Impact Lending Program

A pioneering philanthropic tool enabling Donor-Advised Funds (DAF) and supporting foundations to make low-interest loans to mission-driven financial institutions serving marginalized communities.

Geographic Scope: United States and Israel

Focus Areas:

• Education
• Environment
• Affordable housing
• Job skills training
• Economic equity
• Nonprofit financing
• Social and racial equity
• Economic opportunity
• Poverty alleviation

Key Characteristics:

• Impact-First Approach: Loans prioritize social impact over financial return
• Loan Structure: Low-interest loans made to intermediary financial institutions
• Repayment: Loans are repaid to DAF/supporting foundation for redeployment to other causes
• Capital Multiplier: Mission-driven financial institutions can loan out money multiple times during the loan term
• Market Focus: Targets "financial deserts" where only predatory lending options exist

Key Statistics (as of 2022-2023):

• Total invested: $35 million (over 3 years)
• Mission-oriented financial groups supported: 16
• Participating DAFs and supporting foundations: 96+ (as of 2022)
• Total deployed: $25+ million (by 2022)

Documented Outcomes from $25M invested (3-year period):

• Nearly 5,000 small business and nonprofit loans made
• 24,600 jobs created or retained
• 4,240 new homes built
• 7 sustainable farmlands purchased

Example Loan Recipients:

• Organic farmer in Chowchilla, CA (truck purchase)
• Black business owner in Oakland (coworking/event space expansion)
• Jewish music school owner in Bay Area (pandemic survival support)

Beneficiary Profile:

• Small business owners
• Solo practitioners
• Mom-and-pop shops
• Underserved communities
• Marginalized populations
• Mission-driven financial institutions

Advantages:

• Allows donors to loan more than they might grant (knowing funds will be returned)
• Accelerates and amplifies philanthropic impact
• Puts idle capital to work while awaiting grant deployment
• Attracts additional capital to mission-driven financial institutions
• Enables wealth-building for disadvantaged populations

Background: Launched during the COVID-19 pandemic to address economic free fall in small business and nonprofit sectors. Founded on Jewish values of tzedakah (caring for the needy), tikkun olam (repairing the world), kehilla (building community), and tzedek (pursuing justice).

How Impact Lending Works

1. Fund Participation: DAF holders and supporting foundations commit funds from their accounts
2. Capital Pooling: The Federation pools money from multiple DAFs and supporting foundations
3. Loan Deployment: Pooled capital is deployed to mission-driven financial institutions as low-interest loans
4. Community Lending: Financial institutions use the capital to provide fair and affordable credit to underserved populations
5. Loan Repayment: Borrowers repay loans; institution repays Federation loan (often with nominal interest)
6. Capital Redeployment: Returned capital is available for new charitable grants or additional impact loans

Required Materials and Process

• Contact Federation for information on DAF/supporting foundation eligibility
• Work with Federation staff to identify mission-aligned impact-first lending opportunities
• Review quarterly reports on lending outcomes and impact metrics

Getting Involved

• Email the Federation or call 415.512.6225 for details on participation
• Available to current DAF holders and supporting foundations
• No minimum investment amount specified