Almost a year ago, Mayor John Hamilton of Bloomington, IN, called to ask my help bringing CDFI financing to his city. A founder and former Board Chair of CityFirst Bank in Washington, DC, John is also a friend of mine from the days before the term “CDFI” was used much.
The product of our work together–in conjunction with the Community Foundation of Bloomington and Monroe County, the Bloomington Urban Enterprise Association, and dozens of Bloomingtonians–is a new approach for small cities and rural communities: The CDFI Friendly City™.
The Mayor is seeking $2 million of public funds to capitalize a local fund that could reach $5 million or more to facilitate CDFI financing on current and future opportunities, including affordable housing, small businesses, and commercial real estate.
A CDFI Friendly City™ encourages and facilitates CDFI financing in low-cost ways to:
- Help communities gain access to valuable and elusive financing for small business, commercial real estate and housing;
- Facilitate and significantly lower the costs for CDFIs to expand their coverage and increase their financing activity into new, underserved CDFI markets;
- Give CDFI investors expanding opportunities and attract new investors who have previously lacked knowledge of and opportunities to invest in CDFIs; and
- Leverage in new and productive ways the tight resources that governments in most cities and communities must manage prudently and efficiently.
The idea first occurred to me almost a decade ago when the CDFI industry was exploring ways to expand CDFI coverage. It made more and more sense last August as I talked with the Mayor, Tina Peterson of the Community Foundation, business leaders, community advocates, local bankers, and others. When we heard the enthusiastic interest from a dozen or so CDFIs during the Fall, we decided to convene a meeting in Bloomington in November. (The process as well as the approach is detailed in a The Bloomington Project: A New Approach for Expanding CDFI Coverage in Smaller Markets, a White Paper I wrote to encourage others to think about replication.)
NextCity.org provides a great explanation of how Bloomington became America’s first CDFI Friendly City™
I am hearing from several smaller cities already and expect to start working with a few in the next month or so. I would love to talk to more about how this new approach might work in their towns.
Please spread the word, and let me know what you make of the concept.
“CDFI Friendly City™” is a registered trademark of MPinsky LLC.