Foundation makes rare ‘impact investment’ in local project

Erica E. Phillips

Philanthropic organizations typically invest their endowment funds in traditional vehicles — stocks, bonds, hedge funds, real estate — that offer high returns with as little risk as possible, and they use the earnings from those investments to make grants.

But in recent years, foundations have begun exploring what’s known as “impact investing,” where endowment funds are invested in entities that align more closely with the causes the foundation supports. 

It can be hard to do. Only 5% of foundations’ assets are currently devoted to this kind of investing, according to a recent study by the consultancy Bridgespan Social Impact.

“In the world of philanthropy, you have a lot of foundations talking about it. Few are doing it,” said Sheena Strawter-Anthony, director of impact investment strategy at the William Caspar Graustein Memorial Fund in Hamden. The Graustein Fund is working to make 100% of its investments “mission-aligned,” she said.

Earlier this year, the foundation took an important step toward that goal by providing $10 million in financing to a community redevelopment project in New Haven known as ConnCAT Place at Dixwell. The $200 million master-planned development includes 180 units of affordable housing, a child care facility, health care center, spaces for workforce training and education programs, retail and restaurants, a public plaza, performing arts center, greenhouses, offices and more. 

Connecticut Community Outreach Revitalization Program (ConnCORP), the economic development organization leading the project, has spent the last several years seeking community input, acquiring adjacent parcels of land and clearing blighted structures to make way for ConnCAT Place. It is slated to break ground on the development early next month. 

Strawter-Anthony said the loan was structured “with intentionality,” designed to be paid back over a longer term and with a lower interest rate than a typical real estate investment deal. She said she had to force herself to look at the terms in a new and different way, taking into account the broader impact of the investment rather than just the financial returns for her organization. 

“ConnCORP is helping to build wealth in the Dixwell and Newhallville communities,” she said. “The loan was structured in a way to support the community impact of the project.”

Dixwell and Newhallville are historically Black neighborhoods that have experienced high rates of poverty over the past 70 years, and much of the block that will house the new development had fallen into disrepair. In community meetings, residents told ConnCORP leaders they wanted to revitalize the neighborhood, have a place that felt safe, with high-quality early childhood care and education, where they could buy fresh food and gather for events. 

Erik Clemons, chief executive of ConnCORP and ConnCAT — the education and workforce training organization around which the development was designed — said he sees the project as an extension of the work ConnCAT has already done, training hundreds of local residents for jobs in New Haven and the surrounding area.  

“I was thinking about what is the next iteration of impact, given that these folks are now walking in the world differently, with a job, with pride, with dignity,” Clemons said. “What can we do next to create a world where they wouldn’t be working poor?”

Clemons said he hadn’t aspired to run an economic development project, “but it was natural calling, given the work I had already done.” ConnCORP launched in 2018, and soon the plans for ConnCAT Place began to take shape. “It was really about: How do we create economic infrastructure, capital formation and wealth generation in a community that quite frankly has been forgotten?”

Strawter-Anthony said she hopes the foundation’s deal with ConnCORP can offer an example to other foundations that want to do more impact investing. 

The financial returns on such deals may not be as strong, but the overall effect is far more powerful, she said. That’s because not only do these investments generate value for the loan recipients, they also redirect philanthropic dollars away from the kinds of for-profit investment vehicles that often extract resources from communities like Dixwell and Newhallville, she said. 

“Most foundations don’t invest their endowments in line with their mission. They can invest in things that are counter to their mission,” Strawter-Anthony said. For example, a foundation with a mission to end poverty might be invested in for-profit companies that don’t paying living wages or offer benefits, she said.

“A lot of the harm in the world has been created through investments,” she said. “When I look at the foundation, I look at us becoming conscious of the harm in our actions and changing the way we behave and our impact on the world overall.”

South Windsor warehouse expansion project pitched

Hanna Snyder Gambini

ASouth Windsor property owner is looking to build a new accessory warehouse for consolidation and expansion of a logistics operations tenant along Sullivan Avenue.

Moores Property Management LLC wants to build a new 32,200-square-foot accessory warehouse on a 4.27-acre property that it owns at 500 Sullivan Ave.

