Diane Borradaile recently joined Capital Impact as its new Chief Lending Officer. She leads her team to support Capital Impact’s mission to empower communities to break barriers to success by facilitating loan transactions for health care centers, charter schools, affordable housing, healthy food projects, and more. Diane’s commitment to community development has spanned more than 35 years, through lending at both commercial banks and Community Development Financial Institutions.
In this blog, we take some time to get to know more about Diane, her history, and what keeps her committed to building communities of opportunity.
By Nicole Boone, Business Development Officer
Boyle Heights is a bustling Latino neighborhood just east of downtown Los Angeles with a history dating back before the Mexican-American War. However, it’s the pressures of the present day that weigh heavily here. Approximately 66 percent of the population lives below 200 percent of the federal poverty level, 22 percent are uninsured, and few primary care doctors remain. The systemic poverty the residents grapple with creates ripple effects throughout their lives.
By Virginie Arnaud LePape, Senior Director, Lending
In 1982, Capital Impact was created with a single focus – support the development of cooperatives in underserved communities.
Charter schools create opportunities for innovation that drive academic success for students in underserved communities.
Along the way, we gradually expanded our scope to meet the growing needs of the communities we served by working to increase access to health care, education, housing, and healthy food.
A handful of loans slowly grew into a truly diversified portfolio of offerings as we took the risk to partner with those organizations that traditional financial institutions shied away from. Twenty-five years after we began lending in 1984, we hit an incredible milestone of deploying $1 billion into low- and medium-income communities across the country.
I am humbled that just eight years after that initial milestone, we more than doubled that achievement by deploying more than $2.5 billion through the end of our record-breaking efforts in 2017.
It is a true testament to our mission-driven team for living our mission statement by delivering both the capital AND commitment that enables those most in need to build communities of opportunity that break barriers to success.
While we pause to celebrate, we also know that we must increase our resolve. Too many of us continue to struggle, with a disproportionate impact on people of color.
To help solve the key social and racial justice issues facing our society, we must continue to make inroads in achieving our strategic pillars to address systemic poverty, create equity, build healthy communities, and promote inclusive growth.
Innovative health care models support older adults to age with dignity in their communities.
This requires supporting our lending work by deploying new and innovative programs backed by cutting-edge research; making the case for support from lawmakers at the federal, state, and local levels; amplifying our impact investing efforts with both individuals and large institutions; and forming partnerships that ensure that our solutions are grounded in what communities both need and can act on.
We did not get to this point alone, and for that I want to thank all of those who have supported us, as well as those organizations who are working directly with often-neglected communities every day to deliver the services they need to thrive.
By working together, I know that we can empower communities to achieve transformative progress in 2018 and beyond.
By Will Robison, Senior Loan Officer
As wildfires burned through California’s Napa and Sonoma Counties in late 2017, Sandy Cesario was forced to evacuate her home and all she knew. Like many of the 5,000 residents of her small Calistoga town, she took refuge at one of the county’s evacuation centers filled with uncertainty.
That was the last place she expected to see her personal doctor.
“Right now my throat’s all filled with smoke and real raspy and deeper than normal, but other than that, we’ve been taken care of like we’re kings and queens,” Cesario said.
Amidst the chaos caused by this natural disaster, OLE Health’s staff, along with several other Federally Qualified Health Centers (FQHC), immediately sprung into action, working tirelessly to ensure that their current patients didn’t have any gaps in their care while simultaneously providing immediate critical care to the greater community, treating everyone that they could at the county’s evacuation centers.
“They just give great care. They go above and beyond what they do. They bussed a bunch of us to get our medications, to make sure we have what we need to get us through the month. What can I say? That’s my personal doctor, Dr. Bermudez, and she’s the greatest there is.”
Serving Their Communities in a Crisis
OLE Health is the only FQHC in Napa County, with five locations throughout the surrounding area. OLE serves 1 in 4 children and 1 in 6 adults in the area. They knew that their patients – Napa’s working class, a majority of whom are uninsured or underinsured, who rely on OLE for affordable health care – would be uniquely affected by the fires, disrupting their treatment and access to medication.
