Dealflow | May 29, 2024

Robert Wood Johnson doubles its impact investing mandate with $325 million commitment

Roodgally Senatus
ImpactAlpha Editor

Roodgally Senatus

New Jersey-based Robert Wood Johnson Foundation has more than doubled its impact investing target, bringing its total impact allocation to $625 million.

The $13 billion foundation said it aims to attract an additional $1 billion from banks, commercial lenders, insurance companies, private investors and other foundations by the end of next year to advance health equity, specifically in communities affected by structural racism.

That includes investing in drivers of social determinants of health, wealth and wellbeing, such as equitable homeownership models and minority-led community development finance institutions, or CDFIs (see Zoila Jennings’ guest post, “Changing how capital flows through communities to improve health”).

“For us, it’s not about the transaction. It’s about what the transaction represents along the pathway to system-level change,” RWJF’s Kimberlee Cornett told ImpactAlpha. “We’re very intentional about that. We take financial risks when the opportunity for social impact warrants it.”

(Disclosure: Robert Wood Johnson Foundation supports ImpactAlpha’s coverage of Muni Impact.)

RWJF recently made a $5 million equity allocation in Invest Appalachia, a place-based and catalytic impact fund in Central Appalachia that wrapped up fundraising earlier this month, and recruited MacArthur to invest in the fund.

RWJF also invested in Washington, DC-based Blackstar Stability, which is helping low-income, minority families transition out of predatory loans into more stable and traditional mortgages. In Denver, the foundation backed the Dearfield Fund for Black Wealth to provide down-payment assistance to first-time Black homebuyers.

Catalyzing capital

RWJF is aiming to drive systemic change by de-risking deals in underinvested communities and inviting along commercial co-investors.

“We’re pretty precise about what we count as leverage,” Cornett said. The test: “The foundation’s capital is doing something that enables another investor to come into the transaction.” RWJF made $48 million in impact investments last year as loans, equity investments and guarantees.