Bon Secours Health System

Community Investments

Key strategies employed:

  • Designate a portion of investible reserves for place-based investments
  • Allocate to financial intermediaries, including community development financial institutions (CDFIs) and other investment managers offering place-based private debt strategies
  • Align community benefit with place-based investing strategies
  • Establish an internal green revolving loan fund
  • Move cash and cash equivalent assets into local banks and credit unions, including US Treasury Department-certified CDFIs, using money market accounts, business checking and savings accounts, and certificates of deposit


Location: Headquartered in Marriottsville, Maryland (near Baltimore), Bon Secours has acute-care hospitals and other facilities in New York, Maryland, Virginia, Kentucky, South Carolina, and Florida.

Employees: more than 22,000

Revenues: $3.3 billion

Investment portfolio: $1.1 billion

Mission of Program

“The goal of the program is to make Impact Investments with institutions and/or projects to promote access to jobs, housing, food, education and healthcare for low-income and/or minority communities.”


A nonprofit Catholic health system, Bon Secours 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 financial intermediaries (CDFIs). Launched in 2008, to date, Bon Secours has shifted more than $26 million, or about 2.5 percent of its $1 billion LRF, to support affordable housing, economic development, community facilities, and other projects that benefit community members.

Community members at the opening of a Mercy Housing neighborhood development in Greenville, SC
Community members at the opening of a Mercy Housing neighborhood development in Greenville, SC. Photo courtesy of Bon Secours

Metrics used to evaluate return on investment include the number of jobs or housing units created for low- and moderate-income populations. Bon Secours also tracks the return of principal and interest earned. Recently, Bon Secours added a green revolving fund as part of their community investment allocation and expanded the investment vehicles they will consider for community investment. Bon Secours’ evolution toward community investment has been incremental but dynamic, building on success and continually evaluating new opportunities for improving the health and well-being of the communities it serves.


Bon Secours Community Investments dates back to the 1990s when a number of executive staff, along with the sponsoring sisters, wanted to shift investment to achieve greater community impact. In addition to shareholder advocacy, the sisters and leadership explored a strategy of putting aside a portion of the health system’s invested assets and using it for direct social investment.

In the community investment program’s early years, the system worked with a consulting firm that would research and vet individual projects. While the program has gone through a number of changes throughout the years, and even ceased operations briefly, it is currently a priority for the institution. The current program is structured to work primarily with financial intermediaries, as Bon Secours considers this approach more suitable to existing internal competencies and available resources.

Ross Darrow, the director of treasury services, and Ed Gerardo, the director of community commitment and social investments, manage the initiative on a semi-annual investment cycle. When necessary, the legal department supports the work, and Darrow and Gerardo take all investment decisions to the executive management team for final approval.

New Shiloh Village in West Baltimore, funded through the Enterprise Community Loan Fund
New Shiloh Village in West Baltimore, funded through the Enterprise Community Loan Fund. Photo courtesy of Bon Secours

Program set-up

Bon Secours’ Community Investments is led by the health system’s corporate office as a partnership between Treasury Services and Community Benefit. The program is designed to increase the percentage of the health system’s LRF with intermediaries that serve low- and moderate-income communities. As Gerardo noted, “we will grow it by at least $3 million a year until we have 5 percent deployed.” The program was established through the board’s socially responsible investment policy (see More Resources), and is reviewed every three years.

Management selects and monitors investments, with Community Benefit identifying potential opportunities and Treasury providing due diligence. Potential investment leads might come from Community Benefit or staff at local facilities, as well as community partners. Despite being administered through the corporate office, all of the announcements regarding new investments are attributed to local health systems and hospitals.

Bon Secours primarily works with financial intermediaries, but will make direct project investments selectively. In order to assess and maximize impact for the communities they serve, they do request that intermediaries provide a list of investments in the health system’s geography, and consider investments as proximate to the areas they serve as possible. Darrow explained, “It’s actually easier for us to make the case for a smaller organization that might only be in one state, because we can draw a direct line that is a lot clearer to our local community, as opposed to a larger organization that has multiple sites (unless they have geographic-specific funds).”

