Tuesday, January 17, 2012

We've Moved!

The Calvert Foundation Life-Changing Returns blog has moved to its new
home! Please join us here and update any links or bookmarks. We look
forward to continuing our journey together, earning a financial return
while lifting families out of poverty.

Visit the New Life-Changing Returns Blog

Wednesday, December 28, 2011

Keeping the Faith

By Patrick Davis, Calvert Foundation Senior Associate.

In November, after returning from the Resource Center for Religious Institutes (RCRI) Conference in St. Louis, I was moved to write about my experience for the UnSectored blog. Now, a few weeks later, I wanted to share a version of that post with readers of Calvert Foundation’s blog.

RCRI is primarily a conference for religious treasurers to learn about developments in financial management that relate to their ministry. Not surprisingly, topics in Socially Responsible Investing are particularly prominent, and so I attended on behalf of Calvert Foundation. There I was joined by many impact investing (or community investing) organizations including Oikocredit, Partners for the Common Good, Leviticus Fund, Hope Enterprise Corporation, Urban Partnership Bank, and Mercy Loan Fund, among others.

I was fortunate enough to spend some time with many great people, but I especially appreciated the chance to reconnect with two nuns that I’ve worked with previously. Sister Pam Buganski of the Sisters of Notre Dame and Sister Corinne Florek of the Religious Communities Investment Fund are each forces of nature in their own right – inspiring, compassionate, tireless advocates for social justice...and new thinking in finance. Sister Corinne has been featured in this blog before, for her work using impact investing principles to care for retired nuns while supporting people in underserved communities

My conversations with the sisters reminded me of the faith community’s special and often unrecognized place in the development of what we now call impact investing. More than 30 years ago, faith-based investors began to point to scripture as a basis for moving real assets into the community development space. In fact, the faith community provided critical seed funding that jump-started countless community loan funds and microfinance institutions that we know well today. For more background, check out the Community Investing Toolkit for the Faith Community report from the Social Investment Forum Foundation.

Congregations and religious retirement funds continue to be some of the most significant contributors to impact investing institutions, and this commitment to social justice through investment was established decades prior to the current excitement about impact investing. As an industry, impact investing cannot realize its vision without understanding its roots. Faith communities have continued to support the industry when it’s been difficult, unpopular, or in glaring contradiction to the prevailing financial philosophies of the day.

Flying home from RCRI, I found myself reflecting on the recent buzz around impact investing. The industry has attracted interest from a wide range of institutions - some are drawn to impact investing because they believe in the potential for market-beating returns in the long run, others because it allows for the integration of social or environmental values in investment portfolios. Perhaps the most fascinating aspect of the impact investing movement is that serves such a wide spectrum of beliefs and values, and as such, transcends common political, religious, and social boundaries.

In the melting pot of all those beliefs and values, though, there have been only a handful of steadfast supporters. In our culture, we approach hot new things with both enthusiasm and trepidation. As it was described to me recently, everyone wants to be the “first second” adopter of a new behavior. When it comes to impact investing, the faith community has been quite the opposite – jumping in with both feet. With values systems firmly rooted in concepts of equity and social justice, faith-based institutions have contributed enormously to the development of the impact investing industry. Personally, I’m deeply grateful to Sister Pam, Sister Corrine, and the countless other supporters of our work that I get to see each year at RCRI. In years to come, I hope that our supporters in the faith community earn as much benefit from their investment as we have from their involvement.

Thursday, December 22, 2011

A Warm Welcome to the Newest Additions to the Calvert Foundation Team

As if having the chance to change the world by providing opportunity to the underserved weren’t enough, we at Calvert Foundation also have the great privilege of working with a team of dedicated and talented professionals. Working hard each day, it’s easy to get caught up in our to-do lists and hectic schedules. But when we have a new hire in our midst, it helps to remind us why we’re here, the pride we feel in our mission and our work.

And so it is with great pleasure that we extend a warm welcome to these new additions to the Calvert Foundation team.

