Prosperity in Place
Rotational capital Fund
The Problem
In the wake of the 2008 financial crisis, Historic South Atlanta experienced widespread foreclosures. In partnership with the neighborhood, the FCS board and friends joined together to see what action could be taken.
South Atlanta neighbors were robbed of wealth and stability in the built environment. Unethical real estate risks taken by wealthy individuals and investment funds left South Atlanta vulnerable. At the time, 170 of 530 homes in the neighborhood were vacant - a 32% vacancy rate.
The Approach
In response, FCS established a Rotational Capital Fund (RCF) to acquire, stabilize, and sell over 100 homes to existing residents and new neighbors over a timespan of less than fifteen years.
The RCF unfolded in three distinct phases, beginning with individual investors, then local private foundations, and finally large institutional investors. The fund was first established at $480k in 2009, with $300k at a 4.5% annual interest rate, paired with $180k initial investment by FCS. This was placed in a fund owned by FCS subsidiary, Charis South Atlanta, LLC. Throughout the life of the fund, larger and low-interest rate investments have allowed RCF to withstand dramatic cost increases while maintaining affordability.
The People
The Rotational Capital Fund consists of many partnerships.
Individual and institutional investors that believed in the FCS mission offered their time, expertise, and capital, and all gained their expected returns. Neighbors and residents risked financial resources, and ultimately received the greatest return on financial and personal investment in South Atlanta. Notable partners include Invest Atlanta, Community Foundation for Greater Atlanta, PNC Bank, Northern Trust, and local foundations.
