Session #3 – Metrics, Monitoring and Reporting Community Foundation Impact Investing Peer-Learning Circle Wednesday, December 7, 2016 Session #3 – Metrics, Monitoring and Reporting Presenters: James Lincoln – Consultant, Arizona Community Foundation Jo-Anne Stately – Minneapolis Foundation Karen Florez – Minneapolis Foundation

Community Foundation Learning Group Benchmarking 7 December 2016

Loan Program Data ~$12mm Available ~$4mm Deployed 10 Loans Outstanding Collection of Arizona-based nonprofits Behavior Health Federally Qualified Health Centers Housing Charter/Specialty Schools

5 Philanthropic Service Areas Medical Innovation Educational Excellence Arts & Culture Environment & Sustainability Community Development

One-Off Concept Each Loan needs to show how the debt capital will increase social outcomes of the Borrower beyond ongoing operational outcomes.

Custom Terms Measure outcomes/more cash flow for programs

Custom Covenants Borrower shall use its reasonable best efforts to expand its scholarship program and to increase the number of events and persons served at its events, including hosting smaller and more frequent events   Continued outreach and services into the service area. Specific thresholds to be determined but will mirror other centers operated by Borrower.

Custom Covenants 90% of the pro forma conservation acreage is preserved. Borrower should set high school graduation rates at 90% or higher, and post-secondary education entrance (military service, technical school, community college, four year university) at 80% or higher, and results on standardized tests consistently reaching the 70th percentile or higher in reading and mathematics.

Custom Covenants Borrower shall at all times continue as an Arizona registered charter school, catering to the needs of autistic students. 70% of all matriculated students must progress through the school as demonstrated on each students Individual Education Plan as per special education standards.

CRA Guidelines For low- or moderate-income persons; In low- or moderate-income geographies; In areas targeted for redevelopment by Federal, state, local, or tribal governments; By financing intermediaries that lend to, invest in, or provide technical assistance to start-ups or recently formed small businesses or small farms; or Through technical assistance or supportive services for small businesses or farms, such as shared space, technology, or administrative assistance.

Affordable Housing Fund The Affordable Housing Fund will make pre-development loans that support any type of affordable housing, anywhere in Arizona: New developments and preservation of existing housing for affordable use Permanent Supportive Housing, shelters and transitional housing for the homeless for veterans, families and the chronically homeless Special needs and supportive housing for the disabled and handicapped Rental and home ownership opportunities for working families Senior citizen housing

Affordable Housing Fund Loans to-date $3,120,270 Leverage to-date $340,785,953 Leverage Ratio 109:1 First Year Local Income Generated $176,644,000   First Year Taxes $18,491,720 First Year Job Creation 2,683

Affordable Housing Fund   Ongoing Local Income Generated $53,664,000 Ongoing Taxes $9,860,760 Permanent Jobs 671 $4,650/Job

Community Foundation Learning Group Benchmarking 7 December 2016

Impact Investing: Metrics, Measurement and Reporting CF II Peer-learning session, on Wednesday, December 7th 1 PM Eastern time

The Minneapolis Foundation’s Growth for Impact – Economic Vitality VISION: We have an inclusive workforce reflective of our changing demographics and a business climate that fosters innovation, entrepreneurship, and self-sufficiency. GOAL: A competitive and inclusive workforce. KEY DRIVERS: Increase workforce preparedness. Build community wealth. Strengthen delivery of financial and technical assistance to minority-owned businesses. Advocate for improved policies and public sector programs that impact workforce development and wealth creation.

Key Insights* Across the United States, small businesses in low-income communities are numerous. 43% of small businesses are located in low-income-communities. The vast majority of small businesses in low-income communities are microbusinesses. Of the 11.2 million small businesses in low-income communities... - 90% are micro-businesses (fewer than 5 employees, including the owner) - 30% are sole proprietorships *The Big Picture: A Larger View of the Small Business Market Tapping the Power of Big Data Analytics, Association of Enterprise Opportunity, pages 5-7.

Minnesota Microbusiness Employment Statistics 2002-2011* 31% *Association for Enterprise Opportunity http://www.aeoworks.org/index.php/site/page/category/Microenterprise_statistics/

The Power of One in Three* If just one in three micro businesses hired one additional employee, the U.S. would be at full employment. The Power of One in Three; Creating Opportunities for All Americans to Bounce Back, Association for Enterprise Opportunity, page 1, http://www.aeoworks.org/pdf/one_in_three.pdf.

2014 MEDA - Working Capital Loan Fund Overall Stadium Performance – Hiring Goals of 32% for minority and 6% women A $1 million Program Related Investment (PRI) to MEDA provided working capital for minority contractors to participate on the construction of the new US Bank Stadium. $500,000 of the investment was provided by Donor Advised Funds (DAFs). Construction Workforce on the stadium was 37% people of color out of 7,500 workers. Women hired was 9%.

Neighborhood Economic Opportunity Network (NEON) Small business developer in North Minneapolis NEON conducts two entrepreneur training cohorts with 24 participants annually. 70% successfully launch a business enterprise. In 2015 7 loans approved totaling $540,000 Loans leveraged - $370,000 Average cost per client - $1,300 60 clients received technical assistance 20 jobs were created In 2017 75 minority-owned businesses will receive 3,000 hours of technical assistance 20 jobs will be created with an average wage of $15/hour ($31,200) Average net increase in wealth $50,000 12 loans are anticipated for approval for a total of $1,000,000

Return on Investment and Economic Impact Measures 2016- InvestMPLS Goals for Economic Vitality Minority-owned businesses create 1,500 new livable wage jobs by 2020 Partners Investments Investment Total $800,000 Investment November 2016 Terms 2% over 5 years Local Initiative Supporting Corporation - $500,000 Pipeline for $1.8M for 7 Minneapolis businesses in 2017 Latino Economic Development Center$300,000 Year Pipeline for $400,155 for 7 Minneapolis businesses 2017 Return on Investment and Economic Impact Measures Output Effect Measure of revenue generated and leveraged by investments Income Effect Total income generated by investments Employment Effect Number of living wage jobs created and fill by communities of color Economic Effect Tax revenue generated by partner investments Estimated Jobs Created over 5 years - 300 to 450 through Program Related Investments

Minnesota Grantmakers and Mission Related Investments Minnesota grantmakers award approximately $1.7 billion annually and hold almost $18 billion in foundation assets. Through mission investing strategies foundations can leverage a portion of that $18 billion for social good. Program-related investments (PRIs) as loans are a commonly used tool and are often directed to economic development for low-income neighborhoods and job creation. Beyond the 5% Payout: A Think Tank on Mission Investing for Minnesota Foundation Leaders, hosted by MCF and Northwest Area Foundation (February 11, 2014)

Session #3 – Metrics, Monitoring and Reporting Community Foundation Impact Investing Peer-Learning Circle Wednesday, December 7, 2016 Session #3 – Metrics, Monitoring and Reporting Questions Comments Discussion