Dr. Colleen Townsend was one of OLE Health’s staff members who rallied to provide health care to her community during the California wildfires.
“At OLE Health, we’re a community health center, so we provide primary medical care to people of all walks of life, insured or not insured, or insured through federal programs or state programs. We often see patients who have no insurance. Those patients often have difficulty accessing care when the services are interrupted,” Colleen Townsend, a family physician at OLE, said as she treated patients at a busy evacuation center during the October fires.
During the first week of the fires, OLE treated around 700 patients like Cesario. There was the immediate care they provided, for the people who had broken ankles from running from the fires or conditions related to poor air quality. Many of the grape pickers at River Ranch Farmworker Center, where OLE provides outreach care, continued working outside during the fires, exposing them to dangerously polluted air.
However, one of their biggest successes was filling the gap for people with chronic conditions whose health depends on access to their life-saving medications. As local residents fled the fires, they were forced to temporarily relocate, and medications would have been prohibitively expensive at other health facilities and pharmacies. To fill the gap, they teamed up with volunteers from nearby Touro University to provide free rides to pharmacies that remained open during the fires so that patients with conditions like diabetes could acquire the medications they needed. Many residents, who either lost proof of their insurance or didn’t have insurance, received gift cards to local pharmacies from OLE.
“OLE Health has been present at shelters across Napa since people were evacuated after the fires began,” Townsend said. “We’ve been providing supportive services, checking in to make sure that people had access to the medications they needed for either new or acute symptoms, but also providing support for chronic disease management with medications and calling in prescriptions..”
OLE’s efforts didn’t stop when the fires were finally contained weeks later. Local residents were still grappling with the emotional aftershocks of the wildfires, so OLE provided mental health care resources for victims. They also walked patients through receiving insurance through Covered California even if their information had been lost in the fire. Additionally, since many of OLE’s patients are undocumented, they also guided them through the process of receiving FEMA funds specifically for immigrants.
Medical staff wait to serve patients at a wildfire evacuation center in Northern California.
OLE wasn’t the only FQHC that did exemplary work to serve those affected by the fires. Petaluma Health Center opened its doors to offer walk-in appointments to everyone that needed care – not just its usual patients – and opened on Sundays, when it is typically closed. During the early days of the fire, they saw hundreds of extra patients. Sonoma Valley Community Health Center also provided immediate care and resources like face masks and charging stations for fire victims, and later partnered with the University of California, San Francisco to offer their patients crisis counseling specifically tailored for fire victims. They also helped patients apply for benefits like disaster-related Supplemental Nutrition Assistance Program benefits under CalFresh and short-term disability.
Supporting FQHCs that Go Above and Beyond
Too often, vulnerable populations receive sub-par health care because they can’t afford the high costs of quality care. FQHCs like OLE, Petaluma HC, and Sonoma Valley CHC do a great deal to serve their patients, both in everyday and emergency situations. Many offer not just health care, but dental care, and mental health services, as well as connections to local agencies that providing affordable housing, fresh produce, and legal help with their immigration and citizenship needs.
OLE Health and other FQHCs went beyond their typical duties to provide quality health services to all members of the local community.
Capital Impact Partners is well acquainted with the work of organizations like these, work that often goes above and beyond the norm. Their hard work providing care to all members of their communities is why Capital Impact has partnered with health centers like these, providing the vital capital and capacity building support they’ve needed to grow and expand.
“The types of services that a health center provides are difficult to access either from private physicians or from emergency rooms, which are much more costly. The full range of services, disease care, as well as becoming a real medical home for a patient, are important to us,” said Scott Sporte, Capital Impact Partners’ Chief Lending Officer.
“We’re looking for [partners] that are focused not just on seeing the highest number of patients in a day, but really making sure that those are quality interactions, that are more about the outcome for the patient’s health,” said Sporte. “We’re looking for those who are thinking holistically about the way the care is delivered – that it includes not just primary care, but also thinking about the mental health needs and maybe even the social needs that a patient may have.”
