MICROCAPITAL STORY: Habitat for Humanity International Plans to Establish a USD 70 million Microfinance Fund to Assist Low-income Families and Improve Housing Globally

Habitat for Humanity International (HFHI), a non-profit organization founded in 1976, has received a USD 100 million gift from J. Ronald Terwilliger of Atlanta, a former chief executive of housing developer Trammell Crow Residential Co. and a longtime member of Habitat’s board of directors. According to HFHI’s chief executive, Jonathan Reckford, the gift is the largest individual contribution in its history. Habitat for Humanity International estimates that this single donation will help 60,000 families with access to improved housing conditions.

According to HFHI, (within five years of the funds being transferred by Terwilliger’s estate) USD 70 million of the “legacy” commitment will be used by HFHI to establish a microfinance fund for housing micro-financing globally. The remaining USD 30 million will be used for the “J. Ronald Terwilliger Leveraged Impact Fund.” The gift will be utilized to fund an endowment that provides grants annually for the construction of additional housing for low-income families. No additional information regarding how the fund will function or its geographical focus is provided. The donation comes at a time where many non-profit firms are struggling to maintain their programs and initiatives as the global economic crisis continues.

J. Ronald Terwilliger joined the board of directors for HFHI in 2000. He was later elected chairman of the board in 2007. While Mr. Terwilliger still remains chairman at Trammell Crow Residential Co., he stepped down from the chief executive position in 2008 in order to devote more time to be involved with HFHI. According to HFHI, Mr. Terwilliger has given more than USD 3 million to HFHI during his tenure at the organization. He also has visited Habitat organizations and worked on build sites throughout the United States, Europe, Central America and Asia.

Habitat for Humanity International’s involvement in microfinance is not solely limited to the establishment of a USD 70 million microfinance fund. In the wake of the 2004 Indian Ocean earthquake, MicroCapital reported that HFHI had implemented a program entitled “Save and Build” to help low-income families pool funds to meet construction costs. The goal was to assist in providing decent housing to over 500,000 Sri Lankan citizens displaced by a devastating tsunami. Combined with HFHI’s traditional donation-funded building program, HFHI facilitated the creation of small savings groups, or micro-credit cooperatives, consisting of twelve families. The families worked together to save the equivalent of USD 0.15-0.17 per day for a period of six months, a hefty sum considering many of the individuals in need of housing earn less than USD 1 per day.

HFHI also collaborated with ACCION International, a U.S. based non-profit which heads a network of 27 microfinance institutions, to conduct a study on the role of microfinance in generating adequate housing in Latin America. MicroCapital reported a paper wrap-up entitled “Getting to Scale in Housing Microfinance” and highlighted findings of the two organizations.

Habitat for Humanity International is an ecumenical Christian ministry dedicated to the cause of eliminating poverty housing. Since its founding in 1976, HFHI has built more than 300,000 houses worldwide, providing simple, decent and affordable shelter for more than 1.5 million people. In FY2008, the company served 55,000 families worldwide through new, refurbished and repaired homes. The company has reported Total Net Assets at USD 226 million year-end 2008.

Habitat for Humanity families served by region in FY2008

Africa/Middle East: New: 3,228; Rehab: 2,530; Repairs: 1,956; Total: 7,714

Asia/Pacific: New: 9,482; Rehab: 1,927; Repairs: 12,923; Total: 24,332

Europe/Central Asia: New: 199; Rehab: 718; Repairs: 939; Total: 1,856

Latin America/Caribbean New: 5,719; Rehab: 4,051; Repairs: 5,620; Total: 15,390

United States/Canada New: 5,017; Rehab: 623; Repairs: 527; Total: 6,167

TOTALS New: 23,645; Rehab: 9,849; Repairs: 21,965; Total: 55,459

By Zoran Stanisljevic

Additional Resources:

Habitat for Humanity: $100 million commitment made to Habitat for Humanity by J. Ronald Terwilliger

MicroCapital Story, August 2007: Habitat for Humanity Accelerates Post-Tsunami Reconstruction with Creative Microfinance Initiative, “Save and Build”

MicroCapital Story, July 2007: PAPER WRAP-UP: “Getting to Scale in Housing Microfinance,” by Nino Mesarina and Christy Stickney