Catherine Godschalk
Prior to joining Calvert Foundation in July, as the new leader of the domestic lending team, Catherine was the Washington, D.C., Regional Office Director at Self-Help Ventures Fund, where she led the organization’s efforts to provide more than $33 million in financing to support commercial real estate, affordable housing, charter schools, and other community facilities in underserved areas around the Washington, D.C., metropolitan area. Catherine also led Self-Help’s national Foreclosure Recovery Initiative, developing loan products and lending capital designed to support the redevelopment single family and multifamily foreclosed properties.

Michael Grossman
Our new Manager of International Lending, Michael was previously a Senior Advisor to McKinsey & Company’s Social Sector Office where he worked on economic development assignments with a focus on the financial sector and inclusive agriculture development. In addition, Michael led the creation of the African Development Bank’s $1 billion trade finance initiative and developed small enterprise financing strategies for two African governments.

John Ducey
John Ducey brings 23 years of community development experience to Community Investment Partners, a subsidiary of the Calvert Foundation. As Vice President, John is responsible for CIP's $120+ million asset management business, in addition to direct client portfolio management duties. For the previous five years, John worked at Enterprise Community Investment Inc. (Enterprise). As a Vice President there, he was responsible for the company's placement of equity for workforce housing and New Markets Tax Credit (NMTC) investments targeted at mixed-use and commercial developments.

Richard Tran
Richard brings more a decade of experience in telecommunications networking technologies for both non-profit and corporate sector organizations to his role as Manager of Information Technology. Prior to joining Calvert Foundation in 2011, Richard served as a Network and Telecommunication Administrator at Calvert Investments, where he managed multiple projects from development to implementation. In addition to his great people skills, Richard brings a wealth of experience in technology and strategic solution analysis to Calvert Foundation.

Tuesday, December 20, 2011

Celebrating Communities, the Holidays, and You

Dear Friend,

Every day, we at Calvert Foundation hear stories that give us hope for a brighter future. Every day, people use capital from our investors and donors to start new businesses, build affordable homes and make their communities better. Every day, new investors buy the Community Investment Note and align their investments with their values, earning social returns along with financial returns.

We also see the issues of economic disparity and uncertainty on the front page every day. Since 1995, Calvert Foundation has been working to create opportunities for hard-working people in the U.S. and around the world so they can create better lives for themselves, their families, and their communities. As we count our blessings this year, we ask you to make a donation to Calvert Foundation. As a nonprofit, we rely on donations to leverage investor capital and transform lives.

We’re proud of our impact:
  • $104 million to help create jobs and grow businesses
  • $65 million to ensure that families have decent affordable homes
  • $30 million for community facilities, like charter schools, health care centers and arts facilities
  • $4 million for fair trade and sustainable agriculture
A few highlights from 2011:
As we look forward to 2012 and all of the opportunities a new year represents, we wanted to take a moment to thank you. It is your engagement, compassion and interest that make our work possible. This holiday season, we at Calvert Foundation send our best wishes to you, your families, and friends.

Lisa Hall
President and CEO, Calvert Foundation

Monday, December 12, 2011

Building Trust Through Information

This post, by Christina Conrad Cuenca, Manager, Lending and Advisory Services, was originally published on November 2, 2011, in the Microplace blog

Impact investing has been getting a lot of great publicity lately, but that doesn't necessarily translate into comfort for investors. Knowledge and information, on the other hand, do. Which is one of many reasons we are so glad to be a part of the Global Impact Investing Rating System, or GIIRS, an independent third party that assesses the social and environmental impact of companies and investment funds.

GIIRS is a project of B Lab, one of our borrowers, and was announced officially in September at the Clinton Global Initiative meeting in New York.

Calvert Foundation is one of the “15 Pioneer Investors” who have declared a preference for GIIRS-rated funds and companies in their impact investing decision process. Furthermore, our participation in this is a signal to more mainstream institutions and investors that credible metrics on impact are necessary for impact investing to succeed.

