Washington D.C. The SOAR fund is officially fully deployed, investing $62.8 million in loans - primarily to women- and minority-owned micro-businesses (having ten or fewer employees) who often struggle to receive traditional funding.
New York Forward Loan Fund (NYFLF) - Fully Deployed
In 2022, the New York Forward Loan Fund (NYFLF) surpassed $210 million in lending and retained the leading impact evaluation firm, 60 Decibels, to assess the loan fund's effect by surveying 312 small business owners who had received NYFLF loans. It was discovered that most were first-time borrowers with 68% stating that they could not easily find another loan alternative. We are proud to share that because of the NYFLF loan, 57% of businesses improved their capacity to maintain jobs, and 68% reported better financial management skills. We thank all our partners and funders for leaning in at a time when it was most needed.
Dallas Housing Opportunity Fund (DHOF)
In 2022, we launched the Dallas Housing Opportunity Fund (DHOF) to tackle the issue of affordable housing in Dallas by pooling public and private capital to invest in the development and preservation of affordable housing. Seeded by the City of Dallas, and with investments from Truist and Sunflower Bank, DHOF targets households earning 80% or less of the city's median income. We are excited to share that the DHOF has already made two investments in Dallas, Kiva East and Jaipur Lofts. The recent groundbreaking of Kiva East, an 87-unit affordable rental community with on-site daycare, was celebrated with LISC team members, council leaders, and investor Sunflower Bank. Truist Bank also announced a $10 million investment at an LFM-hosted Dallas Affordable Housing Convening event in November 2022.
Entrepreneurs of Color Loan Fund Launches with $100 Million in Commitments
To accelerate the flow of capital to minority-led businesses, we launched the Entrepreneurs of Color Loan Fund with $100 million in commitments from JPMorgan Chase, Block, Amalgamated Bank, Costco Wholesale, Forbright Bank, and Rippleworks in 2022. This new Loan Fund expands the capital flow to entrepreneurs of color by purchasing participation in previously originated loans to minority-owned businesses from designated CDFI partners. This frees up local capital for additional lending to entrepreneurs of color, breaking down systemic barriers that have historically limited the growth of minority businesses
OUR INVESTORS & FUNDERS
At LISC Strategic Investments, we are incredibly thankful for our investors and funders dedicated to our mission-driven initiatives. We have a diverse and passionate group of supporters, ranging from public corporations to private foundations, all united under the goal of using capital to better society. Working together, we are creating more inclusive communities across the country where everyone can thrive. We cannot thank our investors and funders enough for their collaboration and continued support toward a better tomorrow.
Bank of America
Block (formerly Square, Inc.)
Blue Cross/Blue Shield of Michigan
Boston Children’s Hospital
Capital Impact Partners
Chan Zuckerberg Initiative
The Colorado Health Foundation
Corporation for Supportive Housing
Dana-Farber Cancer Institute
DICK'S Sporting Goods, Inc.
Duke Energy Foundation
Fifth Third Bank
First Independence Bank
First Republic Bank
The Ford Motor Company
Foundation for the Carolinas
The Grove Foundation
Heifer International Foundation
HSBC Bank USA, N.A.
The Huntington Foundation
Jewish Community Federation of San Francisco, the Peninsula, Marin and Sonoma Counties
W.K. Kellogg Foundation
The Howard R. Levine Foundation
McKinsey & Company, Inc.
Mercy Investment Services
Meta Platforms, Inc. (formerly Facebook)
Mizuho Bank, Ltd.
Ms. Foundation for Women
The David and Lucile Packard Foundation
The San Francisco Foundation
Silicon Valley Community Foundation
Thermo Fisher Scientific
Truist Financial Corp.
The Ralph C. Wilson, Jr. Foundation
Winrock International Foundation
Never doubt that a small group of thoughtful committed citizens can change the world: indeed it's the only thing that ever has.”
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