Today, Meyer's Housing Opportunities portfolio released a new Request for Proposals to support housing advocacy efforts around the state.
We think of "advocacy" pretty broadly, including community organizing and mobilization, policy analysis and research, focused communications and education around housing issues, as well as targeted approaches to achieve specific policy goals. Proposals under this RFP can address local, regional and/or statewide issues but must have a strong connection to affordable housing.
This RFP will focus on two tracks: Campaign Leaders, for work that is focused on a clear policy or systems change goal and is led by a strong coalition of partners, and Advocacy Mobilizers, which may be more broad and less focused on one specific issue or for the early stages in mobilizing support for more affordable housing opportunities.
For either track, strong proposals will reflect a strong commitment to diversity, equity and inclusion; a clear sense of the issues to be addressed and obstacles to be overcome; and some track record doing the kind of work proposed. We strongly encourage proposals that bring in voices and collaborators that may not have been part of affordable housing advocacy in the past.
Those awarded grants under this RFP will be invited to participate in one or more convenings and will have a chance to network with and learn from other grantees in the cohort.
An application under this RFP does not preclude organizations from submitting proposals for other Meyer funding opportunities and grantseekers may apply to this RFP regardless of any other active Meyer grants.
Two information sessions are scheduled to explain the RFP in detail and answer questions. Register to attend a session at 10 a.m. on Jan. 29 or 3 p.m. on Feb. 5. Register online here.
Proposals will be accepted online (via grantis.mmt.org) until Feb. 26, 2019. Funding decisions are expected in late spring, with grant payments going out shortly thereafter. Make sure you're signed up for our Housing newsletter to stay current on this and other funding opportunities!
Campaign Leaders:grants intended for focused and targeted efforts with a clear policy or systems change goal led by a strong coalition of partners with a credible plan to succeed. Maximum of $75,000 available per year, for a total of $150,000 over two years.
Advocacy Mobilizers:for organizing efforts that may be more broad-based and less focused on one issue, or in an earlier stage of mobilizing support for more affordable housing opportunities. Maximum of $40,000 available per year, for total of $80,000 over two years.
Final award decisions are expected in May 2019, with first-year payments released in June 2019.
Meyer staff will present an overview of the RFP and be available to answer questions at two information sessions:
As most folks packed up their belongings and headed home after the Philanthropy Northwest annual conference, I boarded a bus with several other PNW members and staff and headed to Jerome, Idaho to visit the Minidoka National Historic Site and view what’s left of the former incarceration camp that held my family, along with 13,000 other people of Japanese ancestry during World War II.
As you step onto the ashy soil of the high desert plain, it’s hard not to notice how little of the camp is left and the expansive scale that it once occupied. Originally 33,000 acres, the camp became the seventh largest city in Idaho at the time. I try to imagine what life would’ve been like behind these barbed wires and underneath the ever-present gaze from the guard tower. I think about how terrified my grandmother must have been, younger than I am now with two young children and pregnant with a third, having just lost everything and now forced to live in a shabby barrack with several other families and no idea about what will happen next. Everything unknown.
I grew up with stories of my family just trying to maintain as much a sense of community as possible, and I can feel that when walking along the baseball field or stepping into the fire stations at Minidoka. Scanning photos of the makeshift holiday celebrations and the community gardens, knowing how my family had to completely rebuild their lives after leaving the camps, the resiliency of the Japanese American community is not lost on me. I feel the strength of my relatives under the face of oppression in the core of my being and in my motivation for supporting communities of color in this work.
My grandmother was vocal about sharing her experience at Minidoka so that it would never happen again. As a yonsei, fourth generation Japanese American, I also know that the trauma of this experience lasts for generations. As I continue to grow within the field of philanthropy, I carry my family’s strength and experience with me and I move towards the ways that philanthropy can play an active role in fighting the oppression of communities of color by centering them in our work, following their lead, elevating their voices and supporting their work. Because “never again” is right now.
A stone monument near the entrance of Minidoka Relocation Center, reminding visitors of “what can happen when other factors supersede the constitutional rights guaranteed to all citizens and aliens living in this country.”
Manufactured home repairs make a real difference in rural Oregon
Turns out, Fred Meyer was right. When he established what would become the Meyer Memorial Trust, Mr. Meyer offered this insight: "With thoughtful giving, even small sums may accomplish great purposes."
So it might not come as a surprise that just a few thousand dollars can sometimes make a huge difference for people facing unsafe housing conditions, shockingly high utility costs or even homelessness.
That's one takeaway from the Year One (interim) report recently delivered by an independent evaluator Meyer engaged to analyze the impact of grants we made in 2017 to nine organizations helping to make crucial repairs and other important upgrades to manufactured homes in rural Oregon.
Why Manufactured Housing?
