Georgia Health Initiative's CDFI Investments

Description

The mission of Georgia Health Initiative is to inspire and promote collective action that advances health equity for all Georgians. The Initiative serves the entire state of Georgia, a diverse population of 10.8 million people living in cities, towns, and rural communities across 696 zip codes in 159 counties. Rural counties make up 75% of Georgia's counties, comprising 21% of the state's population. According to the Economic Research Service based on 2020 ACS data, the poverty rate in rural Georgia is 18.8%, compared with 13.1% in urban areas of the state. Originally named Healthcare Georgia Foundation, the organization was created by the conversion of public assets resulting from the merger of two large nonprofit health insurers.

In 2017, the organization launched the Two Georgias Initiative to address significant health inequities, poor health outcomes and an increasing divide between Georgia's metropolitan and rural areas. The report summarizes this divide: “While many living in the Atlanta metro area and smaller cities such as Athens, Augusta, and Savannah have ready access to world-class medical care, first-rate education …. About 2.75 million people … live in rural communities where there are often few doctors or hospitals…food deserts … and nonexistent internet and cellular service."

Also in 2017, the Initiative began to invest in building the ecosystem of Community Development Financial Institutions (CDFIs) working across the state of Georgia in underserved communities. At the time, few CDFIs in Georgia directly associated their work with social determinants of health. By hosting convenings and highlighting important research, such as a Federal Reserve Bank of Atlanta paper on the intersection of community development and health, the Initiative helped frame the work of CDFIs to drivers of health, such as housing, community health centers, and jobs.

Services offered

The Initiative has supported the Georgia CDFI ecosystem to expand their services in low- and moderate-income communities and among historically underserved populations in primarily rural parts of the state. The Initiative has supported this ecosystem in three ways:

• Capacity building: Convenings have helped build stronger connections among CDFIs to learn from each other. Direct technical assistance from CDFI experts has been provided to CDFIs to strengthen their capacity to grow and expand their services in underserved communities in Georgia. Direct grants have helped build the balance sheets of CDFIs to support raising capital and taking risk.
• Operating Support: The Initiative has provided grants to CDFIs to support the technical assistance they offer across Georgia in underserved and rural communities. For instance, training for community health center operators, housing developers, and entrepreneurs is offered for free by CDFIs, and grants from the Initiative help support the cost of these services.
• Financial Capital: The Initiative also makes Program Related Investments (PRIs), providing low-cost capital to CDFIs, which is then lent in communities with limited access to capital, especially in rural parts of the state. These investments align with the Initiative's mission of health equity for all Georgians by financing supportive, affordable housing; small businesses owned by women, people of color, and immigrants; and community health centers in medically underserved counties.

The Initiative has made PRIs to six CDFIs since piloting the program in 2019. PRIs earn interest for the Initiative and are repaid between five and seven years after they are made. The funds can be recycled for use by the Initiative. These CDFIs have received PRIs from the Initiative:

• Carver State Bank,a CDFI based in Savannah, Georgia, supports businesses and housing development by low-income, minority, and rural entrepreneurs and developers.
• Community Health Center Capital Fund,a national CDFI focused on health, provides low-interest loans to community-based health centers serving low-income and uninsured populations throughout the country.
• Access to Capital for Entrepreneurs, a CDFI based in Cleveland, Georgia, provides loans and technical assistance to woman- and minority-owned businesses in northwest Georgia and Atlanta.
• Atlanta Neighborhood Development Partnership, a CDFI based in Atlanta, Georgia, provides loans for the development of affordable, supportive housing in and near Atlanta.
• Solar Energy Loan Fund, a regional CDFI with staff in Georgia, provides loans to homeowners to make energy efficient home improvements, and workforce development for local contractors.
• Neighborhood Lending Partners, a regional CDFI lending in Georgia, aggregates capital from banks, tax credits, and others to develop affordable, supportive housing with access to health services.

Results

Since the Initiative began making PRIs in CDFIs, the impact reporting has already shown promising results:

• Federally Qualified Health Centers (FQHCs) across the state have received training to improve their operational sustainability. Loans have been made to FQHCs to help expand services and increase the number of patients seen.
• Housing units have been financed for low-income rental, senior housing, and energy efficiency improvements.
• Small businesses have been financed, and advisory services provided to hundreds of women and/or minority entrepreneurs.

Challenges

Understanding the role CDFIs play in communities and the opportunities to partner with them often requires “climbing a learning curve” for board members, leaders, and staff. Identifying potential CDFI partners also requires a commitment to relationship building.

For many grant-making organizations, this is the first time they have made an investment in a program that is expected to be repaid; it is not a grant. The due diligence process has additional activities, and potential costs, that differ from traditional grant making.

Replication

In many states and regions, the CDFI ecosystem is already being supported by partners such as the Federal Reserve Bank or a state-level CDFI Coalition. Identifying the existing ecosystem builders is an efficient way to identify CDFIs that are mission-aligned and potential partners.

For organizations that are starting to use PRIs as a tool to expand their grant making activities, it is important that the leadership, board, and staff understand the purpose and mechanics of the investment. Talking with peer organizations and/or trusted consultants can help to understand the how these investments differ from and complement traditional grant making.

Contact Information

Samantha Beasley, Program Administrator
Healthcare Georgia Foundation
Georgia Health Initiative
samantha@georgiahealthinitiative.org