NEW YORK, March 17, 2022 /PRNewswire/ — The Local Initiatives Support Corporation (LISC) announced today that its Black Economic Development Fund (BEDF) has committed nearly half its capital, having closed on $122 million in investments for Black-owned banks and businesses throughout the country.
The $250 million fund includes investments from Netflix, Paypal, Square, HubSpot, Aflac, Costco, Dicks Sporting Goods, ThermoFisher Scientific, Wayfair, McKinsey & Company, and Dupont. It aligns with LISC’s larger Project 10X strategy to break down systemic racial barriers, including $1 billion in investments that support small businesses, community nonprofits, mission-driven lenders, anchor institutions and innovative urban and rural initiatives.
“Over the last two years, there has been a lot of public debate about how best to support the advancement of racial equity,” said George Ashton, president of LISC Fund Management, which is the fund manager of the BEDF. “This fund is a powerful model for social investing that helps corporations leverage their treasury dollars to fuel revenue and employment growth for Black-owned businesses, so they can deepen their impact on the communities in which they operate.”
The BEDF is designed to respond to unique financing challenges facing Black enterprises, which have historically had more limited access to capital than White-owned businesses. To date, the fund has provided financing for real estate developers, high-impact community development projects and mission-driven lenders in 15 cities.
In Cleveland, the BEDF made a nearly $1.7 million loan to help complete the conversion of two Victorian-style homes and a carriage house into 19 studio and one-bedroom apartments. The buildings are located near the Cleveland Clinic and Case Western University, offering much-needed quality housing for students and professionals at below-market rates. The project is led by Brian Hall, CEO of JIT Services and senior vice president and executive director of equity and inclusion at the Greater Cleveland Partnership, who has owned the properties since 1986.
In Chicago, the BEDF made a $2.5 million mezzanine loan to help preserve and improve a 141-unit affordable housing development in the city’s Roseland neighborhood, a majority-Black community where property values have risen in recent years and threaten to displace long-time residents. The effort is driven by a Black-owned development firm, The Confluent Group, led by CEO David Gross, and co-sponsored by former NBA player Luol Deng, who is active in local philanthropy after spending most of his career with the Chicago Bulls.
In Orlando, the BEDF made a $5.75 million construction loan to enable the development of for-sale affordable housing in the historically Black community of West Lakes. Led by Hannibal Square Community Land Trust, the project offers new affordable pathways to homeownership, creating opportunities for residents to build equity and generational wealth.
Among the Black banks supported in recent months, the BEDF made a $3 million deposit in Unity National Bank in Houston, the only Black-owned bank in Texas, and a $5 million deposit in Carver Federal Savings Bank in New York, a community development financial institution (CDFI) focused on providing access to capital to historically underserved communities with emphasis on Minority and Women Business Enterprises (MWBEs).
The BEDF expects to close on the remainder of its investments by year-end. For more on the fund or its local investments, visit https://www.liscstrategicinvestments.org/black-economic-development-fund.
LISC is one the country’s largest community development organizations, helping forge vibrant, resilient communities across America. We work with residents and partners to close systemic gaps in health, wealth and opportunity and advance racial equity so that people and places can thrive. Since our founding in 1979, LISC has invested $24 billion to create more than 436,320 affordable homes and apartments and develop 74.4 million square feet of retail, community and educational space. LISC Strategic Investments is LISC’s national fund management team, developing pooled investment vehicles and deploying capital on behalf investors through LISC’s registered investment advisor, LISC Fund Management, LLC. For more, visit www.lisc.org or http://www.liscstrategicinvestments.org.
The Black Economic Development Fund (BEDF) is an impact investment fund built to address economic challenges in Black communities and to help close the racial wealth gap. The fund targets Black-led financial institutions, businesses, real estate developers and anchor institutions with the goal of growing these organizations and strengthening their contributions to Black communities. The fund deploys capital across a diverse set of industries, borrowers and geographies in the United States. The BEDF is managed by the Local Initiatives Support Corporation (LISC) Strategic Investments team and LISC Fund Management, LLC, a LISC affiliate. For more information on the BEDF, please visit https://www.liscstrategicinvestments.org//black-economic-development-fund.
SOURCE Local Initiatives Support Corporation (LISC)