Beyond Grantmaking: How Impact Lending Enables Us to Live Our Values

At the crest of the pandemic, small business owners and nonprofits faced an economic free fall. Struggling to survive, solo practitioners and mom-and-pop shops needed an influx of funds to ride out months or even years of shutdowns. Many of the hardest-hit were based in underserved communities typically neglected by mainstream banks—and a federal financial pipeline was limited or out of reach. A cash lifeline was critical. 

Struck by the looming hardships communities faced, the Federation leaped into action.  

Compelled by our Jewish values to help others, we wanted to go beyond the conventional and take a novel approach to positively influence people’s lives. With over $2 billion in assets, we are an organization known for philanthropic generosity, and we quickly launched a new way to deploy philanthropic funds: Impact lending. These low-interest loans are made to mission-driven financial institutions that close persistent funding gaps in marginalized communities across the United States and Israel. 

Impact loans provide an infusion of money to people on the ground who need it most. 

How do they work? In brief, the Federation pools money from Donor-Advised Funds (DAF) and supporting foundations and moves it into impact-first loans. These loans are made to intermediary financial institutions that provide fair and affordable credit to underserved populations. While loans are considered investments, the goal is not to maximize financial return. It is to enable significant philanthropic capital to do good—even while it’s waiting to be granted out. Whereas a grant is a one-time donation, an impact loan generates a nominal return. That return, along with the original loan capital, is expected to be repaid by the recipient organization. The donor can then redeploy that money for other charitable purposes.  

Impact loans move money off the sidelines and get it into the community where it is needed.  

In the past three years, the Federation has invested more than $35 million with 16 different mission-oriented financial groups. Issues we support range from education to the environment, affordable housing to job skills training, economic equity to nonprofit financing, and more. The Federation’s Impact Loan program provides financial lifelines where traditional financial services fall short.  

This pioneering program is an incredible way to put dollars to work in our local community and have an immediate impact. Well-researched and incredibly relevant to address current socio-economic issues, these loans provide a pathway to make a real difference.

- Rachel and Aaron Zubaty, Federation donors

We see a healthy appetite for impact lending and hope many others join our efforts and leverage this as a way to demonstrate compassion, relevance, and vision for the future. Looking ahead, we envision our impact lending activity being on par with our grantmaking–where we scale to hundreds of participating DAFs and supporting foundations, and where this complementing philanthropy attracts people of all ages and backgrounds from across the community as partners. 

Impact lending is a new way, outside of traditional funding, to make a greater impact in the community. This philanthropic tool for Donor-Advised Funds and supporting foundations addresses issues that our donors care deeply about, such as social and racial equity, economic opportunity, and poverty alleviation. To learn more about how you can get involved, email our team or call us at 415.512.6225.


January 27, 2023


Joy Sisisky