 happy to be here this morning, happy to be able to moderate this this panel and it's I was thinking to myself this morning coming over and I was like thinking wow I really hate Socap but as I really then thought about that and deconstructed that a little bit I guess what I hate is that having Socap is still so important right that the idea and the purpose is still so vital for us to be able to move forward for us to be able to make changes to do things differently to have better outcomes so I guess part of my feeling is the frustration that in the time that we've been doing this and within the length of my career of trying to do this that this is still such a vital component to be able to understand how to do it when to do it and learn from what's already been done and so for today we're talking about a project that was taken on by the three organizations that represented it here Chicago Community Trust the MacArthur Foundation and the Calvert Foundation Justin's with Calvert Impact but it was from that side that put together this collaboration and my role what is still is that I'm on the oversight board the governance board that was established through MacArthur called Arc and I serve at Laura and I both serve on that on that board so to keep it going anybody who wants to know anything about me and known you can talk to me afterwards because we really want to highlight benefit Chicago the successes the outcomes lessons learned and because we feel that that will be very important for those of you that are trying to do place-based investing and have success with that so I would like each Charles and Laura and Justin to take a minute or two to introduce themselves sure thanks Jim hi everybody my name is Charles Kustin I'm the portfolio manager for impact investments at the MacArthur Foundation that means that I have overall responsibility for managing our carve out of up to $500 million of impact first investments the MacArthur Foundation our endowment is a little over 8 billion and so that includes the benefit Chicago initiative no Jim do we want to describe the kind of structure of the benefit of Chicago initiative or Jewish afterward okay all right we'll go to Laura then great good morning everyone I'm Laura Kernighan I'm senior director of investments at the Chicago Community Trust it's such a pleasure to be here and to see you all in this room in my role as senior director of investments at the trust I'm responsible for the entirety of our investment portfolio which is composed of about four billion and assets all of which are charitable funds entrusted to us and stewarded on behalf of a wide range of donors a vast majority of that is held in donor advice funds and the benefit Chicago collaborative represents one of our key ways of defining mission alignment within our investment portfolio and it's a delight to share with you that journey thanks everyone Justin Conway I'm the vice president of investment partnerships at Calvert impact we are a nonprofit investment firm with mission to make impact investable we build impact investment products that are really trying to help all types of investors certainly institutions but also individuals channel capital to community-based organizations driving racial gender economic climate justice in their communities and we largely do that through multiple products really will highlight the community investment note which was used in the benefit Chicago program but we have a private equity fund focused on addressing the racial wealth gap and some small business funds and a new green bond focused on building decarbonization to help ensure the clean energy transition so we're working on a lot of different products but this has been a great collaboration so as we look at this I know Charles you were at MacArthur when this was conceived correct I actually joined right after it was conceived and was part of the initial launch okay I think if you want to go back to the the conception period you'd have to go back to Justin but I can certainly describe well no I'm gonna hit Justin because I want to hit him from the Calvert side so as best as you can share with it with us what it was like on the MacArthur side and what the mindset was as you moved into this yeah so this year marks the 40th anniversary of the MacArthur Foundation's first impact investment so we've been doing this for a long time we're based in Chicago and an important part of our grant making work is the city of Chicago and so we've made a series of investments as well in Chicago part of our impact investing focus within the foundation where what's called a field support strategy so part of our strategy and approach is to extend the reach and effectiveness of impact investments more broadly and so the Benefit Chicago initiative from our standpoint was intended to really do two things it was intended to unlock capital to come into impact investing in a new vehicle to bring new investors in and then it was also as our hometown an important place for both investing and grant making make an impact within Chicago so it was sort of this this dual mandate in terms of though how it's structured the MacArthur Foundation committed $50 million this is a hundred million dollar initiative so we committed half the capital and then the other half of the capital comes through Calvert impact capital they issue the notes that Justin was just talking about and much of that capital actually comes from the trust through the vehicle of the community the community notes that Justin mentioned and in order to do all of that we created an entity Jim mentioned that he's on the board Laura's on the board so we created an entity in order to be able to borrow that capital so our $50 million of equity capital from the foundation was able to combine with outside investors and in many cases their individual investors there's institutional investors and Laura can talk more about the role of the trust in the the daft money and other capital that came through the trust and we're able to combine this in a pool and collect this hundred million dollars to then deploy it Laura I will piggyback on much of that thank you for getting the conversation started so it probably comes as no surprise but as a community foundation the Chicago community trust is all about solving challenges in the Chicago region and up until this initiative most of that work had been focused on our more traditional grant making focus and really focused on philanthropy that has always been the core of our institution and really where we've driven the most impact in Chicago over the course of more than a century but through much of that work we recognize that there's a significant capital gap particularly in underserved communities within the Chicago region and we wanted to explore additional ways to bring capital to solve the same challenges that our grant making work was looking to achieve and ultimately we saw this as a very important pathway to bringing that needed capital to the Chicago area and to do so in a way with a very strong partnership on both sides of this table so to speak and then also in a way that very deeply aligned with our own mission at the Chicago community trust choosing impact objectives for benefit Chicago that very much aligned to the work that we were already doing so there was one element of why we were so interested in this project and ultimately why we were involved as a partner the second component was indeed in actually raising the capital to get this fund up and running and to get these funds ultimately deployed out into the Chicago community so you heard me say a few moments ago that we you know in every way across our investment portfolio we are stewards of philanthropic dollars on behalf of our donors those dollars are held at the trust for a