Ten years ago, Capital Impact Partners received an invitation from the Kresge Foundation to join in an effort to support Detroit as the city was reeling in the turbulence of the great recession. It was a seminal moment in our organization’s history, resulting in key shifts to our strategy and how we thought about investing — not only in buildings — but in communities.
After a decade of working side-by-side with Detroiters, I felt it was a good time to reflect both on our accomplishments, but also on what we have learned about building resilient communities.
That first effort, as part of the Living Cities “Integration Initiative,” sought to drive reinvestment along the Woodward Corridor and generate benefits for area residents. Kresge, the Skillman Foundation, Midtown Detroit Inc, Invest Detroit, Vanguard CDC, and the City of Detroit served as local partners.
The Auburn brought affordable housing, retail options, and jobs to its community, and proved the need for developments of its kind.
One key project was the Auburn, a mixed-use property providing much-needed retail and affordable residential space. It proved the demand existed and illustrated how to co-locate much-needed services, create jobs, and draw in surrounding investments.
We also joined with Kresge, Southwest Solutions, and Vanguard CDC to support the Restore North End program. That program was designed to support existing homeowners in their effort to rehabilitate their residences and create neighborhood vitality, stability, and increase market values — key drivers of long-term wealth building.
As a result of what we learned, a light bulb went off, marking a strategic shift for Capital Impact’s traditional national lending approach.
It taught us the importance of standing shoulder-to-shoulder with communities, listening to their challenges, building trust, and understanding the vision residents have for their own neighborhoods to help them create those solutions.
This shift required us to focus all of our efforts — financing, capacity building, policy engagement, local partnership development — in one place to accelerate the change residents were leading. We pivoted from investing in buildings to investing in people, and working to address root challenges that have created obstacles to success.
Through the Detroit Neighborhoods Fund, we were able to finance 11 high-impact developments, including Ranier Court.
Over time, national organizations began to take notice. JPMorgan Chase’s $100 million commitment in 2014, helped us create the $30 million Detroit Neighborhoods Fund to expand affordable multifamily housing and mixed-use real estate development. We ultimately financed 11 high-impact projects across seven neighborhoods including Ranier Court, The Murray, and 655 West Willis.
While we were proud of the impact of these projects, analysis revealed much of our lending, while achieving positive outcomes, was not serving real estate developers who lack access to traditional banking solutions.
This realization required us to better address the needs of these developers. With local guidance, our EDI program was created in 2018 to provide these individuals with training, mentorship, and connections to secure financing. We’ve trained 86 developers, many who have gone on to create their own organizations, build local projects, and develop peer-to-peer networking circles.
Graduates of our EDI program have the opportunity to re-envision and revitalize their communities while building generational wealth.
Ultimately, program graduates began teaching us. They pointed out that while they learned important skills, we were not actually financing their projects. Like many traditional lenders, our underwriting standards remained a barrier. Here again we needed to revisit our credit guidelines to serve those developers. With EDI graduates’ input, we created the DiD – Detroit Loan Fund in 2020 to expand our lending criteria in a way that met their needs. We received over $100 million in applications and look forward to announcing the projects we will be supporting.
As we look to the next decade, our efforts to champion economic prosperity continue. With CDC Small Business Finance, the nation’s leading mission-based small business lender, we created an ambitious new enterprise to innovate how capital and investments flow into communities to support economic mobility and wealth creation.
I am proud of what our $300 million in investments have meant in terms of greater access to affordable housing, quality healthcare and education, healthy foods, and small business entrepreneurship.
I’m equally proud of our ability to recognize our need to understand the city better and create local strategies that deliver the results Detroiters need. For that, I want to extend gratitude to our local partners and guides. We are taking these lessons learned to other cities to create the change that is so desperately needed.
At the same time, it has to be acknowledged that we have work ahead of us. Development in Midtown and Downtown is still coming at the expense of residents living with low incomes who are experiencing rising rents and housing insecurity. The expanding wealth gap also underscores long-standing issues we must face head on.
