Keynote Address by Director Annie Donovan at the 2016 CDFI Coalition Institute


Thank you, Connie, for your kind introduction. It is great to be here at the CDFI Institute. I want to express my gratitude to the CDFI Coalition for inviting me to speak and for your support for the CDFI Fund and the CDFI industry over the years. Thank you!


This event is always a great opportunity for the CDFI Fund to report on what we have accomplished in the past year, and I am pleased to announce that today we are releasing the CDFI Fund's 2015 Year in Review, called A Year of Engagement and Action for the Future. This new edition of the Year in Review offers a detailed look at the highlights of 2015. I invite you to download a copy from our website.

As you know, 2015 was my first year as Director of the CDFI Fund, and it is gratifying to reflect on all that the CDFI Fund and our network of awardees accomplished during the year and to share that information with the CDFI industry and the general public. It is indeed a great privilege to direct the CDFI Fund, and an absolute delight to be connected in this way to each and every one of you and the work of your organizations. We are united by a powerful mission to create economic opportunity for those whose potential is otherwise limited by a lack of access to capital and financial services. You are also a passionate, persistent, and productive group of practitioners.

As I engaged with the industry over the past year, I collected a lot of inspiring stories. And I am struck by how personal this work is for so many of you - how your own stories connect to this work in powerful ways. Many of us were born into modest means, but through some combination of hard work and luck, we gained opportunity and we want everyone to have the same opportunities we had to reach our fullest potential. There is a restlessness to address the barriers that block the path to economic progress for people and communities. As the Director of the CDFI Fund, I share this sense of restlessness, as does everyone at the CDFI Fund.

And that's why, as you'll see when you read the Year in Review, 2015 was such a busy year at the CDFI Fund. I would like to take a few moments to review some of our main accomplishments.

First, I am happy to report that our industry continues to grow. The number of certified CDFIs now stands at 991 - 74 more than the number of certified CDFIs at the end of fiscal year 2014.

Our impact continues to grow as well.

Through the CDFI Program, we awarded $157 million in Financial Assistance awards to 123 organizations and $3.5 million in Technical Assistance awards to 29 organizations in fiscal year 2015. Since the CDFI Program's inception in 1994, we have provided more than $1.5 billion in Financial Assistance and Technical Assistance awards.

In 2014 alone, CDFI Program awardees reported originating $3.4 billion in loans and investments, and financing 12,300 businesses and 25,300 units of affordable housing.

It was a very good year for our Healthy Food Financing Initiative (HFFI) and Native Initiatives, too.

In FY 2015, we awarded $22 million in Financial Assistance awards to 11 organizations through the HFFI, and $19.6 million in Financial Assistance and Technical Assistance awards to 43 organizations through the Native American CDFI Assistance Program (NACA Program).

Both programs are having a real effect. Twenty-one previous HFFI awardees have reported making 206 investments totaling $88 million. These investments have developed more than 1.5 million square feet of retail space and more than 1.7 million square feet of non-retail space for healthy food activities.

The NACA Program awardees reported that Native CDFIs originated loans or investments totaling $68 million in 2014. I'll add that the number of Native CDFIs has grown from seven in 2001 to 70 today. The increase is a direct result of the CDFI Fund's concerted efforts to grow the Native CDFI industry through the Native Initiatives.

We saw strong performances in our other programs as well.

Through the New Markets Tax Credit Program, we awarded $3.5 billion in tax credit allocation authority to 76 organizations. We have now completed 12 allocation rounds of the program since 2002 and have made 912 awards totaling $43.5 billion in tax credit allocation authority. In 2014 alone, $3 billion in loans and investments were made possible through the NMTC Program, and over 75 percent of that $3 billion was put to work in severely distressed communities.

