We Innovate.
We Act.
We Accomplish.

Pacific Community Ventures
2007 Annual Report

Opening doors. Changing lives.

Employee OnRamp

How do you instill a worker’s confidence in a system she has never been a part of? How do you generate trust in a process that she has historically been suspicious of? How do you unleash the potential of an inherently talented individual who has never really had a fair chance to improve her life?

Where language, culture, and negative experiences are often a barrier, the challenge is to connect lower-income workers to financial, healthcare and other essential services and information in a way that inspires trust and participation.

Innovate
Employee OnRamp brings vital tools and information directly to lower-income employees in the workplace to strengthen the bonds between employees, their employers and communities. Through Employee OnRamp, workers who have long relied on expensive fringe financial services like check cashing and payday loans learn to develop budgets, manage a checking account, and improve credit standing. Beginning in 2008, these same workers will learn about options for healthcare. They’ll have the opportunity to participate in HealthCare Vouchers, a new product that PCV developed and piloted in 2007. HealthCare Vouchers connects uninsured workers to affordable basic healthcare.

Act
In 2007, PCV continued its high-impact financial literacy workshops, working with hundreds of lower-income employees to help them understand — and use — basic banking services. PCV helped these workers learn how to retain their earnings and build assets in order to get out, and stay out, of poverty. And we worked with our portfolio companies to develop innovative employee ownership programs that increase employee productivity, retention and opportunities to build wealth.

Accomplish
Through Employee OnRamp, PCV has created a way to access thousands of lower-income workers across California to help them climb the economic ladder. In 2007, as a result of PCV’s financial literacy workshops, lower-income workers changed how they handle their finances. These workers now have better access to a financial system that can help them build good habits, good credit, and, ultimately, a better future for themselves and their families.

Beginning in 2008, we’ll provide employees with tools to manage their health and wellbeing and to avoid the costly medical care options that can force them into poverty. PCV is also creating a statewide Healthcare Policy Forum to help California’s small business employers understand state and local healthcare policy debates and weigh in for a real, workable solution that provides healthcare for workers without bankrupting businesses.

Profiting Communities. Profiting Investors.

Equity Investment

It’s a vicious cycle for underserved communities: they need businesses to grow in order to stimulate economic development and reduce poverty. But they have difficulty attracting investment capital to build businesses. Investors often deem investments in businesses in these communities too risky and too difficult to make happen. Underserved communities continue to lack thriving small businesses and the cycle repeats.

The challenge is to tap into the power of these communities by proving that investments in such businesses produce significant social value. This is accomplished through the creation of a revenue base, physical infrastructure and good jobs — and substantial financial reward through market-rate returns — which will ultimately attract more capital to these communities.

Innovate
With over 90 percent of the California’s private investment capital going to just 9 percent of the state, Pacific Community Ventures focuses on identifying high-potential businesses in California’s many underserved areas. Once these businesses are identified, we deploy capital alongside expertise to create economic and social change.

Act
Through our three equity funds — totaling over $60 million — Pacific Community Ventures fills the “capital gap” that lower-income communities invariably experience. In addition to the financial component of these investments, members of PCV’s investment team hold board seats and are actively involved with the companies they invest in. This gives business owners and their employees access to expertise and resources generally not available to small businesses in underserved areas.

Accomplish
In 2007 alone, PCV invested over $6 million in businesses in California’s underserved communities. In the past year, revenues at PCV-financed companies grew by 10 percent and employment grew a total of 22 percent, far exceeding state employment growth of just 1 percent. In 2007, with repeat investments from investors in our earlier funds, plus several new investors, PCV closed our third equity fund with over $40 million. PCV also became the fund manager for the City of San Jose’s $3 million Catalyst fund.

Measuring the value of social change.

Insight

Traditionally, investors seek financial returns. But, more and more these days, investors want their investments to do double duty: to earn financial returns and to provide significant social returns. But the challenge is that while investors know how to measure the former, they don’t know how to evaluate the latter.

Innovate
PCV has developed groundbreaking metrics to evaluate the social impacts of equity investments. These metrics are arrived at through a considered, deliberate process — one that takes both credibility and feasibility into account — for determining the what and how of measuring social returns.

Act
In addition to measuring the social return on investment of our own portfolio, PCV also consults with pension funds, foundations, fund managers, and fund-of-funds managers to evaluate the social benefits of their investments. For every metric, we identify benchmarks that indicate progress on stated goals, helping investors understand the true power of their investments.

Accomplish
Today, PCV measures the social benefits on nearly $1 billion of equity investments. PCV is proving — through its own portfolio and those of our clients — that investing for the double bottom line works.