Who will be responsible for managing place-based investment decisions?

The decision about who will manage place-based investments is driven by a number of factors: 1) your place-based investment approach, 2) internal competencies, and 3) committed resources.

What approach to place-based investment will your health system pursue: direct investing in specific projects or working through financial intermediaries and investment managers?

Different Models for Staffing a Direct Investment Program

• Full-time position: From 2002 to 2015, Pablo Bravo, vice president of community health at Dignity Health, oversaw the community investment portfolio as one of his primary responsibilities. In 2015, a program analyst was hired to assist Bravo. Bravo’s responsibilities include drafting loan agreements and sharing them with the legal department; the analyst helps with the work leading up to this stage: preparing memos, handling much of the due diligence, providing financial information, and ensuring that borrowers submit monitoring reports.²Pablo Bravo, phone interview by David Zuckerman and Katie Parker, March 18, 2016.
• Part-time positions within different departments: At St. Joseph Health, Lisa Laird, vice president for cash and investments, and Gabriela Robles, vice president of community partnerships, and their support staffs manage the different responsibilities required for their community investment program. For all of them, it is a small portion of their total job responsibilities. Laird recommended allocating at least one-third of a full time employee’s total work time to implement a direct investment program successfully.³Lisa Laird, interview by David Zuckerman and Katie Parker, May 9, 2016.
• Outsourced: This role can also be outsourced to an investment advisor or service provider with expertise in advising on direct place-based investing.

Investing via intermediaries

• Part-time position within different departments: At Trinity Health, Cathy Rowan, director of socially responsible investments, spends about 20 percent of her time overseeing the program. Jody Wise, a socially responsible investment consultant, has helped Trinity Health become more proactive in building connections between local hospitals and specific CDFIs where Trinity Health has made investments. A staff person in treasury services assists with financials, due diligence, and loan servicing.⁴Cathy Rowan, interview by David Zuckerman and Katie Parker, Bronx, NY, January 29, 2016.
• Outsourced: Historically, Catholic Health Initiatives (CHI) managed its mix of direct and indirect investments internally between community outreach and treasury. In 2015, they decided to work with Partners for the Common Good, a CDFI focused on creating tools to grow community development finance and steer investment towards high social impact organizations.⁵Partners for the Common Good, pcgloanfund.org. Partners helps CHI with back-office administration and identifying investing opportunities, although CHI still completes the final financial review.⁶Jennifer Neppel and Diane Jones, phone interview by David Zuckerman and Katie Parker, December 10, 2015. 

Which department/s in the institution will manage place-based investments?

There are a number of competencies required to implement a place-based investment program. Investment analysis expertise alone is not sufficient. Research for this toolkit found that a number of key competencies are especially in-demand for institutions running successful place-based investment initiatives (see the chart below).

Describe who will be the lead responsible for managing place-based investments:

Governance Structure

What is the internal approval process for authorizing place-based investments?

Example:

A place-based investment policy should be instituted through governance to formalize the program as part of the institution’s official investment strategy. Bon Secours Health System’s policy is included as a sample in the More Resources section of the online version of this toolkit. The next resource in this toolkit section provides examples for how health systems have allocated assets for place-based investments.