Conducting due diligence for each investment can take about two and a half to four hours, with new investments requiring more time than renewals. As Darrow described the process, “We have an introductory call and provide [borrowers] with the application and the loan documents. They review both and tell us if there are any issues. Then, we do a due diligence call, which takes about an hour. Most of the time they’ll have filled out the application form prior to us talking to them for the second time.”

Bronx Charter School for the Arts, which received funding through the Civic Builders program to purchase and renovate their new building
Bronx Charter School for the Arts, which received funding through the Civic Builders program to purchase and renovate their new building. Photo courtesy of Bon Secours

Bon Secours currently has more than twenty outstanding investments, and aims to complete seven investments per year (a combination of new investments and renewals of existing loans). This process includes a due diligence analysis or monitoring visit.1Bon Secours has provided a sample agenda for these visits. It is
included as a resource in the More Resources section of this
 Although the loan cycle has been semi-annual to date, it is transitioning towards an annual process. While almost all existing loans are renewed, it is not automatic. Auditors require a process in which Bon Secours specifically acknowledges that the principal will be collected so that there is no confusion about whether they are grants or investments.

Staff vet applicants from November to January and prepare recommendations in February. An advisory committee, including representatives from the finance and mission departments, reviews the recommendations. The executive management team approves all investment decisions and the Pension and Investment Committee receives annual updates on the program.

Over time, the target for the size of each investment has grown. As Gerardo underscored, “Our sweet spot started somewhere between $100,000 and $250,000 per arrangement. Now, we really want to invest between $400,000 to $500,000, and possibly a million dollars.” The minimum investment is $100,000. Bon Secours seeks a 0 to 3 percent annual return; the historical return has averaged around 2.25 percent. Generally, each loan term is three years with semi-annual interest payments and principal repaid at the end of the term.

“We don’t want to be anybody’s largest investor or have any investment dominate our portfolio. Our objective is not to have more than 10 percent of our funds invested in any one organization.”

Bon Secours has put in place certain guidelines to minimize risk. Darrow explained, “We don’t want to be anybody’s largest investor or have any investment dominate our portfolio. Our objective is not to have more than 10 percent of our funds invested in any one organization.”

Bon Secours has adopted the following risk controls to guide their investments:

Intermediary Assets Under Management Max Percentage of Community Investment Fund Target Portfolio (Direct) Max Percentage of Community Investment Fund Target Portfolio (Indirect) Max Percentage of Assets Under Management
<$50M 2.5%; 10.0%; 4.0%;
$1.0M $4M <$2M
$50M-$150M 4.0%; 12.0%; 4.0%;
$1.6M $4.8M $2M-$6M
>$150M 5.0%; 15.0%; 4.0%;
$2.0M $6M >$6M

In 2016, Bon Secours further expanded its policy to consider other investment options that are not necessarily loan funds, but principal-protected funds, such as mutual funds. For example, they might invest in a mutual fund that focuses on mortgage-backed securities, identifying the zip codes that they want to prioritize and using investment leverage to reduce rates for borrowers in those markets. Darrow emphasized, “We went through a of period of getting our feet under us, learning what vehicles are available. We spent time internally socializing the idea of expanding beyond loans prior to doing so. Our plan is to start small and expand as the organization grows more comfortable and we find additional avenues that reach our social and financial goals.”

Staffing and budget

Gerardo and Darrow are the primary staff members who manage community investments. Overall, the community investment work makes up a small portion of their responsibilities. Gerardo estimated that the program took about 300 to 400 hours over four to six months to set up. After initial setup, operating the program requires significantly less time. 


To date, Bon Secours has loaned more than $26 million to the following organizations that focus on community and economic development in the geographic areas that the health system serves:

Organization Focus Market
Calvert Foundation Multiple Multiple
Enterprise Community Partners Housing, Community Development Baltimore
Community Housing Partners Housing, Community Development Virginia
The Reinvestment Fund Housing, Community Development Baltimore
Mercy Loan Fund Housing Multiple
Global Partnerships Economic Development Peru, Haiti
Virginia Community Capital Community Facilities Virginia
Oikocredit Micro-enterprise loans Peru, S. Africa
Boston Community Capital Housing, Community Development Multiple
LISC Housing, Community Development Virginia
Civic Builders Charter Schools Bronx
Partners for the Common Good Community Facilities Baltimore
Shared Interest Loan Guarantees South Africa
Leviticus Fund Housing, Community Development New York
Baltimore Community Lending Housing, Community Development Baltimore
Fonkoze Business Micro-lending Haiti
CommunityWorks Carolina Housing, Community Development Greenville
CRANX Mutual Fund Housing, Community Development Multiple
Virginia Supportive Housing Housing, Community Development Richmond
Solar and Energy Loan Fund Economic Development St. Petersburg

