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Investing for Impact: Lessons from MacArthur Foundation’s Window of Opportunity Initiative

October 1, 2020

As the economic crisis precipitated by the COVID-19 pandemic has unfolded in 2020, nonprofit institutions have stepped up to provide shelter for the homeless, food for the hungry, and health care for those in need. Afinancially strong nonprofit organization that can provide this support through economic downturns does not happen by itself, however. It takes planning, investment, skill and hard work. As funders, policymakers, and practitioners consider how to foster financially strong nonprofit institutions that can help with the current and future crises, it is worth reflecting on the effectiveness of past efforts to support the growth of nonprofit institutions.In the early 2000s, the John D. and Catherine T. MacArthur Foundation (MacArthur) launched one such effort. MacArthur sought to support the growth and sustainability of a group of nonprofit affordable housing developers through program-related investments (PRIs) that provided long-term flexible equity-like capital. This report summarizes the results of Abt Associates' evaluation of this initiative. Among other conclusions, Abt found that these investments played an important role in helping the developers survive and even thrive during the last major economic upheaval, the Great Recession. The flexible financing provided by the PRIs helped the nonprofit developers achieve larger scale, improve financial and staff capacity, and react creatively to changes in economic and social conditions.

Investing for Impact: Lessons from MacArthur Foundation’s Housing Preservation Initiative

July 1, 2020

As the economic crisis precipitated by the COVID-19 pandemic has unfolded in 2020, nonprofit institutions have stepped up to provide shelter for the homeless, food for the hungry, and health care for those in need. A financially strong nonprofit organization that can provide this support through economic downturns does not happen by itself, however. It takes planning, investment, skill and hard work. As funders, policymakers, and practitioners consider how to foster financially strong nonprofit institutions that can help with the current and future crises, it is worth reflecting on the effectiveness of past efforts to support the growth of nonprofit institutions.In the early 2000s, the John D. and Catherine T. MacArthur Foundation (MacArthur) launched an effort to support the growth and sustainability of a group of nonprofit affordable housing developers through program-related investments (PRIs) that provided long-term flexible equity-like capital. This brief summarizes the results of Abt Associates' evaluation of this initiative. Among other findings, Abt found that these investments played an important role in helping the developers survive and even thrive during the last major economic upheaval, the Great Recession. The flexible financing provided by the PRIs helped the nonprofit developers achieve larger scale, improve financial and staff capacity, and react creatively to changes in economic and social conditions.

Best Practices for Small and Rural New England Property Management Firms

January 1, 2002

Residential property management is easiest to do well and profitably when a large number of units are concentrated in a small number of properties located in close proximity. Many managers of residential rental property consider 150 to 200 units a minimum threshold for undertaking the management of a property. Many managers of affordable housing throughout New England and elsewhere, however, are operating without these advantages: their portfolios are modest in size; individual properties typically have less than 50 units and are often scattered over a large geographic area.Economies of scale can prove elusive for small properties or small portfolios. It is difficult to deploy management staff to administer and maintain properties over large geographic regions. Finally, many rural communities in New England have faced declining populations and softening real estate markets in recent years, creating further obstacles to profitable property management.We visited seven property management firms, both non-profit and for-profit, who are widely regarded as doing good work even in difficult environments to learn how some property managers faced these challenges successfully. They have portfolios that range in size from 65 to 2,000 units and from one to 65 entities. (An entity is any building or number of buildings that have the same ownership structure. All but one of the organizations manage less than 1,000 units. We also spoke with four firms in other parts of the country that face similar challenges. We found that while it may not always be possible to turn a profit, a well-run company can sustain high-quality affordable housing even in the face of these challenges.This article will highlight some of the successful strategies we observed are significant in managing small, rural or scattered properties.