When the
Ann Arbor Art Center decided to renovate the third floor of its historic building in downtown Ann Arbor, they realized they could save thousands of dollars in construction costs if they did the whole project at once, rather than in phases.
There was only one problem — they needed the cash up front.
Enter the
Ann Arbor Area Community Foundation (AAACF), which offered the art center a low-cost loan to get started on construction.
It's an example of impact investing in action — an approach to philanthropy that is gaining interest in the foundation community and across the country.
Impact investing, or "mission investing," is not grantmaking — it's when a foundation or other mission-based organization makes an investment to further its philanthropic goals. (You can learn more about mission investing
here.)
"Impact investing actually represents a much wider spectrum of possibilities than traditional grantmaking," says Neel Hajra, president and CEO of AAACF. An impact investment can accelerate a nonprofit's capital project or allow a foundation to invest in a for-profit business that's driving redevelopment in a distressed area.
Because of AAACF's investment, the Ann Arbor Art Center was able to expand its programming substantially — and pay back the loan in just three months. The organization has since grown from a $600,000 organization to a $1.2 million organization, thanks in part to the investment that catalyzed their growth and magnified their impact.
Learn more in
this video, produced by Issue Media Group in partnership with the Council of Michigan Foundations (CMF), and visit
michiganfoundations.org to learn more about CMF's support for impact investing across the state of Michigan.
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