Twenty-five years ago President Bill Clinton signed the CDFI Fund into law in an auditorium at the U.S. Department of Agriculture. The event was originally planned for the White House lawn but rain was forecast and the White House did not want a muddy celebration.
The Fund has been jet fuel for the CDFI industry, capitalizing remarkable growth, increasing industry reach, transforming how community development gets done, and making government work in new ways. As a result, CDFIs have reached new markets, served a constantly expanding range of people, and brought billions of dollars of flexible, affordable capital to under-resourced people and places.
The Fund has also had a moderating effect on CDFIs, rounding off some of the industry’s sharp edges and making CDFIs mainstream. A new generation of CDFIs and CDFI leaders navigate a financial, policy, and civic world that is different in many ways from those in 1994.
The CDFI Fund has been innovative, starting with its investment strategy and model going back to its beginning. It has expanded its ability to help the full range of CDFIs–and then some. Its role in New Markets Tax Credits, which came into being late in 2000, has been positive but not without controversy over its ability to ensure positive community development impacts. More recently, its part in implementing the Opportunity Zones program has muddied its waters–Opportunity Zones is a primarily a tax giveaway and not an effective community development program.
Retaining the mission focus of CDFIs is an ongoing challenge. With more resources, a larger CDFI industry, and a groundswell of change around the industry (impact investing, B corporations, socially responsible investing, and more), CDFIs face a challenge of keeping that focus while working with others to organize money for inclusive and sustainable outcomes.
I look forward to working with my CDFI friends and many others in years to come as we apply the leverage we can bring to bear on the financial and political system. I am getting ready to publish a new book on October 8th to launch a campaign to “organize” $1 trillion or more to those ends.
I invite you to join me at www.organizedmoney.org to learn more about Organized Money: How Progressives Can Leverage the Financial System to Work For Them, Not Against Them (The New Press). I co-authored the book with Keith Mestrich, President & CEO of Amalgamated Bank, the nation’s largest and oldest socially responsible bank. Together we will partner to use progressive “money muscle” in support of restorative capitalism.
Congratulations to everyone who made the CDFI Fund possible and successful!