As the head of Calvert Foundation's risk management team, I take a special interest in encouraging efforts such as GIIRS. One of the great challenges we face in evaluating investment opportunities is a lack of standard metrics across sectors (such as affordable housing and microfinance) and organizational models (such as social enterprises and co-operatives). While we have been successful at navigating our way through these challenges - often by creating our own metrics and screens - the industry as a whole has a better chance to grow and thrive if there is a third-party rating system that investors can turn to for information and comparison.

GIIRS, which has an aggressive five-year plan to provide ratings for more than 2,500 companies and over 350 funds, typically rates venture capital and private equity funds and for-profit companies. Because of this, most of the organizations we invest in wouldn't qualify yet - and neither (as a 501c3) would we. Because of Calvert Foundation's complex model, we often don't quite fit into a defined model, but we are working with GIIRS and the industry at large to change this, one step at a time.

Monday, November 28, 2011

CDFIs: Americans Investing in Americans

By Noelle St. Clair, Investor Relations Associate

Noelle St. Clair
I recently traveled to Minneapolis for the 2011 Opportunity Finance Network conference with Calvert Foundation Marketing Manager, Carrie Hutchison. Since Carrie and I have traveled together quite a bit lately, I know never to get between her and her Starbucks! To someone whose knowledge of caffeinated beverages is pretty much limited to plain coffee or tea, trying to decipher the intricate orders at Starbucks feels like a quasi-foreign experience for me. I did, however, stop into my local Starbucks before the trip to pick up my Create Jobs for USA wristband.

The proceeds from the sale of these wristbands will be donated to Opportunity Finance Network (OFN). Calvert Foundation is a proud member of OFN, the national network of Community Development Financial Institutions or “CDFIs.” Starbucks recognized the good work CDFIs have been doing, delivering affordable capital to low-income and disadvantaged communities around the country, but also realized that the average person has no idea what a CDFI is or what it does. Through the Create Jobs for USA campaign, Starbucks is not only providing funding to OFN and CDFIs, but also helping the industry to receive national recognition. By “buying” and wearing these wristbands, people across the nation are creating jobs for Americans, while simultaneously raising awareness of CDFIs.

Americans, including me, are often quick to complain about the problems in our country. When a solution to a problem becomes apparent, it is empowering to become part of that solution. This is one of the reasons I enjoy working at Calvert Foundation so much. Calvert Foundation is lending to more than 60 CDFIs that are creating jobs in America. More importantly, Calvert Foundation is funded by individual investors looking to become part of the solution to some of our country’s most pressing problems. Americans helping Americans, people investing in people – this is what Calvert Foundation does and this is what OFN and Starbucks are doing with the Create Jobs for USA campaign.

There was definitely a buzz at the OFN conference about the campaign and the partnership with Starbucks. Adam Brotman, VP of Digital Ventures for Starbucks, spoke at the conference, specifically about Starbucks’ commitment to communities and their efforts outside of the new campaign. Adam had an impressive list, including the fact that Starbucks has been an investor in the Calvert Foundation Community Investment Note for almost 10 years. We are appreciative of the support that Starbucks has given and continues to provide for organizations doing the type of work that we do. Personally, I was very impressed by Starbucks and although I don’t think I’ll ever have a VIP Gold discount card like my caffeinated friend Carrie, I just might have to stop in a bit more frequently for a Tall Soy Sugar Free Cinnamon Dolce Latte!

Learn more about CDFIs by watching this great video created by Citi Foundation and OFN!

Wednesday, October 26, 2011

Water and Sanitation: A Quadruple Bottom Line Investment

By Anthony Randazzo, CFA, Senior Investment Officer

Something ironic happened to me the day before I spoke on a Water and Sanitation panel at the Impact Investing Summit in Washington, D.C.

I entered the kitchen at 6:30 in the morning to make my first dose of coffee, but when I reached for the faucet to fill up the kettle, no water came out - just an annoying hissing sound. A water main had burst in the middle of the night, knocking out the water supply in our entire neighborhood.

If you are like me, then you believe things happen to you for a reason. So, it occurred to me as I stood in my kitchen wondering how I was going to get ready for work that perhaps I was meant to feel solidarity that morning with the 884 million people in the developing world who live without clean water every day. We take clean water for granted, so what better way to prepare a heartfelt presentation on water than to live without it for a day?