Meyer has been actively engaged in issues around manufactured housing for about a decade. We've supported creative and impactful work to convert investor-owned parks to resident-owned cooperatives; funded efforts to pilot affordable replacement of older, substandard homes; and more than once wrestled with issues around repairing homes. We have been fortunate to work with a wide array of partners committed to improving conditions for people in manufactured homes, including CASA of Oregon, NeighborWorks Umpqua, St. Vincent de Paul of Lane County, Network for Oregon Affordable Housing, the state of Oregon, Energy Trust of Oregon, Craft3, and USDA Rural Development, among others.
All this work is driven by the realization that manufactured homes are a crucial slice of currently affordable housing in Oregon and often the only affordable homeownership option for many people, especially in rural Oregon. About 140,000 households across the state live in manufactured homes, and nearly half those homes are at least 40 years old. Not every older manufactured home is in dire shape, but many older homes are well past their best days (particularly those built before the federal code updates of 1976 raised the bar for the initial quality and durability of new homes). Residents sometimes are living with structural defects, health hazards, terrible energy efficiency and even major safety issues.
Ideally, many of these homes would be retired and replaced by new, energy-efficient homes, but not everyone is in a position to afford such an upgrade, even with new layered subsidies some of our partners are piloting.
This urgent and ongoing need motivated our Request for Proposals in late 2016 focused on crucial repairs (including energy- and accessibility-related upgrades). We directed this funding to programs serving rural Oregon, both because we felt much of the state's need was outside urban areas and because smaller communities typically lack the local resources that could fund these repairs.
Looking beyond the two-year grants Meyer funded, we wanted to be able to show other funders (public and private) that continuing and expanding this work was impactful and a prudent use of scarce housing resources. To that end, we hired an independent evaluator (Chari Smith of Evaluation Into Action) to help us design and carry out a cross-site evaluation that could analyze and summarize what we learned from the nine projects we funded. We recently received the Year One report, which summarizes early results.
Highlights from the Year One Report
Evidence the evaluator collected from the program staff and from the people who were helped validated Meyer's sense that this work addresses important housing issues and made a material difference in the lives of people served. A total of 107 home repairs were completed by the nine grantees. Roughly half of those served completed and returned detailed surveys about their experience with the repairs done. Of these:
72 percent reported the repairs will help them continue to live in their home longer (by addressing potentially serious issues that could jeopardize their ability to stay there); 90 percent felt that the general comfort level of their home was improved.
70 percent felt their home was made safer by the repairs.
64 percent reported the repairs would help improve their health.
74 percent saw increased energy efficiency as a result of the repairs.
The improvements were targeted to people who had few other options for making these kinds of repairs. Nearly all the people helped live on an annual income of less than $30,000, two-thirds are seniors, and more than half the households have one or more members with a disability.
"For me, this process was lifesaving. Without your help, I can't imagine how things would be. I feel much safer and am so thankful you have programs like this for me."
"I was able to wash dishes, do my laundry, take a shower or bath. I can say that I never realized how much having hot water means in everyday living. … I live on a fixed income, and I could not have afforded to get a new hot water heater without this program."
The nine projects will wrap up their two years of Meyer funding in early 2019, and next fall we'll share the final report summarizing what we learned and what other funders might take away from this work. Some early thoughts on next steps we would highlight for our partners:
There is a real need for more data, specifically on the health impacts of improvements to homes with serious health and safety hazards. This is an area where health partners such as coordinated care organizations could target some research connecting longer-term results of repairs with health outcomes and could lead to a strong evidence-based argument for funding repairs like this. Preventing falls, addressing respiratory issues such as mold, and generally supporting the ability of people to age in place (often in tight-knit and nurturing communities) seems likely to be well worth the relatively modest cost.
Flexibility is an important consideration for other funders. All of the projects funded used some federal and/or state funding to help with these repairs, but those sources come with restrictions that can exclude homes (or particular issues) that urgently need attention. We heard loud and clear from our partners that the flexibility of Meyer funding was helpful in both leveraging other funds and filling gaps some programs can't.
Organizational capacity can be a big issue for those delivering these repairs. Stable, multi-year funding is really essential to allowing organizations to make the investments in personnel, training and other resources to consistently serve this niche, and we all should be alert for opportunities to scale up and increase this capacity. Every grantee spoke of long waiting lists and unmet needs they could address with more funding. Steady and reliable funding could also help with building a cadre of reliable contractors ready and able to do repairs, which was an issue in some parts of the state.
We look forward to sharing this work and continuing to partner with the determined and dedicated partners around the state committed to sustaining and improving this affordable housing option.
Funding statewide stability: Housing Opportunities portfolio awards $5.86 million in grants
Through our Annual Funding Opportunity, this year the Housing Opportunities portfolio saw many of our partners propose innovative solutions to address some of the most complex housing challenges in Oregon. In surveying the awards, grit and creativity rise to the top as two of the most prominent themes of the efforts of this year's 33 grant recipients — taken from 78 applicants — receiving awards totaling $5.86 million.
