Inviting Investors to Put Their Money Where Their Mission Is 

In a downtown Boston conference room, the nonprofit and quasi-public organizations made their best pitches, presenting innovative initiatives or new pilot programs for which they were seeking capital investment. In the audience were two dozen or so colleagues and industry experts, but also a handful of impact investors from philanthropic foundations and mission-oriented lenders. 

It was almost like an altruistic episode of Shark Tank—if the entrepreneurial guests were pitching affordable housing and community resilience projects instead of new businesses, and the investors were seeking to do the most good with their funds instead of maximizing profits.

The Boston event was the latest Investor Challenge hosted by the Lincoln Institute of Land Policy’s Accelerating Community Investment (ACI) initiative, launched in 2021. These roundtables emerge from ACI’s community of practice network, which now includes more than 100 member organizations in 18 states, as well as a network of more than 50 investors. The participants are a blend of public, community, and private or philanthropic actors based in those places, explains ACI Director Robert “R.J.” McGrail.

With a particular focus on public finance opportunities, organizations in ACI’s communities of practice learn from and share knowledge with each other on an ongoing basis in two-year cycles. In addition to general gatherings that have taken place in more than a half dozen cities—from Milwaukee, Wisconsin, to Santa Fe, New Mexico—when members in a region reach a point where they’ve developed a promising new pilot program or feel ready to scale up an existing initiative, McGrail says, then ACI convenes a more targeted event, in either a lab format or an investor challenge.

ACI Labs are “about expertise and solving for a problem—digging deep for a couple of days, almost like a co-design lab activity,” McGrail explains, while investor challenges aim to connect projects with purse strings. “That’s where we have near-term investable programs or initiatives, a room full of experts and investors who know impact investing, and ask them frankly, ‘What do you think, and are you interested? What would make you more interested?’”

Previous investor challenges have taken place in New Orleans, Cincinnati, Austin, Tucson, and Santa Rosa, California. At the October event in Boston, attendees learned about innovative and potentially scalable housing, climate, and community development projects underway in both Massachusetts and New Hampshire.

Maggie Steeple Church introduced the Massachusetts Community Climate Bank, a new loan program offered through the state’s housing finance agency, MassHousing, to help low- and middle-income homeowners electrify, decarbonize, and retrofit older houses and multifamily buildings.

Katy Easterly Martey from the New Hampshire Community Development Finance Authority explained efforts to open a childcare facility in a majority-minority neighborhood in Manchester, which would support local microbusinesses, better prepare kids for educational success, and bolster social infrastructure as the city attempts to recruit biotech companies and workers. 

Leslie Reid of the Massachusetts Housing Investment Corporation (MHIC) described the organization’s Regional NOAH (Naturally Occurring Affordable Housing) Fund, which is based in part on a similar, successful program in Boston. Reid described the loss of older, smaller, more modest homes as a hole in the housing bucket. “Even as we produce new housing, if we’re losing unrestricted affordable housing as we build, the bucket is leaking,” she said.

And Marcos Marrero showcased some of the programs at MassDevelopment, including its Transformative Development Initiative (TDI), which takes a relationship-based approach to community resurgence, dedicating an economic fellow to work on-site in a neighborhood for three years. The program has continued to grow and expand since its inception a decade ago. In that time, Marrero said, MassDevelopment has managed to leverage $45 million in capital to attract $490 million in investments to 28 districts, including $168 million in public funds and $314 million of private investment.

Pointing to Progress

The morning after the pitch session, conference participants gathered in a new pocket park along Shirley Avenue in Revere, about five miles north of Boston—one of MassDevelopment’s TDI districts. The tiny corner park, with native plants, trees, and picnic tables, may seem like a small thing, says McGrail, who, before joining the Lincoln Institute, helped co-design the TDI program at MassDevelopment a decade ago. “But that was an empty corner lot, and now it’s a place where that community can gather,” he says. “It’s an amenity for half a dozen businesses that are within walking distance, and it’s a relatively low entry point to the bigger kinds of investments.” 

TDI Fellow Laura Christopher led the group on a walking tour down Shirley Avenue, pointing to new community-led developments that prioritized longstanding residents and small business owner-occupants to shield them from displacement.  

Through a public-private “Build On Your Business” initiative that provides technical assistance and seed funding, Christopher explained, small businesses that are important to the community are encouraged to develop housing on top of their single-story commercial spaces, stabilizing cultural vitality, creating neighborhood wealth building opportunities, and expanding housing options in the community. “If you’re trying to stop displacement and keep your residents, you need to keep the businesses, too,” Christopher said. 

McGrail says the on-the-ground assistance that a dedicated TDI fellow like Christopher brings is invaluable in helping a community define its shared priorities and find ways to achieve them. “Resources alone can’t help a place achieve its dreams,” he says. “We were standing there looking at a very big, mixed-income, mixed-use new construction across the street. The last time I was on Shirley Ave., probably in 2018, none of that type of new construction was there.”  

Capital Connections

Unlike a Shark Tank episode, partner funders at ACI events aren’t generally jumping over each other to invest in a program based solely on a short presentation—but they do return to their colleagues with new initiatives and proposals to consider. And even if the convened investors don’t end up directly funding the programs presented, McGrail says, much of the value is in the connections made. “The goal to date has been to socialize the opportunity and to increase the possibility of new-to-market capital coming into these projects,” he says.  

Still, some participants, such as Finance New Orleans and the Port of Cincinnati, have received grant support as a direct result of participating in the ACI initiative, he adds. “It’s fair to say that we’ve begun to see capital align toward the places that participate in the ACI network as a result of these events, and that we have absolutely been able to provide them with a chance to meet new-to-their-market investors that they would not otherwise have been able to meet—and to benefit from those investors’ expertise, too,” McGrail says.

For programs seeking capital, the investor challenges are not just about getting in front of asset holders. The investors have valuable feedback to share as well, which can help ACI partners rethink the way they’re framing a nascent program’s impact or return to make it more attractive to future investors. 

“Those questions they asked Maggie are going to make those Massachusetts Community Climate Bank loan products better,” McGrail says. “The questions they had for Leslie, from MHIC, are going to make their Regional NOAH Fund a better investable opportunity. In fact, it might be easier for some local bank, national foundation, or other asset holder to buy into that fund or participate in that loan pool because some person asked a thoughtful question at an ACI investor challenge—and that’s a confirmation of the ACI model’s value. Ultimately, we want to help increase capital flows and community impacts.”

ACI Events Since 2021 Launch

ACI Community of Practice Convenings: Austin, Texas; Milwaukee, Wisconsin; Santa Fe, New Mexico; New Orleans, Louisiana; Santa Rosa, California; Jackson, Mississippi; Cincinnati, Ohio 

ACI Labs: Atlanta, Georgia; New Orleans, Louisiana (with Grounded Solutions Network) 

ACI Investor Challenges: New Orleans, Louisiana; Cincinnati, Ohio; Austin, Texas; Tucson, Arizona; Santa Rosa, California; Boston, Massachusetts 

Jon Gorey is a staff writer at the Lincoln Institute of Land Policy.

Lead image: Participants in the recent investor challenge held by the Lincoln Institute’s Accelerating Community Investment initiative listen as TDI Fellow Laura Christopher describes redevelopment in Revere, Massachusetts. Credit: Jon Gorey.