Charles and Lynn Schusterman Family Philanthropies and Community Investment Guarantee Pool Commit $25 Million to Advance Racial Equity in Housing
Includes commitment in first-of-its-kind credit enhancement tool from Enterprise Community Partners
COLUMBIA, Md., TULSA, Okla. and RICHMOND, Va. (May 6, 2021) – Enterprise Community Partners (Enterprise) announced a $20 million commitment from Charles and Lynn Schusterman Family Philanthropies (Schusterman), along with $5 million from the Community Investment Guarantee Pool (CIGP), toward Equitable Path Forward, Enterprise’s five-year, $3.5 billion nationwide initiative to invest in Black, Indigenous, and People of Color (BIPOC) and other historically marginalized housing providers.
CIGP’s $5 million second-loss guarantee support and $10 million in third-loss support from Schusterman will back a first-of-its kind Standby Guaranty Facility, a credit enhancement tool that helps unlock access to capital for BIPOC developers whose balance sheets do not meet traditional investor requirements. It is part of Enterprise’s work to push the community development finance system to make intentional changes to their risk models to level the playing field for developers of color. The Standby Guaranty Facility will eliminate the need for developers to secure a third-party co-guarantor, which can reduce their profit potential and further perpetuate barriers to BIPOC developers’ business growth. The flexibility of the Standby Guaranty Facility enables Enterprise to provide guarantees at the developer, project, or fund level.
The remaining $10 million from Schusterman will provide growth capital and advisory services designed to support BIPOC developers as they grow their operations and real estate portfolios and create impact in their communities.
“For centuries, Black entrepreneurs have lacked access to the capital we all need to be able to start and build businesses, and even when that capital was available, it was frequently overpriced. We are pleased to support Enterprise Community Partners’ national effort to provide financing to developers of color so they can build their businesses while creating more affordable housing for the many families in need,” said Stacy Schusterman, chair, Charles and Lynn Schusterman Family Philanthropies. “We believe that through efforts to develop new community development finance models, all developers can be afforded equitable access to capital and the nation’s supply of affordable housing can expand in the process."
”We are excited about the opportunity to support Enterprise’s Equitable Path Forward. CIGP’s intent is to enable intermediaries to approach community financing more innovatively and equitably,” said Sarah Stremlau, President of LOCUS Impact Investing, which manages CIGP. “Through this project, we hope Enterprise and the other standby guarantee facility’s investors will help BIPOC and other historically marginalized developers build wealth and gain access to the development opportunities they justly deserve.”
“For too long, developers of color – despite credibility and community knowledge -- have been unable to access the kind of capital that helps them grow their businesses and invest in their neighborhoods. Equitable Path Forward, and specifically the Standby Guaranty Facility, allows Enterprise to address the speed bumps they may face working with traditional lenders and investors,” said Priscilla Almodovar, president and chief executive officer, Enterprise. “With partners like Schusterman and the Community Investment Guarantee Pool, we are beginning to change the finance system to advance racial equity.”
Equitable Path Forward
Equitable Path Forward is a five-year, $3.5 billion nationwide initiative to help dismantle the deeply-rooted legacy of racism in housing – from the types of homes that are built, where they’re built, who builds them, and the wealth that is generated from them. The multipronged initiative establishes an equitable path forward for Black, Indigenous, and People of Color and other historically marginalized housing providers by filling the gaping capital gap from decades of systemic racism, strengthening providers through advisory services and other nonfinancial support and creating new career pathways to diversify leadership in real estate.
About Enterprise Community Partners
Enterprise is a national nonprofit on a mission to make home and community places of pride, power and belonging for all. To make that possible, we operate the only organization designed to address America’s affordable housing crisis from every angle: we develop and deploy programs and support community organizations on the ground; we advocate for policy on a nonpartisan basis at every level of government; we invest capital to build and preserve rental homes people can afford; and we own, operate and provide resident services for affordable communities. All so that people not only make rent, they build futures. With this end-to-end approach, 40 years of experience and thousands of local partners, Enterprise has built and preserved 775,000 homes, invested $61 billion in communities and changed millions of lives.
About the Charles and Lynn Schusterman Family Foundation
The Charles and Lynn Schusterman Family Foundation is a global organization that seeks to ignite the passion and unleash the power in young people to create positive change. Schusterman pursues its mission by working collaboratively with others to support and operate high-quality education, Jewish identity development, leadership training and service programs designed to help young people cultivate their growth as individuals and as leaders.
The Community Investment Guarantee Pool (CIGP), managed by LOCUS Impact Investing, aggregates unfunded philanthropic financial guarantees to accelerate lending in affordable housing, small business, and climate. By helping philanthropic organizations leverage their balance sheets for impact, CIGP makes more and new types of community development transactions feasible. The initial guarantors that helped make CIGP possible include The Kresge Foundation, The Annie E. Casey Foundation, The California Endowment, Chan Zuckerberg Initiative, CommonSpirit Health, Gary Community Investments, Jessie Ball duPont Fund, Phillips Foundation, Robert Wood Johnson Foundation, Seattle Foundation, Virginia Community Capital and Weingart Foundation.