Why investing in community matters

By Deb Markley
Senior Vice President, LOCUS Impact Investing
Co-Founder and Managing Director, Center for Rural Entrepreneurship

I was raised in a small town in south Jersey – a place where every adult was a potential caregiver, problem solver and especially disciplinarian for all of us as kids; a place where people took on leadership roles – civic, school, church – and took care of one another. I have vivid memories of my grandfather, a skilled tradesman who didn’t have much, giving of his time and talents to help families who had even less. That image defined for me what it means to be part of a small-town community. 

When I had to choose my career path, I was drawn to rural economic development because of the pivotal role of community. I even shifted my focus from international to U.S. rural development because I felt I needed to be working in my own “place” – where my roots and commitment were deep. I was strongly influenced by community development principles – that the people in a community should decide their own future; that they should have control over their own assets and the wealth that is generated from them; that everyone’s voice and future matter.

One West Virginia community’s recipe for prosperity.

Sixteen years ago, I had the opportunity to found the Center for Rural Entrepreneurship (CRE) with my colleague, Don Macke. We felt CRE was needed to help rural communities craft more asset-based, entrepreneur-focused economic development strategies. Too many rural places struggled to achieve prosperity using an industry recruitment model. We saw the need to develop new tools and new partnerships with community innovators to learn what works – and what doesn’t – and to share what we learned with other rural places. It’s been an interesting and rewarding journey so far. We’ve learned a lot but one thing hasn’t changed – the importance of engaging and empowering the community to dream about a different future and then create and implement a realistic but aspirational strategy that helps them get there.

That’s the work that drives me to get on yet another airplane to partner with another group of committed community leaders – to share with them, learn from them and be inspired by them. I like to think what we do at the Center is to help communities re-discover or re-connect with a more positive, vibrant vision of what’s possible. There is nothing more rewarding to me than seeing a group of community leaders begin to see their place through new eyes – as a place where opportunities outweigh problems and where there is energy and commitment to work together to change the future. It happens all the time and keeps me energized about our work. 

But, I still have a concern about the future that drives me to a new chapter in my work with CRE and LOCUS Impact Investing. For much of my journey in community economic development, the public sector has been a strong partner with communities. From regionally targeted programs of the AppalachianRegional Commission to grant and loan programs managed by USDA Rural Development to innovative state programs like NetWork Kansas, these public dollars were fuel for community economic development, providing resources to help communities invest in themselves and achieve a brighter future. That capacity is more limited and less reliable today. Where will the resources come from to fill this emerging gap? Again, the solution in my eyes lies in the community – in local investment by rooted anchor institutions and individuals who care about place. 

Community leaders in West Virginia launching their entrepreneurial communities work in May 2017 (supported by the WV Hub).

That’s why I’m so excited and encouraged by the energy around community development philanthropy and place-focused impact investing. In these uncertain times, communities must be able to invest in themselves. As we continue to define our role in this emerging field, we are looking to the innovators in this area, to learn from them and share their stories. I am excited to develop new tools and services that can help place-focused foundations take stronger leadership and investment roles in the places they care about. Strong institutions, committed community leaders and a robust commitment to community engagement and local investing are the best tools to help communities weather these uncertain times and prosper.  

I wake up every day excited by our work for one simple reason – the communities we serve. When community leaders give their time, talent and treasure to work toward a brighter tomorrow, they deserve partners who respect and match their commitment. Those community leaders – and the places they call home – that’s why I do this work.

What drives you to invest in your community? I’d like to hear your stories! 

Deb Markley is Co-Founder and Managing Director of the Center for Rural Entrepreneurship and Senior Vice President of LOCUS Impact Investing. Join the LOCUS mailing list to learn more about local investing for impact.

Our next blog will feature Don Macke’s career journey!

