What does $1 billion in community lending look like? February 4, 2020

For more than 32 years, IFF has stayed true to its mission of strengthening nonprofits and the communities they serve. We’ve done that by financing schools, affordable housing, child care centers, health care facilities, community centers, and countless other social service agencies and neighborhood partners — to the tune of more than $1 billion in loans deployed to nonprofits and community facilities across the Midwest.

We believe nonprofits are the most important engines of societal change.

And while that $1 billion of loans is a milestone worth celebrating, what’s more remarkable is the incalculable impact each of those dollars has made. The impact of IFF is not simply the sum of its loan transactions; it’s the communities, organizations, and lives that have been — and continue to be — transformed by an infusion of capital that IFF is uniquely positioned to provide.

“We believe nonprofits are the most important engine of societal change,” says Matthew Roth, IFF’s President for Core Business Solutions. “Our mission is to strengthen nonprofits by helping them own their facility — a space that, with the right financing and the best possible real estate guidance, they can mold into the ideal location for their services and for the people in their community. Nonprofits, and the people who work there, and the people who seek services there deserve nothing less.”

$1 billion solves facility challenges

Mission is at the heart of IFF’s work, and running from a challenge isn’t in our DNA. So when Meet the Need (MTN) — an all-volunteer, small-budget nonprofit outside of Kansas City — came to IFF for help financing the acquisition of the building it was renting, we were ready to step up.

The agency had started out with nothing more than a $40 check from garage sale proceeds, but it had grown into an organization that served thousands of its community members experiencing times of crisis. In 2009, though, the organization was facing a crisis of its own: purchase their building or close their doors. In July 2009, IFF closed a $309,000 loan allowing them to purchase the 17,000-square-foot facility — but just three months later, a fire destroyed all but 3,000 square feet of it.

So with the help of IFF’s lending experts and a massive joint effort involving volunteers, churches, organizations, and businesses, MTN re-opened its store and assistance center later that year. And in 2017, IFF closed on a third loan for the nonprofit — $61,000 to finance a café expansion which, today, serves breakfast and lunch to the community while providing jobs, training, and critical support to its neighbors.

“IFF is the only reason we’re in existence today. If it weren’t for a program like theirs, we wouldn’t be here,” says Kris Peoples, Executive Director of Meet the Need.

$1 billion creates safe and welcoming facilities

IFF understands the value of thoughtfully designed facilities, and we believe everyone deserves a high-quality space where they feel safe and welcomed. Howard Brown Health is a federally qualified health clinic in Chicago that has been serving the LGBTQ community and its allies since 1974. Now one of the nation’s largest LGBTQ organizations, Howard Brown Health has utilized $7.2 million in IFF financing since 1996 to create high-quality spaces to meet the needs of their patients — most recently in 2016 to help finance the purchase and renovation of a new clinic in the Rogers Park neighborhood.

We have to be really intentional about designing space that is welcoming, but also private so that people feel more relaxed about sharing these really intimate parts of themselves.

“As soon as you walk through our doors, our space feels different from other health care providers,” says Kelly Ducheny, Howard Brown Health’s Senior Director of Behavioral Health Services. “You see pictures and images that represent you and the people in your life. You see literature about health services that serve your particular needs. You start seeing yourself and seeing a system that has been sculpted to be welcoming and radically informed.”

Howard Brown’s fifth clinic opened in Chicago in December 2016; it includes 12 exam rooms, is home to a large community space, and offers walk-in sexual and reproductive clinic services. At its now-six locations across Chicago, Howard Brown Health serves more than 8,000 youth and adult clients annually through its diverse health and social service delivery system.

“The things that people come to see us for can be intensely private,” Ducheny says. “We have to be really intentional about designing space that is welcoming, but also private so that people feel more relaxed about sharing these really intimate parts of themselves.”

$1 billion provides critical, flexible financing

IFF’s lending is as diverse as the nonprofits we serve. Whether it’s for new construction, gut rehabs, critical repairs, special equipment, tax credit financing, or bridge loans as nonprofits complete capital campaigns or wait on federal commitments to come through — IFF provides a variety of flexible loan options.

