Community foundation adds community investing program

Oct. 16—Over the past two years, the Community Foundation of Dickinson County has begun implementing a new program: the Invest Dickinson County Program. Basically, the foundation now partners with local businesses or organizations for their projects to be a guarantor of a bank loan or to loan money through NetWork Kansas. The foundation has decided to offer this program to invest into the economic development of Dickinson County, said Elizabeth Weese, executive director of the foundation.

"We are no longer your grandfather's community foundation because when community foundations started, they were basically philanthropic granting organizations," Weese said. "But that has changed."

The foundation set aside $500,000 of its own operational funds for this community impact investing program instead of investing it into the stock market. Weese said the foundation was financially able to set aside that much money because of a donation in 2019 which is allowing them to go beyond only grant-making.

"We at the foundation understand that we need to bring all the assets we can to the table to assist Dickinson County, and that is exactly what we are doing with the Invest Dickinson County Program," Weese said.

So far, the foundation has applied this investing with two projects. The first is the Smoky Valley Railroad's railroad track upgrade project and the second is the opening of Hapisoul Cafe and Juicery.

After discovering their track project would cost and additional $200,000, the Abilene and Smoky Valley Railroad approached the foundation about their financial situation. The foundation became the guarantor for the railroad in a $200,000 bank loan. As the guarantor, the foundation set aside $200,000 in case the railroad cannot pay back the bank loan.

"We would have been unable to put the ties in and probably not have operated this year, so basically it was a lifeline that we needed and they were able to help us make that happen," said Ross Boelling, general manager of the railroad.

For Hapisoul Cafe and Juicery, the restaurant needed a loan to finish opening the cafe, said Soleyah Brittian, owner of the cafe. Brittian knew a bank would not give her a large enough loan, but the foundation stepped in as the guarantor just like they did with the railroad.

"I put in a lot of effort into convincing the community foundation that this would be successful and that it would be worth their time. Elizabeth, Veronica (Murray) the board and everyone else at the foundation was very helpful and very motivating," Brittian said. "I think they want to see something like this in the community as well, so I was very pleased with working with them."

The community foundation started the process of developing their community impact investing program in 2019, and they are not the first foundations in Kansas to develop such a program. In 2018, the Kansas Health Foundation granted money to Locus Impact Investing and the Aspen Institute to encourage Kansan community foundations to research impact investing. The first group of foundations accepted into learning and developing impact investing was in 2018. Dickinson County, along with a couple other foundations, was accepted in 2019. Weese said the COVID-19 pandemic slowed down the process so much that the foundation had to delay their implementation of the program until January 2022 and the foundations apart of the program have not met in person yet.

"When they first introduce the program, I was just starting with the community foundation, I had no idea what impact investing via a community foundation even was," Weese said. "I found out really quick and said we were applying to be part of the second cohort."

Weese said impact investing is flexible enough that each foundation can determine the purpose and implement the program differently. For instance, the Hutchinson Community Foundation decide to dedicate 5 percent of all their assets toward impact investing. With the money, they decided to partner with a local internet company to build infrastructure to provide internet to more people. When the COVID-19 pandemic came, the Hutchinson foundation there were people in the community without access to internet. They are also partnering to renovate a local hotel, which is similar to the Sunflower Hotel in Abilene, Weese said.

"We're doing the same thing, it's just sized down for us," Weese said. "They have a lot more money than we do, but it's the same process."

If the program shows success, Weese said the foundation would like to dedicate a percentage of all their assets, similar to what Hutchinson Community Foundation has done, toward the program.

The Topeka Community Foundation decided to partner with Habitat for Humanity to buy house mortgages in low-income neighborhoods from landlords with unfair business practices. The foundation and Habitat for Humanity revamped the houses and then sold the houses back to the homeowners at with realistic mortgage and interest rates.

"You can look at different ways to do impact investing," she said. "What is needed in your community? That's the answer."

The second aspect of the foundation's impact investing program is setting up loans with NetWork Kansas for organizations. NetWork Kansas is a non-profit organization which gathers resources to help small business begin and grow in Kansas, according to their website. If an organization or group cannot earn a loan with the help of the foundation and the foundation is willing to take a risk, the community foundation will send the necessary money to NetWork Kansas. The nonprofit will then administer the loan, collect payments and send the payments to the foundation every quarter of the year.

"We put those funds back into investment fund pool, so (hypothetically) when Susie comes in and wants to open a donut shop, money is in there," Weese said.

The foundation is not handing out loans directly, Weese said.

Overall, the Community Foundation of Dickinson County is now ready to aid in the economic development of the county. While the county has many positive facets, there are glaring issues, Weese said, and the foundation is willing to take risks to solve those problems.

"You look at the past six months with the stock market. Our assets have decreased by one million dollars. Will it come back, knock-on-wood, yes, but what about taking some of that risk on people in Dickinson County? Is it uncertain, yes, but we are willing to take a chance on people in Dickinson County."