A public space revitalized by Doh Eain, a social enterprise active in Yangon, Myanmar.

Webinar Recap: Promising Models of Heritage Investing

April 21, 2021 (New York, NY) – FJC hosted a webinar to highlight its strategic partner the Cultural Heritage Finance Alliance (CHiFA), a new initiative that promotes heritage-led regeneration through collaborative and innovative financing solutions.   The event was moderated by Sam Marks, FJC’s Chief Executive Officer and highlighted two promising examples of organizations that embody CHiFA intends to support: Doh Eain and Turquoise Mountain.

A full recording of the webinar is available at this link.

“Our goal is to bring the public sector and private sector together in joint initiatives.”

Bonnie Burnham, Co-Founder, CHiFA

Mr. Marks kicked off the event by explaining FJC’s role providing operational and fiscal support to CHiFA.  As a foundation of philanthropic funds that brings economies of scale to philanthropists (by sponsoring Donor Advised Funds) and organizations (through fiscal sponsorship), FJC will provide operational and administrative support, including servicing CHiFA’s loan fund.  CHiFA is currently raising $3 million to provide catalytic, early stage capital to heritage regeneration projects around the world.  With FJC administering the loan fund, CHiFA will be able to stay lean and focused on mission.

CHiFA Co-Founder Bonnie Burnham described how CHiFA evolved out of her many decades of experience at the World Monuments Fund.   Her previous work was largely focused on revitalizing individual sites, using philanthropy to leverage public sector.  Her work at CHiFA has a more intentionally broader economic and social impact in mind, through nonprofit partners that facilitate investments in enterprises and the urban fabric.  “We’re trying to create a methodology that can be widely applied,” Ms. Burnham explained.  “Our goal is to bring the public sector and private sector together in joint initiatives.”

Aurora Kazi Bassett, the Director of Outreach & Policy for Doh Eain described a promising model of the type CHiFA has in mind: her organization’s work in Yangon, Myanmar.  Doh Eain is a social enterprise that uses private investment (and some grants) to restore and maintain small and medium sized, privately owned historic residential buildings, and also improve public spaces that can be used by the community.  “These are not the big, beautiful palaces that we go to visit on holiday, but the shops, houses, and office buildings that have been used by normal people’s homes.” Doh Eain’s model does not purchase the properties outright, but takes on the risks of revitalization during a discrete leasehold period and returns ownership back to the original owner-residents.

Shoshana Stewart, CEO of Turquoise Mountain, presented another model of heritage-led regeneration.  After describing some of the organization’s successes in the Old City of Kabul, Afgahnistan, Ms. Stewart described their vision for Umm Qais in Jordan, a unique architectural site at the crossroads of the Middle East, adjoining Syria, Lebanon and Israel.   With layers of architectural and cultural assets, including Roman ruins, Byzantine period mosaics, and a ruined Ottoman period village, Turquoise Mountain intends to leverage tourism, which a cornerstone of country’s economy. “Typically when international tourists come, they come to the big sites: Petra, the Dead Sea, Wadi Rum.  In the north of Jordan you’ve got a number of sites, but there is nowhere to stay.  If we can get the accommodations right, we have the potential for both international and domestic tourists. There’s significant potential.”

Common across the Doh Eain and Turquoise Mountain examples is an enterprise model that combines some philanthropic grant resources with more conventional investments that offer a return to investors.   In Doh Eain’s case, rental income from the residential and commercial, properties covers the cost of the physical revitalization, and also provides an income stream to the building owners and a return to impact investors.  Doh Eain uses some of the profits, along with grants, to implement public space work that is more purely subsidized.  Turquoise Mountain will seek investment capital to develop the ruined Ottoman village into accommodation (which will ultimately generate revenue).  Simultaneously, they work with a range of grantmaking partners, including development agencies and philanthropy, for the pieces of the project that are critical to its ultimate success but not expected to generate revenue.

In advance of their capital raise, CHiFA has documented the emergence of heritage regeneration NGOs with investable business models in their recently published white paper Impact and Identity, Investing in Heritage for Sustainable Development. Says Ms. Burnham, “We have to convince impact investors that heritage is a missing link in the circular economy strategy, bringing human environments into compliance with meeting our goals for sustainable development.  This is where there’s a tremendous opportunity.”

Photo courtesy of Cultural Heritage Finance Alliance

CHiFA Issues White Paper on Heritage-Led Regeneration and Sustainable Development

FJC celebrates the release of partner organization The Cultural Heritage Finance Alliance (CHiFA)’s report Impact and Identity, Investing in Heritage for Sustainable Development.  The white paper makes the case for historic resources as investable assets for the comprehensive and sustainable revitalization of many at-risk and culturally significant communities throughout the world. Particularly timely, the report reflects on successful models to define a path forward that is an antidote to environmental degradation, civic erosion, the loss of irreplaceable cultural treasures and the displacement of local populations.

