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Where Will the Money Come From?

At a recent conference sponsored by LISC and the New York Federal Reserve Bank, leaders from the community development financial sector and others who work in impact investing gathered to hash out the future of social enterprise investment. An article on Medium.com distills the takeaways, which include the importance of continued public-private partnerships, tapping new types of capital and harnessing good data to make the case for connecting all Americans with opportunity.

The excerpt below is from:
Transforming Communities: What We Learned
by Morgan Harper, VP of Knowledge Management & Strategy at LISC, and Adrian Franco, Director of Community Development Finance at the New York Fed

At our December summit on community development finance, Transforming Communities: Driving and Assessing Investment, it became clear that organizations financing community development are at a crossroads.

Their mission of funding and building capacity in the service of connecting all Americans with opportunity has never been more urgent. At the same time, however, traditional public and private sources of capital typically used to achieve these goals are shifting and shrinking. Armed with data that prove the effectiveness of its models, the industry is looking for new, flexible capital tools that can power and scale the work going forward.

Insufficient capitalization is what “holds community development back,” said Eric Belsky, director of consumer and community affairs for the Federal Reserve Board of Governors, at the conference. But, building creative partnerships can and must leverage funding from public and private sources, including the capital markets, he added. “[There’s a] new sophistication of the industry in seeking to tap a broader array of funding mechanisms.”

Local Initiatives Support Corporation (LISC)and the Federal Reserve Bank of New York co-sponsored the Transforming Communities event, which brought together hundreds of leaders from community development, the financial sector and others who work in impact investing for a day of conversations, including three expert panels. Presenters took a hard look at how community development is currently funded, how the field can gauge the impact of its investments, and what financing strategies and instruments can be harnessed in the future to attract more capital to promising opportunities.

This last issue was, in many ways, the event’s most critical topic, as stakeholders grapple with the growing demand for economic opportunity among Americans living in underinvested communities. Continued [+]...

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