varying length of time all the way from endowed portfolios to donor advised funds that are kind of in and out of our organization but in all of those instances the ultimate goal is for grant making and for enabling that philanthropy in Chicago but we increasingly as we went into this project and in the ensuing years since then have recognized that we have a lot of ways to activate those investments assets while they are housed at our organization to ultimately achieve some of the same goals we also had a perspective that donor advised funds are very well positioned for impact investing I like to think of behavioral economics type concepts but I think in many ways some of our donors have already thought of these as philanthropic funds they're still being invested they're not back out in the community yet but they are very much primed to be positioned for activation of those assets for social good for the time being that they are held at our organization and so we went through an effort to make sure that we were mobilizing that donor advised fund capital within our organization and ultimately getting us collectively across our two organizations at MacArthur and the trust and then with the partnership of retail investors to achieve that hundred million dollar fundraising goal so to speak and I think that we saw a lot of success in that effort we took two approaches and making sure that that donor advised fund capital was activated first we put a very meaningful allocation into one of our pooled investment portfolios this is kind of a check the back is investment solution for donor advised funds at the trust and benefit benefit Chicago represents an important part of our fixed income allocation every donor that participates in that pool gets a little bit of impact investing by virtue of that investment and then also we worked with individual donors those that look for more customized investment strategies held at the trust to invest individually through their donor advised fund into the benefit Chicago note Justin before you go I want to just take a probably a learning moment that the Laura shared is I think one of the things that we have to think about systematically is how we can do things better and so I think how Chicago community trust approached the use of DAFs which as she said for from the asset holder point of view have already been shareably donated and so that gives the opportunity to be creative you know not to be wild but to be more creative with the use of those funds with the intentionality knowing that those were already donated funds so teaching moment Justin sure thanks so as Charles alluded I was there it kind of in the earlier days of the conversation but I want to be clear this was really started with the Chicago anchor institutions of MacArthur and Chicago community trust who had been talking about this for a while and then brought us rent and really as kind of Laura was mentioning in some ways as a way to kind of both enable the donor advised funds and donor advisors to participate in this but also the broader community including retail investors so the a lot of this was done through our community investment note which is an established fixed income vehicle it's been around since 1995 and it allows folks to invest as little as $20 online it's wired through brokerage firms so people that have brokerage accounts or working with financial advisors could invest in this kind of alongside that there are other investments and so we really tried to make it more accessible to the community and so important to the structure I think is noting as folks have already said MacArthur put in the first 50 million of this the Chicago community trust then put in 15 million kind of in their pooled fund and then they brought in some other other donors but then after that we had you know Catholic orders we had a Jewish Federation we had multiple nonprofits in Chicago invest we had a hospital we had a mutual fund company and then we had more than 400 maybe was 500 but it was definitely more than 400 individuals invest so we had folks like families working with one who opened up five notes one for the two of them is a couple and then one for their three kids and they said we're gonna invest for 15 years in this because it's an important patient capital for Chicago and this will be you know something we'll talk with them about later when we can say hey we have these savings here for you but also here are ways that this is really been at work in community over a long time it's kind of you know the way that they wanted to teach their their next generation about investing and impactful ways to do it so Charles why no and I know you left your numbered notes back in the green room but just on kind of a top level talk about some of the investments some of the first things that came in what the original decision sets were and how that was executed yeah thanks so to frame this we've now raised through what through what Justin and Laura were describing 45 million came through those two to avenues so a total of 95 million dollars has been aggregated and to date we've made 28 investments totaling 110 million how did we make 110 million when we raised 95 we've had six investments that have completed so we've been able to recycle some of the capital so the goal of investing at least 100 million dollars has already been exceeded in terms of the specific investments when we started opening up the opportunity to you for Investi's to seek capital we had a huge influx of applications and we had to sort of quickly winnow through them to to figure out how we would focus the capital and we we wanted to approach a variety of impact types a variety of places within the city of Chicago and a variety of organization type so the initial six investments that we made was consisted of three intermediaries so community development financial institutions or CDF eyes and then we had three direct investments that were smaller organizations social enterprises and then if you look at that 28 investments that we've made now starting from that initial six it has been a mix of intermediaries and direct our largest investments are up to 10 million dollars and the smallest are around a half a million dollars we've invested across a variety of impact types as I mentioned so about half of the capital has been deployed to either real estate or housing related projects about a third has been to community development and then the balance about 15% was to small business and one other thing just to build on Laura's point about the capital gaps when we when we started the initiative we work with next street they did a report to look at the need for the capital and they identified a need a capital gap of at least 400 million dollars so while this is a significant initiative and it's great that we've been able to deploy this capital we did it partially based on that identified need and it's not we haven't necessarily filled all of the capital caps in Chicago obviously Charles I think that that's that's pretty good because the thing is is that this would have been something that had been really talked about for a long time before it was implemented but I think it's it's important to realize that implementing these type of programs it's better to get it done and start doing than to wait because of the impact that they can that they can meet some of the investments that have been made were creating in a partnership with the state of Illinois and with a organization in Chicago Cleveland Avenue run by Don Thompson the ex-CEO of McDonald's and creating a novel structure with with them and several other and then probably our unicorn and investment in there was in a local real estate developer community activists and and champion Leon Walker and it was something that that