While FQHCs play an essential role in underserved areas, they struggle for financing to support their programs. Many traditional lenders see FQHCs and other community health centers as risky investments. Capital Impact has financed more than half of the FQHCs in California through programs including the CPCA Ventures Program, the New Market Tax Credit, and the Healthier California Fund. Capital Impact invests in FQHCs nationwide because they are key to improving health care outcomes for vulnerable communities. Without the invaluable safety net that these FQHCs provide, the health of individuals in many underserved communities would go un-addressed, and disasters like the Northern California fires could have been even more devastating to low-income patients.
To learn more about how Capital Impact can support your FQHC, get in touch with our staff. To learn more about our work with OLE Health, read this story.
By Emilie Linick, Senior Loan Officer
Equitable access to education provides all children with the chance to live up to their full potential and lead choice-filled lives. With racial and socio-economic inequity growing across the nation, high-quality education is crucial to giving students from low-income communities the opportunity to achieve the same life successes as their more affluent peers.
As a mission-driven Community Development Financial Institution (CDFI), Capital Impact Partners aims to create communities of opportunity, and education is one cornerstone of that mission. For more than 20 years, we have partnered with and financed charter schools to extend high-quality education to the children who need it most.
By Michelle Betton, Writer
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’s 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 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 has played an integral role in revitalization efforts in Detroit.
Since its inception, Capital Impact has deployed more than $2.5 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 Equitable Development Initiative 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 and other CDFIs help create equitable and inclusive spaces that lead to communities of opportunity for all.
About Capital Impact Partners: Through capital and commitment, Capital Impact Partners helps people build communities of opportunity that break barriers to success. We deliver strategic financing, incubate new social programs, and provide capacity-building to help ensure that low-to-moderate-income individuals have access to quality health care and education, healthy foods, affordable housing, and the ability to age with dignity. A nonprofit community development financial institution, Capital Impact Partners has disbursed more than $2 billion to revitalize communities over the past 30 years. Our leadership in delivering financial and social impact has resulted in Capital Impact earning a “AA” rating from S&P Global “AA” and being recognized by Aeris since 2005 for our performance. Headquartered in Arlington, VA, Capital Impact Partners operates nationally, with local offices in Detroit, MI, and Oakland, CA. Learn more at www.capitalimpact.org.
By Ellis Carr, President and CEO
This year has been a whirlwind for our country and for Capital Impact Partners.
For all the headlines of stock market records and rising incomes, the reality is that too many of us across America are struggling. People of color are disproportionally impacted, with black households still lagging behind where they were in 2000, and Hispanic households not doing much better.
Due to this stark reality, the question “How can we bring about improved outcomes in access, income, health and opportunity in the communities we serve?” remained central to our efforts.
Through our dedicated focus on breaking the barriers to success – and with your support – I am proud to report that this has been our most impactful year ever in working to turn underserved communities into communities of opportunity.
Fostering Innovation to Address Inequity
To answer that central question, we concentrated on identifying and addressing inequalities within systems and driving equitable means for individuals to propel themselves out of poverty and live the dream America is known for.
Several resources were researched and developed to inform practitioners and communities and influence policy makers about best practices in our areas of practice.
Capital Impact’s Answer Key walks charter school operators step-by-step through facility construction.
We heard from many charter school operators that the school construction process can be daunting. In support of their efforts to build or expand high-quality charter school facilities, Capital Impact published The Answer Key, a step-by-step guide to the school construction and financing process.
With the influx of development in Detroit, long-term residents face the risk of relocation or displacement. Capital Impact published a report to help groups involved in development manage processes to reduce resident displacement.
Alongside these resources, we also developed programs to directly address inequity in access to services and economic participation.
Capital Impact’s Equitable Development Initiative will support minority real estate developers with resources and capital.
In Detroit, where lending and resources for minority real estate developers are limited, we launched the Equitable Development Initiative. This two-year, $5 million program is designed to help minority developers participate in Detroit’s continued economic recovery by providing them with critical training opportunities and access to capital. Our longtime partner JPMorgan Chase provided initial support.
