Minnesota foundations have invested $17 million in an affordable housing and small business bond.
The McKnight and Bush foundations and the Otto Bremer Trust, along with other Minnesota foundations, are collaborating to back the Access Capital Community Investment Fund, a fixed-income bond fund managed by RBC Global Asset Management.
The fund invests in mortgage-backed and municipal securities and government-backed loans for low- and middle-income housing and small business lending.
The standard-issue projects belie the significance of the foundation collaboration: the financing comes from philanthropic endowments, not grant budgets.
The Minnesota collaboration follows the Ford Foundation’s billion-dollar pledge to point its own endowment towards its social mission (see, “Ford Foundation to tap endowment for $1 billion to fight injustice and inequality”). “I believe foundations activating 100 percent of assets for mission will become the rule rather than the exception,” says Trista Harris, president of the Minnesota Council on Foundations, which helped coordinate the effort and made its own commitment to the fund.
The collaboration could top $20 million as at least eight other foundations complete their reviews.
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Photo credit: Minnesota Housing Finance Agency