An introduction for health systems, prepared by Healthcare Anchor Network and Avivar Capital
When health systems sign Healthcare Anchor Network’s (HAN) Place-based Investing (PBI) Commitment, they commit to redirecting a portion of their long-term investable assets toward geographically-focused impact investments, aimed at improving local conditions that affect community health. Place-based investing supports stronger, more resilient local communities by expanding access to affordable housing and homeownership, improving financial security of residents and business owners, and ensuring availability of essential resources and services such as healthy food, childcare, education, community services, and more. Such investments generate positive community impact while achieving a modest financial return or at least preserving the principal of the investment.
Place-based investments can take many forms including low-interest loans, equity investments in social enterprises, cash deposits in local credit unions, loan guarantees, or similar credit enhancements that incentivize investment from traditional investors. In assessing the options for making place-based investments, health systems typically discover that they can invest through mission-driven financial intermediaries such as community-based lenders, make direct investments into mission-aligned organizations such as affordable housing developers, or some mix of both.
Community Development Financial Institution (CDFIs) are financial intermediaries that are federally certified by the U.S. Department of Treasury to have a primary mission of community development and serve a target market—typically a low-income community and/or population that has historically lacked access to quality lending and financial services.1 CDFIs include regulated depository institutions such as community development banks and credit unions, and unregulated, non-depository institutions like loan funds and venture capital funds that are subject to federal oversight.
One way a health system can get started with place-based investing is by making an Impact Deposit—choosing to place some of their available cash in a community-based financial institution such as a CDFI bank or CDFI credit union. Such deposits bolster local economic development by serving as the fuel for lending to individuals, families, and small businesses.
For the place-based investor, Impact Deposits are generally considered to be a lower risk, higher liquidity option compared to other types of impact investments, making them an attractive option for those getting started with the practice.
Getting Started with Impact Deposits
There are approximately 1,400 certified CDFIs serving urban, rural and/or tribal communities across the nation.2 These institutions have strong performance records of deploying investor capital to address unmet local financing needs, addressing nonmedical drivers of health in communities by increasing access to quality affordable housing, employment, and wealth building opportunities, and more in communities with long-standing disparities in health outcomes.
While the largest number of CDFIs are loan funds, which are unregulated and cannot accept deposits, the number of federally regulated CDFI banks and credit unions has grown rapidly in recent years. CDFI banks and credit unions also provide federal insurance for deposits of up to $250,000, which can be extended under various strategies.3 For these reasons, investors are increasingly placing a portion of their cash in deposits at CDFI banks and credit unions that commit to providing loans and financial services that address the needs of underserved local individuals and businesses.
Key differences between CDFI banks and CDFI credit unions generally are that banks are privately-owned, while credit unions are member-owned cooperatives. Banks tend to lend more for small business and commercial real estate purposes, while credit unions have historically focused on consumer lending, including mortgages, home improvement loans, car loans (including used cars), and personal loans. Despite these general specializations, most banks make personal loans and credit unions are increasingly making loans to small businesses.
Structuring an Impact Deposit
Impact Deposits provide essential capital for mission-aligned financial organizations who then lend to individuals, families, and businesses. There are several key factors which distinguish Impact Deposits from standard deposits. In structuring a deposit to have the greatest impact for the community, the health system should:
- Deposit with a CDFI Bank, CDFI credit union, or other mission-aligned depository institution that serves a community in the health system’s footprint, for a documented or planned community development purpose.4
- Place long-term deposits with multi-year terms or one-year deposits that routinely or automatically renew. If there is a need to draw on these funds for operating needs, the depositor may also create a “ladder” of certificates of deposit (CDs) with varying maturities.
- Take a below-market rate of interest on the deposit, ranging from 0% to a substantial discount, for example, at least 50 basis points from the market rate. This helps a community-based bank or credit union to be more financially stable and may lead to the depository providing lower rates of interest on its loans to local borrowers.
- Place some or all of the deposit into a “linked deposit,” which by agreement would support a particular type(s) or term(s) of lending by the depository.
- Require annual reporting on the development impact of the bank or credit union (or, minimally, the impact of the funds on deposit from the health system). While reporting capacity varies by depository, larger deposits significantly increase the likelihood of receiving detailed, customized annual reporting.
Finding a Strong CDFI Bank or Credit Union Partner
As with any investment opportunity, it is important for the health system to perform some due diligence to confirm that the CDFI bank or credit union demonstrates commitment and capacity for meeting the investment objectives—in this case to provide community credit and financial services that meet local needs.
In the absence of a CDFI-certified bank or credit union in their community, the health system might place deposits in a low-income designated credit union (LICU)5 and/or a Minority Depository Institution (MDI).6 A CDFI certification is more compelling, as this is something a bank or credit union must qualify to obtain and maintain, and it usually signals the depository is networking with like-minded institutions (e.g, through organizations like Inclusiv or Opportunity Finance Network to learn how to provide the best service to low-income households and organizations. LICU and MDI designations come from the depository regulators, based upon income levels of the credit union members for LICU status and demographics of the owners of the institution for MDI status. While these designations do not necessarily signal mission-orientation, many LICUs and MDIs are certified CDFIs and/or may have a strong orientation to serving their local communities.
Investors should keep in mind that while analytics of lending activity and certifications are useful indicators, the best way to assess mission alignment is through direct engagement with the financial institution in your community.
