YouthBridge to commit 25% of endowment to local investments

Katie ArnoldJP In The News

From the St. Louis Post-Dispatch.

By Jacob Barker

TOWN AND COUNTRY — YouthBridge Community Foundation, a local nonprofit that manages charitable giving funds for individuals and organizations, plans to shift a quarter of its endowment from traditional financial markets to local investments.

“By moving some of our assets out of Wall Street to projects locally, we believe we can still achieve a competitive rate of return” and “a social return at the same time,” said YouthBridge CEO Michael Howard.

By 2025, YouthBridge plans to have about 25% of its endowment funds invested in local causes, a roughly $5 million to $6 million commitment. That’s on top of its normal $2 million or so in annual grants to area nonprofits, an amount it doesn’t expect to change with the new investment strategy. Its annual charitable grants often are aimed at nonprofits that provide services to children and youth, a nod to the foundation’s 1877 beginnings as the German General Protestant Orphan’s Association. It transitioned from operating its own children’s home in Creve Coeur to a community foundation in 2005.

Initially, YouthBridge has committed $250,000 each to locally active nonprofit lenders Justine Petersen and IFF. The two community development financial institutions provide micro loans and other financial services to underserved and low-income homebuyers, businesses and nonprofits.

“This commitment is really above and beyond what we’ve seen and puts YouthBridge at the forefront of social impact investing in St. Louis,” Justine Petersen Chief Operating Officer Sheri Flanagan-Vazquez said in a statement.

Howard said the two nonprofit lenders were an “easy” first choice, but that YouthBridge will be looking for other places to invest its endowment. He acknowledged there may be more risk than traditional securities butsaid community foundations and their donors increasingly want their endowment capital — not just its returns — to be used for good in their own communities.

“There’s a growing level of interest in social impact investing and finding ways to make money locally,” Howard said. “If we’re not willing to take on the additional risk, then who is going to be willing to do it?”