Remarks by CDFI Fund Director Donna Gambrell
Opportunity Finance Network Conference

Wednesday, November 16, 2011
Minneapolis, Minnesota

Introduction

The theme of this year’s conference is “Impact—It’s What We Do,” and I would like to thank all of you at OFN for everything you are doing to expand the impact of your member CDFIs nationwide. I would especially like to congratulate OFN for partnering with Starbucks to launch the Let’s Create Jobs for USA initiative, which, since its debut on November 1, has already generated more than $1 million in donations, in addition to $5 million from the Starbucks Foundations, and is helping to raise the profile of the community development finance industry and expand its impact.

I would also like to salute the recipients of this year’s Wachovia Wells Fargo NEXT Awards. Through your innovative work, you are developing new ways for CDFIs to make an impact and raising the bar for our entire industry. Thank you for your excellent work.

This conference brings together people from all over the country and gives us the opportunity to look back at our recent accomplishments and to consider the opportunities and challenges that lie ahead.

This year, it is a special pleasure for me to be here. Despite the challenging economic environment, our industry has enjoyed a very successful year and has many opportunities to build upon that success in the year to come.

Reaching new heights in 2011

When I spoke at this conference a year ago, I stated that, as great as our accomplishments had been in the previous two years, we could not allow ourselves to be content with the progress we had made. Our task was to continue moving forward—to take our industry to new heights.

I am pleased to report that the CDFI industry and the CDFI Fund have answered the call in 2011 and have continued to reach new heights.

Indeed, the CDFI Fund established two new records in FY 2011. First, we announced the largest single round of monetary awards in our history. The awards were made through the FY 2011 round of our flagship program, the CDFI Program, and totaled $167.3 million for both Financial and Technical Assistance awards, including the Healthy Food Financing Initiative awards. We had set the previous record—$104.8 million—just a year before, during the FY 2010 round of the CDFI Program. We have now awarded more than $1.4 billion through the CDFI Program since the CDFI Fund was created in 1994.

Second, as of September 30, 2011, the number of certified CDFIs reached 963, again the most in our history and a significant increase over the totals of the previous two years—798 in 2009 and 929 in 2010. The number of certified Native CDFIs is also at all-time high. As of September 30, there were 69 certified Native CDFIs—up from 50 in 2009 and 14 in 2001.

We saw strong performances in other established programs as well.

In September, approximately 80 CDFIs applied and 51 were selected to receive investments totaling $104.2 million through the Small Business Lending Fund.

Just a week ago, we announced awards totaling nearly $22 million to 77 depository institutions through the FY 2011 round of the Bank Enterprise Award Program, which provides grants to FDIC-insured banks for increasing their investment in low-income communities or in CDFIs and requires them to reinvest the grant back into low-income communities.

For the FY 2011 round of our Native American CDFI Assistance Program, we received 88 applications requesting $35 million—the most ever for the program and an increase of 34 percent over the $23.7 million requested in FY 2010—and we awarded $11.8 million to 35 Native CDFIs in 17 states.

We also collaborated with the Federal Reserve Bank of San Francisco and a variety of other federal agencies to present a series of economic development workshops entitled Growing Economies in Indian Country: Taking Stock of Progress and Partnership. The workshops were held in a dozen locations around the country in 2010 and 2011, and attracted nearly a thousand participants.

And by August, we had received a total of 314 applications for the 2011 round of the New Markets Tax Credit Program (NMTC Program), which is the most we have received since 2002 and represents an increase of 26 percent over last year’s total applications. Since the program’s inception, we have made 594 awards totaling $29.5 billion in tax credit allocation authority.

The CDFI Fund also launched a variety of new initiatives during the past year.

In October 2010, we announced the first five contractors that would provide training and technical assistance through our Capacity-Building Initiative, which is designed to help certified and emerging CDFIs expand their ability to serve low-income communities. In May and June, we presented the first training sessions in Detroit, Philadelphia, and Oakland.

In December 2010, we launched a partnership with the U.S. Small Business Administration on a new loan initiative called Community Advantage. As you know, until now, the SBA’s flagship 7(a) lending program, which provides loan guarantees for certain small business loans, has been open only to lenders that are regulated financial institutions. But under the new Community Advantage program, CDFIs and other non-profit lenders can apply to the SBA to originate 7(a) loans up to $250,000.

In July, we began soliciting comments regarding the design, implementation, and administration of the new CDFI Bond Guarantee Program, which will offer CDFIs a new source of long-term patient capital for loans and investments in low-income communities. The CDFI Fund is the administrator for this program and has hired two-full time staff to lead the effort.

This year we also launched the CDFI Healthy Food Financing Initiative (HFFI), which provides grants to CDFIs focused on developing solutions for increasing access to affordable healthy foods in low-income communities. In September 2011, the CDFI Fund awarded $25 million in HFFI grants to 12 CDFIs through the CDFI Program.

Clearly, 2011 has been a very productive year for the CDFI Fund. I am especially proud that we have performed at such a high level despite working in an uncertain and challenging environment. Throughout late 2010 and early 2011, the CDFI Fund, like other federal agencies, operated under a series of Continuing Resolutions as budget negotiations continued and the prospect of significant budget cuts loomed. I would like to thank the entire staff of the CDFI Fund for their steady performance in the face of these uncertainties.