was an example of something that we had to think about work on deliberate on before we were able to move forward with it but that's part of again I can't stress enough how important it is not to just wait but to to move forward and to learn from what's going on Justin looked like you had something you wanted to add yeah I was just say one of the things that I think we got right in this early on was that demand study right initially so when we hear from other folks interested in play space initiatives they go oh we want to raise a hundred million dollars and all of that and like how did you get to that goal but we got to that goal really kind of from the community level up and like understanding that demand and I think that's really important for others and in other places it's not about the hundred million or whatever every type of partnerships also going to be different but I think that kind of understanding that community demand was really important and then it kept going throughout the entire project right and it had I think one of the things that was also great was that we had and some dedicated staffing to complement the expertise among the other partners and MacArthur staff who was doing a lot of the actual investment work to be out and engaging in the communities and kind of understanding that and then when we found other needs like some of the projects where I was like oh how are we going to address the equity capital gap for BIPOC small business owners I mean we had the flexibility and commitment to kind of figure out a new way to deploy capital to meet those needs so I think always having that kind of place-based you know ear to the ground in the community really helped kind of understand the demand and how this capital could be you know gotten deployed in a really I think thoughtful and impactful way so Laura just mentioned the dedicated staffing to that and that was housed with Chicago Community Trust can you can you talk about how that was was formed and how that was managed I think at the outside of the initiative really doing that understanding of what was needed in the community was based on the Chicago Community Trust internal resources mostly focused on our community impact team that team within the trust that ultimately is out in the community day to day knows all of our nonprofit partners so well and knows the community members in a way that allows us to really identify what those capital gaps and what those needs were and then I think from the staffing perspective as the initiative got off the ground that was very much much focused on MacArthur's extensive experience within the impact investing realm which we at the trust had not built a practice really internally at all on the impact investing side and I think as we came into this partnership having that deep bench at MacArthur having that expertise their ability to look at all of these investment approaches from both the financial standpoint and the impact standpoint in a way that we just didn't have the human capital within our organization to do has been amazingly powerful in getting this initiative off the ground. I do want to come back briefly to this point of evolution within the portfolio because I think as we at the trust reflect back on our experience of Benefit Chicago this has been one of the most important takeaways from our standpoint and I think to take a step back we all enjoy coming to Socap except for Jim who hates Socap because this industry and this area of impact investing is so rapidly evolving you can feel the energy in the room there's so many new ideas there's an expanding opportunity set of ways that we can activate our capital for social good in our communities and in the broader world and I think that's really important when you think about building an initiative like this when we got this initiative started there were very much specific ways that we had identified that we could rapidly deploy impact for immediate capital I think that you know starting with investments and CDF eyes is a great example of leveraging existing infrastructure and networks for impact and really a very rapid pathway to generating the impact that you want to see but there's been a very clear evolution through benefit Chicago to pivot some of our approaches as new opportunities arise and as new impact investments are available to us and I think that that's been one of the most rewarding aspects of this collaborative is our ability to really serve the needs of the community in a way that's responsive and evolving over time and the trust has really brought that into so many of our other impact investing approaches with the recognition that we want to be able to do new things as they become available to us and just picking up on that I think one of the interesting things we did is chose you mentioned the demand that we got I mean there was hundreds of applications and that wasn't all going to fit for the benefit Chicago investment portfolio but I think you the dedicated staff at the trust and MacArthur Foundation ultimately help direct some of those people to CDF eyes to get direct relationships there said well you could fit for the one of the CDFI partner portfolios also some of those were referred to grants by your organizations as well because they weren't yet investment ready so there are a number of ways like beyond just the portfolio that I think you know the organizations tried to help that the applicants kind of understand how they could access capital for their needs you know one of the things as this evolved for all of the organizations were as we've kind of talked about the different pivot points and I think that as I don't think as much as there was anticipation as to what how this would be received in the community I don't think anybody really fully comprehended what the volume would be and what the the interest would be you know I know the original team that was at a Chicago community trust was basically you know playing traffic cop you know blocking nudging moving all of the the different organizations and involved and even having to navigate within the community to what it was you know because lots of what people were coming in with were their own ideas of what it was versus what was actually trying to to to happen one of the pivots I know that as this was developing Chicago community trust went through a leadership change and the when the new leadership came in Haleen Gale one of her concerns was over governance and that the community trust didn't have a board member on the seat of arc which was the oversight and so but the governance was really dictated to a degree by MacArthur because they were the sole member of the oversight LLC put in place so my old friend the general council at MacArthur Foundation Joshua mints had an idea of hmm who do I know that I can call that can help me out with this and so in August of 2018 I got a call from Josh mints on when I was on Martha's vineyard and he described the situation and he said well you know while I can't have Chicago community trust appoint a director I can appoint you and I can appoint you from them and then you need to tell Haleen you're actually her person so that's one of the pivots that was made that worked out well and then I Charles I really want you to kind of in guys what I really want you to share with people is as successful as it was we had a lot of friction you know that we that we went through kind of on the investment side without going into detail on the individual investment just walk through some of the the frictions that we ran into with some of the investments that were made I don't know what you're talking about Jim so I would say in terms of some of the early learnings and maybe frictions and things that you know we got right or didn't get as right as we