As we look forward to the next 10 years of working in the city, we must continue to be vigilant that our work centers Detroiters.
Ellis Carr is now the president and CEO of Capital Impact Partners and CDC Small Business Finance. Kurt Chilcott, formerly president and CEO of CDC Small Business Finance, has transitioned to Board Chair of the combined organization. We invite you to learn more about our new enterprise at www.investedincommunities.org
CDC Small Business Finance and Capital Impact Partners recently announced a new alliance between the two companies.
We recognized that we had a special opportunity to create greater change together than we could individually in the communities we serve and beyond. This is an exciting journey we are embarking on and we want to share how the idea of creating an alliance came about and our vision for the future.
Tune in to the last video of our “CEO Conversations” series, “Moving Beyond the Status Quo.” Listen to CDC Small Business Finance’s CEO, Kurt Chilcott and Capital Impact Partners CEO, Ellis Carr discuss how the alliance will disrupt and to call to question the current operating practices to bring change to communities.
Ellis Carr is now the president and CEO of Capital Impact Partners and CDC Small Business Finance. Kurt Chilcott, formerly president and CEO of CDC Small Business Finance, has transitioned to Board Chair of the combined organization. We invite you to learn more about our new enterprise at www.investedincommunities.org
CDC Small Business Finance and Capital Impact Partners recently announced a new alliance between the two companies.
We recognized that we had a special opportunity to create greater change together than we could individually in the communities we serve and beyond. This is an exciting journey we are embarking on and we want to share how the idea of creating an alliance came about and our vision for the future.
Check out our 5th episode of our “CEO Conversations” series, “Disrupting the Distribution Channels.” Listen to CDC Small Business Finance’s CEO, Kurt Chilcott and Capital Impact Partners CEO, Ellis Carr discuss the opportunity ahead to disrupt the current distribution channels in order to get more capital to underserved communities.
Ellis Carr is now the president and CEO of Capital Impact Partners and CDC Small Business Finance. Kurt Chilcott, formerly president and CEO of CDC Small Business Finance, has transitioned to Board Chair of the combined organization. We invite you to learn more about our new enterprise at www.investedincommunities.org
CDC Small Business Finance and Capital Impact Partners recently announced a new alliance between the two companies.
We recognized that we had a special opportunity to create greater change together than we could individually in the communities we serve and beyond. This is an exciting journey we are embarking on and we want to share how the idea of creating an alliance came about and our vision for the future.
Welcome to the second video of our new series, “CEO Conversations,” where CDC Small Business Finance’s CEO Kurt Chilcott and Capital Impact Partners CEO, Ellis Carr discuss the new alliance.
Ellis Carr is now the president and CEO of Capital Impact Partners and CDC Small Business Finance. Kurt Chilcott, formerly president and CEO of CDC Small Business Finance, has transitioned to Board Chair of the combined organization. We invite you to learn more about our new enterprise at www.investedincommunities.org
CDC Small Business Finance and Capital Impact Partners recently announced a new alliance between the two companies.
We recognized that we had a special opportunity to create greater change together than we could individually in the communities we serve and beyond. This is an exciting journey we are embarking on and we want to share how the idea of creating an alliance came about and our vision for the future.
As of July 1, 2021, Ellis Carr is now the president and CEO of Capital Impact Partners and CDC Small Business Finance. Kurt Chilcott, formerly president and CEO of CDC Small Business Finance, is transitioning to Board Chair of both organizations.
In 2020, Kurt Chilcott and Ellis Carr sat down for a video series of conversations about our alliance. You can also watch the whole video series here.
By Ellis Carr, President and CEO
Since 1982, Capital Impact Partners has helped people build communities of opportunity that break barriers to success. We have done that through learning and evolving with a range of investors, donors, community partners, and other Community Development Financial Institutions.
As we looked to the future, we saw a tremendous opportunity to do more, give more, and make a bigger difference. With that in mind, more than a year ago, we began conversations with CDC Small Business Finance. Together, we recognized how our similar visions and complementary expertise, services and financing products could create a change that neither of us could accomplish independently.