And, yes, like previous years, projects funded in 2018 span the entirety of our state, from urban to rural regions and include large and small organizations focusing on single efforts and group collaborations. And a few organizations were funded by Meyer for the first time.
Each year, we seek grant proposals that will move us closer to our vision of safe, affordable, long-term housing for all Oregonians. Knowing that our funds are limited, we look for strategic investments that reflect an understanding of racist and discriminatory housing practices that have created disparities and work to eliminate those imbalances through collaboration, systems-level change and resource alignment. That's the joy and challenge of working within this portfolio. Needs make themselves known and we respond. It's our job to find them.
Thankfully, our partners make that easy.
We'll take a closer look at two topics that gained traction in this year's batch: replacement of substandard manufactured housing and providing housing for formerly incarcerated people.
When Meyer established its initial housing goals five years ago, preservation of rural manufactured housing was one of our key strategies. We knew that manufactured housing is a primary source of affordable housing in many rural Oregon communities. A significant percentage of those homes were built before 1980, and many are in significant disrepair, forcing families to live in unstable and unhealthy environments and pay a significant portion of their limited incomes on utility costs. Our partners labored for years to piece together the puzzle of resources needed to replace these substandard homes at a price families could afford.
Four proposals funded in this batch focus on replacing dilapidated mobile homes. Each proposal comes at it from a unique angle, bringing expertise and connections to address part of the issue. For example, we've been working with Community and Shelter Assistance of Oregon on housing issues for a number of years. This year, CASA of Oregon received a two-year grant to fund a replacement strategy manager position that will both manage and document the ambitious collaboration happening at a resident-owned cooperative park in southern Oregon.
That means fewer repairs, lower energy bills and healthier homes. Better homes allow families to focus more energy on career, education and family goals. Families will also feel empowered because they'll be living in new homes that can be preserved for the next generation.
We at Meyer are even more buoyed by the long-term ripple effect this model may one day achieve.
A critical component of the newly funded position at CASA of Oregon is to memorialize every phase of the process so that other organizations throughout the state can reproduce and adapt its processes to fit their needs and unique circumstances. It's thrilling to imagine the number of new homes for low-income individuals and families, immigrants and elderly people that may emerge from this project.
Three other proposals in this batch are also immersed in manufactured housing. When viewed together, the collective work is poised to make big strides that can address the thorny issues around manufactured housing replacement.
Neighborhood Economic Development Corporation has engaged in a range of homeownership counseling services, such as financial capacity building, matched savings accounts, reverse mortgages and foreclosure counseling. Increasingly, it was seeing owners of manufactured housing coming in with requests but found it was ill-equipped to serve them because of distinct differences inherent in manufactured housing. Meyer's grant will support NEDCO staff focused on manufactured housing education and counseling services over two years.
Craft3 received a two-year grant to pilot a funding model with the Energy Trust of Oregon to replace aging and unsafe manufactured homes in southern Oregon with healthy, energy-efficient models, helping low- and moderate-income homeowners with long-term housing stability.
Meyer supported St. Vincent de Paul Society of Lane County to preserve needed affordable housing at Saginaw Mobile Home Park. With many park homes deemed unlivable, the grant will help to replace existing single-wide manufactured homes with new, energy-efficient models and improve the health, safety and long-term viability of the park.
We also saw breakthrough work this year from Sponsors, which provides transitional and long-term housing services to previously incarcerated individuals, for whom firm grounding in the housing market has always proven elusive. The Sponsors grant will staff and support a multi-sector collaborative integrating comprehensive case management and parole and probation supervision support with permanent supportive housing for the prison re-entry population in the Lane county area.
This level of assistance is essential. Individuals released from prison often can't compete for housing in the marketplace for numerous reasons: a prison record, inadequate rental history, lack of funds, the absence of a job and so on. Yet housing is the most stabilizing factor in a person's life and provides a crucial platform for employment, education and health.
Sponsors works directly with Homes for Good, which is familiar with supporting high needs populations, to ensure a holistic approach to property management and solving housing disputes in an equitable way before resorting to evictions. The pilot was extremely successful, achieving a one-year housing stability rate of 87 percent and a one-year incarceration recidivism rate of only 2.4 percent. Recent analysis conducted by the Oregon Criminal Justice Commission found that the one-year felony re-conviction rate among residents at one of the Homes for Good sites with Sponsors was 60 percent lower than the Oregon state baseline.
Sponsors has been working for years to make housing less daunting to this vulnerable population. The rest of us are just catching up to their good work.
