This fall the first loans from the Michigan Women Forward’s (MWF) Community Impact Notes (CIN) will be deployed to help Michigan women grow their businesses.  

A year ago, MWF, a CMF member, launched CIN, a revolving microloan fund as a vehicle for foundations, family offices, corporations and banks to provide impact investments into MWF. 

MWF says $10 million of CINs are now being raised throughout the state to provide loans to low- and moderate-income women, primarily women of color. Interest from the fund and the microloans will pay for at least half of the deployment costs and technical assistance support.  

“It’s a beautiful statewide team effort,” Carolyn Cassin, president and CEO of MWF said. “We are excited to offer this opportunity to all foundations, family offices and corporations who want to make impact investments that will improve the lives of women in Michigan and break the cycle of poverty for those who have been unable to obtain access to capital to start or grow a business.” 

According to Jennifer Oertel, CMF’s impact investing expert in residence, CINs have been used for more than two decades.

“Because charities cannot issue traditional ‘ownership’ interests, the investors lend money at a certain interest rate to the charity (including a charitable fund) that in turn lends out that money for charitable purposes at an interest rate that is set at a level so that it may repay investors (with the promised interest rate) and cover the charitable lender’s costs of operating the program,” Oertel said. “Sometimes foundations will provide a loan loss reserve that further de-risks the capital for investors.”

Cassin tells CMF that the innovative approach has proven to be very effective and in the first year nearly 30 percent of the fund has been committed. 

The Max M. and Marjorie S. Fisher Foundation, the Ralph C. Wilson, Jr. Foundation and the New Economy Initiative (NEI), a special project of the Community Foundation of Southeast Michigan, all CMF members, have provided MWF with loss reserve dollars and infrastructure funding so the loans can be effectively made and their social impact tracked.   

MWF is also working closely with some community foundations to get involved in this work. 

“This is the perfect impact investing vehicle for community foundations. They can invest in us and we do the on-the-ground work for them of finding the entrepreneurs, making the loan and getting repaid,” Cassin said. “Their money makes the impact, but we do much of the front-line work. The benefit for MWF is tremendous, it provides loan dollars in communities where we have not had dollars to invest – like Flint and Ypsilanti.” 

Cassin is also talking with some private foundations that would like to get started in impact investing and want to partner with MWF because of its experience in this work and because many foundations do not have internal impact investment staffing at this time. To further help lower the costs associated with impact investing, CMF’s Impact Investing team connected these potential investors so that they can share due diligence.

The first loans to be deployed will be from the Adrian Dominicans and the Sisters of Mercy funds.

MWF has been focused for some time on investing in women entrepreneurs through programs, mentorship opportunities and investments. 

Over time, the organization has invested $3.3 million to help more than 200 women start and grow businesses. Approximately 386 jobs were created in Michigan by MWF clients’ companies.  

Cassin says the CINs expand this work on a statewide level and align with the MWF board’s long-term goal of achieving financial sustainability by the development of balance sheet assets and earned income that contributes 50% of operational expenses each year.  

Want more? 

Learn more about the fund by connecting with Carolyn Cassin. 

Be sure to check out What’s the DEAL with Impact Investing?, a breakout session happening Monday, October 7 at CMF’s 47^th Annual Conference.  

In November, CMF is hosting a series of impact investing convenings for members in Traverse City, Grand Rapids, Saginaw and Southfield. Check out the dates and join us for a conversation happening near you!

LOCUS is hosting a series of livestreamed talks on impact investing, beginning on December 11. If you are interested in being a local viewing site, you can sign up with LOCUS.