Earlier this week, an ambitious new philanthropic endeavor dubbed Benefit Chicago was announced by the John D. and Catherine T. MacArthur Foundation, Chicago Community Trust, and the Calvert Foundation. The significant program aims to revitalize Chicago's underserved communities by investing in the businesses and institutions poised to make the biggest positive impact. Here's how it will work:
MacArthur and Chicago Community Trust have respectively donated $50 million and $15 million to the venture, while Calvert plans to raise an additional $50 million by selling Chicago-specific bonds known "Community Investment Notes." These fixed-income securities will mature over a period between one and fifteen years and will pay interest annually. In the meantime, the contents of the Benefit Chicago fund would then be distributed — primarily as small loans — to a number of thoroughly-vetted nonprofits and private companies identified to provide the most social benefit.
The money distributed by Benefit Chicago will not only yield a modest financial returns for investors, but also produce social and environmental benefits in areas that have been historically starved for capital infusion. Known as social impact investing, the practice could yield a diverse array of community dividends in the form of new small businesses, grocery stores, health clinics, affordable housing, transit-oriented real estate developments, educational programs, community gardens, green infrastructure, and sustainability improvements.
According to Benefit Chicago, the unmet need for financial capital investment across the city amounts to more than $100 million. This number could rise as high as $400 million over the next five years as local governments and entities that rely on governmental support face evaporating funding or see their budgets quagmired in legislative gridlock.
With Chicagoans able to purchase one of Benefit Chicago's bonds for as little as $20 online, the fund gives charitably-minded citizens a chance to make a positive, long-term investment in their city's future — however big or small.