Personal water deprivations aside, the Impact Investing Summit provided me an opportunity to interact with commercial and institutional investors from across the financial spectrum to discuss how to use investment to alleviate poverty and address environmental issues. The panel discussion on Water and Sanitation was well received and I, along with co-panelists Rich Thorsten from Water.org and D. Paul Sathianathan, of Guardian, fielded questions about what we do, how our organizations tackle the water and sanitation scarcity issue and why we have chosen to work in this space.

To date, the Calvert Foundation has invested approximately $4 million in social impact investments for improved water and sanitation. Most of this has been indirect, through loans to financial intermediaries that have invested in water and sanitation, but we also have a direct investment in E-Healthpoint, a social enterprise that provides clean water and affordable healthcare in rural India. Why is Calvert Foundation interested in this sector? There are two main reasons.

A woman selling drinking water on the 
streets of Mumbai in India. Proof that water can
 generate income for the working poor. 
Photo by Anthony Randazzo
A “quadruple bottom line”

For one, if done right, investing in water and sanitation can be a rewarding proposition. We have all heard of companies that generate a “double bottom line” i.e. that generate both financial returns and a “social” return (i.e. reduce poverty). However, water can achieve at least four types of impact, producing what I like to call a “quadruple bottom line.”

  • It can have a direct impact on health. Waterborne diseases are a major cause of diarrhea and other illnesses that kill poor people in developing countries. It is estimated that 1.5 million children under the age of five die every year as a result of water and sanitation-related diseases.
  • It can have a gender impact. Women and girls shoulder 72% of the burden for collecting water for the household. By freeing up their time, women can live more productive lives and girls can spend more time in school. 
  • It can have a positive economic impact. Clean water can generate revenue for the family if it is sold or used to maintain a small business. It can also translate into increased savings if better health means higher productivity or less money spent on healthcare. 
  • Finally, water can have a conflict resolution impact. We live in a world where countries enter into conflict over scarce resources. It is not inconceivable that countries will one day fight over water. By investing in clean water today, we can reduce the likelihood that conflicts over water will happen tomorrow. Better water resource management can also improve food security. 
Social and Environmental Impact

The other reason why Calvert Foundation is interested in water and sanitation is because our investors are increasingly interested in achieving both a social return on their investment as well as an environmental impact. However, finding investments that reduce poverty, solve environmental problems, and produce a stable return can be challenging.

We need to keep in mind that there are 2.6 billion people without access to improved sanitation in addition to the 880 million without clean water. Those are large numbers, so you need to harness the private sector to find a solution to these problems. The failure of governments to provide these public services in the developing world has meant that the private sector has had to step in to try to fill the void with “off-grid” solutions. In fact, there are many simple, affordable off-grid solutions available to provide clean water and improved sanitation at the base of the economic pyramid. These range from household water purification systems, to rainwater harvesters, to simple pit latrines.

However, finding the right business model that can deliver such products and services at scale and at an affordable price can be a challenge. There are many organizations out there focused on addressing the water and sanitation issue, but in my experience, most are donor-dependent and few are set up to harness the private sector in a sustainable, scalable manner. The carbon-offset market might provide an answer, since off-grid water purification provides an alternative to boiling, but it remains to be seen if this additional revenue can be tapped as successfully by the water sector as it has by the renewable energy sector. It may be that social enterprises in the water and sanitation sector are today where microfinance institutions were 15 years ago, i.e. still reliant on donor funding to absorb start-up costs and stimulate private investment.

In September of 2010, the Human Rights Council recognized the right to water and sanitation as legally binding under international law. This will help to underscore the responsibility of governments to deliver water and sanitation to their citizens, but it will take time and resources for the public sector to bridge the gap. For this reason, we have to continue to find market-led solutions to the problem since charity alone will not get us there.

Moreover, we all need to be reminded that water is a scarce resource, and not having it for a day will make you realize (as I did) that you can get ready for work with very small quantities of water (from my tea kettle and Brita water filter).