Community development financial institutions (CDFIs) are a key part of the community development ecosystem. Certified by the Department of Treasury, they exist to provide low-cost capital to traditionally under-resourced communities. Currently, CDFIs find themselves at a critical juncture. While the issues CDFIs focus on, such as financing affordable housing, are receiving an unprecedented level of public attention, the industry faces ever-mounting funding threats, particularly at the federal level, and increased competition, both from new entrants and each other.
This increased need to diversify funding sources, paired with a growing class of private investors concerned with making socially conscious investments, have presented an opportunity for the CDFI industry to reflect on its impact to-date and ways to collaborate innovatively with this new investor class while retaining mission focus. In order to continue driving impact, and take advantage of this new opportunity, CDFIs have to think about engaging these new investors and determine other ways of innovating.
In this first spotlight of 2019, we present resources that explore the changing landscape of community development finance and the role of CDFIs. We talked to the U.S. Impact Investing Alliance and Next Street about what will make CDFIs competitive. We feature a report from the Greater Ohio Policy Center with tips for how CDFIs can stay relevant. We also present information on Neighborly, a fintech company that seeks to broaden the pool of investors who finance municipal bond investments. We also searched our own archives and present a white paper from Elise Balboni and Christina Travers about the history and future of the CDFI industry. We hope this content will be good food for thought as CDFIs begin a year of financing some of the most needed investments in the country.