had hoped so with that initial capital one of the important things is we didn't want to crowd out the activity that was already occurring so we didn't want to compete with the CDF eyes that was an initial concern is like wait so the trust and and MacArthur are throwing all this money into the marketplace hey we've been here for years we like why are you and we've worked very closely with the CDF eyes as has the trust and we certainly didn't want to compete with them and so one of the approaches that we used early on to make sure that our capital had a high degree of additionality and wasn't crowding out the players that were in the in the field already is that some of our CDFI investments were for very specific initiatives that the CDF eyes were pursuing so like one example is this wasn't one of the original six but one of the early investments was through the Chicago Community Loan Fund and they two mayors ago in Chicago the city of Chicago closed 50 schools and so there's a lot of question about what would happen with these buildings and so Chicago Community Loan Fund developed this the specific initiative to repurpose the schools and have a pool of capital to help developers redevelop them to create these community assets so we say great we'll support that there's an additionality because this is capital that CCL wouldn't have otherwise had to do this initiative well it turns out it's it's really hard to get these buildings out of get get developers to put projects together there's a long timeline and so the while it was a good idea to do that and by it didn't really pan out very well for CCLF and we ended up removing some of those restrictions from CCLF and saying look we put too much restrictions on you we know we want to have this degree of additionality but if we enable you to just pursue the capital gaps again that's $400 million capital gaps aren't necessarily we can't necessarily see them ahead of time and we needed to create more flexibility so one of the ways that one pivot was putting less restrictions on the CDFI is the other thing that we did in order to not crowd out their activity but be additional to what they were doing as we did a number of participations we hadn't done that before so the CDFI they would have identified a specific loan opportunity were the loan was too big they didn't have enough capital they sort of led the investment and we essentially purchased a part of that loan to enable them to do something at a larger scale so that was a way to put our capital to good use follow the leadership of the CDFIs create an additional investment that wasn't something we had anticipated at the beginning but it was something that we pivoted to when we realized putting these sort of restrictions around what the CDFIs were doing wasn't helpful but having them lead on an investment and then participating in a loan that was a much more effective approach Laura just have a couple of comments related to that so I think broadly speaking we want to talk a lot about the successes but you brought up rightfully so that there have been pain points throughout this process and I think as a more traditional investor I look at my portfolios across the Chicago Community Trust and we know that in any traditional investment portfolio there will always be winners and losers and I think sometimes it feels like we're under a little bit of a microscope in the impact investing world because we so deeply want to be successful and we want to prove to all of our investors that this works and it does and it has in the specific context but that doesn't mean that every single investment has been perfect I just want to lift that up as a key takeaway for everyone in the audience like we need to recognize and be accepting that some of our investments will work we're going to do new things we're going to do risky things and most of them will work but not all and that's just important to keep in mind and it's a way that I think enables us to ultimately move forward not let the perfect be the enemy of the good I also want to just spend a moment on the structure of the note product on Calvert and Justin can back me up in the details because I will not do a good job of describing them but I think we also really benefited from the trust standpoint as an investor in our pooled portfolio and importantly in that fundraising role with our donors so because we only really hold investment assets on behalf of a donor in every impact investing decision at the trust the donor is an important party to that conversation and they're ultimately coming along with us on that learning journey and I think that you've heard a lot about the underlying portfolio at benefit Chicago and we've talked about how there's so many different investment approaches and there's a lot of flexibility and nuance and ways that we've pivoted but with the note structure from an investment standpoint there was a lot of simplicity built into the way that we were able to describe this investment to our donors you have a very specific term it has a specific and a steady rate of interest there's a lot of diversification and risk benefits that come from the community impact note structure and that was really important to us both from a governance standpoint with our own board to say this is something that we want to pursue and here's why we think it's a good idea and ultimately why it won't be a breach of you for do sherry duty or too risky to pursue and it also was incredibly helpful when we thought about those more external facing conversations with our donors because I think that we spend so much time thinking about barriers to entry for impact investing it's very real and the way that we get over some of those barriers is to ground things in simplicity make things easy to understand and easy to implement from the standpoint of the donor and maybe just a couple of things challenges on the investor side I think one was just understanding the different pacing that can happen in capital raising and portfolio deployment and partly we started off on day one with 50 million from a car through foundation and then Chicago community trust came in shortly thereafter with 15 so we had kind of 65 million then we started bringing in other investors their impact investors they want to see the impact we had good stories but we're doing a lot of you know community organizing so to speak and making sure that the money was you know deployed thoughtfully and really impact the lease so it kind of took a little while for some of the portfolio to catch up and all of that and so because people wanted to see those stories and I think one of the things that you know I wish hadn't happened I think we all do right this the pandemic because we were just about to start kind of really getting out in the community more and so the part of this program was not just to work with anchor institutions that are already committed impact investing I appear in the stage but to get folks who cared about Chicago had never thought about impact investing before and we had started to do that but one of the ways that we really do that effectively is get them to kind of go out in the community see the you know the small businesses meet the entrepreneurs see the projects and all of that so we really want to do some of the impact tours and things like that but the pandemic kind of you know stop that so I'm glad now I think we still have some work to do on kind of get providing that impact experience so to speak to investors and we're working on an impact report and a number of things coming up because this is a long term portfolio and commitment so we might not be actively capital raising today for new investors but we have a lot of investors we have some great a great portfolio and all of that so we're in it for the