Opportunity Zone Magazine Opportunity Zone Magazine Volume 1, Issue 1 | Page 54
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OPPORTUNITY ZONE MAGAZINE | VOLUME 1
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ISSUE 1
JOINT VENTURES WITH A MISSION
Opportunity Zones will be
transformational and could be
as impactful as the Marshall
Plan in today’s dollars.
THE IMPACT OF OPPORTUNITY ZONES
While not unprecedented, Opportunity Zones will be
transformational and could be as impactful as the Marshall Plan
in today’s dollars. Real estate developers and Wall Street see the
tremendous value of Opportunity Zones. How do non-profits and
social enterprise fit into the picture to further their community
development mission? The answer is through impact investing.
Impact investing refers to investments made into companies,
organizations, and funds with the intention to generate
a measurable, beneficial social or environmental impact
alongside a financial return. Impact investments provide
capital to address social and/or environmental issues. This is
a perfect match for Opportunity Zone investors.
For example, a local non-profit in Columbus, Ohio recently
received a generous gift from one of its members, who past
away. Had Opportunity Zones existed previously, the donor
would have been able to deploy capital gains into a social
enterprise business established to fulfill the mission and
receive returns for his investment. He might have even gifted
the tax savings to the non-profit. Imagine if he had been able
to see the impact of his investment during his lifetime, rather
than waiting to honor the non-profit’s mission in his will.
How does this fit into real estate development and how does
it become more inclusive? A minority-owned development
company could develop a QOZ project as a joint venture
with a faith-based nonprofit Community Development
Corporation to provide affordable housing solutions and
a range of economic empowerment initiatives designed to
alleviate poverty and revitalize neighborhoods in low- and
moderate-income communities.
The QOZ project could be a transitional housing development
established to assist ex-felons in reentering communities via
a holistic strategy that incorporates meaningful employment,
soft skill development, community connections and an array
of support services. Innovative non-profits utilizing this
approach have driven re-offense down from 43 percent to 5
percent and have provided 100 percent employment within
two months versus the national average of 43 percent. In
impact investment like this would assist in fostering the First
Step program recently discussed at the State of the Union
address.
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In order to make this project happen, a developer could
establish a new for-profit social enterprise joint venture
to develop the real estate. There would be numerous
beneficiaries, from the state, which could save thousands, and
perhaps millions, of dollars per year once the project is fully
occupied by the men and women seeking a second chance. If
the increased employment rates continued to hold true, the
former inmates could generate millions of dollars in payroll,
which would cut costs due to payroll taxes paid to the state.
More than the economics, projects like these will change
lives. Often when speaking about Opportunity Zones, the
Opportunity Zone community talks about the What and the
How. Impact investing is about the Why. If Opportunity
Zones have the benefits they intend, it will be critical for
community and faith-based organizations to enter into the
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