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Reflecting on Five Years of Impact

2022: A Year in Review

2022 marked LOCUS’ five-year anniversary. From day one, our mission was to be a driver of racial and economic justice. Through the events of the past several years – from the pandemic to the murder of George Floyd - the urgency to build a movement of philanthropy and mission-driven investors committing more capital in partnership with communities is greater now than when we started. Earlier this year, we articulated three themes we see emerging from this work. As we reflect on the year, we want to revisit these themes. 

Organizational Readiness 
We have seen more organizations stepping into the role of community investor – declaring their readiness to shift their “way of doing” and taking steps to build local investing programs or funds. We continue to see momentum building among community foundations – a second cohort of community foundation local investors in Indiana, new local investors emerging in Kansas, and deepening work and commitment in places like Louisville, Ann Arbor, and Atlanta. Four new investors have joined the Community Investment Guarantee Pool, leveraging their balance sheets to support investments in affordable housing, climate solutions, and small businesses in communities across the country with an intentional racial equity lens. And we’ve begun working with non-foundation institutional clients who are committing to place-based investing to advance their organizational commitment to diversity, equity, and inclusion. While we may be reluctant to suggest we’re at a tipping point for place-based impact investing, there is certainly momentum as we head into 2023. 

Finding capital solutions to the most pressing challenges and emerging opportunities in communities requires collaboration between ecosystem partners who understand the current system's failings and are willing to create new avenues to drive capital to the people, places, and sectors that need it most. The Kansas City Credit Enhancement Fund resulted from this type of effort. When ecosystem partners understand why BIPOC (Black, Indigenous, and people of color) entrepreneurs in low- and moderate-income metro Kansas City neighborhoods struggle to access the capital they need to grow their businesses, they can devise a real solution. A shared understanding of the potential to leverage private capital with credit enhancements supported by philanthropy led to the capitalization of the fund by the Kauffman Foundation and a commitment to address both the capital gap and the understanding of risk associated with these investments. 

Centering Equity 
We are most encouraged by what we see as a movement away from proclamations about the commitment to racial and economic equity to actions that center equity in the design of community capital solutions. The Community Foundation of Louisville includes an explicit racial equity assessment as part of its investment due diligence process and prioritizes investments in the historically disinvested West End neighborhood. The GroundBreak Coalition in the Minneapolis-St. Paul region has come together to activate the commitment to racial and economic justice made following the murder of George Floyd by identifying and committing the capital and other resources needed to support housing, commercial development, small businesses, and home ownership. Our sister company, Virginia Community Capital, expanded its Economic Equity Fund to direct lending capital to BIPOC entrepreneurs in Virginia. 

The work of these and other partners gives us hope as we look forward to 2023. The increasing focus on place-based investment at the Mission Investors Exchange conference suggests that more foundations and mission-driven investors are coming to understand that “if it doesn’t make a difference on the ground, it doesn’t make a difference.” There is more work to do, especially on the equity front – both within organizations like ours and in communities – but we see a growing momentum and leverageable commitment for significant impact in the year ahead. 

We look forward to working with new partners in 2023 and going deeper with our current partners. We welcome opportunities to build closer ties with people and organizations similarly committed to growing the field of place-based or local impact investing. Together we can advance this new approach to impact investing in the year ahead. 

Best wishes from the LOCUS team for a safe, healthy, and peaceful holiday season! 
Deb Markley, Sr. Vice President, Local Investment Strategy
Jim Baek, Executive Director, Community Investment Guarantee Pool (CIGP) and Sr. Vice President, LOCUS Impact Investing