Through the Bank Enterprise Award Program, which provides monetary awards to FDIC-insured depository institutions for investing in CDFIs and in economically distressed communities, we provided awards totaling $18 million to 83 FDIC-insured depository institutions. Certified CDFIs received 92 percent of the total award dollars. The 83 awardees reported increasing their qualified community development activities by $460 million - including increasing their loans, deposits, and technical assistance to CDFIs by $113 million - over the prior year. Since the inception of the BEA Program in 1994, the CDFI Fund has awarded grants totaling more than $419 million.

In fiscal year 2015, we also closed three bond transactions totaling $327 million through the CDFI Bond Guarantee Program, which provides CDFIs with a significant source of low-cost, long-term capital. Nine eligible CDFIs - including the first Native CDFI to access the Bond Program - were approved to receive bond loans through the FY 2015 round. Since the inception of the program, the amount of bonds closed and corresponding guarantees totals $852 million.

The CDFI Fund in FY 2015 administered five free training series through the Capacity Building Initiative to help CDFIs improve their ability to deliver financial products and services to underserved communities. The series included The Leadership Journey II: Continuing Native Growth and Excellence; Financing Community Health Centers; Preserving and Expanding CDFI Minority Depository Institutions; Expanding CDFI Investments in Underserved Areas; and Building Native CDFIs' Sustainability and Impact. In addition, we continued to build our Resource Bank, an online archive of training materials. The Resource Bank now contains materials from nine different training series which are available to community development practitioners and anyone else at no charge.

Finally, in 2015 we prepared to relaunch the Capital Magnet Fund, which hasn't had an active award round since 2010. The FY 2016 funding round for Capital Magnet Fund is now open; the application deadline is March 16, 2016 for materials due through; and March 30, 2016, for materials due through the CDFI Fund's Award Management Information System (AMIS). In February and early March, we held several live webinar sessions to help applicants learn more about the FY 2016 Capital Magnet Fund round. We also offer guidance on using AMIS on our website.

As a side note - Capital Magnet Fund is not the only award program currently accepting applications right now. The 2016 rounds of the CDFI Program and the NACA Program are also currently open. The application deadline for materials is March 18, 2016, and April 18, 2016, for materials due through AMIS. The CDFI Bond Guarantee Program is also open until March 18.

I'll just add that during the listening tour, many CDFIs commented about the timing of the application periods for some of our programs. Please believe me, we heard you and we will do everything we can to ensure that in the future application periods for different programs don't overlap. We want to make the application process as convenient as possible for CDFIs.

No doubt about it, we have accomplished a great deal, and 2015 was a great year for the CDFI Fund and for the CDFI industry. I would like to thank the entire staff of the CDFI Fund and the staffs of CDFIs throughout the nation for their tremendous dedication to the hard work of serving our nation's underserved communities.


While the 2015 Year in Review mainly reflects our past accomplishments, it also looks beyond 2015 to the next few years of the CDFI Fund and presents the CDFI Fund's Framework for the Future.

When I spoke at this event a year ago, I said that I wanted my first year on the job to be a year of listening and learning for the CDFI Fund, and that we would be conducting a series of listening sessions in order to get input from the industry and the public about where the field needs to go in the future and how the CDFI Fund can help it get there.

We conducted our listening tour last summer. We visited five cities throughout the nation and conducted two conference calls for those in rural communities and in Hawaii, Alaska and the territories. In all, we met with nearly 400 stakeholders to ask them to weigh in on six key areas of inquiry:

  • Whether the CDFI Fund's programs are effective and working optimally for communities;

  • How the CDFI Fund can support CDFI innovation and scale solutions that work;

  • What more the CDFI Fund can do to reach communities that aren't being served;

  • How the CDFI Fund can use data to strengthen the industry and increase our impact;

  • How the CDFI Fund can improve its customer service; and

  • Which issues should be on the CDFI Fund's radar screen, but are not.

We also posted an online survey with the same questions to anyone who wanted to participate electronically. We received 268 responses.

As I participated in the listening sessions and reviewed the survey input, I was very happy to hear about what the CDFI Fund is doing well, and grateful to get feedback about how we can better respond to the needs of the communities you serve.

