PROVIDENCE – In these perilous times, governed by anxiety and uncertainty, the Rhode Island Foundation has been attempting to stitch, quilt and braid together a better future for all Rhode Islanders, making investments to address both short-term needs and long-term goals, focused on equity.

ConvergenceRI recently caught up with Neil Steinberg for a Zoom interview, to talk initially about the latest “impact investment” made by the Rhode Island Foundation, $500,000 to replenish the Capital Good Fund, which was announced on Wednesday, Aug. 26.

The five-year loan from the Foundation will enable the Capital Good Fund to help an additional 250 borrowers. Capital Good Fund is a nonprofit, U.S. Treasury-certified Community Development Financial Institution that provides equitable loans to borrowers with low incomes.

“This investment will enable us to achieve our strategic goals, including increasing the number of Rhode Island families impacted by our products,” said Capital Good Fund founder and CEO Andy Posner. “The death of George Floyd in Minneapolis and the COVID-19 pandemic have exposed long-standing racial disparities in the financial system. We appreciate the Foundation’s support of our work aimed at closing the gap by ensuring that low-income Rhode Islanders have options other than predatory lenders that can cripple their finances.”

Any conversation with Steinberg is an opportunity to discuss the Rhode Island Foundation’s strategic investment strategy, looking to leverage its ability as a community foundation, during a time of great uncertainty – particularly around the state budget, the continuing health crisis caused by the pandemic, the large number of unemployed residents, and racial unrest triggered by the killings of Black men and women by police officers, reinforcing the need to address social disparities and inequities.

Here is the ConvergenceRI interview with Neil Steinberg, president and CEO of the Rhode Island Foundation, who has attempted to bring additional investment strategies and resources to the community in a time of pandemic.

ConvergenceRI: How important is it to create alternative vehicles to get cash into the hands of folks in a time of pandemic?
STEINBERG: That is a broader question than just talking about impact investing.

We’ve been raising money like crazy. We raised $7 million for a response fund and $5 million for behavioral health and $3 million for We Are One for undocumented immigrants, to get [money] in and out to people in need during the pandemic.

This “impact investing” started well before the pandemic; it is not really related to that. So, I would separate those things.

ConvergenceRI: The public does not necessarily understand that differentiation…
STEINBERG: Well, it’s a major point. What we are talking about, when you say, getting dollars in the hands of people, it is extremely important. It’s been our top priority. It’s not project-based, though, and it’s not long-term based; it is immediate-need based, especially for vulnerable populations.

That has been our priority since March 16, whatever the date was when we started on this, to work with very generous donors, thousands of them from across the state, to raise money to get out to organizations serving the neediest populations, the most vulnerable populations – that definition is extremely large, based on unemployment, based on needs in behavioral health, and for undocumented immigrants that are not qualified for the programs,

That [work] is critical; it has been our top priority right now.

This [impact investing] is more of our business as usual. This is supporting the community on a long-term basis, with different resources, [with] “impact investing” being very different than our grants.

We are, at our essence, the biggest grant maker [in Rhode Island], and impact investing, which used to be called different names, mission-related investing in different focus areas, has been around for a long time.

It is using a different approach. It’s using our endowment, and investments from our endowment, to put [financial resources] into the community. But it is not going for purposes of COVID-related, or short-term related [needs]. That’s the distinction I was trying to make.

ConvergenceRI: It’s an important distinction. I’m glad you clarified that. What have been the returns on investments from impact investing? How do you measure the value of the impact investments?
STEINBERG: We started this at the end of 2017, when we made our first impact investment. As I said, the concept is not new, nor is it new for the Rhode Island Foundation – other than the way we formalized it.

If you go back in time, even before my time, we gave the loan to Neighborhood Health Plan of Rhode Island to get them started many years ago.

We have supported loans for Trinity Theater and the Downcity partnership for renovating old buildings in downtown Providence.

[In the past], we have done this on an ad hoc basis. We decided that we wanted to be more intentional, to invest in the community with tools beyond our [traditional] grant making from our very large endowment. When we decided to do this, we said we are going to make loans and investments up to a certain amount from our endowment that have both a financial return and mission-related return.

And, we think it is a powerful tool that allows us to deploy more of our capital, specifically to benefit Rhode Island. It’s all place-based, and on a larger scale, because we have a large endowment.

These investments are designed to build capacity in organizations and leverage resources. To answer your specific question, our target for investment return in this particular portfolio is 3 percent. And that compares to our 7 percent long-term endowment performance.

And, in relation to that, it has to have a strong social impact – I’m trying not to use all the buzzword – [to achieve] a community return, a community benefit.

ConvergenceRI: Can you explain what the goals are?
STEINBERG: These are not grants, they are loans and investments that we get returns on to [grow our] endowment, to be able to use the money again.

