Institution banks on key partnership to aid development

During the 2025 season of giving, Christmas arrived early in the form of a $200,000 philanthropic grant awarded to Boise-based NewWest Community Capital.

The local nonprofit and Community Development Financial Institution (CDFI) was one of 27 recipients nationwide to recently receive a grant in the specific amount as part of KeyBank’s bicentennial celebration.

The dollar figure is symbolic of the bank’s 200-year history providing financial service to communities nationwide.

“As we wind down KeyBank’s bicentennial year, this grant is definitely a big part of that,” said Laura Suter, regional communications manager for the bank.

“We focus on the measurable impacts and outcomes and how philanthropy is helping to improve the lives of our communities,” said Eric Fiala, chief corporate responsibility officer and CEO of the KeyBank Foundation.

“We always like to talk about how our footprint runs from Maine to Alaska. My position allows me to see some of the best work happening in communities all across the country.”

The Treasure Valley certainly qualifies as one of those communities, with NewWest serving as an integral part of the area landscape for the past quarter century.

“We use debt as a means to an end. But our goal is to work with good partnerships to make long-term, successful projects that work from a financial model perspective,” said Dutch Haarsma, president of NewWest Capital.

“We take those dollars and lend them into development projects. Without capital we simply don’t have a mission as an organization. So we rely heavily on the private sector to invest in our fund. We give them a fixed-income return.”

Often, development focuses on affordable housing and health and human services for underserved communities, hot topics even in Idaho.

“The operative word in our title is community,” Haarsma said. “We are not a for-profit organization and were structured in ways to do things that are often very difficult for the private sector to do, or are not as profitable as other opportunities might be for the private sector.”

NewWest was founded in 2000, and during the past 25 years the two financial institutions have maintained a solid and productive relationship.

“In our overall approach to philanthropic giving, we look to support a variety of organizations,” Fiala said. “But we certainly always want to work with a partner, such as NewWest Capital, one that we know can deliver on the outcome.”

In fact, KeyBank is a founding investor of NewWest.

“The way we work as an organization is primarily borrowing capital from banking institutions,” Haarsma said. “Usually, the private sector is the biggest piece of that capital stack for these multimillion-dollar projects. Having an organization that does this kind of lending is so important to us and solidifies our relationship.”

Plus, according to Haarsma, every single dollar NewWest receives goes right back into projects centered on affordable housing, health care and child centers.

“They’ve [KeyBank] got the big pockets. They are a financial institution that does hundreds of millions of dollars with these projects,” he said. “And we’d like them to continue to do as much as they can in Idaho.”

Grants of this nature help NewWest “leverage up” the dollars flowing to help create a multi-year impact. In most cases this translates to about a 12-to-one ratio, meaning for each dollar taken in, roughly $12 go back out the door to help serve the community.

“It’s not a one-and-done. We lend the money out and it comes back to us,” Haarsma said. “We lend it out again and recycle these dollars over and over again, which is what gives us leverage.”

Or, as he calls it, the “secret sauce” that makes the finances work. “This is going to be here for the next 25 years and we’re going to continue to re-lend these dollars into new projects. It continues to pay dividends into the future.”

With the financial institutions sharing a 25-year history, Fiala had no doubts NewWest was the right choice for the funds in this market.

“We strongly felt they could leverage the dollars that we invested,” he said. “When done leveraging it out, they’re creating a million dollars of impact.”

While sticking to the financial playbook is the easy part, it can sometimes be more difficult for nonprofits to obtain funds, especially in today’s society where growth is pushing demand for more dollars. Philanthropists play a major role for an array of community-conscientious organizations seeking financial support.

“Philanthropy is the critical third sector and oftentimes the lifeblood of nonprofits,” Haarsma said. “Without it, the nonprofit sector, which increasingly is being relied upon as the safety net in society, simply would not exist.”

A decade into his current position with NewWest, after numerous years serving as a board member, Haarsma uses the phrase a “bottom-up” approach to best describe the financial process.

“A community says this is what we need, this is how we need to work, and these are our challenges,” he said. “Philanthropy can be both a funder of those initiatives to deal with issues, and it can act as a convener to bring people to the table to help talk about the issues.”

A key factor for KeyBank in awarding NewWest the grant funds, Fiala emphasized, was its focus on its position as a CDFI and a “compelling proposal” and multi-faceted approach in requesting the funds.

“We see such organizations as having the ability to extend the capabilities that we have as a financial institution,” he said. “They can provide loans and reach deeper into the communities and really put capital to good use.”

For the first time in its grant process, the KeyBank Foundation issued a request for a proposal (RFP) geared towards three strategic pillars for philanthropy – education, workforce development and community and economic development – a process that generated 80 requests nationwide.

“In this case, we actively went out with a specific dollar amount to seek proposals from community development and financial institutions based within our 27 markets,” Fiala said.” And we let them tell us how to best put those dollars to use.”

While Haarsma fully understands that good philanthropy boils down to making good process, employing good thinking and planning to help produce the best outcome, he also recognizes how much further the concept goes beyond the exchange of grant dollars.

“Certainly, philanthropists are absolutely critical and we all rely on them,” he said. “They are probably under-appreciated for how much work flows through a philanthropic organization. They tend to be the glue that hold all the pieces together.”

According to figures provided by Suter, KeyBank’s broader investment in Idaho comes in at half-a-billion invested throughout the Gem State since 2017, including as much as $200 million dedicated to affordable housing and community development projects.

“These are just some of the other ways in which we are looking to drive our impact in Idaho,” she said. “Across the Treasure Valley and even eastern Idaho, KeyBank is making a difference in a number of communities. These grants are like an added layer to being involved in making a difference within these communities.”

Locally, NewWest has partnered with two “solid” affordable housing outfits, including NeighborWorks, with the development of its unique “pocket neighborhoods,” and with LEAP Housing on affordable homeownership projects. Haarsma knows the need to push community involvement as strongly the group works to gain financial support.

“Sometimes these are difficult projects to do, and groups like LEAP and NeighborWorks are the only ones willing to step into such projects,” he said. “They don’t spin-off the kind of profit a for-profit developer may look for.”

“For the average person on the street, affordable housing is for working families,” said Jane Pavek, community strategy and administrative specialist for NewWest. “Some projects do have subsidies for people who may be on social security disability, but you need all of these different housing options to make a community healthy.”

Other options for financing and completing developments fall under the category of creative or sophisticated solutions, the kind that go beyond the dollar figures involved.

“The money is actually the smallest piece of this community engagement process,” Haarsma said. “People getting engaged is where the magic really happens. Someone with a good idea who can get people involved and make the idea take off like wildfire.”

That is where a lengthy partnership such as the one shared by KeyBank and NewWest helps fill the void when it comes to seeking financing and community participation.

“In our overall approach to philanthropic giving, we look to support a variety of organizations,” Fiala said. “But we certainly always want to work with a partner, such as NewWest Capital that we know can deliver on the outcome.”

And this long-standing relationship looks like it will continue to extend and expand for many years to come.

“We see ourselves as the yeast that makes the dough rise,” Haarsma said. “We put a small dollar amount into some projects and that can then encourage some very, very large ones.”