“Benefit Chicago” To Funnel $100 Million Into Social Sector
Chicago Community Trust, the MacArthur and the Calvert Foundations are joining forces to create a $100 million fund to provide non-profits and social impact organizations in the city with access to much needed capital.
“Benefit Chicago” will provide low-interest loans and investment opportunities to social sector organizations. Institutions can invest in the fund, but it also has a crowdsourcing component, where the members of the public can contribute a minimum of $1000 dollars.
WBEZ’s Melba Lara spoke to Debra Schwartz, the managing director of impact investments for the MacArthur Foundation about the specifics. This interview has been edited for clarity and conciseness.
On why the fund is necessary
“What we know is that even with the substantial amount of capital we’ve been putting to work here in our city, it’s not enough,” Schwartz said.
The groups released a report on Tuesday that shows a $100 million “shortfall” in the capital needed by Chicago social-sector organizations. They expect it to grow to 400 million over the next few years.
On how this program will work relative to state and local government funding
“This is not money that’s going to make up the vast amount of public dollars that are needed to provide human and social services in our community. We know we need that too.”
On how the program differs from a grant
“There are many non-profits for which the scale of what they do simply could not be met by traditional donations. The scale of capital that’s needed to construct really large buildings or operate affordable housing, to finance that, we’re talking $500 thousand loans or $10 million loans. When that’s what you need, that’s beyond what they would be doing with grants.”
Schwartz added that this model offers a way for smaller organizations, who one day might completely finance themselves traditionally, to build credit that could help in future loan applications.
On what the program wants to have accomplished in 15 years
“At the end of the day, we want to see all of the organizations that work to make Chicago better for everyone, stronger and better resourced and able to do more of the great work that they do. That they’re not working so hard to raise the money, the financing they need, and much better equipped to do the great work that their missions call them to do.”
The MacArthur Foundation provides financial support to WBEZ.