longer term and have some more to do on the impact investors experience so as we talk about this you know it's always great to to bring it back to the this original strategy was really place based right for Chicago and I think even in its earliest conception it was intended to also be a model so from the perspective of each of your organizations what would be your recommendation for others that in you know for wherever they are what should be some of their thoughts if they're going to move forward with this type of place based investing or I'll let you go first. Thanks I was hoping someone else could go first on that one that's a very big topic. I think that broadly as you've heard from everyone on the stage today we've learned a lot in the experience but we also were willing to just get started at the beginning and I think that we have taken that learning and so many impact investing efforts at the trust to say we don't always know what's going to be perfect. We don't know what's going to be perfect from an investment standpoint. We know we can't satisfy every stakeholder whether that be our donors community members internal staff our government so on and so forth but trying to get most things right I think is an important first step. I think the the other thing that we've really learned and I think it's important from both the trust perspective and when we think about the external donor perspective as well is really centering around impact and I think being able to do that in the investment approach that MacArthur has so thoughtfully put together for this portfolio but then as Justin also mentioned really starting to be able to tell that impact story very effectively to all the investors coming through the no product as well has been so critical to the way that we think about this working and the way that really enabled us to do that more fundraising element of the Chicago Community Trust portion of this initiative. We didn't know going into this initiative or other impact investing approaches essentially whether our donors would accept a concessionary return in order to generate locally focused impact. I think that we were very much predisposition to think that would be the case. Most of our donors in some way have a very personal connection to Chicago but I think this was one of the first examples for us of really demonstrating that our donors are indeed willing to activate their capital at the trust for a concessionary return when they feel deeply connected to the impact that will be generated from that portfolio and I think that we we've done a lot of good work when it comes to aggregation of investment outcomes impact measurement approaches led by the MacArthur team and also such great storytelling coming from Calvert. But it's definitely still an ongoing work in progress. I would say for folks thinking about their own play space initiatives one I would echo the get started in some ways and start early and move. I think that's really important given that the challenges we have in our communities and in the world but I would say important for this initiative was that we kind of really understand the demand and understand that but not just the demand of the type of capital there but how is that capital going to get deployed and be flexible. So some of the other I think there are what at least three dozen other kind of places that have gotten in touch with the I'm not sure Lord with you and CCT but certainly I know MacArthur and we've heard from a lot of different cities but kind of really understand kind of what what is the right size what is the right kind of model for the play space program. There's you know lessons to learn from what we've done in Chicago but there have been many other examples of play space programs and everything doesn't always fit the right size. But I understand that demand but then really understanding the community infrastructure that's there to kind of deploy it right because beyond the demand we know their needs and communities but how can we really get this capital effectively working. And then it's the the engagement with you know the the anchor institutions and all of that in the community to kind of bring it all together and allow that community engagement and kind of the resources really to back this right Chicago Community Trust and MacArthur Foundation have great people have you know some significant resources to help make this all come together. So Charles yes Jim I'll let you wrap up on not wrap up everything but just wrap up on on this point. Yeah so I think my comments are going to be somewhat similar. I would say start with listening to the community and being flexible and maybe Jim let me build on something you raised earlier in the conversation. You mentioned Cleveland Avenue because I think that's an example of listening to the community and pivoting to something slowly. So initially when we were working with the in place institutions and intermediaries the CDFIs etc the way the capital was being deployed by those CDFIs as a form of loans. And what we were seeing was we were getting a sense in talking with our direct investments that there was also a need for more flexible equity capital. And so we actually went out and did a second study working with next street. So we had the initial one called the bridging the gap report. We identified that four hundred million dollar gap. We brought them in when we saw this struggle particularly among black and Latinx founders to access capital. We worked with next street. And then this was two or three years after we had already initiated Benefit Chicago did a follow-up study looking at the challenges unique to entrepreneurs of color in the city of Chicago. And they specifically saw this gap of fifty thousand to two hundred fifty thousand dollars where entrepreneurs were not seeing the equity investment capital that they needed in order to build and grow their businesses. And so part of that process we got in touch with Cleveland Avenue. You mentioned Don Thompson who's the principal who runs that organization. They were launching this new fund called the Cleveland Avenue State Treasurer Urban Success Fund cast us for short. And we made what we kind of considered a capstone investment a very significant investment that was a ten million dollar investment into an equity fund to enable them to then go ahead and make these much more flexible loans in an area where there was a need for that capital. So that wasn't part of something we saw initially. Initially all of our investments and still the majority of our investments are loans and part of the reason for that is that given the capital structure given the notes given the specific time period that we have to repay these loans it made much more sense that if we had debt capital brought into the Benefit Chicago entity that it would make sense for us to deploy debt capital. So it would have been difficult if we had done all equity capital but we had the flexibility to do this one capstone investment. And Cleveland Avenue has been very actively deploying their investments they've and they're doing quite a bit of work and that that wouldn't have been possible with the initial approach we started with. So again one of the things I'm going to push on with with MacArthur that I think MacArthur has continued to do as Charles indicated you know for some of this there's more being invested than was raised and some of the things that are being looked at going forward really are some of the things that are also partnerships because I know that you're in process of doing we won't give all the details but in doing joint due diligence with other foundations on looking at aspects of this that came out of Benefit Chicago relationships but then are also being looked at by what you all are doing