Advice from the Field
Ed Gerardo, director of community commitment and social investments at Bon Secours Health System recommends, “having conversations with other organizations to see how they structure their community and place-based investment programs, their policy statements and their guidelines…if a health system committed someone with finance or lending experience and did this kind of research, they could develop a program in relatively short order.”1Ed Gerardo and Ross Darrow, interview by David Zuckerman and Katie Parker, Marriottsville, MD, December 16, 2015.
Hospitals and health systems have developed a variety of resources and materials to implement their place-based and community investment programs. Examples of these resources are included below. After each example form/document, please find a reference to institutions that have provided templates that are available in the More Resources section of this toolkit.
- Loan Application: The application that an interested party would complete requesting a direct loan. (Dignity Health templates available online.)
- Standard Form Documents: The contract created between the lender and borrower. (St. Joseph Health templates available online.)
- Due Diligence/Monitoring Visit Agenda: Document that guides due diligence and monitoring conversations with potential and existing borrowers. (Bon Secours Health System template available online.)
- Community Investment Brochures: Document that provides information to interested borrowers (Dignity Health and St. Joseph Health examples available online.)
- Credit Memo Templates: Internal document for preparing the narrative rationale for loan. (Dignity Health template and examples available online.)
- Risk Controls: Guidelines that determine maximum investment based on size of borrower. (Included in Bon Secours Health System case study in this toolkit.)
- Pre-qualification Scan (St. Joseph Health example available online.)
- Financial Monitoring Templates: Analyses tools or “metrics” to evaluate a potential borrower’s current financial condition and future repayment projections based on cash flow. (Dignity Health templates available online.)
Establishing terms and conditions for a loan portfolio is a key step. Here are a few health system examples:
|Health System||Types of Borrower||Rate of Return Range||Average Rate of Return||Duration of Loan||Type of Loan||Minimum Loan Amount|
|Bon Secours Health System||Intermediary||0-2.5%||2.25%||3 years||Interest only; semiannual||$100,000|
|Catholic Health Initiatives||Intermediary||2-4%||2-3%||5 years||Principal and interest||$100,000|
|Dignity Health||Direct to nonprofit or intermediary||0-5%||3.2%||1 to 7 years||Interest only||$50,000|
|St. Joseph Health||Direct to nonprofit or intermediary||No set rate||2%||5 years||Interest only||$50,000|
|Trinity Health||Intermediary||0-2.5%||2%||3 to 5 years||Interest only||$100,000|
What will the community loans terms and conditions for your place-based investment program be?
The following contacts work in place-based and community investment at their institutions and can provide additional resources and information not already referenced or included in the More Resources section of the online version of this toolkit.
|Pablo Bravo||Dignity Health||Vice President, Community Health||Pablo.Bravo@dignityhealth.org|
|Ed Gerardo||Bon Secours Health System||Director of Community Commitment and Social Investments||Ed_Gerardo@bshsi.org|
|Jeff Rich||Gundersen Health System||Executive Director, Envisionemail@example.com
|Lisa Laird||St. Joseph Health||Vice President, Cash and Investments||Lisa.Laird@stjoe.org|
|Jennifer Neppel||Catholic Health Initiatives||Director, Cash and Investments||JenniferNeppel@catholichealth.net|
|Cathy Rowan||Trinity Health||Director of Socially Responsible Investmentsfirstname.lastname@example.org|
References [ + ]
|1.||↑||Ed Gerardo and Ross Darrow, interview by David Zuckerman and Katie Parker, Marriottsville, MD, December 16, 2015.|