CDFI Impact Blog



The CDFI Fund's Guiding Principles CDFI Fund's Guiding Principles<div class="ExternalClassD8FB58389F624801BD7767F0E82968CE"><p>Today I spoke at the 2016 CDFI Coalition Institute to discuss the CDFI Fund’s recent accomplishments and our upcoming objectives. You can read my<a href="/Lists/CDFI%20Speeches%20%20Testimony/DispForm.aspx?ID=47" target="_blank"> full speech here</a>, but I wanted to take a moment to emphasize an important development for the CDFI Fund that I discussed: the CDFI Fund’s Framework for the Future and our new Guiding Principles. </p><p>Continuous growth in the community development field requires ever increasing support and input from CDFIs and CDEs across the nation. To that end, in FY 2015 we began a strategic effort to develop a comprehensive plan to support this growth. Weighing the generous public input we received from our Listening Tour last summer, we have created the Framework for the Future – our strategic roadmap. This Framework is built upon five Guiding Principles that drive our strategic efforts to increase impact in underserved communities:</p><ol><li><p>Increase the impact of the CDFI Fund network by supporting the growth, reach, and performance of CDFIs and CDEs.</p></li><li><p>Foster a diversity of CDFI and CDE activities and geographies while holding certified CDFIs and CDEs to high standards of integrity.</p></li><li><p>Build the capacity of the CDFI Fund and its network to capture, produce, and utilize data to improve decision-making, performance, and accountability.</p></li><li><p>Ease the customer experience and create on-ramps for new and emerging CDFIs and CDEs to access CDFI Fund programs. </p></li><li><p>Promote awareness of CDFIs in order to expand their access to new resources.</p></li></ol><p>The CDFI Fund is moving at a rapid pace to help CDFIs and CDEs improve the lives of people living in distressed communities throughout America. Our efforts are all geared to help our network of financial institutions maximize economic impact critical to creating an inclusive economy that helps every American prosper. We will be utilizing our five Guideposts as we develop a five year strategic plan. I thank everyone who has provided us with input over the past year, whether through the Listening Tour or otherwise. This input is driving our efforts. I look forward to continued engagement in the year to come!</p> </div>Annie Donovan2016-03-09T16:26:00ZFramework for the Future14
On Cue: The CDFI Fund's Innovation Challenge Cue: The CDFI Fund's Innovation Challenge<div class="ExternalClassAA5A0048A703431BB57CF197AE8E35E4"><p> <i> By: William Girardo</i> </p> <p>In November 2015, the CDFI Fund <a href="/news-events/news/Pages/news-detail.aspx?NewsID=185" target="_blank">announced</a> that the Association for Enterprise Opportunity (AEO) had won its 2015 Innovation Challenge. The CDFI Fund created the Innovation Challenge to seek new ways to expand or increase investments in underserved communities across the country. AEO won the Challenge with a proposal to develop a screening and assessment tool to connect small businesses searching for loans with a CDFI that may be able to meet their needs when a bank or other lenders cannot.</p><p>The Innovation Challenge directly supports the first of the <a href="/news-events/Pages/story-detail.aspx?StoryID=4" target="_blank">CDFI Fund’s Guiding Principles</a>: “Increase the impact of the CDFI Fund network by supporting the growth, reach, and performance of CDFIs and CDEs.” AEO proposed to design, build, and demonstrate a web-based solution that allows financial institutions and other lenders to direct small business credit applicants they can’t serve to CDFIs that can provide safe and affordable loans and financial education opportunities. If successful, the solution may expand the reach of CDFIs and provide more small businesses with a path to capital. </p><p>The one-year initiative is structured in three phases: solution design, proof of concept, and lessons learned. To date, AEO has completed the solution design phase and is moving into the proof of concept phase. More than a dozen banks, non-bank lenders, and industry experts shared insights in the design phase about their processes and what “pain points” need to be solved to allow AEO’s solution to work for them. Banks and non-bank lenders need the solution to avoid “double-declines,” wherein clients they refer to another lender are declined again: it’s an experience that frustrates clients and can affect how they feel about the lender. CDFIs need the solution to lower their costs of customer acquisition and support the scaling up of their own application processing: it reflects their goals of better meeting the needs of different customer segments in their target markets. All stakeholders expressed a need for more and better data to make investment and resource allocation decisions. </p><p>Now, as the project moves into the proof of concept phase, the AEO team has started working with four “early adopter” CDFIs to test the viability of a shared-services platform for CDFIs and other financial institutions. The participating CDFIs are Access to Capital for Entrepreneurs (Georgia), the Intersect Fund (New Jersey), Justine PETERSEN (Missouri), and LIFT Fund (Texas). The goal is to develop a platform that could be adopted or replicated as an industry-standard solution. </p><p>At the end of the project, AEO will share lessons-learned to strengthen future efforts to meet needs in low-wealth communities, mobilize investment, and make better use of scarce resources. If the developed platform proves to be viable, it will be made available to any certified CDFI who wants to use it, expanding access to capital for small businesses operating in economically distressed areas.</p><p>The CDFI Fund will provide another update on the Innovation Challenge later this year. In the meantime, follow along with AEO’s efforts (which they have named Connecting Underserved Entrepreneurs, or Project CUE) by reading their <a href="" target="_blank">blog series</a>. </p><p> <i>William Girardo is a Portfolio Manager for the CDFI Fund’s Community Development Financial Institutions Program and Native Initiatives.</i></p></div>2016-04-15T12:00:00ZFramework for the Future15GP0|#0eabfb68-e7e3-40d3-8ca9-949a19428ed8;L0|#00eabfb68-e7e3-40d3-8ca9-949a19428ed8|Innovation Challenge;GTSet|#52f34ab0-6f81-4fe6-b393-2715c7089532
