Editor’s note: Each Monday, Alabama NewsCenter is highlighting stories from the Alabama Power Foundation‘s annual report. Each story spotlights an organization or initiative the foundation supported in 2019.
In the dead of night, while much of the world sleeps, tractor-trailers haul houses down highways and byways in and around Birmingham.
These aren’t new mobile homes, but older, immobile homes recently unmoored from their foundations and headed to a new destination: Ensley.
The homes are part of nonprofit organization Build UP’s effort to teach students skills, transform a blighted neighborhood in its own backyard and create a new middle class in the once-thriving town. Build UP prepares Ensley-area students for careers in construction and skilled trades.
The Alabama Power Foundation provides a low-interest line of credit to Build UP to transport the good-condition donated houses to the Ensley neighborhood. Homeowners pledge their tax deduction for the donated house to Build UP, which then repays the loan to the foundation for the moving costs. Working with good-condition homes reduces costs by up to 60% per renovation and the construction timeline by about 50%.
Build UP is an example of the future of enabling good works – identifying and supporting them in innovative ways – and part of a powerful reality as the Alabama Power Foundation moves into its fourth decade of elevating Alabama.
Strategic thinking and mission alignment are at the heart of new, boundary-pushing tactics to distribute resources – both in-kind support and financial. Employing concepts of Impact Investing and Collaborative Impact convening to empower good, the foundation’s traditional grant model has shifted in new directions in the past year.
The foundation’s Impact Investing efforts are a way to incentivize nonprofit organization leaders to think more like business owners, and help businesses offset risk associated with prioritizing social value. This is done by investing grant funds into financial tools – like low-interest loans and other forms of financing. These impact investments provide partners low-cost capital, which the foundation recycles to support other charitable projects when it is repaid.
For nonprofits, these projects help build revenue streams to sustain programs. These financial tools are helping businesses make a charitable impact, offsetting risk and providing a return for projects that benefit the community. In Build UP’s case, that means using Impact Investing capital to reduce the costs of its workforce development-oriented program.
For Birmingham-based startup Pack Health, this Impact Investing model is soon to be a reality through a pilot program called Pack Education to benefit at-risk college students at three Mobile-area institutions. Reaching participants digitally through their personal electronic devices, the program provides a personal touchpoint, advice and resources to college students facing challenges and barriers to academic success.
“Pack Education will be a game changer because student lives do not revolve around their adviser’s office hours,” said Chandra Scott, Strategic Outcomes director, Mobile Area Education Foundation. As a partner helping the Pack Education project come to life, Scott’s focus is on ensuring enough students graduate to supply the local workforce.
“You put this tool in their hands and they can schedule and reach out any time. This is a way to be sure they get in, stay in and finish college,” she said.
She adds of the Alabama Power Foundation’s involvement, “This is the epitome of the public-private partnership, doing something no one has done before, bringing the idea and the funding to the table to create something to impact post-secondary attainment not only in our region but ultimately throughout the state.”
Collaborative Impact convening brings like-minded people together as a team to work toward a common goal. Through the Alabama Workforce Council Public-Private Partnership Committee (PPPC), the foundation brings together nonprofits focused on addressing and removing barriers to education access and workforce success. By supplying nonprofits with skilled grant writers to attract greater resources for capacity-building efforts, they are able to expand programming, track outcomes and carry out their missions more effectively.
Chris McCauley represents technology startup Ed Farm, one of 30 Alabama-based nonprofits in the cohort. Serving as cohort facilitator during the group’s formative period, McCauley understands the value of collective impact.
“We started by determining how we could come together with collective impact toward a transformational outcome on a very collaborative fashion,” McCauley said. “We set a goal for the funding we wanted to secure and agreed that requests should involve more than one cohort member. We also aimed to expose the cohort to more national partners.
“My work with the cohort further illustrated for me the value of collaboration and complementing one another, not competing with one another,” he said.
Kerri Pruitt, founder of The Dannon Project, remembers competing with other nonprofits for the same dollars. A member of the PPPC cohort, Pruitt realizes now “that I’m among great peers. This process allows us to see how we can find some commonalities in funding – going for it together or collaborating. I also realize that money is not the only resource a nonprofit needs – you also need partnerships, collaboration and honesty.”
