Invest Appalachia: A Blended Capital Fund for Regional Development

Invest Appalachia, a non-profit organization established in 2019, is tackling the challenge of attracting investment capital to Appalachian counties across six states, which have historically faced economic difficulties.

• The organization launched a fund, securing $35.5 million in commitments, with the goal of revitalizing the region through strategic investment.
• Invest Appalachia's mission is to promote economic equity, build community wealth, and foster sustainable development within Appalachia.

A Blended Capital Model for Impact

Invest Appalachia's approach involves a blended capital model, combining loans with philanthropic funding to create a unique financial structure.

• The Invest Appalachia Fund raises capital from foundations, banks, corporations, and family offices to provide loans.
• The Catalytic Capital Fund offers grant-like capital, including unsecured bridge loans, to support projects.
• Invest Appalachia also collaborates with existing community development financial institutions (CDFIs) and other capital providers to ensure projects align with community needs.

Targeting Inclusive Development

The fund focuses on key areas that have the potential to drive inclusive economic development in Appalachia:

• Clean energy
• Community health
• Food and agriculture
• Place-oriented development, including downtown redevelopment and repurposing historical and industrial buildings

Building a Resilient Appalachia

Invest Appalachia aims to create a more resilient and equitable Appalachian region through its investment strategy.

• The organization seeks to address systemic economic challenges and create pathways for long-term sustainable development.
• By investing in community-driven initiatives, Invest Appalachia fosters local ownership and promotes equitable economic growth.

Designing a Fund for Impact, Not Just Profit

Understanding that market-rate returns may not be realistic in an underdeveloped region, Invest Appalachia has designed a fund that prioritizes impact over solely financial returns.

• The fund structure shares risk equally among investors, similar to a private equity fund, but with a limited financial upside and a significant focus on social impact.
• First loss capital from grants helps mitigate risk, making the fund attractive to impact-focused investors like foundations.

Progress and Future Goals

Invest Appalachia has made significant progress since its inception.

• The fund achieved its first close in 2022, securing $18.95 million in commitments.
• The final close in 2023 reached $35.5 million in commitments.
• Invest Appalachia is on track to make approximately $15 million in loans by the end of 2023.

Invest Appalachia's Impact on the Regional Economy

Invest Appalachia is playing a vital role in revitalizing the Appalachian economy.

• By channeling capital into community-driven initiatives, the fund is creating jobs, stimulating economic growth, and fostering a more inclusive and equitable future for Appalachia.
• Invest Appalachia is demonstrating that capital can be a powerful force for positive change in historically under-resourced regions.