And we are already putting that information to work. Over the past several months, we have been sifting through the comments we received, and we have used those insights - your insights - along with input from CDFI Fund and Treasury Department staff, and our Community Development Advisory Board, to help us develop five principles that will guide the CDFI Fund as we advance our mission in 2016 and beyond. We will use these guideposts to build out a more detailed strategic plan in 2016.

For me, it is important to articulate these guiding principles because, to our good fortune, the CDFI Fund administers a whole portfolio of programs, as you know. With statutory authority coming from four different laws, with certification criteria varying by program, and with no less than five competitive funding rounds to run each year, it would be easy for the CDFI Fund to succumb to siloed" thinking and acting. If there is one thing I've learned from my first year on the job, it is just how easy it can be for the government to operate in silos! Because you don't operate in silos based on our programs, there is real value in ensuring that, at a high level, the CDFI Fund has developed an integrated and cohesive sense of direction across programs.

Moreover, the demands of program administration can become overwhelming and all-consuming, and it would be very easy to focus more on meeting day-to-day deadlines than on advancing the development of the field. The guideposts laid out in our Framework will help us stay focused on the big picture.

I will talk for a minute about the five principles, but let me emphasize that at this stage these are high level. We are currently working out the details of how we will implement them, and we will flesh out the "how" in our forthcoming strategic plan.

So here are the five principles of our Framework:

1. Increase the impact of the CDFI Fund network by supporting the growth, reach, and performance of CDFIs and CDEs.

As impressive as our results are to date, we can't lose sight of the fact that the problems we seek to address are still so much bigger than the scale of our solutions. We have to keep reaching for more impact, and we have to ensure that scarce federal dollars are being used in a way that maximizes impact. We heard quite frequently on the listening tour that you want the CDFI Fund to hold you more accountable for past performance. Many of you suggested that we find ways to tie future funding to past performance, and we are working on ways to do just that. Further, we are also looking at ways to better evaluate conditions for repeat funding set by the Riegle Act in our CDFI Program applications, including whether repeat awardees have expanded target markets, created new products and services, and/or increased their lending volume.

2. Foster a diversity of CDFI and CDE activities and geographies while holding certified CDFIs and CDEs to high standards of integrity.

Creating opportunity for those on the margins of our economy is a complex business. We know there are no silver bullets. We also trust that the best solutions usually come from communities. For that reason, the CDFI Fund wants to support the full range of activities contemplated in the Riegle Act - from financing affordable housing, small businesses, and community facilities, to offering financial and development services that bring the unbanked and the underbanked into the financial mainstream.

This principle also addresses the CDFI Fund's desire to cover more geography. As most of you know, we have gaps in our coverage map. We would like to see more of those gaps filled. But I hasten to add that we don't want an expansion of activities and geographies to be accomplished at the expense of diluting the CDFI impact. There are many ways to expand coverage. That's why we will hold certified CDFIs and CDEs to high standards of integrity when it comes to both certification and investment.

3. Build the capacity of the CDFI Fund and its network to capture, produce, and utilize data to improve decision-making, performance, and accountability.

I don't think I have to make a case to this audience for why it is important for all of us to improve our game when it comes to using data to communicate the impact of CDFIs and to make better strategic and operational decisions. This past year, we created a "data and evidence working group" inside the CDFI Fund that has been exploring, with great enthusiasm I might add, the possibilities for making better use of the data the CDFI Fund already collects, as well as the new ways we might use our new Award Management Information System (or AMIS) platform to better link past performance to future funding. Expect to hear and see a lot more from us on the data front.

4. Ease the customer experience and create on-ramps for new and emerging CDFIs and CDEs to access CDFI Fund programs.

We want to make the CDFI Fund's programs easier to use where we can, in part because the labor-intensive nature of our processes can be expansive, but also because smaller CDFIs are disproportionately impacted. We will be examining all of our programs and putting more thought into whether or not new entrants have a fair shake at access. Recently, we announced a partnership with the National Credit Union Administration, which is putting its resources to work to help low-income credit unions navigate the CDFI certification process more easily. Our goal is to minimize burden for all our applicants, regardless of CDFI type, and we welcome other organizations, whether they are bank regulators or others, to think creatively about how they can facilitate similar solutions.