Founded 20 years ago to specialize in second chances, The Dannon Project helps hundreds of people every year transition from prison back to society. “We supply services like short-term training, certifications, job placement, case management and extensive referral networks,” she said.
Pruitt credits the foundation’s technical assistance with helping Dannon win a U.S. Department of Labor grant, “which made a significant difference to us.” The difference came with the foundation providing a grant writer to research the data needed for a strong application while Pruitt prepared the narrative. “Organizations like ours that deal with people who’ve been incarcerated are necessary but not popular. Now with the cohort and the technical assistance, we can continue to grow our mission.”
Likewise, Margaret Morton, executive director of Sylacauga Alliance for Family Enhancement (SAFE), extols the cohort. “It changes our landscape because it brings us into discussion to work through issues – and has led to SAFE being recognized on a national level,” Morton said. “I now think from a perspective that collectively we are so much more powerful than we are individually.”
She credits the foundation’s technical assistance grants toward hiring staff to expand programming as crucial to recent SAFE efforts to recruit an architect for the upcoming Rural Training and Technology Center in east Alabama. The association with the foundation is “invaluable,” Morton said.
Strategic efforts aligned
By aligning these Impact Investing and Collaborative Impact strategies, the foundation is empowering thought leadership and elevating efforts in Alabama in a powerful way. One organization that has benefited from both programs to realize enormous success is Opportunity Alabama.
“We are building a new investing ecosystem here in Alabama,” said Alex Flachsbart, founder and CEO of Opportunity Alabama (OPAL), a nonprofit working with federal opportunity zone initiatives throughout the state. “If you look at the support Alabama Power Foundation offered us – we were incubated by the foundation and would not exist if not for the foundation. There are only a few foundations anywhere thinking in this space. Speaking from our own experience, this foundation put resources into our nonprofit and our nonprofit has become a national leader on how to do opportunity zones effectively on the state level.”
OPAL is already turning heads and making strides by drawing investors to projects in designated opportunity zones. By putting money into projects in these areas, investors can benefit from deferred or reduced capital gains taxes.
One such project empowered by OPAL is at Birmingham’s long-defunct Woodlawn Theatre, which will return to life as a performing and instructional space under the leadership of Will Mason, whose nonprofit teaches music to low-income and disabled children.
“Investors envisioned that this would make the neighborhood better and deemed it a worthwhile investment,” Flachsbart said. “These are local people actually looking at low-income projects for the good of the community. Until now, Alabama has lacked access to capital for low-income places in a systematic way.”
Through participation in the PPPC cohort in 2019, OPAL partnered with another nonprofit to pursue federal grant funding using the foundation’s technical assistance. The free grant writing provided by the foundation facilitated a partnership between OPAL and Bronze Valley, a peer nonprofit focused on growing minority startups, and has helped both organizations expand their mission and resources.
OPAL is working with the foundation’s Impact Investing team on a loan that will cover startup costs to launch an opportunity fund in Birmingham. This Impact Investing project will empower OPAL to leverage thought leadership from around the nation and potentially attract millions of dollars in out-of-state investment to a Birmingham opportunity zone.
With the beginning of a new decade – and a second year of leading the way with Impact Investing and Collaborative Impact – the mission is clear: grow, connect and enable partners to succeed.
The foundation is already seeing a return on the investments it has made in these new strategies. Its Impact Investing efforts empowered peer-funders to commit nearly half a million dollars of additional co-investment on impact projects, while its funds dedicated to Collaborative Impact work drew more than $6.4 million in out-of-state funding.
“We believe that these efforts can lead to powerful change for our state,” said Myla Calhoun, president of the Alabama Power Foundation. “Our partners are already doing transformational work, so our job in the foundation is to find ways to amplify that.”
By deploying its resources through the strategies of Impact Investing and empowering Collaborative Impact, the foundation is equipping its partners with tools they have not had access to before.
“We are extremely proud of the work we have done in this first year of using these new strategies,” Calhoun said. “I can’t wait to see what we accomplish next year, and beyond.”