Our clients and partners often come to Arabella Advisors for help figuring out how best to use a variety of resources—including both grants and impact investments—to accomplish sustainable impact and needed social change.
Today, we’re pleased to release a case study that describes the innovative work one such partner, the Atlantic Philanthropies, has done to build up health care providers in underserved communities, by using an innovative grant process designed to catalyze subsequent financial investments and help a nonprofit scale sustainably.
As the case study notes, “health care organizations serving low-income communities struggle to attract capital” because traditional investors typically look for less risky places to put their money to work. This often “makes it extremely challenging for these organizations to properly serve the health care needs of community residents.”
Atlantic sought to address this challenge—to get more capital flowing to health care providers serving communities of need—by supporting a community development financial institution called Vital Healthcare Capital (V-Cap), whose mission is to support such health care providers.
Working closely with the impact investing team at Arabella Advisors, Atlantic provided capital in the form of a grant, the terms of which were designed to help V-Cap develop in ways that would de-risk further investment from other sources. The grant enabled V-Cap to build both capacity and sustainability, helping it become more attractive to other investors and creating a flow of capital that can sustainably feed the community health care organizations that V-Cap in turn serves. Using our combined experience in both grant making and impact investing, the Arabella team worked with Atlantic to design and manage a customized grant process through which “V-Cap was able to grow from a small organization to one with a $30 million pool of capital in just three years.”
Atlantic’s effort in this case provides useful lessons for any funder seeking to deploy catalytic capital and to use innovative financing mechanisms to effect sustained change for those who need it most.