We are also not looking to replace banks. If somebody has access to bank financing, we’re not here just to do a cheaper rate. We want to supplement and add to the pool of capital available in the state, mostly for nonprofits, looking at both financial return and social return.

If you look at [investments] we have made, they are aligned with what our priorities are. They are [investments] to support affordable housing, to support expansion of food availability in some of the food deserts; they are related to health and education needs.

They are not instead of grants; in some cases, they can be in addition to grants to different organizations.

These are not grants. There has to be a source of repayment. There has to be a viable proposition underneath it.

The most recent example of Capital Good Fund is a great example.

Capital Good Fund has been growing, We want to make sure that people can get funding, especially in this environment, cheaper than payday loans.

When you look at Capital Good Fund, they have been very successful in getting money out the door.

The investment we did with Urban Greens was an equity investment, specifically to address the food desert challenges.

We funded a mental health crisis center, where we partnered with Horizon Health Care. We have also made impact investments with ONE Neighborhood Builders and Farm Fresh RI. The Providence Revolving Fund recently got $2 million toward a $10 million fund for low-interest loans for affordable housing. We gave a $1.5 million loan to help fund UCAP on the education side.

There is a big equity component to this, too, Richard. This is part of our commitment to the community, to benefit communities.

I often feel like I’m living through 1968 again. These are not new issues. We’ve got to make some progress. We want to commit to equitable funding, we want to commit to communities of color. We want to commit to people in the community who are doing work for the community.

ConvergenceRI: You may have seen the story I wrote about Dr. Beata Nelken, a pediatrician in Central Falls. She is the first pediatrician to open up a solo practice in Central Falls in years. She has been trying to figure out how to handle the financing of her work around providing testing for COVID-19 for residents and children in the community, thinking about setting up some kind of charitable foundation to support that work.
I suggested that she might want to talk with you at the Rhode Island Foundation in regard to an impact investment. She asked: Can they do that, because her practice is not a nonprofit.
STEINBERG: Again, if the purpose is obviously health care in Central Falls, that’s a pretty good mission-related aspect of it. We want to expand capacity. If this a tool, it’s not for everybody, it’s not for every situation, it’s more of a tool than we had before, and we are prepared to commit significant dollars if the opportunities are there.

ConvergenceRI: This is a broader question related to the critical role that the Rhode Island Foundation is playing. Do you sometimes feel like you are Holden Caulfield, trying to keep babies form falling into the field of rye?
STEINBERG: [laughing] We’re in this together with a lot of people, obviously, and there is a lot of need. Our mission, to meet the needs of all the people of Rhode Island, is a pretty broad mission.

The combination of the health pandemic, the economic recession or depression, depending on who you are, and the racial equity issues, all together, are a bit overwhelming. We are still Little Rhode Island. We still can reach out and talk to each other and meet with each other and help each other. We’re trying to juggle the short and the long term [needs].

Those long-term plans that we have been working on for education and health are even more important now. Those groups are fully engaged. They are fully meeting. That is what is going to take us out of this.

You know that I’ve been a big proponent of [long-term planning]. I don’t like the expression, “new normal.” The old normal left too many people behind. We need to build a better future. I’ve been saying that for months. That is what we need to do; not just to get back to where we were. Again, we left too many people behind.

I get a little concerned when people say, all of a sudden, we “discovered” what you have known, which is that there are these huge disparities.

Let’s take health, for example. [Some will say], “Gee, COVID revealed these disparities.” COVID didn’t reveal anything. COVID exacerbated and confirmed. We knew that there were disparities.

We knew about the issues with the social determinants. And, lo and behold, it has had a huge impact on COVID, when we have Black and Latino populations getting hit much harder for a variety of reasons. And, some of those reasons, as I said before, have been around [for a long time].

If we don’t go after housing, if we don’t make people [more] food secure, if we don’t train people for better jobs, we won’t prevent it the next time, either.

We’ve got to come out of this with a renewed sense of a better future. And, these long-term plans on education and health, people are committed to making those happen.

ConvergenceRI: You’re right. If I have used that language in my reporting about “revealing,” sometimes it is more about confirming what we already knew. But sometimes, it is surprising how many people didn’t recognize what was going on.
STEINBERG: Absolutely. I agree with you 100 percent.

It might have been “revealed” to some, but unto itself, [these issues have] been kicking around. And, shame on us. We can talk about these issues for another 20 years if we don’t start attacking them.

And, again, we are very passionate about dealing with achievement gaps in education and disparities in health. They are there; they are documented; they have impact, we need to go after them.

That’s where the racial equity work we’re doing – and we’re going to do more of intersects. Why is there a bigger risk for maternal outcomes with Black women? Let’s go after that. Let’s get underneath that.

