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Impact Investing in Underinvested Communities

Mar 2, 2023

In this episode of Engaging Alternatives Spotlight, Elana Margulies-Snyderman, Director, Publications, EisnerAmper, speaks with George Ashton, President of LISC Fund Management, a Washington, D.C.-based investment firm that manages and deploys impact capital into businesses and real estate investments in underinvested communities across the country.

George shares with us his outlook for impact investing in underinvested communities including the greatest opportunities and challenges, how the firm integrates DEI and more. 


Elana Margulies-Snyderman:Hello, and welcome to the EisnerAmper podcast series. I'm your host, Elana Margulies-Snyderman, and with me today is George Ashton, president of LISC Fund Management, a Washington DC-based investment firm that manages and deploys impact capital into businesses and real estate investments and underinvested communities across the country.

Today, George will share us his outlook for impact investing in underinvested communities, including the greatest opportunities and challenges, how he integrates DEI and more. Hi, George. Thank you so much for being with me today.

George Ashton:Thanks, Elana. Happy to be here.

EMS:Absolutely. So to kick off the conversation, love to hear more about the firm and how you got to where you are today.
GA:Thanks. LISC Fund Management is a registered investment advisor with an impact-first focus on investing. We invest in underserved communities around the country with affordable housing investments and small business investments. My background is I actually came from private sector finance through Arthur Anderson and Fannie Mae, and then actually through the field of renewable energy in a company that I co-founded called Sol Systems. And then decided after working for the environment for many years, that working for underserved communities would be my next life's mission.

But excited to be here. LISC Fund Management is a subsidiary of LISC, which really is a national presence and a combination of local-based contextual solutions for communities, but also with a national high finance function. And that's really what we bring to the table. We manage funds across the country focused in different communities, and some of them focused across the country as well.
EMS:Great. Very interesting background, George. That segues into the next question I have for you. Love to hear your high level outlook for impact investing in underinvested communities.
GA:Well, I'm both excited and then overwhelmed. Excited because we've managed to really pierce the veil on finding some really innovative ways of utilizing capital. I think some of the narrative about what's happened historically that's gotten us to this point has been really useful. The color of money, the color of law outlines some of the paradigms that have brought us to this dislocation in our economy. And so with that information, we can structure financial solutions that really get to the heart of some of the challenges for underserved communities. And then also with increased sophistication, we can actually marry those solutions with the needs of investors who ultimately are in this investment space for impact, but also need to preserve capital and show a return as well.

And so all of that is really exciting. The overwhelming part is the amount of work that now we can do and we can accomplish, and the need. Even with, as you look at 2023 and the need for affordable housing, the decreasing middle class, the potential recession that could come our way, all those things are harder and hardest on those underserved communities. So it just means we need to work harder to fill those gaps and make sure that everyone has a chance to succeed. So both excited, but also a lot of work to be done.
EMS:Absolutely, George. It's definitely a very exciting time. And that leads into the next question I have for you. What are some of the specific opportunities you see in this space? Love to hear your thoughts and why.
GA:Yeah, I think specific opportunities around in this space are really in identifying the gaps in capital availability, that we've really narrowed it down and into with some of the research we've done lately. So capital gaps for small businesses, capital gaps for new entrepreneurs, minority entrepreneurs. Figuring out the exact type of equity or debt that needs to come to the table to help those businesses grow. And also on the real estate side with affordable housing, figuring out how to marry public and private capital to create bigger solutions to tackle the affordable housing challenge.

All of this around what I think is the largest opportunity, which is ... for corporations and private companies in the United States, the concentration of wealth in the 1% is not a good long-term economic outlook for almost any company. I was talking to some banks and I was saying, 1% don't keep a lot of deposits in banks. So I think if we can continue to highlight for the private sector why an equitable society with many businesses and the middle class that's doing really well is really good for their business long-term, that's a huge opportunity to encourage more impact investing in the space.
EMS:And George, to shift gears a little bit, what are some of the greatest challenges specifically that you face? I know you touched on it in the beginning of the conversation, but I'd love for you to go more into depth on this as well.
GA:Yeah, I think I can tie that to the outlook for 2023. You're looking, particularly on the real estate side, but also on the business side at rising interest rates in general. So the cost of money is higher. And then the real estate side, rising construction costs, although those are mellowing out now. Rising labor costs. All of that works together to make everything more expensive. And I know the Fed is working hard to fight inflation, and I think slowly winning that fight. But as things become more expensive, obviously those who have less struggle even harder to make ends meet. And so I think in terms of challenges, we're continuing to have to work harder and harder to find the correctly priced and structured capital that's going to close those gaps and make for an opportunity for those who wouldn't previously have it.

The other is just the earnings outlook. And so as folks start to get a little bit worried about the economy and where earnings are headed, all the wallets tighten. And so that's the case across the board for folks seeking investment, and we feel that as well in the impact space. So hopefully we'll have a short respite here and get back on our feet as an economy overall, and that will bring things back in line, but also bring investors willingly back to the table as well.
EMS:George, on another topic, clearly you embrace DEI, so I'd love to hear your thoughts on that topic and what you're doing to integrate it across the firm.
GA:Yes, I think DEI is core to the strategies in many of our funds. With the racial awakening and George Floyd and the focus on the negative effects and externalities of a more racist-focused culture, I think we are in the right spot with our focus on some of the DEI needs in our society. And our funds, some of them have a direct focus. The Black Economic Development Fund is probably the first institutional fund I've seen with Black in the PPM, and it's really focused on Black communities.

And so we have made a proactive and concerted and intentional effort to be focused on communities of color. It's also important to note that they have their own story, history and their own challenges based on which community you talk about, Black versus Brown versus Asian, et cetera. So they all have different challenges, which makes it really interesting to think about how to structure capital solutions that solve those challenges.

Lastly, I'll say DEI should not exclude some focus on rural white America as well. I think that has been excluded probably for longer than it should have. And LISC has a rural LISC, and we focus on those communities as well because they are also locked out of access to capital and opportunities. So DEI can mean diversity in a bunch of different ways, but we like to include all the folks who are underserved.
EMS:George, we've covered a tremendous amount of ground today, and I wanted to see if you have any final thoughts you'd like to share with us.
GA:Yes, I want to thank you for inviting me. I hope those listening will think long and hard about the long term benefits to their business models of investing in impact, and I like to move it from just investing in impact to investing in domestic consumers. Investing in communities, investing in the middle class, investing in your employees as a business. All of that is critical to the long-term benefits to each of your corporations. And so we'd be happy to talk with you about that, but others would as well. But impact and the benefits of impact are more than just altruistic. They're also really important to our economy in the long run.
EMS:Well I wanted to thank you so much, George, for sharing your perspective with our listeners. And thank you for listening to the EisnerAmper podcast series. Visit for more information on this and a host of other topics. And join us for our next EisnerAmper podcast, when we get down to business.
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Elana Margulies-Snyderman

Elana Margulies-Snyderman is an investment industry reporter and writer who develops articles, opinion pieces and original research designed to help illuminate the most challenging issues confronting fund managers and executives.

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