We applaud our partners in the field — including Sponsors, CASA of Oregon and dozens of others — that remain committed to solving some of the hardest issues in affordable housing and breaking down barriers to equity that have likely been in place for decades, possibly generations. It is only through our partners' work that Meyer will see strides toward our mission of an equitable and flourishing Oregon.
A full list of the grants in this year's Annual Funding Opportunity batch can be found here.
This summer Meyer challenged Oregon experts on innovative housing design, construction and finance to think big: Bring us your best ideas to create 1 million months of affordable housing for as little public subsidy as possible.
Our 1 Million Months Challenge RFP elicited 18 proposals from teams around the state that brought fresh thinking to the basic thrust of our question: How can communities help many more people into housing that's suitable and affordable, given current levels of funding?
We are glad to report that a first look through the proposals validates our hope that there are promising, untested approaches that might well be worth trying. Those who submitted concepts in that first round that seem most impactful and innovative will be invited to submit more detailed full proposals this fall, with funding decisions announced in January 2019.
We look forward to sharing what emerges from this work with you and getting your thoughts on how to channel and support the creativity people have brought to it!
Affordable Housing Initiative: Changing the statewide conversation around housing issues
Meyer's efforts to help better inform and align work around affordable housing in Oregon are a good example of how philanthropic funders can deepen their impact. A recently completed evaluation of 2017 efforts under our Affordable Housing Initiative (AHI) describes the effectiveness, results, limitations and lessons learned from AHI grants related to advocacy, policy and systems change.
Kristina Smock Consulting prepared the evaluation based on a review of grantees' report documents, interviews with key partners involved in affordable housing and related work, and discussions with Meyer staff.
Meyer began the Affordable Housing Initiative in 2008 in part because we recognized that housing is an essential foundation for thriving families and equitable communities, and we wanted to engage in a more focused and systems-based way with partners working on housing issues. In recent years the statewide shortage of affordable housing (even for people working full time), the vulnerability of low-income households to eviction and a rise in homelessness have become front-page issues.
Meyer always understood that dollar-wise we are a small part of the puzzle when it comes to addressing those issues and that helping inform and influence public policy and larger systems issues are where we can make the most difference.
So how did that work out last year? The full report is worth reading, but we think key takeaways include:
Foundations and philanthropic funders clearly can support important policy and advocacy efforts without running afoul of legal constraints on lobbying.
Targeted grants have successfully elevated and amplified the voices of low-income Oregonians most affected by housing issues, including people of color and culturally specific organizations.
There are longer-term and more immediate and tangible targets in the area of policy and systems-change and it's important to work on both tracks.
Meyer-supported housing advocacy saw real wins in 2017, including a commitment from the state of Oregon of an additional $150 million for affordable housing and new policy initiatives from the state around preservation and manufactured housing. At the local level, several Oregon cities adopted construction excise taxes to support affordable housing and are engaged in lively debates about reducing unnecessary land use and zoning barriers to housing development. Stronger tenant protections and reform of the mortgage interest deduction fell just short in the Legislature, but both of those issues (and the advocates urging positive change) will surely be back.
Meyer also funded several collaborative projects across the state attempting to better align and coordinate housing and services, including areas such as health care, diverting families from foster care and early learning.
The report also highlights some of the grass-roots work Meyer has supported to help mobilize, organize and connect specific communities suffering most from the state's lack of affordable housing, such as Community Alliance of Tenants, Immigrant and Refugee Community Organization, Unite Oregon and the Urban League of Portland.
Looking forward, we take to heart some of the lessons and challenges you'll see in the report:
Strengthening advocacy is a long-term project: doing it right requires a sustained, multi-year commitment and reasonable expectations about the pace of change and what "outcomes" can be easily documented. What we're really trying to build is a durable and effective constituency around the state to support affordable housing issues emerging from different communities.
Aligning systems is easier said than done, and we're still in a learning mode about the best ways to support collaboration across silos, re-structure incentives and overcome barriers to sharing data, resources and power.
External/environmental conditions matter: despite our efforts, the steep rise in housing costs and changes in federal policy make this work (and opportunities for leverage and collaboration) even more urgent.
Research and evaluation are important in this work: understanding what kind of data and evidence motivates decision-makers and funding it is essential to effective advocacy!
Meyer should be alert to opportunities to collaborate more with other funders; while advocacy can be a touchy or intimidating area for some organizations, more funders are hearing urgent messages around housing issues from their own stakeholders and we can do more to find areas where our priorities overlap with others.
As the Affordable Housing Initiative's current iteration wraps up in 2019, we expect to share more evaluation and reflection on the past five years and how that shapes Meyer housing efforts going forward. As always, we welcome your thoughts and suggestions on how we can be more effective and responsive partners!
