CDFI Fund Impact Blog



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
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
Local Impact of CDFIs in Milwaukee and Chicago Impact of CDFIs in Milwaukee and Chicago<div class="ExternalClass2FE67FA13C5143AFAEAF5FEAF6B800CA"><p>Just before Thanksgiving, I visited Milwaukee and Chicago and had the opportunity to witness the impact that CDFIs are making in those great cities. CDFIs nationwide are building businesses, creating jobs, and developing housing, and the CDFIs in Milwaukee and Chicago are no exception.</p><p><img class="ms-rtePosition-2" alt="Image of Next Door in Wisconsin" src="/SiteCollectionImages/Project%20Images/Next%20Door%20WI%20Nov2015%20small.jpg" style="margin:5px;" />In Milwaukee, I visited Next Door, Inc. Next Door is an early education provider that has worked with thousands of children and families to give them the skills they need to achieve sustainable success in school and in life. Next Door’s mission is to support the intellectual, physical, spiritual and emotional development of children so they become self-sufficient, contributing members of the community.</p><p>Forward Community Investments, a Wisconsin-based CDFI and CDE, provided New Markets Tax Credits to help Next Door expand its Head Start and Early Head Start programs into a larger building. When the renovation of the 103,000 square foot building is complete, there will be space for 20 new classrooms, a children’s kitchen, a drama and art studio, and multi-purpose rooms.</p><p>What was most impressive to me about Next Door’s programming is that it goes beyond the child to include the whole family. They start with pregnant moms and support them through birth and the critical early years of their child’s development. They also have programs targeted specifically to dads!</p><p>I also met the inspiring <a href="" target="_blank">Genyne Edwards</a>, who runs P3 Development Group. P3 Development Group is a small consulting business that is focused on community development solutions for Milwaukee. Organizations such as United Way and the Boys and Girls Clubs of Greater Milwaukee have used P3 Development Group’s services to help them identify gaps and opportunities in the programs they provide to the local community. And now Genyne has been able to purchase her own office space, with the help of Legacy Redevelopment Corporation, which will enable her to continue to facilitate transformative change in Milwaukee.</p><p><img class="ms-rtePosition-1" alt="Image of Bronzeville Jerk Shack" src="/SiteCollectionImages/Project%20Images/Chicago%20Tour%20Nov2015%208_small.jpg" style="margin:5px;" />In Chicago, I experienced a wide range of CDFI projects on the South Side of the city because many CDFIs collaborated to plan and execute the tour. We all hopped on a big bus and toured over a dozen sites. For example, Bronzeville Cookin’s Jerk Shack, the home of delicious Jamaican street food. Founder Bernard Loyd is a visionary leader who is using food as a tool for community development. He has said, “the path to good community goes through good food.” We also saw Stony Island Arts Bank, a formerly abandoned building turned into a neighborhood space that serves as a repository for African American culture and history. Both of these projects wouldn’t have come to fruition without the patience and persistence of Chicago Community Loan Fund.</p><p>We also visited Pullman Park in Chicago, a mixed-use development that will bring new retail, affordable housing, and park space to an historic part of the South Side. Pullman Park is possible thanks to New Markets Tax Credit investments from Chicago-area organizations, such as the Chicago Neighborhood Initiative, and will address the needs of an underserved area.</p><p>It is so energizing to see the impact CDFIs make locally, and how communities and lives have been transformed by CDFIs. At every project I visited, it was clear that CDFIs are working at the intersection of people and place, not just financing tangible assets, but seeding opportunities for future generations to thrive.</p></div>Annie Donovan2015-11-30T21:00:00ZLocal Impact13GP0|#5c568afc-7fff-4133-ab30-b833f3fd3a3f;L0|#05c568afc-7fff-4133-ab30-b833f3fd3a3f|Illinois;GTSet|#52f34ab0-6f81-4fe6-b393-2715c7089532;GP0|#78de02a6-ea08-4eec-90a2-57d6bb226cb7;L0|#078de02a6-ea08-4eec-90a2-57d6bb226cb7|Wisconsin;GP0|#6739e502-ad8d-4e57-bade-8d5d363e66c7;L0|#06739e502-ad8d-4e57-bade-8d5d363e66c7|In the Field