Around the time of Virginia Community Capital’s (VCC) 10-year anniversary, we began to explore the ways we could make more of an impact beyond the Commonwealth.

Through our work, we saw place-focused foundations – philanthropies whose missions are focused geographically – asking a similar question; how can we have more impact by complementing our grantmaking with direct community investments? This inquiry presented these foundations with several questions. Where do we start? How do we build the internal infrastructure for targeted investments? Can we do this work in a way that both mitigates risk and stays mission-aligned? To unlock their endowments as a new source of capital for community impact and leverage those funds to catalyze even more investment dollars, mission-driven organizations needed to build a new set of capacities. And, they needed a trusted partner to help them do it.

In 2017, VCC answered that call with the launch of LOCUS Impact Investing, a social enterprise to empower place-focused foundations to invest their capital locally to build prosperous, equitable local economies.

LOCUS Impact Investing partners with organizations to use their capital as a tool to drive equitable prosperity, redefine their role as capital providers, and activate investments and endowments for community impact. This is achieved by:

  • Educating stakeholders and developing local impact investing strategies;
  • Identifying and assessing investments through advisory services; and
  • Designing, servicing, and managing investment funds and portfolios.

LOCUS’ partners include a mix of mission-driven organizations seeking to do more with their capital in way that benefits communities. U.S. foundations alone, for example, control nearly $1 trillion in assets. Yet, most philanthropies disburse around five percent of their endowments through grantmaking each year. Capturing even a small portion of those endowment dollars for local investing would yield impact for communities across the country. The LOCUS team understands the complexity of how and where place-focused institutions decide to invest and works to help them create and implement inclusive programs that bring together donors, board members, and the broader community.

They guide clients through impact investing program education, strategy, and development while also providing nuts and bolts services like sourcing, due diligence, and portfolio management that make those programs workable. Through LOCUS, VCC is supporting an innovative new field, helping mission-driven organizations define and strengthen the field of impact investing. Over four years, LOCUS’ partners have committed to deploy $57.8 million into their communities and made $26 million in new community investments. In addition, LOCUS has serviced $304 million in community investments made by our partners.

LOCUS is an innovator in community investing. In late 2019, the team launched the Community Investment Guarantee Pool (CIGP), a national financing tool for intermediaries participating in affordable housing, small business, and climate lending. The pool of guarantors includes 12 institutions, regional and community foundations, private philanthropy, and a regional health system, who collectively leverage their balance sheets to accelerate community investments that would not otherwise be possible. Difference-making projects across the country often struggle to secure needed capital. To get off the ground, projects might require a financial guarantee from an established partner to unlock capital where it can do the most good. Mission-driven organizations make ideal partners. To date, CIGP has secured guarantee commitments valued at over $38 million and deployed nearly $16 million in guarantees in its first year of operations.

For all those committed to investing more in place, LOCUS provides value by demonstrating that a different approach to unlocking assets is possible. The team supports their partners as they engage with stakeholders to uncover the greatest potential for impact. VCC brought the same spirit of innovation born at its launch 15 years ago to LOCUS, one of the many ways we’re supporting vibrant places.

LOCUS CIGP Nurture Build Deploy Infographic

Looking Ahead

Now four years in, LOCUS wants to engage more impact investors, unlock more capital committed to place, and develop more effective and equitable practices. Over the last year and a half, the pandemic and the awakening around racial injustice have revealed the severity of systemic inequities across the country, and it’s more important than ever for VCC and LOCUS to view goals through the lens of diversity, equity, and inclusion.

We believe philanthropic organizations and their mission-driven peers are well-positioned to level the playing field for those who have been excluded by traditional capital systems. And as foundations and other institutions begin to explore impact investing as a solution, it’s essential that equity is centered from the beginning of the conversation.

At the same time, we are looking inward and making sure we incorporate social and racial equity into every aspect of our work. Our vision for LOCUS includes a diversity of people, staff, partners, and lived experiences, with an environment that allows for equitable growth and inclusive voices. We want to empower others and better reflect the communities we serve.

Going forward, how are we going to make sure capital gets to where it’s needed most and to those who haven’t been well-served by the existing system? How do we need to rethink our approach and get creative with our solutions to really make a difference?

Will you join us in reimagining the future?Let’s do more, together.