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CDFIs & Impact Investing: An Industry Review

A new white paper from LISC offers an overview and analysis of the CDFI industry and its trajectory of social impact investing. The field of community development financing is changing radically, and as pools of funding shift and contract, it is more important than ever that CDFIs diversify their resources and develop new tools to carry on their important work. Not only do CDFI investments help strengthen communities, the paper contends, they also provide a robust rate of return and fuel the larger economy

A Message from our President & CEO

What you are about to read in this document is of critical importance to anyone working to ensure that all Americans have the power to share broadly in the vast prosperity and dynamism of this country. It is an overview and analysis of the CDFI industry and its trajectory of social impact investing—investing in people and places where demand for physical and economic revitalization and growth is high, but where capital has long been in short supply. Not only do CDFI investments help strengthen communities, they provide a robust rate of return and fuel the larger economy.

The landscape of our field, along with our society and economy overall, has changed dramatically since the CDFI industry began taking shape some 50 years ago. Those changes demand new strategies for channeling capital into this crucial, ongoing work. As public and other financing pools shift or dwindle, it is more important than ever for CDFIs to create wide-ranging public-private partnerships and diversify funding streams. LISC’s foray into the capital markets early this year—with other CDFIs following suit—is just one example of how we can expand and vary our resource pool.

What hasn’t changed is the desire we all share to live in safe, healthy, lively communities and to have access to quality education, healthcare and fulfilling work that pays a good wage; to have the means to reach our potential as social, intellectual and spiritual beings; to contribute to the wider society and economy in ways that make our nation a competitive and beneficent actor in the international community.

We know it’s a tall order, and a complex one, but it is our moral imperative to fill it. To make this a reality, CDFIs must continue to explore new territory, and forge new tools, in the service of social enterprise investment and of an inclusive society.

Maurice A. Jones, President & CEO

Read the full report [+]...