LISC Impact Notes and Racial Equity: An Update on Progress

9.17.2024 - LISC Stories

At the end of 2020, LISC announced our most ambitious initiative yet. Against the backdrop of the pandemic, a recession, and the police murder of George Floyd and other Black Americans, we set out to raise $1 billion over 10 years to invest in underserved communities of color through our Project 10X initiative.  

In just three years, LISC raised $974 million of that total, of which 60 percent or $590 million has thus far been deployed to address persistent health, wealth, and opportunity gaps across the country.  

LISC Impact Notes have played an important role in this work. At the outset of Project 10X, we pledged $10 million in proceeds from our ‘AA-’ S&P-rated Notes to fuel this initiative. We renewed that commitment each year in subsequent Impact Notes offering periods. In doing so, we opened an access point for investors interested in putting their capital to work catalyzing opportunity for communities of color.  

To date, we have deployed $152 million in Impact Notes proceeds into 57 eligible projects. Impact Notes funding has supported Project 10X deals in 23 markets, from the Bay Area to Houston to Atlanta. The funded projects are helping create 197 affordable for-sale homes and 2,006 affordable rental units. And they are helping close the racial opportunity gap through economic development and job creation, financing more than 3,300 construction and full-time jobs.  

But the numbers only tell part of the story. Through Project 10X, Impact Notes proceeds have supported  entrepreneurs like Johnnie Akons, a licensed barber and the owner of Legacy Cutz barbershops on Chicago’s South Side. His partnership with LISC helped him acquire two permanent storefronts, on East 95th Street and West 63rd Street, providing a stable base for him to grow his business. 

In Indiana, we invested in J. Benzal, a high-end custom clothing and menswear shop that has served Indianapolis since 2008. A LISC loan helped them acquire and rehab their downtown store, and also supported opportunity for wealth building for this immigrant- and BIPOC-owned small business.  

Impact Notes proceeds have also supported Project 10X homeownership work, including helping tenants exercise their rights in Washington, D.C., under the Tenant Opportunity to Purchase Act (TOPA). Existing residents of the Baldwin House Cooperative in Northwest D.C. worked with LISC and other local resources to form a limited equity cooperative to preserve eight affordable condo units in a gentrifying neighborhood. Across town, at 701 K St NE, a LISC loan supported another TOPA acquisition by providing financing that will enable 12 primarily low-income, Black households—many of them long-time residents—to purchase and modernize the building in which they reside. 

In the Twin Cities, Impact Notes proceeds supported 10X investments in a number of Community Asset Transition (CAT) Fund project sites. The CAT Fund aims to transform the nature of property ownership in areas impacted by the civil uprising following George Floyd’s murder. Projects like Walker West, Elite Cleaners, and 810 East Lake are supporting this goal—transforming spaces into community assets that produce healing, cooperative and community ownership, and generational wealth for developers and residents. 

For example, an investment in the Coliseum Restoration has preserved an iconic building in the Longfellow neighborhood, one identified by local residents and leaders as high priority to save from demolition. LISC’s investment helped rehabilitate the building and reopen it to tenants, including those displaced in 2020. In the long-term, it also creates a pathway for the building to become fully Black-owned through a co-ownership model with local business owners. 

These projects represent just a handful of the dozens of Project 10X deals financed in part by the proceeds from Impact Notes, projects that meet needs for healthcare, education, creative arts spaces, and more—and projects that upend the cultural and structural racism that acts as a barrier to prosperity. The outpouring of support from funders and investors has surpassed expectations and drives home the deep importance of racial equity work to our partner institutions and the individuals in communities where we work.  

As we look ahead, we are keeping our eye on the intersection of racial equity and green financing. Impact Notes are already funding 10X projects with green and sustainability features, such as Folsom and Dore Apartments and Mapleridge Duplexes. But this is just the start. We recognize that climate change increasingly poses an existential threat to the affordability, health, and safety of our communities, and that this threat is multiplied for low-income communities of color and other marginalized groups. 

By applying a climate justice lens to our work, LISC can build on Project 10X successes and help deliver the benefits of decarbonization and other green investments to disinvested communities.

ABOUT THE AUTHOR

Kathleen Keefe, Investor Relations and Portfolio Reporting Lead, LISC
Kathleen Keefe is the investor relations and portfolio reporting lead at LISC, where she manages the LISC Impact Notes program and leads analysis and reporting to lenders on LISC’s loan portfolio. She has experience supporting CDFI investment products at Capital Impact Partners and in local economic development through work with the City of New Haven’s Economic Development Administration. Previously, Kathleen worked in development consulting, managing large-scale U.S. Agency for International Development economic growth projects in Eastern Europe, and in domestic policy research. Kathleen holds a bachelor’s degree from Wellesley College and a dual MBA and MPP from the Yale School of Management and the Yale Jackson School.

Disclaimer: This is not an offer to sell or a solicitation of an offer to buy any securities. Such an offer is made only by means of a current Prospectus (including any applicable Pricing Supplement) for each of the respective notes. Such offers may be directed only to investors in jurisdictions in which the notes are eligible for sale. Investors are urged to review the current Prospectus before making any investment decision. No state or federal securities regulators have passed on or endorsed the merits of the offering of notes. Any representation to the contrary is unlawful. The notes will not be insured or guaranteed by the FDIC, SIPC or other governmental agency. Impact Notes currently are not offered to residents of Tennessee and Washington.