How did a recovering attorney find her passion in local investing for impact?

by Teri Lovelace, LOCUS President

Ever felt like your chosen profession or career didn’t quite reflect your inner values? You know that feeling when you’ve made choices but you’re not exactly “planted” in the right pot. You feel it inside, that small nagging discontentment urging you to do more for a greater good, but the path is unknown, uncertain and very scary. I chased careers, education and certifications to find the elusive alignment between heart and mind that I desperately craved. And each unique professional experience brought me a bit closer to what I know now as my true passion—social finance and mission investing.  

As a merger & acquisition (M&A) attorney with a MBA, capital markets and capital flows fascinated me, particularly their contradictory nature. Capital permits creativity, creates wealth, transforms businesses and expands opportunities. Yet, as powerful and empowering as capital can be, it never seemed to flow easily or readily to those communities, businesses and people most in need. I was a fundraiser for our 80+ year-old local community house, modeled after the 1920’s settlement house movement that embodied the idea that poverty must be treated systemically—that the causes, not just the symptoms, must be addressed. This experience galvanized in me the essential need for community investments—not just charity—in vital services like childcare, pre-K education, affordable housing, senior care and job creation for the working poor.  

I was lucky enough to work at our local community foundation, The Community Foundation Serving Richmond and Central Virginia, www.tcfrichmond.org, with incredibly thoughtful donors, deeply committed to the community. From these philanthropic visionaries, I saw a longing for vibrancy of place and prosperity for all. I saw firsthand that traditional grantmaking, although critically important, could not solve pressing social issues like housing, access to living wage jobs and quality childcare. Annual 5% payouts from private foundations were necessary but were they sufficient to create jobs? Ensure safe housing? Provide access to fresh foods? Not really. While working at the foundation, a donor challenged me asking, “Teri, do you have any place for me to invest my charitable assets to do good locally and receive a return?” I was stumped.  

In my search to answer this donor’s question, I discovered a different kind of financial institution unlike the corporate finance world I had left behind. These CDFIs—community development financial institutions—were using their capital (not grants and gifts) to achieve social change in a well-defined geographic region. Many were focusing on Maslow’s basic needs of housing, security, food, health and jobs; these institutions were bringing solutions, hope and prosperity to underserved communities through capital. What a novel idea! And, most of these CDFIs were nonprofits that, rather than focused on fundraising and program administration, deployed capital to create jobs, enhance quality of life and build vibrant communities. It wasn’t charity and it wasn’t purely investment...it was social finance. It was the opportunity to do good and get both a financial and social return. A light bulb went off! If you cared about place and were philanthropically inclined, why wouldn’t you want to participate in this new way of investing for impact? This was the answer for my donor friend! And, I was finally planted where my values aligned with my profession—the use of capital for good.   

After nearly 5 years at Virginia Community Capital (VCC), a CDFI bank, helping to catalyze over $15 million in impact investments from foundations, high net worth individuals, family offices and socially aligned investment managers, I find myself leading VCC’s new social venture—LOCUS Impact Investing. LOCUS empowers place-focused foundations nationwide to invest their capital locally to build prosperous, vibrant communities. LOCUS builds on VCC’s 11 years of experience in successfully deploying over $350 million for vital community projects while leveraging total community impact of nearly $1 billion all with a very low charge off ratio. LOCUS’ mission-aligned “banking” experience and financial infrastructure create a much needed “on-ramp” for foundations that want to engage in local investing for impact. It is my vision that LOCUS, as a trusted partner to foundations, will empower them to unlock their philanthropic capital for mission investments, building prosperous and vibrant communities across our country.  

So, what’s the common thread between a M&A attorney, a community settlement house, a donor advisor and a CDFI? These unlikely and disparate experiences, along with tons of patience and trusting my inner voice, have fueled my passion and ignited my longing for social finance and mission investing, resulting in a new career path with LOCUS Impact Investing. Let the next leg of this journey begin!

Teri Lovelace is President of LOCUS and Chief Impact Officer at Virginia Community Capital. Please join the LOCUS mailing list to learn more about local investing for impact.

Watch for the next LOCUS blog describing why co-founder of the Center for Rural Entrepreneurship, Deb Markley, joined forces with VCC to launch LOCUS.