More broadly across Michigan, the Michigan Good Food Fund invested more than $10 million in statewide healthy food programs since its launch two years ago, creating approximately 213 construction jobs, 366 full-time jobs and 32 part-time jobs.
Cooperatives can provide a considerable economic and social benefit for communities. Our cooperative work focused on expanding racial and economic equity to the communities we serve by supporting worker, food and housing co-ops. We gave our third year of Co-op Innovation Awards to Project Equity and the Food Co-op Initiative for exemplifying innovation in the co-op space with a focus on communities of color. Additionally, there has been movement in the home care worker cooperative space. Capital Impact partnered with the AARP Foundation to create quality work options for women 50 and older through a national effort to scale worker-owned, home care cooperatives. With women – mostly women of color – making up 90% of all home care workers and wages for these jobs keeping workers hovering around the poverty line, worker ownership is a viable option for giving older women employment empowerment while providing quality care for their clients.
Supporting Communities to Succeed
Our lending team also had an incredibly full year. Fueled by a record-breaking projected loan volume of more than $200 million, 2017 will be our largest year ever.
Martha’s Table’s relocation and expansion in a new community-services campus will help address local disparities.
As we have expanded our lending, we have also expanded our footprint. We’ve reached into new geographic areas to continue addressing the increasing need of communities across the country, including work in the Southeast and Midwest. I am particularly excited about our growing focus in the “backyard” of our headquarters. We helped launch a number of impactful projects in Washington, D.C., including a focus on education with the Mamie D. Lee development, Martha’s Table and the D.C. International School.
Setting a Foundation for the Future
Along with these outward successes to empower new communities of opportunity, we made great strides in focusing inward to further position ourselves to address the nation’s biggest challenges. In January, S&P Global, the world’s leading provider of independent credit ratings, assigned Capital Impact a “AA issuer credit rating.” Being one of a few Community Development Financial Institutions (CDFIs) that have received an S&P rating is not only an honor, but it improves our ability to access financial tools that allow us to support vibrant economic opportunity and shared prosperity.
That set the stage for the October launch of our Capital Impact Investment Notes. This first-of-its-kind offering from a CDFI – with its own “AA” S&P rating and offered on a continuous basis – gives us the flexibility to invest in new programs and initiatives in communities needing support. It has already been incredibly well-received, selling more than $41 million in the last quarter, making it among the most successful in the impact investment space by a non-profit.
We closed the year by launching a unique partnership with Annaly Capital Management. Through this first-of-its-kind $25 million joint venture with the world’s largest REIT, we were able to raise direct equity for our mission. We are thrilled to embark on this partnership, as it enables us to expand our work to new communities.
Of course, these numbers mean little without impact. We reached more than 200,000 beneficiaries this year and created more than 750 jobs.
I am immensely proud of the work that our team has done to make this year our best yet. Their commitment allowed us to increase access to health care, education, affordable housing and healthy food for many deserving individuals. You can learn more about our approach and focus on equity from my interview with the More Than Money podcast.
More than ever, communities across the country need support to help themselves out of poverty, and Community Development Financial Institutions are becoming an ever greater tool for realizing that goal.
Capital Impact is well placed to continue affecting positive change for communities in 2018 and beyond.
Of course, we can’t do it alone. Thank you for all of your support, this year and in the future.
By Olivia Rebanal, Director, Loan Programs
Community engagement is a critical component to our work at Capital Impact, particularly as supporters of innovative community-based work. As a Community Development Financial Institution (CDFI), we support community-driven solutions that address the economic, social and racial justice barriers to success in our most underserved communities. Having first-hand knowledge of our communities and their needs helps us ensure that the projects we support have the outcomes our clients need.
With our home base in the Washington D.C. area, we strive to be present and engaged in the city’s communities. We work with organizations across the city to address various issues of structural exclusion and poverty. One of the areas that Capital Impact focuses on in this effort is healthy food access. Our strategic focus on health care and healthy food ties directly into our call to help communities achieve their full potential. We all need access to healthy food to thrive.
