Opinion: Mission-related investing unlocks community, economic benefits

Luis Leon

Mission-related investing, sometimes called impact investing, has become a major topic of conversation among community foundations nationwide. Why? It allows charitable dollars to work multiple times. Instead of being donated and then granted out, MRI funds are loaned, repaid and then reinvested into new projects. When not in use, they grow as part of the Community Foundation of the Ozarks’ primary investment pool. In effect, the same dollars can support multiple projects over time.

And there are plenty of potential projects just waiting to be born. One of the joys of working in this community, specifically at the CFO, is having people walk into our offices at 300 South Jefferson with ideas that could improve quality of life, expand economic opportunity or strengthen neighborhoods.

Unfortunately, many of those ideas never get off the ground for one simple reason: lack of access to capital. Traditional financing works well for many businesses and institutions, but nonprofits often face barriers that make conventional loans difficult to secure. Their balance sheets just look different, and revenue streams can be unpredictable. Their missions, while vital, don’t always fit neatly into commercial underwriting models.

At the CFO, our Mission-Related Investment program is designed for such organizations. These below-market, collateral-backed loans help nonprofits pursue projects that deliver meaningful community impact. The CFO plays a complementary role by filling a financing gap, rather than competing with local financial institutions.

To be clear, our goal is not to replace or undercut commercial lenders. In fact, we see ourselves as part of the same Ozarks financial ecosystem, one where philanthropy, banking and business each work to build a stronger regional economy. When nonprofits succeed, the entire community benefits: Employers have a more stable workforce, quality of life improves and local dollars circulate more effectively.

To ensure responsible stewardship, we require MRI borrowers to provide collateral — typically a hard asset — to secure the loan. As a side benefit, in many cases the CFO’s initial participation helps build an organization’s financial track record and credibility, positioning them to successfully pursue conventional financing for future projects.

Across the Ozarks, MRI funding has already supported projects that touch a number of key community needs. In total, the CFO has distributed about $10 million to 28 entities across the region. These investments have helped purchase an MRI machine at Salem Memorial District Hospital in Dent County, expand Jordan Valley Innovation Center, stabilize arts organizations during the pandemic and improve outdoor infrastructure that enhances quality of life across the region.

One recent example illustrates the power of public-private collaboration: Restore SGF, a Springfield based housing initiative, received MRI support that helped attract additional investment from six local financial institutions. That combined capital is now being used to rehabilitate homes, support new construction and strengthen neighborhoods. In this way philanthropy and banking work hand in hand to address community needs neither could tackle alone.

For business leaders, mission-related investing is not just a philanthropic concept — it’s an economic strategy. Strong nonprofits reduce pressure on public services, improve workforce stability and create the kinds of amenities that attract and retain talent here in the Ozarks. When employees have access to affordable housing, reliable childcare, quality healthcare and arts and cultural spaces, they are more productive and more likely to stay in the region.

Investing in nonprofits is also an investment in the broader business community. MRI projects often stimulate contracting, construction and service work, generating dollars that flow directly into the private sector.

The CFO’s board recently expanded the pool of funds available for mission-related investments to more than $6 million, and our Mission-Related Investments Committee oversees applications and distribution of funds. With the help of these talented leaders, we combine our longstanding financial stewardship with bold action in support of the CFO’s mission. As community needs shift and more nonprofits come up with increasingly innovative solutions, we see tremendous potential to scale this work in the years ahead.

Luis Leon is chief financial officer and executive vice president of the Community Foundation of the Ozarks. He can be reached at lleon@cfozarks.org.