on the impact side. Could you kind of talk about how that intersection has bled into the impact portfolio at MacArthur. Yeah so the the partnership approach has been kind of a hallmark of our work generally. I mean that this is a perfect demonstration of that. We had a subsequent initiative called the catalytic capital consortium where we teamed up with the Rockefeller Foundation and the Omedia network to explore the ways in which catalytic capital capital is more flexible that's more patient and oftentimes concessional in terms of not demanding a market rate of return. We created this whole partnership approach with them partly modeled on the success of collaborating with other partners that could bring something unique to the table. I don't know if that's what you were specifically referring to Jim but that's an example of a subsequent initiative where we took a partnership approach each bring something to the table in order to pursue a specific impact initiative. Yeah no that was definitely part of it and one of the other things again from observations of what MacArthur has done that I applaud is they're always looking at if we don't internally have the muscle or the expertise MacArthur doesn't hesitate to bring that in and if you can talk about some of the experts and some of the consultants that you that this is brought into the team which also has helped not only getting to the finish line of the investment but also building the expertise of the evaluating team at MacArthur. Okay let me think about where to go with that one. So you know I mentioned obviously I mentioned next street twice in terms of understanding the marketplace. We've worked with individual people to help us under right specific loans. In one example Jim will remember well is one of our troubled investments one of the things we did to help with this organization as we brought in a consultant to assess their business and I don't again I don't know if that's where you're going with this Jim or not and they looked at the business prospects of one of our early direct investments that was struggling came up with a set of recommended actions and eventually the organization did pursue one of the recommendations that came out of that assessment that we paid for with that consultant which was essentially to sell this for-profit enterprise to a non-profit. The sale price was not sufficient to fully repay the loan so that was a financial loss to us but we're hoping for impact continuation by having that organization sort of recognize that their initial thesis wasn't playing out and that by selling to a non-profit if we didn't get our financial return at least there was an opportunity for impact continuation. You got there Charles. And I wanted to kind of lean on that example and to what Laura had said as well to when there wasn't necessarily you know another term that I hate is concessionary return because Sorry. Well no no no it's fair but the thing is is because we devalue the value of outcomes of successful outcomes and so in that example that Charles just talked about the reality is we had a very successful outcome it wasn't we didn't get the financial return but I think that the outcome return and the ability of an entity to continue operation continue with the impact that it was having in the community is huge to be able to do that and that's part of what I think is when we do impact investing and when we think about it we can't use the same nomenclature that we think about of how we do market rate investments. We have to think of that the benefit the utility of that return particularly when it's place based within the community can literally be something that grows and grows over time that we're not going to necessarily capture that in our time horizon that we're looking at but that impact overall in those things that have changed are huge influences within the communities that they're executed in says we're we're kind of getting down to the end of our time. We got about a little bit less than 10 minutes. Justin I want to start with you. If you could share with us what the view is for what's the go forward what's what are the next steps for Calvert after not that benefit Chicago is over but it's it's it's time for next steps what are what are Calverts next steps going to be. Yeah so again as you said Jim it's not over so we're still working on the benefit Chicago program and will be for for many years. But I think we ultimately want to be more active and kind of showing the investor experience right to folks in Chicago but also to helping you know share lessons learned inform other play space and other impact investing programs. So I know some of us probably can speak to others. I know there's some some work now in the twin cities that's taking place in a play space initiative. Been talking with some of the transition team with the new mayor in Denver about kind of how they can learn from benefit Chicago to do something kind of at that scale to address some of the needs in Denver area. So I think there are some you know some of the play space things but I would just say for Calverts perspective we've learned a lot as folks have said just about the deep partnership and kind of now how that's just like really part of our model and in all of our new products and programs it's how can we really build a partnership of collaboration to ultimately execute well and do it at a scale and an urgency right that we need. And so you know that's you know been really exciting. We have a motto internally that we're hungry and humble for justice right like that's our staff motto. And so it's really only going to happen the change we need to see in the world is going to happen through a deep collaboration. Laura will echo some of those comments as well I mean from our perspective benefit Chicago is an ongoing effort and we still have many years left on our investment and I think that we in particular are at a very interesting point in the fund when we can start telling that impact story more completely and more articulately and from my standpoint that's a key way that we can get our donors those who are already invested either through their pool or through an individual investment through a day off or those that are not in some way connected yet to the benefit Chicago investment to get excited about impact investing to know that we've done it has been executed we have results that we can speak to and most importantly we can point to the impact that we've seen in the Chicago community as a result. And so while we're not looking to you know put additional dollars into this particular fund just given where we are in the life cycle of it. I've taken a lot of the key learnings from the benefit Chicago initiative and put them into other impact investing approaches at the trust. Most notably we've built an impact investing platform for our donor advice funds in partnership with Capshift that allows our donors to self select into a curated menu of impact investments many of which echo the same approaches that we used in benefit Chicago such as investments with local CDFIs. And I think there too we've taken the approach to say that this is a way and a platform that we can use to keep adding new impact investment options available to our donors and ways that we can ultimately respond to that demand in the marketplace over time. On the other point that I made earlier about having a level of simplicity though we also recognize that we want to have solutions available to our donors that are easy to choose. Not every donor wants a bespoke approach or wants to choose from among a menu that can be very overwhelming to some. And so we're looking into ways that we can ultimately build pooled portfolios kind of echoing the note product and the way that that was ultimately