Some of Washington D.C.’s districts, or wards, are more impacted than others: Wards 7 and 8 are hard-hit as it relates to food access. According to a report by DC Hunger Solutions, only 3 supermarkets serve the 150,000 residents in Wards 7 and 8, whereas the 82,000 residents of Ward 6 have 10 supermarkets.
Recently, we combined our expertise in and devotion to community engagement and healthy food by hosting a volunteer session as part of Martha’s Table’s Joyful Food Markets program during the annual conference of the Opportunity Finance Network (OFN), a national network of CDFIs.
Bringing communities together around healthy food
Martha’s Table, a local non-profit, launched its Joyful Food Markets (JFM) program in 2015, and it is now offered in 39 schools exclusively in Wards 7 and 8. Each month, the markets offer families the opportunity to sample produce, enjoy chef-led culinary demonstrations, dance to music, get excited about healthy recipes, and bring home selections of fresh produce and healthy non-perishable items for free.
Chef Jojo chats with volunteers at a Joyful Food Market at KIPP DC’s Promise Academy.
Martha’s Table relies on the engagement of a robust volunteer corps to keep these markets running, which was a perfect opportunity for OFN conference attendees to pitch in and see how the model works. Representatives from my team at Capital Impact, along with others from the Self-Help Ventures Fund, Finance Fund of Ohio and ICA Fund Good Jobs put on aprons and gloves and got to work.
The Joyful Food Market event was hosted at KIPP DC’s Promise Academy, a public charter school in Washington D.C.’s Ward 7 offering a college preparatory curriculum in addition to a suite of enrichment programs. Among the 721 students enrolled in kindergarten through fourth grade, 168 children and their families were served at the inaugural market, in addition to the 23 school staff members.
Martha’s Table’s Chef Jojo showed volunteers how to make batches of kale and apple slaw to showcase the food items that were being offered at that month’s Joyful Food Market. Students were eager for taste-tests, watching our volunteers prepare the slaw before their eyes.
Volunteers help students and families choose fresh produce at a Martha’s Table Joyful Food Market. Photo: KIPP DC
By the end of the day, we had moved pallets of onions and apples, trimmed kale into bunches, and watched student after student enjoy crunching into apples. The kids who came through the market were excited, happy and smiling, asking their parents and guardians to let them help make some of the recipes they’d seen at home. It was just another day at a Joyful Food Market, but all the volunteers were glad to be a part of it and the impact it was having on the local community in that moment.
Addressing food access in American communities
Some of our communities have experienced historical disinvestment in fresh food access, resulting in a replacement of healthy and local food establishments with a disproportionate concentration of highly processed, low-nutrition fast food.
Capital Impact works with communities across the country to expand access to healthy foods. In D.C., for example, we are working with Martha’s Table on its relocation and expansion as part of “The Commons at Stanton Square,” a new three-acre, community-services campus development project in Ward 8. It will address key disparities in this low-income community by bringing together a variety of key social services including health care services and affordable housing while spurring community development.
Martha’s Table’s contribution to the city is not small. Services provided at the new headquarters will include a branch of its popular preschool program, food distribution, nutrition and parenting workshops. Opened 35 years ago, Martha’s Table now reaches more than 18,000 people through its food, education and thrift store programs with significant support from 18,000 volunteers every year. In 2015, Martha’s Table served more than 1 million meals, distributed free clothing and housewares to more than 10,000 neighbors in need, and provided education to more than 200 children and older youth.
The Michigan Good Food Fund (MGFF) is another example of Capital Impact’s commitment to healthy food access. More than 30 percent of Michiganders are obese—the second highest rate of obesity in the Midwest region. This disproportionately impacts communities of color. MGFF is a public-private loan and grant fund created to finance healthy food production, distribution, processing, and retail projects that benefit underserved communities throughout Michigan. This includes supermarkets, grocers, community markets, co-ops, food distributors and others working to increase access to healthy food for Michigan children and families. Created in partnership with the Fair Food Network, Michigan State University Center for Regional Food Systems and the W.K. Kellogg Foundation, this unique program supports projects that increase access to healthy food, spark economic development, and create jobs in the communities that need it most.
