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$200-Million Foundation Effort Seeks to Increase Healthy Food in California

Mother and daughter in the produce section

The California Endowment wants to increase access to healthy food in poor neighborhoods.

The California Endowment got a little help kicking off its newest project. First Lady Michelle Obama announced the start of the California FreshWorks Fund during a ceremony at the White House. The new $200-million loan fund is designed to increase access to healthy, low-cost food in poor neighborhoods in the state.

“Healthy food is often the prescription that your medical practitioners provide you with if you’re diagnosed with a chronic condition,” says Marion Standish, director for community health at the California Endowment. “Yet you can’t eat healthy food if you can’t buy healthy food near your home, near your work, or in your community.”

The California Endowment started the fund with a $30-million low-interest loan and a $3-million grant. Other investors helped the fund grow to $200-million, including Kaiser Permanente, JPMorgan Chase, NCB, and other institutions.

While one purpose of the financing is to attract grocery stores to neighborhoods that have limited access to fresh, healthy food, it isn’t the only one. Officials at the California Endowment say the fund will also consider making loans to start farmers’ markets, efforts to distribute fruits and vegetables to corner stores, and maybe even trucks to deliver produce.

Applications to the loan fund will be evaluated on a number of criteria—some traditional and some decidedly nontraditional.

“We’ll look at their business plan and look at the type of financing that they need and analyze their cash flow to make sure that they can repay the loan that they take on,” says Annie Donovan, chief operating officer at NCB Capital Impact, the nonprofit finance institution that will administer the loan fund.

But health considerations will play a role as well. For example, an application will gain points if the project takes steps such as eliminating snack-food aisles, not selling cigarettes, or supplying a high proportion of healthy foods.

Through the Calvert Foundation, another nonprofit institution that contributed loan capital, individuals can make an investment—for as little as $20—in the loan fund. The investments will earn a 0.5 percent rate of interest.

The organizers of the California FreshWorks Fund have posted a video online to explain the group’s mission.

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