Looking ahead, moving forward

I wish I could say that the uncertainty we faced throughout 2011 will vanish in the year to come, but I am afraid I can’t. There are still many questions remaining about the budget for 2012, and there are no clear indications yet of how they will be answered.

One thing that is certain, however, is that we can take nothing for granted. In this year and every year going forward, we will have to fight for every dollar our industry receives, and we will have to do everything we can to ensure that those who make the decisions that shape our future understand that our work is essential and our impact is real.

And that means we must all be committed to raising the bar. Each of you must be more committed than ever to exploring new ways to expand your impact. And you must be more committed than ever to telling your stories and communicating your impact to a wider audience.

I also want to encourage you to partner with the CDFI Fund. We offer a variety of tools to help you raise the bar.

The FY 2012 funding round of the CDFI Program is now open and, depending on our final appropriations, will provide up to $123 million in Financial and Technical Assistance awards, including $25 million in Financial Assistance awards under the Healthy Food Financing Initiative.

The FY 2012 funding round of the NACA Program has also just opened. And we are planning to offer a new series of Growing Economies in Indian Country workshops in 2012, as well as another new training series for Native CDFIs entitled The Leadership Journey: Native CDFI Growth and Excellence. The latter series will be part of our Capacity Building Initiative and will provide advanced training and technical support to help Native CDFIs take their operations to the next level.

We are also planning to offer other new training sessions for all types CDFIs through our Capacity Building Initiative in 2012 based on feedback from all of you.

And we are continuing to work diligently on the CDFI Bond Guarantee Program, to make it the best program we possibly can.

These are just some of the programs we expect to be offering in the next year, and I invite you to learn more about how the CDFI Fund can support you. We announce the latest news about our programs through CDFI Updates, our free e-mail subscription management service, and on our website, so please stay tuned. You can sign up for the updates on our website: cdfifund.gov

Now, one of the advantages of my position is that it enables me to speak at a number of industry conferences like this one each year. And as I travel across the country, I have an opportunity to hear what’s on people’s minds and to get a fresh perspective on some of the issues the industry is facing.

For example, when I spoke at the annual SRI in the Rockies conference in October, there was a lot of discussion about the potential for attracting investment in CDFIs from the SRI community. Clearly, SRI investors are interested in CDFIs. At the same time, they feel it is very important for CDFIs to offer better investment products with more familiar terms and more standardized performance metrics. I was encouraged by the willingness of both sides—the CDFI community and the SRI community—to work together to build new partnerships.

Another recent gathering at which I spoke also focused on the potential for collaboration. The event was a symposium in San Francisco co-sponsored by the Federal Deposit Insurance Corporation, the Federal Reserve Bank of San Francisco, and the Office of the Comptroller of the Currency. The topic was the state of small business lending by CDFIs, and the goal was to explore the potential for developing innovative new partnerships between CDFIs and banks to increase access to capital and credit for small businesses.

And at the National Community Investment Fund’s Annual Development Banking Conference earlier this month, the focus was on ways for the community development banking sector to respond to the continuing challenges posed by the economic downturn. Among the issues explored were impact measurement, the effective use of new financial technology, and the potential for common shared services such as back room operations.

I mention all of this to give you an idea of some of the issues that will be on the CDFI Fund’s radar in the coming year, and to invite you to consider putting them on your radar as well. One of the trends that has particularly struck me as I have attended these conferences is the growing awareness of the importance of collaboration. More CDFIs are recognizing the value of forming new partnerships with organizations inside and outside the CDFI industry.

And I certainly endorse that trend. CDFIs are naturally innovative organizations. And when you share your creativity and expertise with other organizations, you multiply your strengths. And that is the way to extend your reach and expand your impact.

The true impact of our work

I do not mean to suggest that any of this is easy. I understand that, in the best of times, it is hard to build new partnerships and expand your impact, and that in challenging economic times, it is even harder. And I know that many CDFIs are still working to recover from the economic downturn, and that some are struggling to survive.

I know, too, that for many of us who choose to do this work, it can at times be difficult to escape the knowledge that no matter how much we do, there is so much more to be done. No matter how many businesses we finance or how many jobs we create or how many new homes we build, we stop and look around us and see that our work has hardly begun.

I have found that it can help to take a larger view of our work and our impact. Dr. Martin Luther King Jr. once said that “the arc of the moral universe is long but it bends toward justice.” Now, to some, those words may sound overly optimistic. But I see them as an expression of deep faith by a man who surely experienced many moments in his life when the bend in the arc of the moral universe was all but undetectable. Yet he continued to believe and he continued to march onward, because he saw that the arc is long.

I believe that we can do the same. I believe that, when our burden becomes too heavy, we can stop for a moment, and we can look out over the long arc extending before us and see our place upon it. We can see that upon our work, the work of many others will be built, and the work of many others will be built upon that. And so we can have deep faith that our work counts because the arc is long and each of us in our own time is bending it toward justice just a little bit more.

That, I believe, is the true impact of our work. So as you go forward, I say to all of you, have faith, keep on going, and do everything you can to keep bending the arc. Because together we are building something wonderful and truly creating an impact for generations to come.

Thank you. We look forward to working with you in the year ahead.