A coalition of religious groups has started an interfaith community development fund that will lend money to developers who build businesses, housing and community centers in needy neighborhoods throughout the region.
The nonprofit Faith Fund has raised $750,000 to address a longtime regional conundrum - affordable housing tends to lie inside the city limits, while new jobs cluster in the far-flung suburbs. The organization hopes the loan pool will grow to as much as $20 million in as little as five years.
"It's kind of an obvious idea," said Barbara Bezdek, a professor at the University of Maryland School of Law and former trustee of Homewood Friends Meeting who chairs the group's board.
"Here's Baltimore City with a very diverse religious community that has for generations demonstrated its commitment to social justice. ... We want to organize capital and put it where it wouldn't be otherwise."
The organization includes representatives from across the faith spectrum, including Catholic, Jewish, United Methodist, Islamic and Quaker groups, as well as the Baltimore Regional Partnership. Its new executive director, the Rev. Kent Marcoux, is an Episcopal priest.
The Faith Fund received a $200,000 grant from the U.S. Department of the Treasury and raised the rest of its start-up money from religious groups.
The fund plans to make loans to community-based developers creating affordable housing, community facilities and small businesses, generally in neighborhoods where family income is at or less than half the regional median of $66,400.
The idea behind the organization - to marry social goals with a return on investment - is both old and new. Religious orders such as the Marianists and the School Sisters of Notre Dame have operated their own loan funds for years for nonprofit organizations.
Secular nonprofits have also experimented with social investments. The Baltimore Venture Fund, a $15 million project spearheaded by the Open Society Institute-Baltimore and the Annie E. Casey Foundation, will invest in companies that create jobs for low-income and middle-income workers in the city.
Similar loan funds have cropped up around the country, but Faith Fund "is somewhat unique in that it's really focused on the faith communities," Marcoux said.
Faith Fund grew out of a planning session about six years ago with Felton E. May, the United Methodist Bishop of Baltimore and Washington, said David Casey, a Methodist minister and board member who helped organize the fund. The discussions predated President Bush's national "faith-based" charity initiative.
Some backers have given money outright, but much of it has been invested - meaning that congregations and other contributors will eventually get their money back, in some cases splitting the interest earned on loans with Faith Fund.
Though the fund hasn't made any loans yet - several applications are pending - it has started working with congregations of various faiths to design projects in one Baltimore neighborhood, Casey said.
The first loans will probably be small, "micro-enterprise" loans of $5,000 to $35,000 or bridge loans for larger projects, Ransom said.
As a community development loan fund, Faith Fund might not offer terms much more favorable than a bank's, Bezdek said. But it will offer more technical help to borrowers - working in some cases through other nonprofits with particular expertise - and will seek out developers that may have a hard time getting loans from mainstream financial institutions, she said.
The organization will not be exclusively faith-based, and developers applying for loans need not be religious entities.
But the organization does plan to look for ways to accommodate various religious beliefs of borrowers.