The magnitude of the pandemic and economic crisis required philanthropy to be bold, creative, and fast. In March 2020, MCF and Saint Paul and Minnesota Foundation created the Minnesota Disaster Recovery Fund (MDRF) as a first-response to the crisis. As of mid-2021, donors had contributed $11 million for this fund.
As the crisis response transitioned to longer-term recovery, in April 2020, MCF launched an Integrated Capital Recovery Program to enable foundations to increase their impact quickly yet thoughtfully. This was a perfect time for foundations to make loans or “Program Related Investments” (PRIs) in addition to expanded grant making. Integrated Capital, a term coined by RSF Social Finance, means using all the tools philanthropy possesses to solve a problem: Integrated capital is the coordinated use of different forms of financial capital and non-financial resources to support an enterprise that's working to solve complex social and environmental problems.
MCF’s Integrated Capital Recovery Program encouraged foundations to provide loans, PRIs and other types of patient capital to CDFIs to get resources flowing to small businesses and nonprofits. The program gave a priority to supporting small businesses and nonprofits led by women, people from Black, Indigenous, or People of Color (BIPOC) communities, community members who identify as LGBTQ, people with disabilities, and people from rural communities. As of December 2021, ICRP generated $44.7 million in loan and grant commitments for Minnesota communities. MCF is thankful to the 13 funders and the working group members who led this innovative collaboration.
Philanthropic Action Options
Through ICRP, foundations were able to take various actions:
- Learn more about integrated capital. MCF provided education for members about Integrated Capital and how they could explore this concept to make loans along with grants to address the crisis.
- Get support to enhance impact investing capacity. MCF provided expanded access to the Impact Investing Executive in Residence, Susan Hammel, CFA, for MCF members seeking specific advice on their course of action regarding loans and other types of financial investments.
- Invest in CDFIs for crisis recovery. MCF crafted a collaborative COVID-19 Program Related Investment (PRI) approach to encourage members to provide patient capital to CDFIs to get resources flowing to small businesses and nonprofits.
Contact Susan Hammel, MCF Impact Investing Executive in Residence, if you’re interested in learning more about ICRP and ongoing strategies to consider integrated capital at your organization.