Last year, Oregon's Point in Time Count recorded that Native Americans are significantly overrepresented in Oregon's homeless population and the least likely to be sheltered of any community counted. Indigenous communities are facing substantial housing disparities in our state and we need to do more. As Meyer continues to work toward our mission of a flourishing and equitable Oregon, the Housing Opportunities portfolio seeks to understand the unique challenges that face our indigenous communities and what we can do to better serve them.
Although Meyer has funded Native organizations that work on affordable housing, such as the Native American Youth and Family Center (NAYA), until recently we had never funded the efforts of Tribal Nations to house their members. Meyer's housing portfolio is committed to building lasting relationships with tribes in order to partner with them in their housing priorities, educate ourselves about Native housing issues and advocacy priorities, and understand the challenges of housing development and homeownership that many tribes face.
Earlier this summer, Meyer collaborated with the Cow Creek Band of Umpqua Tribe of Indians to convene a group of foundations and tribal housing representatives from across Oregon for a roundtable discussion about how philanthropy can support the ongoing housing work of tribes across the state. As a newcomer to the sector, it was intriguing to hear how disconnected many tribes felt from philanthropy as a whole. One person stated the impression that tribes were not eligible to apply for philanthropic support. It was clear that foundations must do more than just harbor the idea of engaging with tribal entities: we must actively work to earn a relationship of trust, respect and partnership.
The Housing Opportunities portfolio is making strides in our journey to support our Native communities, and the convening was just a start. In 2017, we joined the Northwest Indian Housing Association as an affiliate member and have attended several quarterly meetings around the Pacific Northwest. We continue to visit directly with tribal governments and housing departments to build relationships and understand their specific priorities. As a result of this focus, we have developed deeper connections and pathways of communications with tribes and began making grants to tribal housing entities: The Klamath Tribes through our Affordable Housing Initiative Systems Alignment RFP in 2017 and capital funding to the Confederated Tribes of Siletz Indians in 2018. We are so honored to have supported these projects, but we still have a long way to go to strengthen our relationships with tribes across the region and we are ready to learn.
Most nonprofit organizations see foundations as only a source of grants. But foundations have another important, and lesser known, tool for helping organizations with a charitable purpose: Program-Related Investments (PRIs).
Defined in the U.S. tax code, PRIs are investments — including below market-rate loans, guarantees, linked deposits or equity investments — made primarily for an exempt or charitable purpose and not for investment return. They were initiated by the Ford Foundation and MacArthur Foundation in the 1960s, as an alternative way to invest in social change while earning a modest return. Like grants, PRIs count as qualifying distributions toward the 5 percent payout a private foundation is required to make to maintain its tax-exempt status.
What role do PRIs play for nonprofits and for foundations? After spending some time to identify the characteristics that distinguish PRIs from other impact investment tools, I'll explore the reasons why PRIs continue to be a useful tool supporting social change.
The Investment Continuum
Potential for return is a key characteristic often used to distinguish the range of investments a foundation or social investor may make. At the low end of the return continuum are those investments that have no expected return — grants, in other words. In the middle are a range of PRI options earning below-market returns, and at the high end are more traditional investments earning market rates, such as public and private equity. All come under the heading of mission-related investments because they are made by mission-based organizations, such as foundations.
"Impact investments," another common term, tends to be used to describe a range of investment in companies, organizations and funds while seeking social or environmental impacts alongside financial return. Impact investors are generally seen as broader than foundations and may include wealthy individuals and institutional investors.
As the field of impact investing has evolved in recent years, the push for greater financial return has often overshadowed social and environmental returns. "Too many impact investors have predefined expectations of financial return that are both too high and too short term," wrote the authors of Marginalized Returns, a Fall 2017 article in the Stanford Social Innovation Review, called for a "shift from the false binary of grants with no financial-return expectations, on the one hand, and investments seeking net-15-percent-or-greater return, on the other." The solution? A call for philanthropists and donors to deploy more long-term funding in the form of program-related investments — in essence, refocusing on social impact with lower financial returns.
Meyer's PRI practice
Over the years, Meyer Memorial Trust has completed more than fifty PRIs, and almost all were below-market loans, sometimes coupled with a grant. We've completed both direct PRIs to specific nonprofits and projects and PRIs to intermediaries, such as Community Development FInancial Institutions, that will re-lend to customers. Some examples of PRI loans from Meyer's Award Database are:
Portland Housing Center - $400,000 (2015) - To increase outreach to underserved homebuyers and to invest in a revolving loan fund for downpayment assistance.
Cascadia Behavioral Health - $500,000 - To support a project with affordable housing and an integrated health clinic offering mental health, addiction services and primary care
Craft3 - $4,000,000 (2011) - To establish a loan fund for land trusts to acquire land and secure conservation easements.
In our PRI work, Meyer has used the same program staff to process PRIs and grants, and Meyer typically counts PRIs under its payout budget. By contrast, the market-rate investments are more typically made using foundation corpus funds and lead by investment staff.