“Broadly speaking, IFF’s lending is for capital projects — to help buy, renovate, or outfit a facility,” explains Dana Lieberman, Senior Vice President of Capital Solutions at IFF. “But the important part of our work isn’t about making those loans — it’s about providing capital that drives impact. Our lending helps organizations serve more people, serve people better or differently, and deliver those services in an efficient and high-quality space.”

In short: IFF helps nonprofits access the capital they need in order to do the meaningful work their community needs. Where traditional lenders might not understand or be able to accommodate nonprofits’ needs, IFF offers terms up to 15 years and in amounts from as low as $10,000 to as much as $6.5 million. And as a leading Community Development Financial Institution (CDFI) offering loans that are not dependent on a building’s appraised value, IFF is uniquely positioned to help schools, health care facilities, grocery stores, homeless shelters, affordable housing, and countless other community facilities come to life across the Midwest through access to affordable financing.

“The importance of IFF’s non-appraisal-based lending cannot be overstated,” Lieberman says. “Many of our nonprofit clients work in disinvested communities where real estate values are unjustly low. Loans based on those buildings’ appraised values are therefore also lower. But a lower appraised value doesn’t mean it costs less to build a school or retrofit a health clinic. It just means that nonprofits are burdened with bringing more money to the table — and that’s less money available for mission.”

Read more about IFF’s non-appraisal-based lending in IFF CEO Joe Neri’s recent blog post, “The Appraisal Bias.”

The important part of our work isn’t about making those loans — it’s about providing capital that drives impact.

$1 Billion fuels new opportunities

The right facility is about more than bricks and mortar — it’s about creating opportunities and environments where all people can reach their full potential. Which is why, six years ago, IFF made its first loan in the state of Michigan to the little-known Detroit Achievement Academy, a public charter school whose expeditionary learning model focuses on providing a world-class education that develops and nurtures the whole child.

The school’s original $18,000 loan not only supported critical equipment and technology needs, but helped establish the organization’s credit history and positioned it for future growth. A little less than a year later, Detroit Achievement Academy took out its second loan with IFF to help purchase and renovate a school building with a capacity to serve 360 students. And just last November, the ribbon was cut on the steps of Detroit Prep, the expansion of Detroit Achievement Academy’s sister school, financed in part by IFF’s $6 million allocation of New Markets Tax Credits and $2.75 million loan.

“This project was really hard to do. We fought to purchase [the building] for about a year … we fought to clear up small issues with the title for another year. We fought to firm up financing for another year,” explained Kyle Smitley, founder of Detroit Achievement Academy. “Four years later, here we are. And we wouldn’t be here without our financial partners.”

It was an honor to get such special kids into such a beautiful building. It really was a highlight of my career.

That’s what IFF is to the nonprofit organizations we work with: a partner. IFF doesn’t just care about making loans. We care about driving impact by putting that capital to work in the organizations and communities that need it most. The expansion of Detroit Prep began years ago with a small infusion of capital from IFF. Now, they are the most racially and socio-economically diverse school in Detroit with the highest proficiency rate of any elementary school in the city.

“Our students learn by doing. They learn by being active members of their community,” Smitley explains. “It was an honor to get such special kids into such a beautiful building. It really was a highlight of my career.”

$1 billion leverages an additional $3 billion of capital for stronger nonprofits and even stronger communities

Since 1988, over 1,000 nonprofits across the Midwest have relied on IFF as a lender and partner in realizing their mission. The more capital we put into communities, the more partner funders are likely to join us. By lending $1 billion, we’re also leveraging more than three times as much in overall capital that is deployed into critical nonprofit projects.

“Deploying $1 billion of loans into nonprofit and community facilities across the Midwest is made possible by an incredible group of investors that have committed their resources to a larger purpose,” Neri says. “And thanks to the unbelievably passionate and knowledgeable team of professionals that work hard every day to maximize that impact, those dollars have been leveraged into nearly $3 billion of capital to strengthen nonprofits and the communities they serve.”

Stay tuned for IFF’s 2019 Annual Report, which will include more data and stories about our $1 billion of impact.