Elevance Health's philanthropic arm is launching a new initiative that aims to provide loans to small businesses and other organizations in a bid to address health equity.
The Elevance Health Foundation has made a $10 million commitment to the "impact investing" effort, according to an announcement. The loans offered through the program will be offered at below Prime rates, and the partners will deploy the funds to address key social needs like access to care, food insecurity and health disparities.
The foundation also intends to seek out purpose-driven businesses that may not be able to access traditional banking, particularly those owned by women and people of color, who can impact equity in their communities.
Shantanu Agrawal, chief health officer at Elevance Health, told Fierce Healthcare that the foundation has historically offered grant-based programs, which does limit the reach of its work to non-profit organizations. The team "took a step back" and examined other ways it could invest in communities before landing on this loan program, he said.
Identifying the businesses with the biggest potential impact and supporting diverse entrepreneurs ensures that "we are empowering the communities that need this the most," he said.
"Hopefully, with our funding, they're able to get their business off the ground," he said. "We're going to ensure that the businesses are really going to create a community resource that's important and necessary."
The foundation intends to make investments across the country but will focus initially in seven states: California, Florida, Georgia, Indiana, Nevada, Missouri and Texas. It has also tapped Mission Driven Finance, a California-based organization that "mobilizes capital to increase inclusive and equitable access to education, health, and wealth" as a partner.
Mission Driven Finance will manage $8 million of the $10 million commitment, and Elevance will provide additional details on the remaining $2 million in the future, according to the announcement.
Agrawal said that investing in local businesses and social enterprises is a key way to drill down into the challenges facing individual communities. For example, through the grant program, the Elevance Health Foundation can support a food bank in a region where there is a food desert.
However, the new funding initiative offers another avenue to address that challenge, as the program could provide backing to a burgeoning grocery store, he said.
The team sees these two arms of the foundation working in tandem, Agrawal said.
"I really see these two models dovetailing well with each other," he said.