The report presents studies of six examples from across the world where heritage investment has restored vibrancy to historic urban centers that had been in economic and cultural decline.  A housing investment company in Amsterdam, a World Bank loan in Fez, a visionary private investor in Mexico City, entrepreneurial businesses in Panama City and Yangon, and a government-supported loan program in the UK succeeded in catalyzing more than a billion USD in leveraged capital. 

Dynamic success requires a complement of NGO engagement, private investment and mission-motivated entrepreneurs who together can advance heritage preservation at the urban and district levels.

FJC formed a strategic partnership with CHiFA last year as loan servicer and finance administrator.  As CHiFA raises philanthropic loan capital to invest in sites globally, FJC’s role will be to manage the operations of aggregating and deploying these funds, including servicing for its international project loan fund. This arrangement will allow CHiFA to remain lean and focused on mission, with FJC leveraging its scaled operational platform to deliver back office support and ancillary services. FJC will also manage payments for most of CHiFA’s day to day expenses.

The Cultural Heritage Finance Alliance (CHiFA) was founded in 2019 to promote heritage-led regeneration through innovative financing solutions.   Its goal is to position historically and culturally significant built environments as anchors of environmental, social and economic development.  Bonnie Burnham, president and founder of CHiFA and president emerita of the World Monuments Fund, stated: “Preserving heritage is among the targets set by the UN Sustainable Development Goals, but it is not on the radar screen of investors and institutions who are aligning behind sustainable development.  And yet there are inspiring and highly impactful examples of how it can transform the places we live, for the better.  We want to call attention to these examples so that people around the world can learn from them.”  

Public agencies are responsible for heritage preservation in most countries.  But with an increasing number of sites under protection, decreasing budgets, and low political priority, these agencies face a crisis of inadequate resources.  There is a tendency to focus on landmark structures, whereas the more encompassing urban fabric — where people live and work — offers the greatest potential for impact. While public commitments are necessary, dynamic success requires a complement of NGO engagement, private investment and mission-motivated entrepreneurs who together can advance heritage preservation at the urban and district levels. Currently, no entity exists within the heritage conservation field to facilitate these partnerships and to align capital to bring projects to fruition.

CHiFA’s research, conducted over the course of 2020, has revealed a spectrum of  successful models. The full case study analyses are linked to the appendix, and will be released as a second volume in early April 2021. 

Gary Hattem, a co-founder of CHiFA and former head of Global Social Finance at Deutsche Bank, concluded: “The experiences, ideas, strategies, and plans presented in this paper explore a new frontier: that of how to go about healing our planet and preserving the richness of the world’s cultural assets. CHiFA builds upon lessons learned to identify a financially viable ecosystem capable of validating heritage sites by leveraging their irreplaceable value to the benefit of existing residents.” 

New Collaboration to Finance Cultural Heritage Sites

As the leader of the World Monuments Fund over three decades, Bonnie Burnham saw firsthand how cultural heritage sites around the globe stimulate local economies and strengthen communities. “Heritage sites, whether buildings, landscapes, or structures,” explains Ms. Burnham, “have enormous cultural or historical value that with careful stewardship can be translated into economic value and job creation for a broad range of stakeholders.” Unfortunately, many heritage sites exist in places that have limited public resources for their upkeep.

Enter the Cultural Heritage Finance Alliance (CHiFA), which brings together expertise in conservation, architecture, urban planning, business and finance to orchestrate long-term strategies that create revenue and economic sustainability for heritage assets while supporting a range of Sustainable Development Goals. The goal of CHiFA is to raise loan capital from foundations and other mission-lenders to provide working capital loans that will catalyze significant public and private investment in these important places.

As Ms. Burnham and her team prepared for CHiFA’s formal launch, they realized they needed a strategic partner to manage the operations of their loan fund. Co-Founder Gary Hattem, formerly Head of Deutsche Bank’s Global Social Finance Group, made the introduction to FJC.

As CHiFA raises philanthropic loan capital to invest in sites globally, FJC’s role will be to manage the operations of aggregating and deploying these funds, including servicing for its international project loan fund. This arrangement will allow CHiFA to remain lean and focused on mission, with FJC leveraging its scaled operational platform to deliver back office support and ancillary services. FJC will also manage payments for most of CHiFA’s day to day expenses.

“This relationship will benefit us both,” said Bonnie Burnham, President of CHiFA. “For CHiFA, FJC brings the advantage of more than 25 years of experience in loan servicing and financial management, which will give us, our partners and investors confidence that we will launch our initiative with a high degree of operational excellence. We hope this alliance with a foundation partner will accelerate cultural heritage as an emerging impact investing theme.”

“We are thrilled to collaborate with CHiFA to execute this unique and innovative international program,” said Sam Marks, Chief Executive Officer of FJC. “The revitalization of cultural sites has enormous potential impact, not just as a worthy goal on its own terms, but as an engine for economic development and job creation. As a sponsor of Donor Advised Funds with a long history of lending to the nonprofit sector, it’s exciting to apply our operational model to advance the goals of partners like CHiFA, where money meets mission.”