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GreenMoney Journal - publishing since 1992
Winter 2009/10 issue
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GreenMoney Profile: Institute for Community Economics
One of the oldest community loan funds in the country, the Institute for Community Economics' (ICE)
Revolving Loan Fund, marks its twenty-fifth year in 2004.
Based in Springfield, Mass, ICE is a national Community Development Financial Institution (CDFI)
and a pioneer in community investing. The ICE mission is to promote the just allocation of
resources in communities to address the needs of low-income people. In addition to financing, ICE
offers technical assistance and advocacy programs to strengthen the capacity of community land
trusts (CLTs) and local grassroots organizations to revitalize communities and create permanently
affordable housing.
ICE became engaged in community investing as it established the first CLTs.
These fledgling nonprofits had limited track records, unconventional property ownership models, and
limited leverage capital, impeding their ability to obtain financing from mainstream lenders.
Exploring a new model of community lending, ICE began meeting with interested social investors who
wanted to support community projects, but lacked the time and experience for their own research.
Then ICE received an urgent call from a Cincinnati minister seeking help for a
parishioner. A single mother and her eight children were facing eviction and desperately searching
for housing. Just in time, ICE brokered a $15,000 loan from one of its supporters to provide a down
payment and secure housing for the family. The Revolving Loan Fund (RLF) was effectively launched.
Recognizing a broader need, ICE began gathering investors and building the loan fund to provide
financing to CLTs and other community non-profits for affordable housing and community development.
Early loans to the RLF mirrored ICE's values. Financing to New Day Tofu Vegetarian Foods,
Mandala Farm, and Stonyfield Farm reflected the organization's interest in social enterprise. Loans
to tenants' organizations in Roxbury, Massachusetts; Trenton, New Jersey; and Cincinnati, Ohio
demonstrated ICE's interest in empowering residents of under-served and low-income communities.
Drawing on its own model and experience, ICE helped establish several community-based loan
funds in the early eighties, including the Boston Community Loan Fund and the New Hampshire
Community Loan Fund. In 1985 ICE sponsored the first national conference of community loan funds
and presented a landmark proposal for the 35 participants. The proposal to form an association of
community loan funds was unanimously approved. The following summer, the National Association of
Community Development Loan Funds (later to be known as NCCA) was born. For the first three years,
ICE provided the NACDLF with a staff person and an office at ICE's home base in Greenfield,
Massachusetts.
Today, community investing is recognized as the level of socially
responsible investing with the most direct impact. ICE's current loans still resonate with the
organization's mission-driven approach to financing. Included in its current portfolio is financing
for permanently affordable housing for low-income people in urban areas such as Albuquerque, New
Mexico; and Washington D.C.; in rural sections of Maine; and for migrant farm workers in
California. There are loans to community nonprofits responding to human services needs through
operation of homeless shelters, food coops, and women's shelters. Another loan for funding of a
mobile meat-processing unit for farmers in the Pacific Northwest Islands reflects efforts to
support recapture of wealth within communities.
Community development loan funds can
represent the only source of financing as well as critically needed leverage financing for
community organizations. Loan funds develop long-term relationships with borrowers and offer
greater flexibility than mainstream lenders. To ensure the success of borrowers' projects,
technical assistance is frequently provided.
ICE's Revolving Loan Fund has received over 1,000
individual investments, allowing ICE to lend over $41 million to CLTs and nonprofits nationwide.
The RLF has met all obligations to its lenders over the past 25 years, and no investors have ever
lost funds. On the borrower side, the RLF has written off less than one percent, net, of recovery
of the total $41,330,437 in financing to CLTs and nonprofits. Currently ICE's Revolving Loan Fund
is capitalized at $13 million and has 400 investors who have partnered with it to create lasting
change.
For more information about the fund and how to invest, contact:
Susan Stern,
Institute for Community Economics,
57 School Street, Springfield, MA 01105.
Phone:
(413) 746-8660, ext. 113.
Web: http://www.iceclt.org
Email: susan@iceclt.org
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