- change ups
Fund Has Many Happy Returns
“Here’s what happened to my money. It went to City Vision, which immediately got a federal match of 100 percent, an instant double, and then leveraged those funds into about $45,000 worth of (home) mortgages,” wrote Edwards in an e-mail message.
“As an ‘investor,’ I couldn’t be more pleased with that kind of return,” he added, “even if it is philanthropic rather than for my own personal wealth.”
In all, 56 local business people each invested $2,000 in SVP, which gave GRCF $112,000 to fill grants to four nonprofit organizations. The investment Edwards made was part of a $26,000 grant that City Vision got and put into its Individual Development Accounts (IDA), a program that helps low-income homebuyers boost the amount of their down payments.
Earl James, executive director and co-founder of City Vision, said budding homebuyers can deposit up to $1,000 into their IDA, and his organization matches their down payments on a 3-to-1 ratio.
“Then they have the potential of going into a mortgage situation with $4,000 as their down payment,” he said.
A grant from the U.S. Department of Health and Human Services allows City Vision to match on a one-to-one basis the $1,000 a homebuyer has in his or her IDA. Add to that the $2,000 from Edwards and a homebuyer has $4,000 to put down on a mortgage.
“All of Brian’s money went to a participant’s match,” said James. “The participant that I discussed with the social venture group closed last week on a house with a mortgage value between $70,000 and $72,000.”
But more noteworthy than the return on the Edwards’ donation was the almost unreal yield that City Vision got from the $26,000 SVP grant and all the HHS matches. All totaled, City Vision leveraged those sources into a mind-boggling $1.26 million worth of homes.
“Including their amount of giving, times the federal match piece, times the mortgage rate of $70,000, and that gets us to the $1.2 million,” said James.
Down payments on mortgages, however, aren’t the only financial aid City Vision provides. The organization also helps with tuition for post-secondary education and with capital for a small business.
“Home ownership, by far, is the asset of choice,” said James.
The IDA program is a five-year venture in its second year that has a goal of serving 400 families in western Michigan. Most will be residents of Grand Rapids, though, where the majority of City Vision program centers are located.
James, Dave Allen and Jay Van Groningen started City Vision in 1998 with help from Roosevelt Park Ministries, His Place, Oakdale Neighbors, Vinedresser, and an active group of black pastors. City Vision offers a handful of services to about 40 local nonprofits and churches.
“We sort of do a supplier quality assurance in four of five areas,” said James.
More information on City Vision can be found at its Web site, www.cityvisioninc.org.
The three other SVP grants went to Perspective 21, CampFire USA’s Community Family Club, and the Pediatric and Adult Asthma Network. Returns on the initial round of investments were revealed at a recently held dividend session.
“People told us they often have more money than time. But in our early focus groups, they said that while they might be pressed for time, they care deeply about the impact of their charitable contributions,” said Lon Swartzentruber, GRCF donor relations director.
GRCF started the SVP fund to help new philanthropists invest wisely in areas of concern to them. The foundation styled its program after one begun by journalist-turned-innovative-businessman Paul Brainerd, creator of the Aldus Corp. GRCF will announce its second round of SVP grants this spring.