The U.S. Department of the Treasury’s Community Development Financial Institutions (CDFI) Fund recently announced $104.8 million in awards for 179 local financial institutions serving struggling communities in 44 states and the District of Columbia. According to the CDFI Fund’s press release, these grants will help those financial institutions support local entrepreneurs and small businesses, and spur local economic growth and recovery by expanding access to capital and affordable financial services in underserved areas.
MACDC was pleased to see that four of our members had secured over $1.8 million in funding, along with five other Massachusetts based CDFIs who received another $3.2 million (three of these were national funds that are based here.) Profiles of the winning organizations can be found on the CDFI web site.
Congratulations to our members:
The CDFI program provides both technical assistance grants and core grants to certified CDFIs that demonstrate strong capacity and a sound strategic approach toward advancing their mission. The program is an excellent example of how the government can systematically and strategically build and strengthen a key field within the nonprofit sector. The program starts with a formal certification program that allows the CDFI Fund to identify the specific organizations that they are trying to strengthen. It then invests in both building their capacity through technical assistance grants and invests in their strategy through core capital grants. The funding is at the “enterprise level” and invests in their mission, rather than providing highly restricted, categorical grants that fund specific programs or activities. As a result, the CDFI sector has grown substantially since the start of the program in the mid- 1990s.
While the current financial crisis has certainly taken its toll on the CDFI field – Shore Bank, one of the nation’s oldest and most successful CDFIs collapsed and had to be acquired by another institution - the CDFI program has helped create a diverse, durable and resilient sector with the overwhelming majority of CDFI’s weathering today’s storm. And the existence of a solid support infrastructure helped the CDFI field successfully secure additional funding through ARRA because there was an efficient way to distribute funds across the country.
Community health centers, Community Action Agencies and other non profits benefit from similar systems of support. However, at the moment, there is no parallel system for CDCs either at the Federal or state level and this is a serious problem for our field.
We hope to change that reality here in Massachusetts with the recent passage of a new CDC-enabling law, Chapter 40H. This law will provide a mechanism for certifying CDCs in Massachusetts, thereby laying the foundation for establishing publicly and/or privately funded programs similar to the CDFI model. Ultimately, a comprehensive system of core support, technical assistance, organizational capacity building, professional development, and program funding would enable CDCs to work together and with others to dramatically increase our ability to bring economic opportunity to communities, neighborhoods and families across the Commonwealth.