Select foundations, including The Heron Foundation, have chosen to remove the division between the investing and the grantmaking sides of the business. In 2011, Heron went "all in" to deploy all of its capital — financial, human knowledge and social — on its mission. One team with wide-ranging skills of financial analysis, investing, research and community-building work in concert to make all investments.
Meyer's functions are not this integrated. We continue to explore intersections of program and investment, and we added a full-time Director of Mission Related Investing to our investment team in 2017. Through our investment team, we are exploring mission-related investments that are expected to earn a market-rate return. Some of these directly connect with and complement Meyer's programmatic priorities, and program staff are engaging in those nexus points.
As of the end of August, 2018, Meyer has $15.6 million invested in PRIs, as well as an active loan guarantee. Although we have paused in making new PRI investments through our recently restructured grant programs, we continue to have a hands-on approach with our 15 outstanding PRIs. Specifically, we have been increasing the duration, flexibility and impact of some of our investments in intermediaries, allowing us to continue to keep dollars circulating in support of mission-aligned organizations and work without impacting our payout. In addition, we are contributing dollars to a pooled philanthropic investment fund alongside other funders, providing opportunities for leverage and efficiencies for both recipients and funders.
Why take on a "Mean Grant"?
Because PRI loans are expected to be repaid, some in the nonprofit field have labeled them "mean grants." That name belies some challenging truths behind PRIs. First, they require a different relationship between the foundation and the PRI recipient. Financial analysis and underwriting can feel awkward when the organization is used to having a grant relationship with a foundation. The organization's board of directors may struggle to understand the different relationship that is being established in a PRI versus a grant and feel intimidated by the PRI documents. There is also pressure to perform, typically reflected in financial covenants.
Structurally, PRIs don't fit every capital need an organization may have. Some projects need a line of credit structure, allowing funds to be drawn down as needed. Many foundations, including Meyer, don't have the bandwidth to manage a letter of credit structure and instead have all the PRI paid out at once. Additionally, foundations tend to invest in shorter projects (1-5 or 7 years) and are not well structured to tie up assets for a 20- or 30-year mortgage in the way a traditional bank lender might. Foundations can also be notoriously slow in processing PRI and grant applications. In a quickly changing market where capital is needed quickly, PRIs are not a great fit.
Despite these challenges, PRIs can still be useful tools for many organizations working for social change. Most foundations make PRIs at higher amounts than grants, so they can play a meaningful part in project financing. As below-market investments, PRIs often have an attractive interest rate (1.5 percent- 3 percent). When coupled with more traditional commercial loans, PRIs can create a lower blended interest rate and significantly lower the costs of capital. Often, they also serve as critical bridge funding in early stages of a project, before an entity may meet the underwriting standards for commercial financing. PRIs can help an organization build a credit history or entice traditional lenders with a guarantee.
From the perspective of the foundation, PRIs also serve many purposes:
PRIs can complement grantmaking. If a project has a revenue stream that can be used for debt service, a PRI can make sense and be another tool for supporting social impact work.
By earning a below-market return, PRIs stretch the foundation's corpus to allow for more resources toward mission and social change. By our calculations, PRIs have allowed Meyer to grow the corpus by $25 million in the last few decades.
PRIs can buffer the foundation's market-rate investments. During the Great Recession of 2008-14, PRIs were, for some quarters, the second best performing asset class for Meyer Memorial Trust.
PRIs allow an easier way to invest in a broader range of entities, including for-profit corporations that advance its social goals. Meyer made its first PRI to a for-profit entity that developed a biomass system using waste wood to heat public buildings in Harney County.
When done in larger amounts, PRIs serve as an efficient way to meet a foundation's payout.
Despite some challenges posed by PRIs, they serve an important role by being a flexible, capacity-building tool for mission-related investments for social change. Many private and public foundations are wading into the PRI space, either by experimenting with a few solid PRI candidates or launching more robust programs. It's safe to say that PRIs will continue to be a critical tool for philanthropy and social impact well into the future.
Cascadia Behavioral Healthcare's Garlington Campus in NE Portland is home to the Garlington Health Center, an integrated health clinic offering primary care, mental health and addiction services; and Garlington Place, a 52-unit affordable housing complex.
Meyer sets lofty housing target: the “1 Million Month Challenge”
Meyer will select a small number of projects to develop innovative approaches to housing affordability in Oregon, with initial grants of up to $125,000 available early in 2019 and potential follow-on grants in 2020 to further develop the pilots and broadly share results of the work.
Defining the problem
Meyer prioritizes stable, safe and affordable housing as one foundation of a more equitable Oregon. A shortage of housing generally has driven up rents and home prices across the state, and for those unable to earn enough to pay for even very basic housing without help, the consequences can be life-altering. A growing body of research shows that housing instability contributes directly to poor performance in school, difficulties getting and keeping a good job, and poor health outcomes.
