News and analysis
October 08, 2015

AARP Foundation Launches Impact-Investing Program

With $5 million in initial support, the AARP Foundation hopes to attract a total of $70 million to what it calls the first impact-investing program designed to benefit struggling older adults.

The AARP Foundation, the charitable arm of the advocacy group AARP, made a $1-million grant to the effort, called Age Strong, and also provided $4 million in a program-related investment that has the potential to generate returns. In addition, the foundation’s parent organization has pledged up to $6 million.

Using the grant maker’s support as a launching pad, the Calvert Foundation plans to raise up to $60 million from private investors seeking both a financial return and social benefits for the country’s aging population. Capital Impact Partners, a nonprofit community-development group, will identify projects designed to help people over 50 secure housing, access to healthy food, and an improved financial situation and to remedy problems associated with isolation.

"These are stubbornly persistent problems for a growing aging community," said Lisa Marsh Ryerson, the AARP Foundation’s president.

Although the AARP Foundation has made program-related investments in the past, Ms. Marsh Ryerson said the Calvert Foundation and Capital Impact partners brought additional financial expertise to the project and improved the foundation’s chances of attracting outside capital.

Small Investors Included

Age Strong will allow rank-and-file investors to commit as little as $20. The money invested will be used to create securities that will provide loans to groups pursuing real-estate purchases and property rehabilitation and improvements, such as technology upgrades, designed to benefit older Americans. The notes promise returns of one-half of 1 percent for a one-year note and 3 percent for a 10-year note.

While the investment offering was officially announced today, donors have been able to make investments on the group’s Age Strong website since July, when it was given a soft launch.

AARP’s initial contribution will shield investors from risk and allow them to support projects that have a social impact, said Catherine Godschalk, vice president for investments at the Calvert Foundation. While AARP and its foundation do not have immediate plans to market the investment to members, Ms. Godschalk said AARP’s participation will go far beyond the purely financial support the organizations offered.

Reaching AARP Foundation’s donors and its parent organization’s members, she said, "is an amazing opportunity for us."

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