5. Promote awareness of CDFIs in order to expand their access to new resources.

After twenty years of success, CDFIs are still a "best kept secret." You know that. We know that. We are thinking about how we can optimize our own scarce resources to better tell your story. One step we took in 2015 to promote awareness was to launch a new public website for the CDFI Fund. That's just a start, and we know that we have a lot more work to do.

In fact, we know we have lots of work to do to build out the "how" for each of these five guideposts - but that's what strategic planning is for - which is the next step in this process.

Still, there are things we are doing right now that will advance these goals. Here are a few examples:

  1. We have just released a new Annual Certification and Data Collection Report for implementation in 2016. All certified CDFIs will be required to submit the new report each year; this will replace the requirement to apply for certification every three years. The new report not only will ensure continued compliance with certification rules but also will enable the CDFI Fund to gather valuable data that will help us better understand and publicize for the first time the performance of the CDFI industry as a whole. The development of the new report reflects the second principle in our Framework, holding CDFIs and CDEs to high standards of integrity, as well as the third principle, building our capacity to capture and utilize data, and the fifth, promoting awareness of CDFIs.

  2. Assessment and Risk Management Framework: In FY 2015 the CDFI Fund began the development of an assessment and risk management framework. This will be a set of tools that allow us to get much more systematic and precise about how we evaluate applications and how we monitor compliance. This addresses our capacity to take the CDFI Fund to the next level in terms of linking prior performance to future funding, as is expressed in several of the guiding principles.

  3. AMIS: AMIS is the technological infrastructure that will allow the CDFI Fund to increase its efficiency and organizational performance. We launched AMIS at the end of fiscal year 2015, and we are continuing to add programs and processes to the AMIS system. Currently, you can use AMIS to maintain your organizational profile; to apply for CDE Certification; and to apply for the FY 2016 rounds of the Capital Magnet Fund, the CDFI Program, and the NACA Program. We will continue to add more programs and processes to AMIS in the coming months.

    AMIS will eventually completely replace myCDFIFund, so I would encourage everyone interested in the CDFI Fund's programs to please take the time to read our user manuals and guidance documents for how to use AMIS! And please be patient with us as we work out the initial kinks and bugs in the system.

  4. Revamping applications: As you may have heard, we are working on revamping some of our upcoming program applications. For example, the CDFI Fund will implement a number of changes to the FY 2017 CDFI Program application that will encourage greater diversity in the use of Financial Assistance awards, specifically those that increase the availability/utilization of banking services for unbanked and underbanked populations. In addition, we are also tweaking our BEA Program and NMTC Program applications in an effort to reduce applicant and administrative burdens. We'll be requesting comments from the industry about these applications in the near future through the Federal Register. We hope to hear from you.


What inspired our decision to develop the Framework for the Future was the sense of restlessness I mentioned earlier - the awareness that we have not yet reached our full potential as a field. While it's true that the CDFI Fund and the CDFI industry have accomplished a great deal, it's also crystal clear that we have a great deal more to do.

So the challenge we face in 2016 and beyond is to keep moving forward.

CDFIs have always been at the forefront of the movement to create an inclusive economy. You have always led the way, creating opportunities for people who have been overlooked and showing mainstream financial institutions that the markets they have judged to be filled with risk and peril are in fact places of possibility and promise.

But this is no time to dwell on what we have already accomplished.

There is so much more to be done, and so this is the time for us to keep leading the way.

This is the time to keep envisioning and innovating and collaborating.

And yes, this is a time to stay restless, for in our individual and collective restlessness we will find an energy that will keep us moving forward as we work to realize our vision of an America in which opportunity is within the reach of all of its citizens.

Thank you all for your hard work, and may we all stay restless in 2016. I look forward to working with you.