Kentucky Highlands Investment Corp

What it reported doing in 2024

Kentucky highlands investment corporation (khic), london, Kentucky was founded in 1968 as job start corporation as a part of the war on poverty. Khic started with a nine county service area and has expanded to twenty-two counties. These counties have chronically high rates of unemployment and poverty. This hilly, rural area has only nine population centers with more than 5,000 residents. But with technology, good highways, loyal employees and lower cost of living it is an increasingly attractive area for new businesses.at march 31,2025, khic has provided $735 million in financing to 1,171 borrowers, including 537 small farm borrowers, and created 21,028 jobs while maintaining 8,612. Khic has been a vibrant catalyst for change in its target area. However, khic's primary concern for the area is poverty. The poverty rate in the targeted investment area averaged 23.6 percent in 2024 and median family income was only $55,000. Unemployment is consistently higher in the area by several percentage points than for the state or the nation. Unemployment in 2024 is 6.8% which is 179% of the national rate of 3.8%. In 2003, khic expanded its service area to include an additional ten contiguous counties all evidencing extreme poverty, low educational attainment, and high unemployment as well as other aspects of persistent economic distress. Khic's service area includes 134 high-poverty census tracts with greater than 20% poverty; 61 greater than 30%; 12 greater than 40% and 4 greater than 50%. Khic serves 5% of the nation's rural persistent poverty counties.since its founding, khic has been involved in a variety of business lending related to real estate development, including lending for community facilities, manufacturing and industrial plant development, and office space. Khic has developed close to $13 million in industrial real estate projects directly and has provided approximately $100 million in financing to companies for industrial and commercial real estate development. As lead agency for the Kentucky highlands empowerment zone (khez), khic has successfully managed millions of dollars of federal, state and local resources, leveraging more than $150 million of private resources on behalf of the communities throughout the empowerment zone and resulting in more than 4,100 net new jobs from khez investments. Kentucky highlands provides an opportunity to businesses in its footprint to receive sophisticated financial services otherwise unavailable in in the area. Access to financing, access to training, access to national level programs are the key attributes which differ Kentucky highlands and its staff. Most individuals are long time employees, familiar with the region and its constituents, and passionate about the economic aspirations of its citizens and businesses.on january 7, 2014, president obama named Kentucky highlands investment corporation, in partnership with eight counties in southeastern Kentucky, as the first rural promise zone in the nation. Promise zone is a federal designation of a geographic area containing no more than 200,000 in population and that 20% or more of the population lives in poverty. The initiative aims to reverse factors that lead to poverty through a strategic alignment of federal agencies working together in concert with bottom-up strategic development plans at the local andregional level. The designation ended on january 7, 2024 but the relationships established during the designation will remain. Ultimately, the implementation of the Kentucky highladnds promise zone strategic plan opened avenues to a more diversified and vibrant economy that is less dependent upon the coal mining industry. Development of human capital was at the core of the initiative.

Financial Efficiency

• Mission deployment rate: 70%; rating input score 70
• Program expense ratio: 83.1%; rating input score 83
• Fundraising efficiency: Limited

Transparency & Controls

• Consistency checks: 100%; rating input score 100; 63rd percentile among comparable filings
• Pay-setting controls: 5 of 6 controls in place; rating input score 83
  • Compensation committee: Pass
  • Independent consultant: Pass
  • Other Form 990s reviewed: Pass
  • Written employment contract: Missing
  • Compensation survey or study: Pass
  • Board or committee approval: Pass
• Foreign activity oversight: Limited
• Grant itemization coverage: 100%; rating input score 100; 72nd percentile among comparable filings
• Major donor itemization: Yes; rating input score 100
• Related-party transparency: Limited

Accountability

• Independent voting board: 100%; rating input score 100; 63rd percentile among comparable filings
• Governance controls: 7 of 9 controls in place; rating input score 78
  • Conflict-of-interest policy: Pass
  • Whistleblower policy: Pass
  • Document-retention policy: Pass
  • CEO compensation review process: Pass
  • Other executive compensation review process: Pass
  • Form 990 shared with the board: Fail
  • Board meeting minutes documented: Pass
  • Audit committee oversight: Fail
  • Independent financial-statement audit: Pass

Sustainability

• Operating margin: 17.4%; rating input score 74; 74th percentile among comparable filings
• Total-asset coverage ratio: 20.2; rating input score 96; 96th percentile among comparable filings
• Liabilities to assets ratio: 0.43; rating input score 25; 25th percentile among comparable filings
• Officer compensation ratio: 28%; rating input score 6; 6th percentile among comparable filings

Growth

• Program expense growth: 3.9% per year; rating input score 100; 33rd percentile among comparable filings
• Revenue growth: 3.4% per year; rating input score 100; 29th percentile among comparable filings
• Asset growth: 5.2% per year; rating input score 100; 36th percentile among comparable filings