put in place from a structure perspective that it makes our donors really easy to say yes this is what I want to do you're going to do all of the investing and the impact work for me but I can feel very deeply connected to the end results and the impact that it's going to achieve. And Charles and everybody know Charles and I have spent a lot of time together over the last seven years in the different investments and looking at some of the more difficult aspects of the portfolio. And you know he's the one who sometimes gets to take my crazy calls of you know pointing the finger what should be done what shouldn't be done. So that's why I'm just picking on him a little bit. Yeah I was thinking you know I'm under a lot of pressure here I've got to two board members these are the people I'm accountable for accountable to. So in terms of what where do we go what do we learn where do we go forward. One of the things if you look at the history of our impact investing on our team prior to Benefit Chicago a lot of our impact investing activity had been very focused and in specific impact areas. So for example we had a very large scale multi year initiative called the window of opportunity around the preservation of affordable housing. So when we thought about impact as it related to affordable housing and impact metrics it was it was fairly straightforward what were the number of housing units that were preserved what was the affordability of them it was very straightforward and aggregatable. One of the things we struggle with early on is since the focus is on a place rather than a particular kind of impact is how would we talk about impact and how would we aggregate that impact and how would we know whether we were achieving what we set out to do and I think we struggled with that early on in the initiative of thinking through how do we how do we measure that and the thing that we settled on was that we have three principles through which we do our impact measurement and one of them is that the three principles are to center the investee to have a learning agenda and then to align with the field whenever possible. And so if we embrace those principles what we ended up doing and evolving into was having impact targets that were specific to the investee. So if it was a federally qualified health care facility you know they might have how many patients were served. Jim talked about one of our our Gold Star investments in this black developer focused on the south side. We might focus on community serving square footage built et cetera but each of those investments have a specific set of targets. There's an impact thesis and so what we could do at the portfolio level is assess how are each of these investments regardless of what impact sector regardless of what they intend to do. Are they making the progress that they expected and we expected. And that really helped drive the learning agenda that we could look across the whole portfolio and we when we did it that way we could see that most of the portfolio was on track some were exceeding like our Gold Star example. We had a few that were lagging a little bit and a few that were lagging badly. And so by being able to look at impact from that standpoint it was a really effective way for us to approach more heterogeneous impact portfolios. The other thing we looked at from an impact standpoint is leveraged capital. So again when MacArthur committed 50 million the trust committed 15 million and through the work of Calvert we enabled we approached 100 million total. But then we looked at the capital that that unlocked within our investees and sort of the knock on effect. And so we've had an approach of measuring both the additional capital attracted and then degree to which we influenced that. And that was another way for us to think about kind of long term leverage and impact. Well I think we're going to be moving into the questions and hopefully you guys have some questions I think that they're there are. Oh and we even have a microphone. But one of the things in just wrapping this up and I think key takeaways is one do it get started do it to listen to the constituency that you're looking to help. Don't come in with the Nobel oblige we know better but come in willing to listen and willing to pivot three the accountability of all of these organizations to do those first two and then to manage through those I think has really been exemplary and should be modeled as well as how to be able to accomplish this on the go forward. So I think Chris is out there so if there's any questions we're more than happy. Hello I'm curious how you guys are looking at the rest of the funds. You said you're recycling some how much longer will you be recycling and when is kind of the end date on investment where you're just waiting for returns to come back. Yeah so the the fund the fund life goes until 2032 is that correct. It's just 33. 33. All right we should probably know that more specifically. So so what we're doing as we approach that in life when we're making subsequent investments we're thinking about I mean maybe not enough since I don't know the exact date but we're thinking about when is the end of the life and what flexibility do we have to make investments that that can be fully repaid within the period of time when the fund ends. So that gets a little bit trickier. I'd say one sort of challenge one of the challenges from the MacArthur standpoint since we're the the ultimately responsible as a single member LLC and the cost of the capital that comes from the the notes is that as we approach the end of the fund and our investments repay that aligning when investments that we've made repay with when we need to repay the notes is a real challenge and that's something that we're trying to think through the timing so that's something we're continuing to work through as well. More questions. Hi there folks. You're not allowed to ask a question. I'm Deborah Schwartz I'm the managing director for impact investments at the MacArthur Foundation. So now Charles has his two board members another board member and his boss. So sorry. First of all I want to say thank you to all of you Jim Charles Laura and Justin because you guys have done amazing job and I know everybody everywhere on the benefit Chicago team would be really excited that you've been able to share that out with this community today. Charles you buried the lead capital mobilized are we allowed to say that number. Sure yes. I'm sure that sometimes people wish they could do that because you talked about how you've come up with a fantastic way you and our colleague Emma championed to think about how to very thoughtfully and conservatively try to estimate what the capital mobilized is because that is one of the few ways we can aggregate across all these different metrics of jobs and enterprises and units of housing and all the different impacts. So if you if you can share. Yeah no I can share that number. Thanks for thanks for the excellent question Debra. So we so the total number on the outside is 780 million of our estimate of capital that was mobilized with the MacArthur with the MacArthur and trust capital that was committed. But part of the way we look at that too when we're talking about it internally is rather than have I'm giving you a single point estimate. Jim didn't let me keep my notes but the 780 is actually disaggregated and we kind of have a range of confidence of the degree to which our capitalized mobilized other other capital. So it's really more of a range 7 it 780 million is sort of the high end of the range the low end of the range is is below that but still significant. So but we we do track the capital mobilization at a variety different levels and then a variety of different confidence levels. Hi I'm Alani I'm with