Snapshot of CDFI Bank and Credit Union Partnerships
In 2025, Healthcare Anchor Network members BJC HealthCare and SSM Health, alongside St. Louis-based James S. McDonnell Foundation, collectively deposited $15 million with the St. Louis Community Credit Union’s Community Impact Deposit Program to bolster its lending to individuals and small, local businesses. 7
Like all credit unions, St. Louis Community Credit Union (SLCCU) is a member-owned financial cooperative. Unlike most, it is minority-owned and has a member base that is over 50% low-income households. For these reasons, SLCCU is designated by the National Credit Union Administration as both a Minority Depository Institution and a Low-Income Credit Union. By the credit union’s own initiative, SLCCU is a certified CDFI that is actively engaged in loans to small business, nonprofits, and consumers, sparking economic empowerment across the city.
The National Credit Union Administration authorizes Low-Income Credit Unions to accept non-member deposits. Typically placed by regional anchor institutions such as health systems and foundations, non-member deposits are much larger than the credit union’s retail deposits, which reflect limited resident savings. Non-member deposits serve as critical fuel for SLCCU’s local lending including to small business such as Freddie Lee’s Gourmet Sauces that are bringing jobs, wealth, new commercial space, and partnerships to the area.
With the deposits from BJC HealthCare, SSM Health, and McDonnell Foundation, SLCCU President and CEO Kirk D. Mills said the goal is to “lend money responsibly to help maximize the community impact.” A similar $10 million Impact Deposit from the Missouri Foundation for Health further enables local small businesses to grow through low-interest or no-interest loans to help with equipment, working capital, real estate, and new hires.
With a loan from SLCCU, Freddie Lee’s was able to expand their business. “We are able to take care of business like we’re supposed to. We’re able to see our goals being fulfilled with this building. We’re able to breathe a little easier and not have those high-interest loans hanging over our heads. We were able to believe in the banking system again,” said Deborah James of Freddie Lee’s Gourmet Sauces.8
Originally, Freddie and his wife Deborah were working with other lenders but became discouraged at the high interest they had to pay—despite a successful business and good credit profiles. They sought advice from the St. Louis Small Business Empowerment Center, which introduced them to SLCCU. The relationship turned into financing for a 6,700-square-ft. building that provides room for a mini mart, kitchen, and office space to lease—an upgrade from the company’s prior space of 2,700 square feet. “The [new] building we have will allow us to grow, to hire more people and it will allow us to help our clients more,” says Deborah who, along with Freddie, believes their relationship with SLCCU ensures the company’s success. Their labor of love has also allowed them to build generational wealth, with their grandchildren often working in the facility to help produce the sauce.
In developing a place-based investing strategy, Healthcare Anchor Network encourages its members to ask how they can best achieve their place-based investing goals, focusing on the capital needs in communities, the expertise of available intermediaries, and investment opportunities that accomplish a health system’s mission in place.
Those interested in learning more about Impact Deposits and putting their cash to work for communities are encouraged to find CDFI Banks and CDFI Credit Unions that serve your community and connect with an expert for guidance:
- Opportunity Finance Network is the national network for CDFIs
- Inclusiv is a national network of CDFI credit unions and also offers a national Social Impact Deposit Program
- National Bankers Association National Bankers Association is the national trade association of minority-owned banks and an information resource on minority-owned banks
- Community Development Bankers Association is the national trade association of CDFI banks and an information resource on CDFI and mission-focused banks
- U.S. Treasury Department CDFI Fund keeps a list of all Certified CDFIs in the U.S. by type
- National Community Investment Fund is an impact investor and nonprofit investment fund investing in mission-oriented banks
- Cnote offers deposit placements across a network of mission-driven financial institutions; read their Impact Stories and their whitepaper, From Myths to Opportunities: Uncovering Value in the Community Banking Sector (March 2025)
- IntraFi offers deposit placements across a network of depository institutions
For questions about this brief or to access a comprehensive list of CDFI Banks, CDFI Credit Unions, Minority Depository Institutions, and Low Income Depository Institutions, reach out to Kate Gallagher, senior manager, place-based investing and policy initiatives, kgallagher@anchornetwork.org.
The content provided in this brief is for informational purposes only, and should not be construed as investment or financial advice.
Footnotes
- “CDFI Certification,” CDFI Certification | Community Development Financial Institutions Fund, https://www.cdfifund.gov/programs-training/certification/cdfi.
↩︎ - “CDFI Impact Across America.” OFN, May 9, 2025. https://www.ofn.org/cdfi-impact/.
↩︎ - For example, IntraFi can extend federal insurance with bank deposits and Cnote and Inclusiv typically work with lending organizations that participate in other credit enhancement programs or loss protections for deposits in CDFI banks and/or credit unions.
↩︎ - In the absence of a CDFI bank or credit union, organizations might consider deposits with a Low Income Credit Union or Minority Depository Institution. See further discussion, below.
↩︎ - Per standards of the National Credit Union Administration (NCUA, the federal credit union regulator), a credit union may be designated low-income if more than 50 percent of its members have a family income of 80 percent or less than the greater of the median family income for the metropolitan area where they live or national metropolitan area, or those members who earn 80 percent or less than the total median earnings for individuals for the greater of the metropolitan area where they live or national metropolitan area.
↩︎ - A bank or credit union in which the majority ownership is by members of an eligible minority group.
↩︎ - Condon, Alan. “How BJC, SSM Health’s ‘impact Investing’ Is Tackling Economic Disparities – Becker’s Hospital Review: Healthcare News & Analysis.” Becker’s Hospital Review | Healthcare News & Analysis, March 15, 2025. https://www.beckershospitalreview.com/finance/how-bjc-ssm-healths-impact-investing-is-tackling-economic-disparities/.
↩︎ - “St. Louis Community Credit Union Expands Community Access to Business Loans Through Collaboration with Regional Anchor Institutions” St. Louis Community Credit Union, February 5, 2025. https://www.stlouiscommunity.com/about-us/slccu-expands-community-access-to-business-loans-through-collaboration.
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