New Impact Investing Opportunities
A fund for Early Learning Centers is the first of several products taking shape
July 31, 2019
Seattle Foundation is growing the impact investing opportunities we offer and increasing our overall holdings of impact investments at the Foundation. Chief Impact Officer Kris Hermanns is leading this strategic effort in partnership with Chief Financial Operating Officer Kirstin Sandaas and our Philanthropic Services team.
The first fund of these new opportunities is our Early Learning Facilities Fund. This fund will support necessary financing and technical assistance for the rapid expansion of early childhood learning centers, an expansion designed to increase equity and required by Washington State’s Early Childhood Education and Assistance Program (ECEAP) for the 2021–2022 school year. Today less than 50% of 3- and 4-year-olds in the state are entering kindergarten ready to learn. ECEAP is working to increase that figure to 90%, with race and income no longer predictors of readiness.
One of the fund’s initial investment will support construction of the Othello Early Childhood Development Center as part of a neighborhood revitalization effort underway at Othello Square. To support this new fund, Seattle Foundation is committing $1M to a 10-year, 3% mission-related investment with Enterprise Community Partners. The Early Learning Facilities Fund is open to philanthropist participation through the end of the summer and we aim to attract an additional $250,000, with minimum investments of $25,000. Contact your philanthropic advisor or Allison Parker for more information on how to make an investment from your Community Philanthropy Fund or Family Foundation.
In partnership with the Washington State Housing Finance Commission, and with grant support from JPMorgan Chase, Seattle Foundation is also researching the feasibility of a philanthropic investment strategy that would help to develop affordable multi-family rental units for people who earn 50-60% of the Average Median Income (AMI). This fund, currently in the proof-of-concept stage, would provide subordinate debt to build larger buildings (200+ units) in high-cost centers throughout the region. A pilot project with seed investors is targeted for a debut this fall, with the goal of launch the full program in early 2020. Please let your philanthropic advisor know if you are interested in learning more about this opportunity.
In addition to these two opportunities, we are exploring two potential partnerships that would enable custom investments from Seattle Foundation Community Philanthropy Funds and Family Foundations. We are currently conducting due diligence to determine which partner will best meet the needs of our philanthropists and expect to move forward with a decision this fall.
An additional development in impact investing resulted from the Tax Cuts and Jobs Act of 2017, which created Opportunity Zones, a new community investment tool designed to encourage long-term investments in low-income urban and rural communities nationwide. When it comes to Opportunity Zones, the 2017 Tax Act legislation timeline, for the most part, requires a “shovel-ready” project in 2019 in order to take full advantage of available tax benefits. Where possible, our goal will be to identify and support projects that have emerged out of a community master planning process. We are also looking to work with individual and institutional philanthropists, alongside the City and County, to support community-led design processes within King County Opportunity Zones. Through the development of a pooled fund, we hope to identify, scope and partner with others in driving investment in community, cultural and commercial projects that will revitalize local neighborhoods and foster inclusive economic growth in our region.
With this momentum, and with the support of SeaFdn’s Board, our Leadership Team is committed to finalizing our impact investing strategy this year. Please look out for further developments in the months ahead. In the meantime, if you have questions about any of these impact investing opportunities, please contact Chief Philanthropy Officer Fidelma McGinn.