Health Impact Investing represents an exciting new financing strategy for Georgia’s health nonprofits. Health impact investing combines traditional charitable resources (grant funding) with existing public and private capital (financing) to improve health outcomes.
At Healthcare Georgia Foundation we see impact investing as a new, untapped opportunity to expand and align our limited resources with the causes of poor health, including the social determinants of health.
Since 2002, Healthcare Georgia Foundation has relied solely on grant funding as the means of deploying financial resources to achieve our mission. More than $70 million has been strategically allocated to health nonprofits for enabling, improving, and advancing the health and well-being of Georgians. Yet to address health disparities evident among vulnerable populations and underserved communities, and to achieve health equity for all, we must find new ways to align our mission with our funding and financing strategies.
With this in mind, the Foundation will assess and test the feasibility of a new funding and financing strategy – health impact investing. This includes 1) making Program Related Investments (PRIs) to certified Community Development Financial Institutions (CDFIs), which in turn provide financing to health nonprofits, and 2) building the capacity of CDFIs to include a focus on the Social Determinants of Health in their investment portfolio.
What is Impact Investing?
Health impact investing is “investments made with the intention to generate a measurable, beneficial social or environmental impact along-side a financial return.” For Georgians, health and wellbeing is the social impact. For the Foundation, the financial return is the opportunity provided for us to “recycle” charitable resources for the benefit of more health nonprofits and/or for purposes not supported by grants. Impact investing has the potential to be a win-win for our state’s vulnerable populations and for the Foundation’s financial capacity to do more.
What are CDFIs?
Community Development Financial Institutions are specialized community-based financial institutions with a primary mission to promote economic development by providing financial products and services in underserved communities. CDFIs include banks, credit unions, nonprofit loan funds, and venture capital funds. Click here for a list of National and Georgia-based CFDIs.
What are Program Related Investments?
PRIs are financial instruments aligned with the Foundation mission. They can take a variety of forms such as equity, debt, guarantees, or deposits. On May 14, Healthcare Georgia Foundation announced its first program related investment, a loan to Community Health Center Capital Fund. This investment will bring new and potentially leveraged financial resources to Georgia’s Federally Qualified Health Centers with attention to the special healthcare challenges in rural Georgia.
What does this mean for the Foundation’s grantees and partners? The Foundation will continue to engage in strategic grantmaking at current levels. Capacity building grants may be used in the future by eligible nonprofits to prepare for financing and mitigate risks by investors. As new Foundation partners, CDFIs will be eligible to receive grant funding that builds capacity to participate as health impact investors, and they will be eligible to receive program-related investments made by the Foundation.
This strategy creates an opportunity for catalytic impact and attracts new funding and financing partners. Stay tuned for more as we build on and leverage our impact on Georgians’ health with impact investing.