Our tax code and social policies invest billions into housing in the form of property tax deductions (for mortgage interest and property taxes) that mostly benefit affluent households. For poor people, people with disabilities and chronic illnesses, and people of color, public investment (outside of prisons and jails) has been rather less lavish.
Even at that, publicly subsidized affordable housing has long been under intense scrutiny around cost. Hardly a week passes without a new article or news segment challenging the ostensibly high cost of new affordable housing. The urgency behind that concern is understandable, as the gap continues to grow between the demand for affordable housing and the public investment necessary to meet the need. There's no doubt we must look for ways to get more from every public dollar going into affordable housing.
Beginning in 2015, Meyer has sought to play a constructive role in this conversation, convening 16 experts as the "Cost Efficiency Work Group" and producing a report aiming to clearly articulate the factors that tend to drive up costs in affordable development and to focus on real opportunities to bring down costs.
Part of this work is a communications challenge. Subsidized affordable housing is different in significant ways from market-driven real estate development, and there are constraints that are beyond developers' control that make it easy to put affordable developments in an unflattering light for those unfamiliar with the special nature of this work. There's also an important conversation about tradeoffs between long-term lifecycle costs and upfront construction costs -- building smart for the long term is not necessarily "inexpensive."
Still, in the face of urgent unmet need and a widespread skepticism about government's ability to respond effectively, it's critical to achieve as much as possible with the limited amount of public subsidy available. Although it's unlikely there's a completely novel "silver bullet" approach to creating affordable housing no one has ever thought about or tried before, it does seem worthwhile to support exploring new ways of looking at these perennial issues.
Changing the frame: focusing on the big-picture outcome
In mid-July 2018, Meyer will release a Request for Proposals that builds on our recent efforts to support innovative work around how to provide more affordable housing by lowering costs. In 2015-16, we awarded funding to five projects looking at different approaches to bringing more housing online at a lower cost, and we continue to follow that work with keen interest.
For this RFP, we wanted to open the doors even wider to innovative ideas and approaches and to focus more clearly on the end goal: creating as much access as possible to affordable housing for as little public subsidy as possible. To that end, we are defining a "moonshot"-style challenge, focusing creativity and energy around a specific, lofty goal.
The 1 Million Months Challenge ("1MM"):
Bring us your best ideas for guaranteeing 1 million months of affordability, using as little public subsidy as possible.
This takes a bit of unpacking. There are many possible paths to 1 million months; here are some potential examples to illustrate the kinds of ideas this could include:
Piloting an approach to build, site and deliver new factory-built units meant to be affordable for 20 years that would aim for just under 4,200 units (240 months x 4,167 units = just over 1,000,000 months of affordability)
Creating affordable units for 60 years with lower rents through cross-subsidy from other income-producing uses in the same properties, aiming to scale up to about 1,400 total units (720 months x 1,389 units = over 1,000,000 months)
Maybe your best idea doesn't involve building any new housing? Exploring a sustainable approach to master-leasing new units in the private-market for five-year increments, staggered over time, to assist nearly 17,000 households five years at a time (60 x 16,667 = over 1,000,000)
The key point is that we are leaving it up to people who know the most about these challenges to define how to reach the goal. We're framing the goal this way to emphasize flexibility and focus on the outcomes:
Flexibility: This is less about developing "projects" than creating a viable model or path; we are explicitly open to purely financial strategies that deliver on the outcome of creating more access to affordable housing.
Outcomes: We are not necessarily focused on production of units (although more housing is important, and some strategies will rightly focus on that), but rather on the end-goal of housing large numbers of people for an extended period of time.
Finally, it's worth highlighting that we're pulling the focus away from the raw total development cost to focus on what really matters most: the amount of public subsidy required to achieve the goal.
Unlike a typical Meyer RFP, we're not looking for affordable housing projects per se, but a model or path that changes the game. You could say we're trying to "get out of the way" of solving these problems, by putting as few limitations as possible on what counts as a solution. We're calling the question for those who insist that the current system doesn't deliver bang-for-the-buck and there are better ways to do things. Ultimately, the point of this RFP is to give you an opportunity (and some resources) to take an idea or a notion or intuition that you've been thinking about and build it out to a full-fledged plan, test it, improve it and share it.
Sharing ideas, results and lessons learned will be a central part of participating in this experiment. Project teams funded under this RFP will be expected to participate in a learning cohort with each other, sharing and critiquing ideas, and helping each other refine and improve each model. Additionally, Meyer will create a variety of platforms and public events to highlight this work, to broaden the circle of folks around the state trying to think about these challenges in a different way and improve upon the ways we help people into housing they can afford, and ultimately to help public funders and other partners identify new models and approaches worth their support.
