Impact Investment Profile

Investor

Calvert Foundation

Investee

Craft3

Calvert Foundation invests to increase the flow of capital into disadvantaged communities. Craft3 is a nonprofit, non-bank community development financial institution with a mission to strengthen economic, ecological, and family resilience in Pacific Northwest communities of the United States. Calvert Foundation's USD 2 million fixed rate term loan provided capital to Craft3's revolving loan fund, a vehicle which lends to enterprises and individuals making an impact in the community within its target geography.

Investor Targeted Impact

Increase economic opportunity in disadvantaged communities

Investor

Name Calvert Foundation
Investor description Calvert Social Investment Foundation, Inc.'s (Calvert Foundation) mission is to maximize the flow of capital to disadvantaged communities in order to create a more equitable and sustainable society. Calvert Foundation is a nonprofit loan fund and community development financial institution (CDFI) that was incorporated in 1988. To achieve its mission in the U.S. and globally, Calvert Foundation invests in other loan funds, microfinance institutions, affordable housing, and social enterprises. In addition, by creating innovative financial products and services, Calvert Foundation makes it possible for anyone, not just institutions, to invest in financial instruments that directly serve communities.

Investee

Fund/product name Craft3
Manager information Craft3 (formerly Enterprise Cascadia) is a certified nonprofit CDFI headquartered in Ilwaco, WA, with offices in Seattle and Port Angeles, WA and in Astoria and Portland, OR.
Sector Multi-sector
Geography North America - United States (Oregon, Washington)
Asset class Fixed income
Size of fund/product Craft3 manages USD 166 million in total assets. The revolving loan fund has USD 127 million in outstanding loans.
Fund/product description Craft3, created in 1995, strengthens economic, ecological, and family resilience in Pacific Northwest communities by providing loans and business assistance to entrepreneurs, nonprofits, individuals, and others who lack access to traditional financing. The fund has invested USD 208 million in more than 2,200 individuals, businesses, and social and civic ventures that represent new strategies for economic security and ecological health.Craft3 offers four main loan products: 1. Commercial loans, to finance commercial real estate, start-ups and expansions, working capital, acquisitions, inventory, fixtures, equipment, and related business property2. Community development loans, to finance nonprofit organizations engaged in affordable housing, community development projects, healthcare, childcare, environmental conservation, and human services3. Conservation loans, to acquire sensitive lands, restore habitat, and protect water quality 4. Consumer loans, designed to help homeowners upgrade their septic systems and improve their homes' energy efficiencyIn addition, the fund's Indian Country Initiative provides financial products and services to Native American communities. It makes loans to individually-owned Native American businesses, tribal enterprises, tribal governments, and nonprofit organizations to support business startup and expansion, trust land acquisition, and fishing/seafood, forestry, and human services ventures. Calvert Foundation's investment supports all of the fund's loan products except consumer lending. Craft3 has been a Calvert Foundation borrower since 1998.
Motivations for investment Craft3 is one of the leading CDFIs in the Pacific Northwest, with investments in both urban and rural areas. It focuses lending on triple-bottom line enterprises and has a scorecard system to measure the environmental impact of its loan products. Since inception Craft3 has made capital investments and provided services that have created and maintained over 5,100 jobs and has leveraged an additional USD 550 million in investment. Additionally, Craft3 has been particularly innovative in crafting specialized loan products, such as consumer loans for septic improvements and energy efficiency retrofits and loans designed to serve Native American businesses. Craft3 has a strong balance sheet with net assets (or equity) historically over 30 percent of total assets, positive surpluses from operations in 2006-2011, a strong management team, and stable portfolio performance, maintained through the period of economic recession that began in 2008. The fund has a broad range of public and private sector investors and a high historic investment renewal rate, contributing to its solid capital base. For example, in addition to loan program income, the fund manager earns fee income by originating and managing off-balance sheet assets, such as its New Market Tax Credits allocation.

Investment

Instrument Debt - fixed rate term loan
Investment size USD 2 million
Investment term 3 years
Investment impact objectives Calvert Foundation's impact objective is to facilitate increased flow of responsible investment capital to distressed communities with the goal of increasing economic opportunity and well-being.
Social and environmental metrics tracked on investment For its investments in financial services, Calvert Foundation tracks social and environmental performance metrics on its CDFI investees, as well as measuring subsequent impact of these CDFIs on the community. Metrics tracked vary by the CDFI's lending focus. Social and environmental performance metrics, including IRIS metrics (IRIS alignment noted in parentheses) tracked on CDFI investees include:Board of Directors (IRIS aligned - OI1075)Board of Directors: Female (IRIS aligned - OI8118)Board of Directors: Minority/Previously Excluded (IRIS aligned - OI6696)Financed enterprises owned or controlled by womenFinanced enterprises owned or controlled by minoritiesJobs Created (In Financed Enterprises) (IRIS aligned - PI3687)Jobs Maintained (In Financed Enterprises) (IRIS aligned - PI5691)New lending volumeNumber of investments by sector, including: affordable housing, commercial real estate, small and growing businesses, consumer mortgages, community facilities such as schools and health centersPortfolio SizeValue of investments by sectorAdditionally, Craft3 tracks proprietary social and environmental performance metrics based on their lending activities to enterprises. It collects these data annually and publishes them on its Mission Results website as a report card (below). Metrics include:Certified or Sustainably Managed Land Protected (Acres) Local Ownership of Real Property Assets (USD)Low-Income Families Assisted (Number Households)Riparian Zone Habitat Protected/Restored (Linear Feet)Secondary Value-Adding Enterprises Created (Firms)Third-Party Investment Leveraged (USD)Water Diverted from the Waste Stream (Gallons)

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