Investment

Place-based Investing: Creating Sustainable Returns and Strong Communities

This toolkit was created by Dave Zuckerman and Katie Parker of The Democracy Collaborative, with contributions from Joshua Humphreys and Ophir Bruck of the Croatan Institute.

Making the case for
place-based investing

Nationally, health systems have an estimated $400 billion in investment assets. Redirecting even a small portion of these resources to place-based investments would shift billions of dollars toward addressing economic and environmental disparities in local communities. It would allow institutions to more effectively improve community health and well-being, even as they continue to earn a healthy rate of return. This toolkit outlines a range of strategies for how health systems are using their investment assets to help address the resource gaps that keep communities from achieving better health and well-being.

As we learn more about what families and children need to lead healthy lives, it is clear that adverse social, economic, and environmental factors, coupled with racial disparities, prevent communities from building a culture of health. The good news is that hospitals and health systems are recognizing that they have significant, untapped assets at their disposal to help address these challenges: their investment portfolios. Through place-based investing, institutions can leverage these resources to improve their communities’ overall health and well-being. This toolkit will help you get started.

Making the case for placed-based investing

Case Studies

Learning from leaders in the field

Dignity Health

Headquartered in San Francisco, California, Dignity Health provides below-market interest rate loans and other investments to nonprofit organizations through its Community Investment Program for community economic development projects that benefit low-income...

Bon Secours Health System

Headquartered in Marriottsville, Maryland (near Baltimore), Bon Secours Health System aims to invest up to 5 percent of its Long-term Reserve Fund (LRF) with intermediaries that serve low- and moderate-income communities, primarily community development...

Gundersen Health System

Headquartered in La Crosse, Wisconsin, Gundersen Health System became the first health system in the world to produce more power than it consumed, six years after establishing its goal of achieving 100 percent energy independence. To finance the development...

ProMedica

Headquartered in Toledo, Ohio, ProMedica established the Ebeid Institute for Population Health in December 2015. The cornerstone of the Institute is a 6,500-square-foot, full-service grocery store, owned and operated by ProMedica, that offers healthy,...

St. Joseph Health

Headquartered in Orange, California, St. Joseph Health provides capital in the form of loans, deposits, and other support to nonprofit organizations and programs focused on affordable housing, economic development, social services, food banks, job expansion,...

Trinity Health

Headquartered in Livonia, Michigan (in metro Detroit), Trinity Health has been investing in its communities using low-interest rate loans for more than a decade through its Community Investment Program. Its investments total more than $35 million to date,...

 

Key Strategies

Place-based investing

Utilizing institutional investment portfolios to improve community health and well-being

Place-based investors often find that the community interventions and supports needed—and the investment required to make them sustainable—are not a good fit for the highly compartmentalized and specialized offerings of the mainstream financial system, and may therefore require more patient capital and new approaches to investment analysis and capital deployment. An integrated capital stack might include investments across a range of asset classes, including cash and cash equivalents, fixed income, private equity, private debt, and real assets, as well as grants and human and social capital, such as access to mentors, learning circles, and technical assistance.

Learn more about strategies to invest in your community

Diving In

Small projects with big impact

Quick Practice Upgrades

  • Foster relationships between community outreach and investment staff
  • Move cash assets into local banks and credit unions
  • Engage key nonprofit partners
  • Join impact investment networks

Simple Policy Measures

  • Build a relationship with a CDFI
  • Allocate assets from investment portfolio for place-based investments
  • Connect capacity building with direct lending
  • Switch to an impact investment advisor

Readiness Checklist

Do a basic assessment of where your institution is at, and identify the steps you need to take to implement a place-based investment approach to improve community health and well-being.

The Big Questions

Getting clarity on Your Goals and Priorities

What area do you want to impact?

What does “community” mean to your institution?

Which community needs and institutional priorities could be met by realigning your investments?


Learn how to ask — and answer — the big questions

Laying the Foundations

Setting the stage for transformative impact

Tracking Dollars

Often the best place for a health system to begin the process of building a place-based investment program is by assessing its current asset allocation and investment choices.

Deciding Your Approach

What is your purpose or mission as a place-based, community investor?

Managing your Place-based Investment Portfolio

Designing your team and governance structure

Allocating Assets

How will assets be allocated from the investment portfolio for place-based investments?

Creating Forms and Templates

Hospitals and health systems have developed a variety of resources and materials to implement their place-based and community investment programs.

Moving to Impact

Communicating wins, building relationships, monitoring borrowers, and scaling impact

Measuring Performance and Impact

How place-based investing benefits your institution and community

The Returns on Investment

Tracking positive environmental, social, and economic outputs and outcomes specifically within your health system’s geographic footprint can help demonstrate the business impact of these investments beyond simply the financial return.

 

Overcoming Barriers

Promising solutions to common challenges
  • Place-based investments are not creating sufficient impact…
  • Not familiar with CDFIs or other financial intermediaries that serve the geography of our patients, or none exist….
  • Lack of internal capacity to monitor individual, direct loans to borrowers, or make direct investments in other asset classes….
  • Governance and leadership unwilling to settle for a rate of return less than the historical average of the investment portfolio…

 

More resources

additional templates and tools plus further reading and research

Resources from the Democracy Collaborative

A national nonprofit helping health systems, universities, local governments, and community foundations who wish to leverage local purchasing, hiring, and investment resources to build community wealth.

Tools and Templates from Hospitals and Health Systems

Learning from leading institutions creating pathways to more effective place-based investment.

Other Key Resources

More key guides and tools to advance your place-based investing strategy