Liberty Bank investment bolsters effort to help underserved populations in Connecticut

WALLINGFORD, Connecticut – An ongoing effort to help underserved populations in Connecticut will benefit from $1 million in new funding from Liberty Bank of Middletown, say officials of Capital for Change Inc.

“These funds will provide capital to expand our lending capital base and to help Capital for Change raise additional support for its community-development activities,” said Charles Bodie, the organization's chief financial officer.

Through a financing instrument that functions similar to an equity investment, the funds are expected to be distributed as loans focusing on Connecticut in general and the Greater New Haven area specifically, Bodie said.

Organizations providing services to low- and moderate-income persons or households in the Greater New Haven area also are expected to receive priority for these loans, he said.

To that end, the Community Foundation for Greater New Haven (CFGNH) has agreed to provide a 50 percent guarantee for loans made from the funds, Bodie said. The foundation, established in 1928, is the region's largest grant-making organization.

“Our mission at Liberty Bank is to improve the lives of our customers, teammates and communities for generations to come,” said David W. Glidden, the bank's president and CEO.

“To do that, we must always look for ways to create strong partnerships with organizations such as Capital for Change and the Community Foundation for Greater New Haven, who do so much in helping others create economic opportunity and improve our communities,” Glidden added.

“This unique investment to establish the loan fund will go a long way in helping nonprofits, particularly in Greater New Haven, continue to do what they do best, make our communities a better place to live and work, improve the well-being of individuals and families and form lasting partnerships with other organizations that share the same sense of purpose,” he said.

“Capital for Change has been our partner for many years in the Greater New Haven area, and we have benefited from their knowledge and capacity as lenders,” said A.F. “Drew” Alden, the foundation's senior vice president and chief investment officer.

“As a way to enhance this new investment with additional leverage and support, we felt it was important to stand behind and guarantee a portion of the resulting loans, so Capital for Change would continue to do more and build on the achievements they've made in this area,” Alden said. “We think it's important to do that.”

Alden also is president and CEO of the foundation's wholly owned subsidiary, the Mission Investments Company, established in 2017 to deploy charitable capital through loans, guarantees and direct equity investments in an inclusive and proactive fashion with a priority given to those in the community that historically have been at a distinct disadvantage.

“The goal is to spur growth and connections among entrepreneurs, community groups, start-ups, existing businesses and nonprofit organizations, especially those that may not fit conventional financing profiles, under its strategic-plan priority of 'Opportunity and Equity,'” Alden said.

“The more capital we can bring together and make it work equitably for the community in new and different ways is essential to the long-term health of our community and is consistent with our mission-related investment goals and intended impact,” he added.

“This investment is coming at exactly the right moment for Capital for Change to provide needed funds to nonprofits in the New Haven area that have been impacted by the coronavirus,” Bodie said.

“In conjunction with the CFGNH, Capital for Change has been active in serving nonprofits in the city for many years,” Bodie said. “In fact, we have several loans supporting the community today and prospective loans in our pipeline that can be supported with Liberty’s investment.”

The financing instrument involved in such loans is called Equity Equivalent, or EQ2, a capital product for community development financial institutions and their investors, Bodie said.

“This tool allows community-development financial institutions to strengthen their capital structures, leverage additional debt capital and, as a result, increase lending and investing in economically disadvantaged communities,” he said.

The investment can be renewed annually and requires interest payments during its term, although at a rate that often is well below market, he said. 

“With these low-cost flexible funds, we are able to help nonprofits -- such as community health centers and agencies that serve vulnerable children – to access funding for expanding their facilities to serve more clients,” said Carla Weil, director of commercial lending at Capital for Change.

“For other agencies, these funds can provide a crucial operating bridge to contract funding or pledged contributions,” she added.

“This support from Liberty Bank is extremely important to the future of our efforts statewide and in New Haven,” said Capital for Change CEO Cal Vinal. “We believe this demonstration of trust in our efforts will help fulfill our mutual goals while helping many people in underserved communities throughout Connecticut.”

Liberty Bank, founded in 1825 and with headquarters in Middletown, is the oldest mutual savings bank in the nation. It offers consumer and commercial banking, home mortgages, insurance and investment services.

More information about Liberty Bank may be found online at liberty-bank.com, and information about the Community Foundation for Greater New Haven may be found at cfgnh.org.

More information about Capital for Change is available online at CapitalForChange.org and the organization's Facebook page, “Capital for Change, Inc.”

Capital for Change's mission is to provide flexible, creative and responsive financial products and services to benefit low- and moderate-income persons, and minority and otherwise underserved individuals, businesses and communities. Its programs and products broaden access to affordable housing, energy efficiency and job opportunities.

Capital for Change Inc. was created in 2016 through the mergers of the Community Capital Fund, Connecticut Housing Investment Fund and the Greater New Haven Community Loan Fund, shaping an organization with a statewide history of service stretching back to 1968. Serving Connecticut for more than 50 years, C4C has invested more than $425 million in mission-driven capital statewide.


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