Overview

The Community Bank model allows anchor institutions, like local health systems or government agencies, to create a shared pool of funds to utilize towards localized health equity initiatives. The Community Bank funds are managed by a trusted, third party financial institution such as a Community Development Financial Institution (CDFI), bank, or credit union and are dispersed to community partners for health-promoting projects.

The flexible financing created through Community Banks creates a fund of readily available capital that impacts localized priorities around the social drivers of health. 

Unique Value

Community Banks democratize financing by anchoring capital in the communities it serves. Unlike funding institutions investing in individual priorities, Community Banks reinvest deposits from hospitals, health plans, and anchor institutions into projects agreed upon by a community of stakeholders.

The collective nature of Community Banks create larger funding opportunities with longer guaranteed duration, creating more impactful results. This model brings together stakeholders from various sectors to provide financial assets and resources for a larger collective impact on health outcomes. 

Origins

The model has been championed by health systems such as CommonSpirit Health (CSH), who identified the impact of creating a localized pool of funds to address the social, economic, and environmental needs of the communities they work with.

First started in Nevada, and then expanded to communities in California, CSH created localized Community Banks to pool funds from local institutions to share in community infrastructure costs over a period of three years. Utilizing these shared funds to advance a common goal, the Community Bank funds successfully allowed local health systems and CBOs to implement a shared referral platform to better connect patients to necessary social services. 

Methodology

Conditions

1. Community-defined priorities for investment areas and clear equity metrics.
2. Local partner(s) able to meet the needs of the communities they serve. 
3. Funding partners (e.g. healthcare providers or payers, universities, government agencies, philanthropy) willing to shift capital to the collective pool of money. Often these institutions will get some return on investment.‍
4. A mission-aligned, neutral financial intermediary (bank, CDFI, or credit union) with strong management and community trust.

Process

The generalized process for implementing a Community Bank is as follows:

1. Convene institutional and community partners.
   Invite institutional stakeholders that have access to capital and could benefit from a return on investment such as healthcare partners, healthcare payers, universities, government agencies, and foundations. Identify key community partners that are trusted by the local community.
2. Identify shared health priorities.
   Create shared goals for meaningful community impact. Determine shared success metrics inclusive of impacts on health and economic returns on investment. Include diverse perspectives including community members, community partners, and funders.
3. Pool deposits or capital contributions from partners.
   Determine financial commitments from each funder and establish funding duration, with a minimum commitment of three to five years.
4. Utilize a neutral fiscal agent.
   Use a neutral third party fiscal agent with an established track record for fund management and disbursement to manage the Community Bank. Consider local financial institutions such as credit unions or CDFIs that have similar goals around community development.
5. Fund local community partners.
   Disperse the funds allocated in the Community Bank to local community partners that align with the funds goals and vision. Prioritize trusted partners with a commitment to impacting health equity.
6. Measure outcomes on health metrics.
   Use a neutral third party evaluator to measure health outcomes and quantify the impact of the community bank funds.