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January 03, 2001

Leviticus 25:23 Alternative Fund Puts Money Where Its Faith Is

Religious-based community development organization is working to lift the lot of the economically disadvantaged. -- The Leviticus 25:23 Alternative Fund is a regional revolving loan fund that focuses on important community needs such as affordable housing and day-care centers. Through financing provided largely by its members, it strives to "help create opportunities whereby the poor can become authors of their own destiny."

The Judeo-Christian based values of the Fund are revealed in its name. Some people will recognize that Leviticus 25:23 is a reference to the 25th chapter in the Book of Leviticus in the Bible. The Bible passage, as quoted from Fund literature, reads "your land must not be sold on a permanent basis, because you do not own it; it belongs to God, and you are like foreigners who are allowed to make use of it."

"The Fund is a real example of people and organizations living out their faith commitment in concrete ways within a modern economic system," said David C. Raynor, Executive Director of the Fund.

The Leviticus Fund carries out its mission by making loans through its lending programs. Since being founded in 1983, the Yonkers, New York-based organization has lent approximately $7.3 million in the tri-state area of New York, New Jersey and Connecticut. The $7.3 million includes $3.4 million for affordable housing, $1.7 million for child care and $2.1 million for not-for-profit facilities loans, and almost $200,000 in other small business loans.

The Fund gives priority to lending for affordable housing, which includes home-ownership and supportive housing projects. In 2000 alone, the Fund closed four loans totaling $778,000. The four loans included a supportive housing project for people with psychiatric disabilities, and three loans for new-construction home-ownership projects. The three home-ownership projects have partially financed 180 housing units.

Based on prior experience and success, the Fund initiated a lending program specifically for child day-care in 1998. Leveraging a Federal Community Development Financial Institution grant, the Fund has built a $1 million pool of zero-interest funds garnered mostly from banks and foundations. The program offers loans of up to $150,000 for up to 10 years at 5 percent interest. In the last three years, the program has helped create 850 child-care slots.

Leviticus' third program involves loans to support not-for-profit social service agencies. These loans are often for repairs of improvements to buildings, bridge loans to cover the gap between award and recipient of grants, and loans for equipment or other infrastructure improvements. Over the last three years, over $975,000 in facilities lending has benefited 13 social service administration buildings a community health-care facility.

The capital for Leviticus Fund's lending projects is derived chiefly from its 78 members and 50 associate members. Members consist of churches, religious orders and faith-based not-for-profit organizations that make loans of $5,000 or more to the Fund for a period of at least five years. Associate members are individuals or organizations that make a minimum loan of $1,000 for one year or more.

Looking to the future, Leviticus is hoping to expand its loan portfolio related to day-care. "We intend to capitalize on our expertise in child care lending and expand this key program," says Raynor. "This expansion will require leveraging our Member's and Associate Member's investment to attract community development investments from traditional financial institutions," he added.

The impact of the Leviticus 25:23 Alternative Fund can be measured in New York, New Jersey and Connecticut in terms of the increased affordable housing and day-care provision it has realized, as well as the support given to not-for-profit social services.

But Leviticus' Executive Director also sees an impact that is not so tangible, one that should resonate with all social investors. "In a sense," said Raynor, "our real impact is in bringing together the funds of individual and institutional investors interested in developing this kind of social impact with the projects that actually make it happen. That is our strength."

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