C3 Impact Fund which is a local CDFI in Chicago. We're smaller but we're still growing and emerging and we like to say we be in the intersection of affordable housing and entrepreneurship and I was just interested in learning a little bit more of how can organizations get in contact with you all on the benefit Chicago level but also an individual foundation level. Well you can contact me and come talk to me afterwards that's that's for sure. When we started the initiative we had more of an open call proposal approach now that we're in in the recycling capital it's it's a little bit more ad hoc but I would yeah I would strongly encourage you to let's talk afterward. Same I'd love to meet you and I'd love to further discuss your work. We are all all ears and all doors open when it comes to meeting new organizations that are doing good work in Chicago and I'll say that's both from a community impact or a philanthropic standpoint and also from an impact investing lens as well. How are you I'm Karen Pollock and I'm from Chicago but I would be remiss if I didn't throw in a plug for Baltimore and Philadelphia. I'm just curious on that hundred million of the 400 million that you identified as the need gap. You know you have two institutions that have been working in Chicago for forever for many more than decades. How did you think about where to deploy that piece of the need. Yeah I think that was the early challenges we were talking about. So we were thinking about OK do we focus on a particular set of neighborhoods. Do we focus on a particular set of impact challenges. And there was a lot of discussion and hand wringing over that frankly. And I think where we ultimately ended up was with this kind of lesson learned of having to listen. So again I'll go back to the example of Cleveland Avenue and the very clear need for entrepreneurs of color to have flexible capital. That's not we didn't go in with that thesis. But as we were in the marketplace for several years talking lots of entrepreneurs and talking to other constituents in the neighborhoods that was where an identified need was. So it was really more a matter of being responsive and listening and then acting when we saw what was needed. Hi I'm Casey Schultz with St. Paul Minnesota Foundation. And we want to do exactly what you did and launch a hundred million dollar catalytic capital portfolio. Do you for other communities who want to replicate this do you have like a playbook? What resources are you sharing with other community foundations? Again I'd be happy to talk through it and we can sort of explain our approach and what worked and what didn't work. I think there are some challenges again that we talked about that might keep you from replicating exactly. So some of the timing issues I mentioned with the cost of the capital. So for example we pulled down the capital from Calvert at the beginning of the initiative before we had deployed any capital. So we had negative cash flow and in the early part of the initiative right now we're in a positive cash flow mode and the risk is we're going to end up in a negative cash flow at the end of the initiative. So it ends up being very expensive. That's that's one thing just in terms of the structure. The other thing is that we had to have a staff in place to do the investment. So all the investment activity is being done by the MacArthur Foundation staff. We have nine full-time people working on it including my boss who's sitting directly behind you. And without without having the staff in place the expertise within the foundation it's not just our staff. We have the legal staff. So all the legal works being done within the foundation the accounting the the compliance work. There's quite a bit of resources within the MacArthur Foundation that existed prior to the initiative that we were able to to deploy in this way. I think if you're building it from scratch that would be another cost. So there's definitely some cost issues with this approach. As we mentioned I think there's a lot of things we learned and a lot of things that we would encourage you to try to learn from what from what we what we cleaned over the years but I don't know that this is like take this model exactly replicate it. But but happy to talk separately. I'm happy to talk as well from the community foundation perspective. We are very much still learning and we are building our internal resources as well. So we so most certainly do not have a playbook but we've been testing a lot of things and happy to share with you our takeaways from all of our efforts. And also happy to talk. We had a play space initiative in Twin Cities a number of years ago. So I learned some things that you can have more specific to that community as well. And I think there's some broader organizations like Mission Investors Exchange and others. I know MacArthur has founded some other kind of place based you know reports and things with some organization. So I think there's some other resources certainly the person behind you can help with that too. I think we're we're close wrapping up. But one of the things I did want to share having I'm I'm a Chicagoan having had the opportunity to grow up in Chicago for the impact of over the years of Chicago Community Trust on the things that they have done with within the community and then had the opportunity early in my career to work at the MacArthur Foundation having a crossover with my great friend and fellow board member Debra Swartz and going taking it back to my earlier statement of why I'm still I'm frustrated on that there's such a need for this is that Charles had said and MacArthur has been doing this for over 40 years looking at different innovative ways to utilize not just the five percent that's giving up but also the endowment dollars. We did a lot of the early PRIs and even I remember us working with representatives of IRS with our Treasury Group and even trying to figure out the the structures and the meanings around the term PRI and MRI and coming up in that and that was in the 90s. And you know we did an investment in South Carolina that was in South Carolina Jobs and Economic Development Authority. We bought a portfolio of loans that were from HUD community block grants that this organization was using to create businesses and jobs throughout South Carolina. But that was drying up and they wanted to be able to continue. While I was at MacArthur we purchased that portfolio. We cleaned up that portfolio. It was it was I think originally twenty five million dollars of loans we bought them for about 14 million dollars and then cleaned them up ended up selling them for twenty three million. And yes I did think I was pretty smart in putting that transaction together. But I was able to come back to that 18 years later and learning that South Carolina Jobs and Economic Development Authority had taken the model that we had used to underwrite nine billion dollars of loans create two hundred and fifty thousand jobs in the state of South Carolina. And also a lot of those businesses attracted the auto industries to BMW and Mercedes to come to South Carolina to establish was all that mean. It means that impact works that outcomes matter. But you have to press into and lean into doing things that are different doing things that are novel and learning from them and being able to move forward. So on behalf of my of my friends who are up here Justin and I serve on a board together. Laura and I serve on a board together. And Charles is my favorite analyst to go at when I have a question. But really the work that he has done in the reporting in the analyst in everything has just been outstanding. So thank you all very much. I think we're I don't know if we're going to be around but we'll be available to talk to. Thank you everybody.