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  • Fund Profile: LEAF Fund

    Fund Profile: LEAF Fund

    2 November 2021
    by Elias Crim, with Josh Glickenhaus

    This conversation was with LEAF Fund’s Josh Glickenhaus, Director of Lending and Operations.

    Boston-based LEAF Fund, a subordinate organization under the ICA Group, is one of only three CDFIs nationally with a specific focus on worker cooperatives, including community-owned natural food cooperatives that create high quality jobs and provide access to healthy food in urban and rural communities; low-income cooperative housing developments; and worker-owned firms and other community-based businesses and social enterprises.

    Since its founding over 30 years ago, LEAF (Local Enterprise Assistance Fund) has invested and leveraged over $122 million, resulting in the creation or retention of more than 10,300 jobs.

    In addition, LEAF provides capital advisory services and other technical assistance to small businesses in the Greater Boston Area.

    LEAF Fund

    Boston, Massachusetts
    leaffund.org

    contact : leaf [ at ] leaffund.org

    Total assets under management

    $ 19.1 M

    Active loan portfolio

    $ 9.6 M

    Asset class(es)

    • debt

    Areas of focus

    • community-owned natural food cooperatives
    • low-income housing cooperatives
    • worker-owned firms
    • other community-based businesses & social enterprises

    om :

    Josh, when did you arrive at LEAF Fund and what’s your background?

    JG :

    I began at LEAF in 2019 with a background in the CDFI sector, working with one group which aimed to be a bridge between CDFIs and institutional investors, to bring more of that kind of funding into the CDFI space. So social impact investing has been my background, along with a couple of years in grad school for city planning.

    I think co-ops are something that has always interested me because they align with my political values. In grad school, it was housing and land co-ops, land trusts, limited equity co-ops that really caught my interest as a promising solution to address gentrification and the other externalities affecting cities. Such as Philadelphia, where I was living at the time before relocating to Boston. LEAF had always been on my radar as one of the few groups at the intersection of community development, finance, and co-op development. Luckily for me, they had an opening right around the time my family moved to Boston.

    om :

    Were you already aware of the good work going on in Boston — the Dudley Street Initiative and so on?

    JG :

    They were actually a case study in my planning course because of their novel model for an urban land trust. And now it’s a pleasure that I get to work with some of these folks on a regular basis after having read about them.

    om :

    LEAF has always had a focus on food co-ops, correct?

    JG :

    LEAF was originally founded in 1982 as an affiliate of the ICA Group, one of the leading national co-op developers. Our current executive director came in about 15 years ago to keep the core focus on worker co-ops but to extend our involvement with food co-ops and housing co-ops, for example. Today food co-ops are the biggest single segment of our portfolio, with worker co-ops and small businesses a fairly close second. Housing co-ops and land trusts rank third in our mix but also the fastest-growing.

    om :

    Interesting — what are your thoughts on that growth?

    JG :

    Well, everything on our balance sheet has been growing, but housing of course is more capital intensive. The food retail sector lately has been very active and successful throughout the pandemic, but pressures on the sector — the mainstreaming of health foods, Whole Foods stores popping up everywhere — are also increasing.

    One of our advantages at LEAF is that although we concentrate on the organizational structures — shared ownership models — which is a fairly narrow universe, we have become very broad in our geographical reach. We now have clients in 27 states — which is wider than the more conventional, locally-focused CDFIs of our size might have.

    om :

    I notice you have the Elevate Small Business program, a mix of technical assistance and some capital advisory services?

    JG :

    Yes — it’s a more regionally focused offering, a very high-touch kind of consulting that works in Massachusetts with co-ops but also with other small businesses and social enterprises aligned with our vision of economic and racial justice.

    om :

    And did you folks feel the impact of Covid in terms of new client needs?

    JG :

    Certainly — it put everybody on their back foot for a while, so we had a surge in demand for help with things like PPP applications and documentation, as well as providing support to our existing clients.

    om :

    Your minimum investment size is $5,000, with terms of between one and five years and a maximum return of 5% — so we’re talking about patient capital, of course.

    JG :

    Yes, and you know what’s interesting: over 90 percent of our investors renew their investment at the end of their term. It is a long-term patient investment with a return which we think is comparable with the other sorts of low-risk, fixed income investments. For most of our investors it is just a piece of their overall portfolio, and they do tend to stick around.

    om :

    With this growing national reach, would say LEAF is looking to reinvent its model in some way?

    JG :

    I’d say we have a kind of flexibility due to the fact that we’re a bit different in our funding structure than many community loan funds. We have a very diversified and large group of somewhat smaller-dollar individuals — direct investors — that are rare to see in a CDFI of our size. We are accountable to these individuals, who expect LEAF to be creative in finding ways to support the cooperative economy.

    om :

    So LEAF has had some flexibility in its offerings.

    JG :

    Yes, because more conventional lenders are often founded by bankers and bring traditional ideas about things like a personal guarantee requirement, which have historically been a significant barrier for cooperatives — which don’t have an individual owner — to accessing loan capital. But LEAF and other co-op lenders make a choice not to require those guarantees and accept the greater level of risk that comes with that, and have developed a specific expertise working with cooperatives to manage that risk. When you look back at our whole founding vision, this approach was actually kind of built into things — our interest in offering bespoke financing products and features to serve a different set of priorities.

    om :

    What’s one project you might pick that has been interesting to watch?

    JG :

    In Bloomington, Indiana, we’re working with a co-op housing group to renovate a 5,000-square-foot dilapidated mansion — a huge place in rough condition — thanks to new zoning regulations in the city that allow cooperatives to house more individuals in properties zoned for single-family use.

    So the Bloomington group is renovating it into what will be an 18-bedroom housing co-op. Not just for students but for young families needing affordable housing, with a shared commercial-grade kitchen and a bike repair station open to the community.

    om :

    Great to hear of the city’s cooperation in making that project happen.

    JG :

    Zoning laws are changing in lots of places. Across the board, we’re seeing a lot of creativity and technical innovation in terms of legal and regulatory frameworks aimed at supporting shared ownership.

    om :

    Great work — thanks for your time, Josh.

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    all: 2772, 2773, 2774, 2775, 2778, 2781, 2789, 2791, 2892, 2946, 3365, 3381, 3382, 3388, 3407, 3413, 3414, 4167, 4168, 14070, 20707, 20708, 25172, 25173
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