(LOS ANGELES) -- The Milken Institute announced that it has received a $1 million grant from the Koret Foundation′s Philanthropic Fund to develop an infrastructure bond which will aid with reconstruction in the war-damaged region of Northern Israel.
The grant money was awarded to the Milken Institute′s Israel Center, which works to accelerate capital-market development, financial innovation and job creation with the goal of ensuring Israel′s economic independence. Half of the grant will be used by the Milken Institute to establish a bond authority and the remaining funds will become the first deposit into a credit enhancement pool for the bond.
"Expanding the role of philanthropy to include more financial innovations, such as credit enhancements, is a way for public, non-profit and private sectors to work together and leverage their investments," said Glenn Yago, director of capital markets at the Milken Institute and director of the Milken Institute′s Israel Center.
More than a year after the Second Lebanon War, Northern Israel continues to suffer from high unemployment, high poverty rates and a lack of infrastructure needed to help rebuild the war-torn region and increase regional security. A recent report by the Milken Institute, "Financial Innovations for Economic Recovery and Development in Northern Israel," described how this economic transformation can be achieved if both private and public sectors in Israel use existing financial tools that will leverage scarce government and philanthropic funds to create new sources of capital.
"We are developing a new model for strategic and leveraged philanthropy to increase the impact on the Israeli economy," said Jeff Farber, CEO of the Koret Foundation. "Our continued partnership with the Milken Institute helps us design and implement philanthropic innovation."
The Milken Institute has routinely called for foundations and philanthropic agencies to play an increased role in providing credit enhancements and other financial innovations to increase leveraged giving to address a variety of challenges. Credit enhancements provide an increased level of security to bond investors, making the investment more attractive to investors and ultimately enlarging the potential impact of the gift. Although it is only the first deposit into the credit enhancement pool, Koret′s gift sends a positive message to others donors who are interested in leveraging their gifts for increased benefit.
Koret′s Philanthropic Fund is housed at the Jewish Community Endowment Fund of the Jewish Community Federation of San Francisco, Peninsula, Marin and Sonoma Counties.
The Milken Institute′s Israel Center will work with national and regional authorities in Northern Israel to establish and advise the separate governmental body that will ultimately issue the bond. Previously, the Milken Institute has successfully designed and advised on the first-ever municipal bond authority in Israel.
About the Koret Foundation
An entrepreneurial spirit guides Koret in addressing societal challenges and strengthening Bay Area life. Investing in strategic, local solutions, Koret helps to inspire a multiplier effect — encouraging collaborative funding and developing model initiatives. With roots in the Jewish community, Koret embraces the community of Israel, especially through Koret Israel Economic Development Funds (KIEDF); asserting that economic stability and free market expansion offer the best hope for a prosperous future.