Impact Investing

The Michigan Collaborative is an example of this type of impact investing tool, one that is used by a number of CMF members. 

The Michigan Collaborative is an initiative managed by Community Capital Management (CCM) that invests in targeted fixed income investments in affordable housing, small business lending and civic infrastructure - all targeted toward the investor's individual respective desired geographies or areas of impact within Michigan through CCM’s publicly traded mutual fund, the CRA Qualified Investment Institutional Shares (CRANX) fund. 

What makes it a collaborative? While the CRA Qualified Investment Institutional Shares fund is a publicly available fund and investors act individually, through CMF's collaboration with members, we've championed the development of additional benefits to CMF members not available to other investors through the publicly traded fund. 

Through the Michigan Collaborative an additional $55 million has been targeted for investment in Michigan, adding to the $145 million already invested through the fund in Michigan.¹ 

Learn More: 

• Letter to CMF Members Announcing the Collaborative (August 7, 2017)  
• CCM Impact Investing Fund, with Michigan-specific focus: Aeris rates as first tool to help evaluate impact (October 23, 2017)
• CCM Impact Investing Fund with Michigan-specific focus named as a top performing fund (January 29, 2018)  
• MI Collaborative Fund Leads to $188M in MI Investments (May 14, 2018) 
• MI Collaborative Impact Investing Fund: Fund Manager Announces New Impact Theme (October 29, 2018) 
• Community Capital Management Website 

A number of CMF members have invested in the Michigan Good Food Fund, a $30 million public-private partnership loan fund that provides financing to good food enterprises working to increase access to affordable, healthy food in low-income and underserved communities in Michigan. This includes the range of businesses that grow, process, distribute and sell healthy food that reaches those who need it most. The fund provides flexible, patient capital to good food enterprises often overlooked by traditional banks. Lending is bolstered by business assistance to help entrepreneurs grow their ventures and prepare for financing. 

According to fund leaders, since its June 2013 launch, the Michigan fund has invested more than $11 million in good food enterprises, supported 47 businesses with financing and business assistance and created/retained 390 jobs across the state food value chain. 

Learn More: 

• Michigan Good Food Fund Website 
• Michigan Good Food Fund Partners 

Community Development Financial Institutions (CDFIs) are private-sector, financial intermediaries with community development as their primary mission. While CDFIs share a common mission, they have a variety of structures and development lending goals. There are six basic types of CDFIs: community development banks, community development loan funds, community development credit unions, microenterprise funds, community development corporation-based lenders and investors and community development venture funds. All are market-driven, locally-controlled private-sector organizations. CDFIs measure success by focusing on the “double bottom line” - economic gains and the contributions they make to the local community. CDFIs rebuild businesses, housing, voluntary organizations and services central to revitalizing neighborhoods.² 

Learn More:

• CDFI Coalition  

Through a guarantee, a social good investor – like a foundation – can promise repayment through a pledge of its balance sheet, offering protection for another investor's returns. Essentially, a guarantor is saying, "If this project doesn't generate the returns we expect, we guarantee you will be repaid " up to a set amount and under certain agreed upon conditions.³   

As defined in “Scaling the Use of Guarantees in U.S. Community Investing from The Global Impact Investing Network (GIIN),” supported by The Kresge Foundation, a guarantee is defined as one of the following two instruments:  

1. Unfunded guarantee: A legal agreement in which a third party to a financial transaction promises to pay the investor (or lender) in the event that the investee (or borrower) is unable to do so. The contract specifies the conditions that trigger a payment and the amount to be paid. No funding is provided up front. A fee may be charged, though in the context studied here most guarantors charged a nominal fee or no fee for unfunded guarantees.  

2. Funded guarantee: Capital set aside by a third party for the benefit of a financial transaction, to be used in the event that the investee (or borrower) is unable to repay the investor (or lender), depending on specified conditions or triggers. These funds can be provided in several ways, including grants, loans, and deposit accounts. The capital may be reserved on the balance sheet of the guarantor, the investor, the investee, or an intermediary, such as a fund manager. 

Learn More: 

• Scaling the Use of Guarantees in U.S. Community Investing from The Global Impact Investing Network (GIIN), supported by The Kresge Foundation.