About the RFP
The strongest proposals will be invited to submit more detailed proposals in the fall, with decisions and grant funding in early 2019. Grantees receiving funding under this RFP will be eligible to request follow-on implementation grants to be awarded in early 2020.
Finally, because it matters who is being helped and how much rent they are able to pay, and because there are distinct challenges in this larger context of cost and efficient use of subsidy, Meyer has defined three categories under the RFP and hopes to make awards in each:
Hard-to-House or Extremely Low Income: Housing solutions affordable to people/households between 0-30% Area Median Income (AMI), and/or designed and specifically intended to assist populations with significant challenges around access to affordable housing:
Transition Age Youth exiting foster care
Immigrants and/or refugees
People of color
Indigenous communities and tribes
People with disabilities (including severe and persistent mental illness)
Domestic violence survivors
People released from incarceration or people with a criminal record
Rural Workforce Housing: Housing solutions intended to serve residents of rural communities up to 100% of the local AMI. "Rural" in this context means any community not located within one of the federally defined "Metropolitan Statistical Areas": Portland-Vancouver-Hillsboro, Salem, Eugene-Springfield, Medford, Corvallis, and Bend.
The Open Challenge: Housing solutions affordable to households at or below 60% AMI that do not fit in the other two categories.
Applicants will be asked to specify one of the above categories when they apply. Meyer's intent is to make at least one award in each category, depending on the quality of proposals received.
For more answers, check out this recording from our 1 Million Month Challenge Information Sessions or contact me directly at michael [at] mmt.org or (503) 228-5512.
The application deadline for this RFP was 5 p.m., on Tuesday, August 13, 2018.
Cost Efficiencies: 1 Million Month Challenge RFP details
For Concept Development, Meyer expects to award grants ranging from $75,000 to $125,000 (up to $550,000 in funding will be available in this stage.)
Grantees awarded Concept Development funds under this RFP will be eligible to for Implementation grants (up to $1.2 million in funding will be available.)
Final award decisions are expected in January 2019, with first-year payments released in February 2019.
Meyer staff will present an overview of the RFP and be available to answer questions at two information sessions:
Tuesday, July 24, 9:30-11 a.m.
Monday, July 30, 3:20-5 p.m.
Both information sessions will be held in Portland at Meyer’s office (425 NW 10th Avenue, 4th floor); interested parties may also participate by telephone conference. Visit our official event page to RSVP.
Building and preserving affordable housing is a key goal at Meyer, and for the past two years, the Housing Opportunities portfolio has invested about $2 million in affordable multifamily projects around the state. As part of that process, we ask all applicants: What is your goal on this project for minority-owned, women-owned or emerging small business participation? This has become increasingly important as housing organizations grow capacity and strategically align to meet local, city, state and regional goals around equity in contracting contributing to equitable outcomes for contractors and subcontractors.
Why is equity in contracting important to Meyer?
Our mission is to contribute to an equitable and flourishing Oregon, and we see equity in contracting as an important prong in that mission.
As a community we have not collectively been successful in establishing and meeting goals that lead to long-term impacts for the success of all contractors.
Meyer and its nonprofit partners have struggled to identify and find resources that help organizations to connect with contractors and subcontractors in all parts of the state.
Meyer recognizes there are barriers at the systems level that our nonprofit partners could address head-on as a part of operationalizing equity in their work.
What is Meyer looking for in question responses? We are looking to see:
How the applicant views equity in contracting and what its connection is internally within organizational strategies and practices. Does the organization generally approach equity in contracting for its projects or just for the project in the grant proposal?
How the organization and their business partners identify real strategies that impact aspects of bidding and working with contractors and subcontractors.
Clear goals with outcomes that address a clear strategy.
What is your goal, what are the details, and what is driving it?
Does your goal relate to any other equity strategies in your organization?
What is the diversity of the overall workforce (i.e., all people involved in the project)? Are there training and workforce development opportunities for communities facing disparities in this project?
In this construction market, we understand that many developers have challenges to secure any contractors or subs, let alone those contractors that are less represented in the trades by gender, race or other factors. At the same time, we want to partner with organizations that are continuing to push themselves to develop the relationships, expertise and structures that move toward greater equity in contracting.
Because Meyer is a statewide funder, we also understand that the contractor base may look very different in Ontario and Albany. Although COBID (Certification Office for Business Inclusion and Diversity) or SDVBE (Service-Disabled Veteran Business Enterprise) and other certifications can increase capacity to compete for public projects, Meyer takes a more flexible view around equity certifications.
If you are planning to submit a capital grant request in the Annual Funding Opportunity and want to discuss equity in contracting issues, feel free to reach out to housing staff by emailing questions [at] mmt.org
Need more information on MWESB, COBID and SDVBE Certification? Visit these resources: