Ellis Carr, president and CEO of Capital Impact Partners

Expanding Equity for Underserved Communities in 2017 and Beyond​​

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 Answer Key guide to charter school construction

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.

Minority developer Richard Hosey

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 supports community food and education needs

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 developmentMartha’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.

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A mother and children participate in a Joyful Food Market; photo: KIPP DC

Commitment to Community Drives Engagement Through Healthy Food Access

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.

CDFIs revitalize underserved communities

Op-Ed – Congress: Continue to Invest in America’s Struggling Cities and Towns

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.

CDFIs revitalize underserved communities

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.

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Capital Impact Investment Notes align investments with values.

Now You Can Invest In Underserved Communities with Capital Impact

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.

Ellis Carr discusses community development on More Than Money podcast.

How CDFIs Expand Economic Opportunities in Underserved Communities

More than Money Podcast Interviews Ellis Carr, President & CEO of Capital Impact

Expanding opportunities for residents in low-income communities is the focus of community development financial institutions (CDFIs). These mission-driven institutions prioritize social, economic and racial justice for underserved communities over and above profits, meaning that CDFIs invest in places and projects that traditional lenders are often reluctant to support.

How To Use Historic Tax Credits To Promote Community Development

By Danielle Graceffa, Senior Director, Legal Services

Real estate development has always been a risky proposition, fraught with numerous challenges that must always be carefully balanced against the promise of reward.

Throw in the possibility of rehabbing historic properties and that risk-reward scenario is certainly amplified. The city of Detroit, where we have our Midwestern office, is a perfect example.

Founded in the 1700s, the city has witnessed various transformations, with Henry Ford setting the stage for Detroit to become the booming manufacturing center that it is best known as. During that time, the population swelled from around 200,000 residents to well over 1.5 million.

Why and How We Finance Charter Schools

By Emilie Linick, Senior Loan Officer, and Quanic Fullard, Impact Strategy Specialist

Capital Impact Partners has long been driven by a mission to help people build communities of opportunity that break barriers to success. To that end, we continually look to expand our lending and incubate, scale, and advocate for new ideas that advance community development for those most in need.

A Big “IDEA” to Address Inclusion, Diversity and Equity

By Kimberly Dorsett, Human Resources Director

The concept of identity politics has had a lot of press of late. How do we, as professionals, as voters, as members of our community, as individuals, apply our own identity and personal narrative to our actions and convictions? Given the diversity of our organization and the communities we serve, is the act of presenting and leveraging our own backgrounds an appropriate starting point for our professional work?

Young male stands in front of abandoned building.

COIN: Building economic clout to fight neighborhood poverty

By Ellis Carr, President and CEO and Scott Sporte, Chief Lending Officer

Note: This Op-Ed originally appeared in the publication Capital Weekly.

According to the U.S. Census Bureau’s report The Supplemental Poverty Measure: 2015, nearly eight million people in California were living in poverty in 2015. The report indicated that the state’s poverty rate was 20.6 percent—well above the national rate of 15.1 percent—and surpassed the rates of every other state in the nation.