Key strategies employed

Designate a portion of investible reserves for community investments

Bon Secours’ initial target was that 1 percent of the LRF be targeted towards community investment. It achieved 2 percent in 2015 and revised the target upward to 5 percent. As Darrow described it: “The money we use for this comes out of our fixed-income allocations, so we look at it as a fixed-income substitute.”

To achieve this target, Bon Secours has adopted a tiered priority system for identifying how these dollars should be invested:

  • Local Bon Secours Health System communities
  • Green revolving fund
    1. The green revolving fund is seeded with community investment funds. Its investments are managed in consultation with the institution’s “Green Team.”
  • Communities that correspond to Bon Secours global health initiatives
  • Other domestic opportunities
Allocate to financial intermediaries, including CDFIs and other investment managers offering place-based private debt strategies

Bon Secours’s strategy to work with financial intermediaries rather than investing directly in specific projects helps reduce the due diligence the health system is directly responsible for. It also enables existing staff to assume responsibility over the community investment program and directly support communities in the specific geographies the institution serves. “The big trade-off in this is that we are not able to direct those investments to particular projects,” said Gerardo. “We do not have the capability to vet specific project opportunities outside our healthcare expertise. We rely on the intermediary’s evaluation and respect their determinations. Our assurance is that risk is substantially reduced and we look for a more modest financial return of about 2 percent. Our requirement of the intermediary is that they place and utilize the funds within our local geography.”

Move cash and cash equivalent assets into local banks and credit unions

Bon Secours has placed more than $500,000 in Federal Deposit Insurance Corporation (FDIC)-insured certificates of deposit (CDs) at Virginia Community Capital (VCC), a nonprofit statewide community development loan fund that also has a banking subsidiary. Bon Secours utilizes the Certificate of Deposit Account Registry Service (CDARS) to access FDIC insurance on CD deposits greater than $250,000. Bon Secours has since expanded its relationship with VCC, investing more than $1.5 million.

Establish an internal green revolving loan fund

Bon Secours has recently established a green revolving loan fund as a subset of the community investments. It is an internal mechanism to finance energy-efficient projects that have a payback of less than three years. Currently, there is one project of $700,000 underway for a medical gas chiller.

Align community benefit grants with targeted community investment

Bon Secours’ community investments increase its impact on community health and well-being. In addition, Bon Secours has committed community benefit resources to address factors further upstream and to strengthen community partnerships in response to identified community health needs. Several examples of these efforts include:

  • Addressing lack of access to health and affordable food: Virginia Community Capital, a CDFI that Bon Secours has an investment with, is providing financing to a grocer in a neighborhood in Newport News, Virginia. Bon Secours has been an advocate for addressing food desert conditions in neighborhoods near its hospitals and is also considering providing grants to further support grocery store development. In addition, they are considering whether to include nutrition education and pharmacy services in stores once they open. 
  • Addressing housing affordability: In West Baltimore, in response to a community engagement process, Bon Secours helped build more than 800 units of affordable housing and worked with residents to convert more than 640 vacant lots into green spaces. In Greenville, South Carolina, Bon Secours helped develop a community land trust through staff support and seed funds for the Sterling neighborhood.
  • Supporting local and small business development: In Richmond, Bon Secours partnered with the community development intermediary, Local Initiatives Support Corporation (LISC), to grant more than $400,000 ($100,000 a year for four years) to support locally owned businesses through a program called Supporting East End Entrepreneurship (SEED). Bon Secours recently committed to providing an additional $150,000 to SEED.

For more information

Ed Gerardo, Director, Community Commitment and Social Investments 


Ed Gerardo and Ross Darrow, interview by David Zuckerman and Katie Parker, Marriottsville, MD, December 16, 2015.

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...

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...


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,...


1 Bon Secours has provided a sample agenda for these visits. It is
included as a resource in the More Resources section of this