Turning the tide on systemic exclusion
Every community deserves the ability reach its full potential, and healthy food is a major force in achieving future success. Healthy food, education, affordable housing and many other factors intersect on the path to inclusive growth and shared prosperity. Supporting communities and organizations to address their healthy food needs empowers individuals to overcome structural barriers and achieve greater equity. It’s a privilege to bring both our capital and our personal commitment to support Martha’s Table and our greater Washington, D.C. community in achieving just that.
By Nancy O. Andrews, Ellis Carr, Donald Hinkle-Brown and Joe Neri
As leaders of four of the nation’s largest nonprofit community development financial institutions (CDFIs) with the mission of investing in low-income communities and entrepreneurs, we ask Congress to protect the desperately needed flow of investment capital to America’s struggling cities and towns.
In short, we ask Congress to ensure full funding for the U.S. Treasury Department’s Community Development Financial Institutions Fund (CDFI Fund), whose support enables us and more than 1,000 other CDFIs nationwide to provide patient, innovative capital solutions to help small businesses, expand educational opportunities, and build affordable homes. These investments provide a tremendous bang for the taxpayer buck: On average, CDFIs leverage every federal dollar with at least 12 additional dollars from other sources, including banks, foundations, and impact investors.
CDFI investments in underserved communities promote economic opportunity and inclusive growth.
Last year, $233 million in CDFI Fund appropriations led to more than $2 billion worth of investments and loans across the U.S. Most importantly, this capital has fueled economic growth in thousands of distressed cities and towns, providing economic opportunity for millions of Americans. In 2016 alone, with support from the CDFI Fund, CDFIs nationwide created 36,000 jobs, made 11,000 business loans, and financed 24,000 affordable housing units in urban and rural communities that need it most.
Yet, despite a solid track record of success and consistently strong bipartisan congressional support since its founding in 1994, the CDFI Fund is on the chopping block. The Trump administration’s proposed budget for fiscal year 2018 would eviscerate the CDFI Fund’s vital programs, cutting all but $14 million of its current $248 million budget.
The House voted to restore some of that funding, and although that’s a good first step, we need more than that. The CDFI Fund must continue to operate at full strength. Without the CDFI Fund, small businesses like veteran-owned Honor Capital, which brings affordable grocery stores and jobs to underserved neighborhoods, wouldn’t exist.
Honor Capital’s seven grocery stores in Kansas, South Carolina, Virginia, and Oklahoma have all been financed with CDFI loans. In Wichita and Winfield, Kan., for example, Honor Capital opened two stores that have brought fresh, affordable foods to their communities, created jobs, and attracted new businesses. Each Honor Capital grocery store serves thousands of customers every week.
As part of Honor Capital’s ambitious plan to increase access to healthy foods and support veteran entrepreneurship nationwide, the company will expand to operating a total of 10 stores by the end of 2017, including new stores in North Carolina and Georgia. This growth is made possible by $9 million in innovative financing provided by a partnership of three CDFIs—IFF, Reinvestment Fund, and Enterprise Community Partners. CDFI financing is essential because many start-up and early-stage businesses like Honor Capital have difficulty accessing credit.
In the District of Columbia’s Congress Heights neighborhood, a $14.4 million capital infusion from two CDFIs, the Low Income Investment Fund (LIIF) and Capital Impact Partners (CIP), enabled the Charter School Incubator Initiative to renovate a building that houses two charter schools. Somerset Prep DC and Community College Preparatory Academy serve students in grades six through 12, as well as adult learners. These two schools expand the opportunities for youth and adults to secure high-quality education in their community. Congress Heights, a predominantly African-American and low-income neighborhood, is undergoing pressure from the rapid public and private-sector development in the District. Like other CDFIs, LIIF and CIP are working to ensure inclusive growth by enabling all residents to participate in the revitalization of their community.
The impact of the CDFI Fund’s support goes well beyond dollars and cents.
CDFIs help communities realize their visions of prosperity. They work closely with local nonprofits, businesses, and government to ensure that they are addressing community needs and priorities. They seek out opportunities that traditional financial institutions often overlook: in neighborhoods where median incomes and school test scores fall below national averages, and in businesses like grocery stores that have thin profit margins and higher risk.