You can call that health care. You can call that racial injustice. You can call it a lot of things. The thing is, it is wrong that it is happening, and we have to make it right.

ConvergenceRI: Are there specific things in terms of racial equity that you’ve brought to the forefront that you want to look at beyond the recognition that “Black moms matter?”
STEINBERG: Yes. I think a number of things. Some of this is work in progress, too, that we will be doing more and more.

The biggest commitments have been two long-term planning areas in education and health. But we have also been doing this Racial Equity Institute training. [See link below to ConvergenceRI story, “Cranston is working on racial equity.”]

We have done seven or eight of them; we’re going to keep doing them. I was in a conversation the other night with the Rhode Island Black Business Association, working with them, with the Hispanic Chamber, and there are other specific things over the coming months that we will be looking to do.

ConvergenceRI: The last time we talked, you said you were incredibly busy. [See link below to ConvergenceRI story, “Not good enough to return to what we thought was normal.”] Has the pace of work increased? Has it lessened? Have you been able to better manage the demands on your time?
STEINBERG: If only [laughing]. I would say that it has stayed at a pretty high level. Some of it is just practical. Before, you could walk down the hall in our building to meet with somebody to work something out, now it’s got to be a scheduled phone call.

I sit in my office, because I’m in a lot, and I’ve often got two phones ringing at the same time, my cell phone and my office phone. I didn’t have that before.

I didn’t tell anyone my cell phone before, because I was sitting in the office. I mean, they had the number; it wasn’t that I didn’t want to give it out, it’s just that I knew they could get me in the office. I think it’s just as busy, there’s more to do.

We’re trying to juggle and to balance, as is the state, the short and the long term.

I feel very strongly about that. We need to look beyond the immediacy, because the tail of this, and you’ve written about this, it’s going to take a while to turn around the economy, even if we got a vaccine tomorrow, and treatments tomorrow, which would help significantly.

It’s going to take a while to deal with behavioral health, substance abuse and mental health issues that will stick with people. There’s a tail to all of this; it’s going to take a while to make things better for the future.

I’m not going to whine about things getting busier. It hasn’t let up. We all just have to keep putting one foot in the front of the other.

If you and I talked on March 16, I don’t know what we would have predicted for the end of August, but I don’t think it would have been this. We would have been a little more hopeful that things would have turned around a bit.

It’s the incredible uncertainty. That’s the biggest challenge, Richard. It’s the uncertainty [about what Congress will do]. We don’t know what the impact is going to be on the state budget and therefore, on state agencies, as we sit here.

It could have a huge impact on the state, a huge impact on the quality and availability of services, and then, as the largest [philanthropy] in Rhode Island, it could have a big impact on our work, not because we get those funds, but because we will try to help people if funds get scarcer.

ConvergenceRI: What keeps you optimistic? I know you are a big believer in optimism and hope. What replenishes you? What sustains you in this work in this work?
STEINBERG: We are all informed by history, right? We have had crises before, crises reveal character, and sometimes they inspire new and better solutions. That keeps me going, that we will get through this together. It will not be easy.

It’s not fair. That is what keeps me up at night, the equity part of this, that we need to address. There are people, as we know, who are benefiting from this. You know, whether it is companies, or individually, you look at the wealthiest individuals in this country, and they have all increased their net worth through this [pandemic], because people are using services more.

But there are many, many more people who are being negatively impacted. And, whether it is students in school, whether it is people who have lost their job and are worried about making the next rent payment, there is just too much of that.

But, we’ve been through this before, if we pull together, if we leverage the brains, the resources, and the passion that I think is around, if social and economic will can overcome political will, that is what I think it will take.

ConvergenceRI: At the end of every interview, I always ask: What would you like to talk about, that I haven’t talked about? What should I be covering in ConvergenceRI, that I haven’t been covering, that you would suggest that I cover?
STEINBERG: Who has the crystal ball, Richard? You are pretty good at responding in the moment, right? You see something announced, and you see something going on, you go talk to people about it.

I think the one thing that I said that I am worried about, which is not something you can write about now, is the state budget. How the decisions are going to be made. And what will be the priorities.

We’ve got to have the priorities; we’ve got to have shared sacrifices. We’ve got to have a shared vision for the long-term, not just for the next 18 months.

We have to have a shared vision about what want [our future] to be. In education, it’s providing a world-class education for every student in 10 years. It’s to be the healthiest state in the country in 10 years. I’m big on focusing on these aspirational goals, because it’s fun, it’s inspiring, and it’s necessary.

To the extent that you see, you’re pretty agile on these things, it is what is in front of us, how do we get through next week, next month, next year, while we are building for five or 10 years down the road.