By Lauren Counts, Senior Director, Strategy, Innovation, and Impact Management
Mission-driven organizations face down some of the world’s biggest challenges – systemic poverty, inequality, and racial inequity, to name a few – as a matter of business practice. Certainly these are not easy issues to tackle; they require bold thinking and brave action in order to create transformative change for those underserved communities that experience these inequities.
A veteran of the Community Development Financial Institution (CDFI) sector, Scott Sporte has helped shape Capital Impact Partners’ lending priorities and has envisioned innovative pathways for supporting our communities. Scott recently transitioned from his role as Chief Lending Officer to a new role within Capital Impact, Chief Strategy & Innovation Officer.
In this interview, Scott discusses new focuses for CDFIs, outlines his vision for his role, and describes how championing equity and inclusion can transform the communities that Capital Impact serves.
Despite the challenges, positive outcomes are achievable. Capital Impact aims to fund schools willing to rise to the challenge and create and maintain diverse by design school campuses.
Our extensive research yielded examples of several best practices for schools pursuing the diverse by design model, including:
Locating schools in naturally diverse neighborhoods or on the border of racially or socio-economically diverse communities;
Instituting a weighted lottery system for student recruitment that takes into account socio-economic status, parental education levels, and/or census tract;
Training teachers and staff on equitable and culturally responsive pedagogical practices and recruiting diverse personnel; and
Promoting the benefits of integration to students, families, and communities.
Montessori for All students help break ground on their “diverse by design” school building.
Capital Impact has presented these findings, in partnership with thought partners and schools at the National Charter School Conference, the Central Valley Leadership Program, and a gathering hosted by the Diverse Charter Schools Coalition.
These schools are promoting academic excellence for all by creating inclusive and nurturing environments in which all students have equitable opportunities to succeed, and we look forward to collaborating to continue this progress.
For more about how Capital Impact is working to support the “diverse by design” model, we invite you to learn more about our overall education work and strategy behind why we finance charter schools.
Across the country, unemployment numbers are down and the news talks of economic recovery and the booming stock market. Outside of that news, however, are many people who are still struggling to achieve equal opportunity and prosperity with the rest of the country.
Transformative investments are needed to get struggling Americans into the mainstream economy and working toward a brighter future.
This means access to health centers, charter schools, affordable housing, grocery stores that sell fresh and healthy food, transportation, and other infrastructure improvements. However, access to financing can be a major barrier to these projects getting off the ground.
Financial services, investment capital, and affordable credit from traditional financial institutions has historically been limited for those looking to serve low-income communities.
Community Development Financial Institutions (CDFIs) have played a major role in empowering communities to address the structural barriers that exclude them from shared prosperity.
What are CDFIs exactly? How do they work? Whom do they serve? Here is a breakdown…
Insight into CDFIs
Martha’s Table provides healthy food to Washington, D.C. communities daily.
CDFIs as we know them today began more than three decades ago as private financial institutions focused on increasing economic prosperity for low-income and underserved communities by providing affordable lending for community projects. Today, more than 1,000 CDFIs operate across the United States.
Over time, their work has evolved to address key issues of economic, social, racial, and political justice. These mission-driven institutions provide support in disinvested areas that traditional lending institutions deem too risky to finance; in fact, they are mandated to embrace risk in order to create social impact.
CDFIs fall into four sectors: community development banks, community development credit unions, community development loan funds, and community development venture capital funds. Each has a slightly different way of operating, but the end product is the same: communities of opportunity that break down barriers to success.
CDFIs work as market creators and market catalysts by supporting community businesses—including small and family businesses, micro-enterprises, cooperatives, non-profit social service organizations, mixed-use real estate, and affordable housing. CDFIs’ ability to foster catalytic change comes from loans and grants from government institutions like the CDFI Fund, loans and grants from large financial institutions, and program-related investments from major donors and foundations.
Meals on Wheels support older adults to age within their communities.