The site contains an existing building used by United Delivery Inc., a family-owned logistics management, product distribution, and warehousing company that has been operating there since 2020. The site was formerly operated by New England Transportation Inc.

United Delivery is currently leasing off-site storage space in multiple buildings around South Windsor, and the new building would limit the need for off-site storage space and transportation between facilities, the application reads. 

The United Delivery facility has roughly 25 employees, which “may increase due to future business growth but is not anticipated to increase immediately with the construction of the warehouse,” the applicants said.

Plans for the expansion project include building two new loading docks, adding to the existing building’s nine active loading bays, and seven trailer parking spaces, all of which will remain. Additional parking spaces for employees will also be added to the site.

United Delivery office space in the existing building will be relocated to the new warehouse, the application said.

Members of the development team incluse PDS Engineering and Construction of  Bloomfield as general contractor; Design Professionals Inc., of South Windsor for civil engineering, planning, landscape architecture and land surveying; F.A. Hesketh & Associates Inc., of East Granby for traffic engineering; and Ian T. Cole, of Middletown, for wetlands and environmental work. 

White House calls for stronger labor standards

Kathryn Moody

President Joe Biden signed an executive order Sept. 6 calling on federal agencies to adopt a series of “high-road labor standards,” according to an announcement from the White House, continuing the administration’s push toward expanding the federal workforce while pushing certain standards.

The announcement calls the move the “first in history to specify a clear list of labor standards that all Federal agencies should look to prioritize.”

The federal government considers itself a “model employer,” in that private sector employers often follow suit when it moves to change standards. The “Good Jobs Executive Order” calls upon agencies to adopt a number of standards around wages, union organizing, workforce development and workplace safety.

Among those standards, agencies are directed to prioritize project labor agreements, community benefits agreements, voluntary union recognition and neutrality in regard to union organizing when such takes place, the announcement said. The EO also directs agencies to “consider incentivizing specific high-wage standards for manufacturing grants,” similar to Davis-Bacon rules for construction jobs, which require contractors to pay workers “no less than the locally prevailing wage,” according to the U.S. Department of Labor.

Associated Builders and Contractors opposed the order, calling it exclusionary and saying it removed competition and favored union builders. 

“The executive order will undermine the efficient and economical delivery of taxpayer-funded infrastructure, clean energy and manufacturing projects and is consistent with the Biden-Harris administration’s politically motivated policy schemes,” said Ben Brubeck, ABC vice president of regulatory, labor and state affairs, in a statement. 

He added he looked forward to reviewing the official text to see if it would be challenged in court.

Indeed, unions do feel the order favors them and their workers, but also other U.S. workers looking to support themselves.

Mark McManus, general president of the United Association of Union Plumbers and Pipefitters, praised the executive order, which Biden signed at his union’s chapter, Local 190, in Ann Arbor, Michigan, on Sept. 6. McManus called Biden, “the most pro-worker and pro-union president,” a title he’s worn with pride.

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“With incentives to strengthen our gold-standard registered apprenticeship programs, to guarantee the rights of all workers to collectively bargain for a better future, and to expand family-sustaining wages for all, this Executive Order will help ensure all Americans have a fair shot at success,” McManus said in a statement.

Apprenticeship rule

Workforce development through registered apprenticeships was also mentioned as a priority for federal agencies — a focus of the Biden administration, which has invested in creating training pipelines and tightening registered apprenticeship standards to ensure the program retains its high quality, leaders previously said.

That apprenticeship rule has come under fire from Republicans, who say the rule will disincentivize apprenticeships due to heavy administrative requirements.

The executive order also states federal agencies should encourage contractors to focus on equitable and fair hiring as well as support workplace safety by prioritizing solid reporting structures.

To that end, the administration has pushed for an extreme heat standard. The Occupational Safety and Health Administration proposed such a rule earlier this summer and will be taking comments until Dec. 30.

The Investing in Good Jobs Task Force is responsible for ensuring these standards are implemented, according to the announcement, and will be co-chaired by the Secretary of Labor, currently Julie Su, who is serving as acting secretary.