June 25, 2002
New PRI Opportunity Garners Flexible Capital for Award-Winning Community Development Corporations
by The Calvert Foundation
Calvert Foundation has created a well-structured program related investment (PRI) opportunity that
for the first time allows funders to buy-into a PRI Offering, combining strong credit quality and
convenience with significant community impact.
The first round of investment into the SEA Corp PRI placed over $1.32 million of capital into ten
Community Development Corporations (CDCs), recipients of the Fannie Mae Foundations' Sustained
Excellence Award. Over the last three years, SEA Corp members generated more than 1500 units of
affordable housing, bringing much needed housing and community facilities to families in
In the fall of 2000 these award-winning CDCs joined
together to launch a new nonprofit organization, the Sustained Excellence Alliance Corporation (SEA
Corp). This grassroots initiative partners exemplary institutions that are committed to building
affordable housing in the context of improving their entire community. Whether incorporating
financial literacy training for youth in Washington, D.C.'s inner city (Manna), transitional jobs
programs in Minneapolis (Project for Pride in Living) or childcare facilities in Los Angeles (NEW
Economics for Women), the organizations fulfill a range of needs in their communities beyond
The SEA Corp PRI offering is structured to provide credit
enhancements and portfolio diversification, while allowing participating investors to target their
capital to one or more of the selected organization. Calvert Foundation's aim has been to bolster
investor confidence while make this type of PRI more accessible
"We hope to educate
funders and other investors new to PRIs about how they can incorporate investments on softer, more
flexible terms into their philanthropic strategy," says Shari Berenbach, Executive Director of the
Calvert Foundation. "The strategy we used for SEA Corp PRI can now be replicated to raise funding
for many other community development initiatives."
While program related investments
(PRIs) have been around for more than thirty years, many foundations and high net worth individuals
have not pursued this option given questions of credit quality and administrative burden. Calvert
Foundation has paved the way for others to invest in high impact community development corporations
by structuring this unique collaborative PRI offering.
The SEA Corp PRI raised, and
continue to raise, pre-development capital for these ten organizations. This "seed" capital equips
the CDC with the resources it needs to identify a project and incubate its development through to
the construction phase. The availability of pre-development capital will significantly increase the
capacity of the CDCs by allowing more effective planning and more timely procurement of properties.
George Rothman of Manna explains, "This new low interest money will provide Manna with
working capital funds that cover pre-development work -architectural design, removal of hazardous
materials, legal and engineering fees - for a 30-unit condominium for very low income folks in one
of Washington's most distressed neighborhoods."
The organizations to place capital in the
first round of the SEA Corp PRI include Valley National Bank, Deutsche Bank, F.B. Heron Foundation,
State Farm Bank, the Needmor Fund, Calvert Foundation and Sisters of St Joseph Carondellet, Los
Angeles. This group (banks, religious institutions and foundations) is representative of the
diverse nature of institutions that can achieve their social impact goals through this unique PRI.
Kathleen Starr of the F.B. Heron Foundation commended this initiative saying "We appreciated
Calvert working to structure a deal that enables investors to work with these ten high-performing
affordable housing groups in an efficient manner."
In addition to offering this combined
PRI, SEA Corp creates a cooperative environment for the CDCs to share their experiences and
knowledge to create synergies that can increase their overall community impact
members of SEA Corp are Abyssinia
n Development Corporation (NY), Asian
Americans for Equality, Inc. (NY), Chinatown
Community Development Center (CA), Kansas City Neighborhood Alliance (MO), Manna, Inc. (DC),
New Economics for Women(CA), People's
Self-Help Housing Corporation (CA), Project
for Pride in Living, Inc. (MN), The
Resurrection Project (IL), Southern
Mutual Help Association (LA).
SEA Corp continues to actively seek investments
starting at a minimum of $25,000. Click here for more details.