Financing from CDFIs targets specific populations – often low-income individuals in both urban and rural settings, and heavily concentrated with women and people of color. These high-impact interventions build community infrastructure and resilience.
CDFIs work for and with the communities they serve, developing strategic financing packages – ranging from pre-development to real estate acquisition, from construction to refinancing – for vital projects needed to help communities succeed. Generally smaller than mainstream financial lenders, CDFIs come in different sizes and provide loans ranging from $50,000 to $5 million. CDFIs have also jointly raised capital to deploy larger loans in the multi-millions.
In addition to core lending services, some CDFIs also provide capacity building, help build and scale social innovation programs and support policy advocacy as a means of further supporting local organizations. Combined with our lending services, these efforts promote increased job growth and retention, improving communities’ economic outlook and viability.
Importantly, CDFIs are not in business to maximize profits. Instead, CDFIs maximize support for community needs and empowerment.
CDFIs’ Immense Impact on Communities
The impact of CDFIs shows in their support and empowerment of underserved communities to address the barriers that hold them back from shared prosperity.
Axis Community Health provides high-quality health care services for its clients.
In 2016, CDFIs supported by the CDFI Fund financed nearly 12,000 businesses, created 37,600 jobs, and created 34,000 affordable housing units. Nearly 450,000 individuals received financial literacy capacity building through CDFIs. As part of the CDFI Fund’s Bond Guarantee Program, $119 million was spent on rental housing, $102 million on charter schools, $13.3 million for health care facilities, $2.7 million on daycare centers and $2.9 million on small businesses.
Capital Impact Partners’ Role in the Space
Equitas Academy is one of many charter schools preparing students for future success.
Since 1982, Capital Impact has served often-neglected communities, starting with the cooperative model to foster economic development for low- and moderate-income areas.Our non-profit, mission-driven lending began in 1984 and progressively expanded to support communities nationwide, including establishing offices in Oakland, California and Detroit, Michigan. Capital Impact also grew to support access to quality health care, education, housing, healthy food, dignified aging and cooperative development.
Capital Impact Partners works to improve the lives and futures of individuals and communities through four strategic pillars: addressing systematic poverty, building equitable communities, creating healthy communities, and ensuring inclusive growth.
Through it’s place-based focus, Capital Impact Partners has played an integral role in revitalization efforts in Detroit.
Since its inception, Capital Impact has deployed more than $3 billion for community development projects nationwide. In that time, our lending has created more than 36,500 units of affordable housing, helped more than 2 million patients receive quality health care, facilitated access to quality education for 240,000 students in 235 charter schools, financed 86 retailers to provide healthy food for 1 million people, helped 37,000 older adults age with dignity through 191 projects, and supported cooperative services for 870,000 customers. Our place-based strategy has also facilitated the revitalization of Detroit neighborhoods, creating mixed-use spaces and multi-family housing to help the city rebound.
In addition to our lending, we advance programs to create equity and opportunity. For example, our EDI program provides catalytic capital and training to minority real estate developers in Detroit so that they can participate in the city’s revitalization efforts. We are also investing nationally in efforts to scale worker-owned, home care cooperatives that are creating quality jobs for women aged 50 and older who care for our loved ones as they age.
Capacity building is another service we extend to organizations. A great example is the Answer Key, a step-by-step guide with practical tools designed to help charter school operators successfully navigate the often difficult process of building or expanding charter schools.
Like several other CDFIs, Capital Impact also embraced impact investing in 2017 by creating Capital Impact Investment Notes as a means to drive more capital from socially conscious investors – big and small – into the communities that need it most.
All that individuals and communities want is the opportunity to succeed. When traditional financial institutions refuse to invest in communities, CDFIs offer a chance of living a dream that so many Americans hold: providing their children with a quality education so that they can achieve greater gains. Receiving quality health care and healthy food access so that they can enjoy many years with family. Having affordable housing to call home.
In supporting communities to reach these goals, Capital Impact Partners and other CDFIs help create equitable and inclusive spaces that lead to communities of opportunity for all.
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