CDFI financing is about helping Americans live better lives—through good jobs; safe and affordable housing; access to fresh, healthy foods; high-quality education from early childhood to college; and excellent health care.
America’s cities, towns and rural areas need the CDFI Fund in order to thrive. Congress should ensure that funding for CDFIs is fully restored in the 2018 budget and keep investment capital flowing to vulnerable communities.
Nancy O. Andrews is President and CEO of the Low Income Investment Fund, which is dedicated to creating pathways of opportunity for low income people and communities. Ellis Carr is Capital Impact Partners’ President and Chief Executive Officer and has more than 20 years of experience in the financial services and mortgage industries. Donald Hinkle-Brown is President and CEO of Reinvestment Fund, a national CDFI which integrates data, policy and strategic investments to improve the quality of life in low-income neighborhoods. Joe Neri is President & CEO of Chicago-based IFF, the Midwest’s leading non-depository, diversified Community Development Financial Institution, which focuses on strengthening nonprofits and the communities they serve.
By Ellis Carr, President and CEO
The idea of “community” often conjures images of a geographic place, a shared space where people congregate. While true, communities can be so much more. Their true potential can manifest itself when they foster connections between individuals who share mutually beneficial ideals. Through championing those shared values, community members can create a future of shared prosperity.
This idea of community inspires us here at Capital Impact to look beyond the boundaries of space and place and take action to create ‘communities of opportunity’ built on a foundation of equity and inclusion. In doing so, we can create a network of connections that supports successful outcomes for all.
With Capital Impact Investment Notes, you can invest in your values.
In an effort to fulfill that vision, we are announcing a new opportunity that allows you to embrace this broader concept of community and support the values that matter to you. Beginning this week, we are offering Capital Impact Investment Notes, the proceeds of which will support investments in underserved communities across the country. I am excited that S&P assigned a long-term issue credit rating of AA to our Notes*, marking the first time an S&P rated Notes offering is being made available by a Community Development Financial Institution on a continuous basis.
For as low as $1,000, you – as an individual or institution – will have the ability to invest in our mission-driven efforts to create jobs, support equitable access to critical services, foster good health and drive economic development – things that our country so desperately needs.
For more than 30 years, Capital Impact has lent to, invested in and developed programs with the residents in underserved communities, communities that traditional lenders are reluctant to support. Central to that effort is our work to partner with and empower communities to identify locally driven solutions that help address their most pressing needs.
I encourage you to read our stories of impact and see that work through the eyes of those individuals in communities who are benefiting from this collective social impact effort. Now you can help us create more stories of positive social change.
On our website you will find the current Prospectus and Pricing Supplement and terms and highlights associated with the offering of our Notes. I invite you to discuss these details with your broker.
This announcement is an important step in providing another way for you to align your investments with your values and truly make a difference in the lives of others.
I hope that you will join us in creating communities of opportunity that break down barriers to success and expand equity for all.
This is not an offer to sell or a solicitation of an offer to buy any securities. Such an offer is made only by means of a current Prospectus (including any applicable Pricing Supplement) for each of the respective Notes. Such offers may be directed only to investors in jurisdictions in which the Notes are eligible for sale. Investors in such states should obtain a current Prospectus by visiting https://www.capitalimpact.org/invest/capital-impact-investment-notes. Investors are urged to review the current Prospectus before making any investment decision. No state or federal securities regulators have passed on or endorsed the merits of the offering of notes. Any representation to the contrary is unlawful. The notes will not be insured or guaranteed by the FDIC, SIPC or other governmental agency. As of October 16, 2017, the Notes will be offered for sale in all 50 states and the District of Columbia, excluding the States of Arkansas and Washington and the Commonwealth of Pennsylvania.
*S&P Global assigned a long-term issue credit rating of AA to the Notes on September 7, 2017. Please check the current Pricing Supplement at the link above for the S&P credit rating assigned to Notes currently being offered for sale. An S&P credit rating is not a recommendation to buy, sell or hold Notes and may be subject to suspension, reduction or withdrawal at any time by S&P.