Community Development Financial Institutions Finding Innovative Ways to Build Climate Resilience Development Financial Institutions Finding Innovative Ways to Build Climate Resilience<div class="ExternalClassB3799676ECF648E1997925A5E2CF4851"><p><i>This blog was originally posted on the <a href="" target="_blank">White House Blog </a>on May 26, 2016.</i></p> <p>Last month marked an historic moment in the global fight against climate change. On Earth Day, Secretary Kerry joined nearly 170 countries in signing the Paris climate agreement. That’s the largest number of countries that have ever signed an international agreement in one day. While the signing of the agreement is a great turning point in our global fight, there’s more work to do. Communities across the globe are having to make difficult decisions daily as they experience the impacts of climate change. Not only are these impacts immediate and relevant to all Americans today, but our most vulnerable populations continue to bear the worst impacts, despite having the least resources to cope with them.</p><p>Increasingly extreme weather, wildfires, drought, sea-level rise and other impacts of climate change have exacerbated impacts on vulnerable populations - including children, the elderly, urban and low income communities, pregnant women, outdoor workers, and people with disabilities and pre-existing conditions. For example, in the aftermath of Hurricane Katrina and Superstorm Sandy, studies showed that minority and low-income populations were not only among the worst affected, but also required much more time to recover from the storms due to limited resources, capacity, and other challenges.</p><p>As we think about the pressing needs of these vulnerable populations, there are three realities that we should keep in mind: (1) low-income communities cannot be forgotten, (2) we should use every tool in our toolbox, including innovative partnerships to finance resilience, and (3) our work should be community-driven and locally-specific. </p><p>There is one group that is uniquely poised where these three realities intersect: Community Development Financial Institutions (CDFIs). </p><p>CDFIs come in a diversity of forms. They can be banks, credit unions, loan funds, or venture capital providers. They support a wide range of projects and activities. Regardless of their form, CDFIs share a common goal of promoting economic revitalization and community development in low-income communities through mission-driven, locally-informed investments. With over 1,000 CDFIs operating nationwide, there are significant opportunities for CDFIs to build climate resilience into ongoing projects and support local efforts to adapt to a changing climate. Many CDFIs are already doing so – in many different ways. Here are just three examples to illustrate that point. </p><p>Issues of climate change have long been central to the work of Coastal Enterprises, Inc. (CEI), a CDFI based in Maine, where changes to the temperatures and salinities of the Gulf of Maine waters are disrupting normal ecological systems. Many fisheries have declined to unsustainably low levels, so CEI has focused efforts to address the economic survival of fishing-dependent communities by investing to support a diverse aquaculture that supports alternative income streams for fishing families. </p><p>Many CDFIs have long been partners in our national efforts to reduce the carbon pollution that is causing climate change – through energy efficient retrofits and transit oriented development – but there are examples where CDFIs have taken that work one step further to also help communities adapt and prepare for future impacts of climate change. Following Hurricane Katrina, AMCREF Community Capital, a Community Development Entity based in New Orleans, provided nearly $13 million of New Markets Tax Credit financing to create 150 affordable homes that used environmentally safe materials and reduced homeowner energy costs by 75% (LEED Platinum). The homes were also raised to avoid floods and built to withstand hurricane force winds, rebuilding in a way that will be safer for the long term. </p><p>Craft3, a nonprofit CDFI working in Oregon and Washington, partnered with The Freshwater Trust in 2013 to finance a project to restore 30-miles of streamside vegetation in Oregon. Rivers across the country are increasingly too warm for native fish. Historically, to address this problem, cities have built cooling towers or chillers to cool the discharge from wastewater treatment facilities, but The Freshwater Trust’s green infrastructure solution of planting trees to create shade and offset the temperature impacts of the warm, but clean, water being discharged provides long-term environmental benefits not achieved with traditional, more expensive grey infrastructure solutions. </p><p>These examples are just the tip of the iceberg. Projects like these serve as models for how CDFIs can help communities become more resilient. This Administration wants to continue working with the CDFI community to lift up and learn from promising and innovative practices. One approach that is under consideration by the CDFI Fund is to offer training in resilience financing through its Capacity Building Initiative so that even greater numbers of CDFIs will understand and help address the vulnerabilities that the communities they serve face as a result of climate change. There’s much work ahead but we are hopeful that our continued partnership with CDFIs will provide critical lessons that will help build the business case for resilient investment, and more importantly, help support our nation’s most vulnerable residents. </p><p><i>Annie Donovan is the Director of the Community Development Financial Institutions Fund at the U.S. Department of the Treasury. <br> <i>Christy Goldfuss is Managing Director at the White House Council on Environmental Quality.</i></i></p><i> </i></div>Annie Donovan2016-05-26T15:00:00ZLocal Impact16GP0|#6739e502-ad8d-4e57-bade-8d5d363e66c7;L0|#06739e502-ad8d-4e57-bade-8d5d363e66c7|In the Field;GTSet|#52f34ab0-6f81-4fe6-b393-2715c7089532