A year after its launch, the local impact investing initiative Benefit Chicago has announced its first round of loans.
Six Chicago-area nonprofits and social enterprises have received a total of $12 million in low-cost capital to support their operations.
Research commissioned by the John D. and Catherine T. MacArthur Foundation and The Chicago Community Trust found a significant unmet need for financial capital throughout the region’s nonprofit and social impact landscape. That’s why the two foundations, together with the Calvert Foundation, launched this powerful collaboration that aims to mobilize $100 million in impact investments for nonprofits and social enterprises.
“The history of our three organizations is rooted in connecting financial resources to the causes and places people care about,” said Terry Mazany, the Trust’s president and CEO. “Through Benefit Chicago, we’ve combined forces to help bring needed financial capital to organizations that are poised to innovate, expand and grow.”
To date, Benefit Chicago has raised $77 million of that goal—including $12 million from 169 individual investors, who purchase Chicago-targeted Community Investment Notes to put their money to work in local neighborhoods.
The recipients of this first round of loans are:
- AutonomyWorks, which provides jobs for people with autism and others who might have trouble finding work. Its $600,000 loan will support additional technology and hiring additional employees.
- Chicago Neighborhood Initiatives, a community development financial institution (CDFI) committed to revitalization in Chicago’s economically challenged neighborhoods, most notably the Pullman community. Proceeds from the $2 million loan will be used to complete the 111th Street Retail Gateway.
- Garfield Produce, an indoor hydroponic vegetable farm providing sustainable employment in disinvested neighborhoods. The company will use its $500,000 loan to expand production capacity and increase its workforce.
- IFF, a mission-driven lender, real estate consultant and developer whose $5 million loan will finance family services in Humboldt Park and a youth facility in Bronzville.
- Local Initiatives Support Corporation, which will use a $3.5 million loan from Benefit Chicago to revitalize the 63rd Street corridor from Cottage Grove Avenue to Pulaski Road, and Halsted Street between 63rd & 79th Streets.
- Sweet Beginnings, a subsidiary of the North Lawndale Employment Network. The honey product business provides transitional jobs for individuals who have been incarcerated; this $500,000 loan will allow it to extend the length of their employment.
“Through our Community Investment Note, investors of all stripes have been able to participate in making impact investments in Chicago,” said Calvert Foundation president and CEO Jennifer Pryce.
“From individuals investing only $20 online, to institutional investors placing $2 million with us, our investors have expressed strong interest in supporting Chicago,” Pryce said. “We think this can serve as a model for impact investing in other cities.”
Benefit Chicago executive director William Towns refers to these loans as “patient capital” because they can extend for up to 10 years, enabling the recipient to sustain focus on its mission without short-term financial pressure for repayment.
The initiative will continue to evaluate loan applications and to award more loans in future.