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Financial First Responder: Our 2020 COVID Relief Work

This story is part of LIIF’s 2020 Annual Impact Report.

Maria Naranjo had raised a family and worked in early care and education for years when, in 2009, she purchased a two-story row house in Washington, D.C., to fulfill her dream of running her own child care business from her home. She spent a decade growing her business and helping to raise and teach newborns to five-year-olds in her Spanish immersion program, My Little World Daycare. The business was successful and ran with a waitlist until the COVID-19 pandemic hit, forcing parents to pull their children from care.

In May 2020, Naranjo’s son, Luis Gallego, worried that his mother would lose her business and her home due to low enrollment. “Having a daycare here was her dream for a very long time,” said Gallego, who also works as My Little World Daycare’s operations manager. “If she has to close…it would not only be my mom who would be left homeless or struggling economically, but many families [of employees].”

The coronavirus and its financial consequences have had a dramatic impact on community-serving organizations like My Little World Daycare that knit together the services and support systems to keep people safe, employed, connected, educated and healthy. The myriad organizations LIIF supports are a first line of defense for community well-being. They are anchors of neighborhoods and provide long-term opportunities. Yet, over the past year, hospitals have been overwhelmed, schools have scrambled to adapt to virtual learning and child care small businesses have faced significant drops in enrollment and widespread shuttering.

LIIF is a source of flexible capital behind thousands of organizations and projects working to bolster low-wealth individuals and families, frontline and essential workers and people of color. Since the pandemic began, we have taken it as a personal charge to deploy our greatest engine of impactcapitalwith speed and flexibility, coupled with technical support while maintaining financial sustainability and a stable portfolio. In the early care and education (ECE) space alone, LIIF has mobilized more than $23 million to provide grants and technical assistance to ECE small businesses.

LIIF provided My Little World Daycare with technical assistance in securing a Paycheck Protection Program (PPP) loan and today, the business is sustaining itself and operating at capacity.

As of December 2020, nearly one-third of child care centers remain closed and it’s been widely reported that 4.5 million child care spots across the country could be permanently lost without significant federal investment.

“If it weren’t for LIIF, we could have been one of those,” said Gallego. “It’s especially hard for small businesses. Big businesses have a lot of cushion, but small businesses don’t. Most of the time, we live paycheck to paycheck. So, when you get a crisis like this one, it’s not just daycares but restaurants, barber shops [and other small businesses] that are the first ones to go down.”

“When the pandemic hit, we immediately realized the impact this would have on the community-based organizations we serve,” said Kimberly Latimer-Nelligan, LIIF’s President. “Not only would many of them struggle to stay financially viable, but they were also working overtime to better serve their communities and extend themselves in a time of extreme need. We mobilized quickly to distribute emergency grants and devise solutions for extending flexibility on our loans.”

Through this period of emergency relief response, racial equity has become, more than ever, a lens for our financial supportunderscored by both the Black Lives Matter movement and the disproportionate impact of COVID-19 on the health and economic security of people of color. Communities know their needs best and LIIF recognized that our support must be responsive and tailored to each community and business.

Below are a few ways that LIIF creatively mobilized capital via co-created community solutions. We hope these can serve as models for other lenders and donors looking to extend capital to increase the capacity of community-based organizations and frontline response workers at a critical moment for sustained financial support.

Flexible Financing Solutions for Greater Impact

The COVID-19 pandemic, election and Community Reinvestment Act reform in 2020 created a great deal of uncertainty for LIIF borrowers who build and invest in affordable housing, schools, health clinics, community facilities and more. Some banks and financial institutions slowed their lending, forcing developers and community-serving organizations to seek grants and PPP loans and dip into reserves.

LIIF’s role was clear: establish consistent outreach to borrowers and provide loan deferment and flexible financing when needed to expand borrowers’ resources and latitude to respond to community need, while ensuring long-term financial sustainability.

In the Spring of 2020, Good Food Markets (GFM) connected with our loan officers to request a repurposing of construction loans to feed seniors in Washington, D.C.. The D.C. government had awarded Oasis (GFM’s nonprofit parent) a $250,000 contract, but they needed capital upfront to purchase food before public reimbursement came through.

LIIF approved the reallocation of funds, and this flexibility allowed GFM and Oasis to immediately purchase and begin distributing food boxes. As of July 2020, they had provided 350,000 fresh meals to people in need, becoming the fifth largest provider of pandemic relief meals in D.C.

GFM is a mission-driven grocer that brings healthy food options and nutrition education to food deserts. A recent feature on this project in the Washington Post revealed the immense capital hurdles to serving historically redlined neighborhoods despite resident demand. In this case, public and community development financial institution (CDFI) funding have kept GFM financially solvent.

Another borrower, CrescentCare, requested, and was quickly approved for, a payment deferral to help cover a decrease in revenue from a drop in patient visits. The federally qualified health clinic in New Orleans has vastly expanded its services during the pandemic, offering walk-in COVID-19 testing and treatment, primary care telehealth visits and resources including a COVID-19 podcast with science updates from doctors and experts.

As a source of significant capital, our work comes with great power. It is of critical importance that financial institutions, banks and CDFIs, like LIIF, reach out and extend ourselves to borrowers serving people in highest need at this time. Flexibility and patient capital balanced with risk management can help ensure that community-serving organizations and facilities, small businesses and vital-yet-historically-underfunded services and programs run by people of color live to see the other side of the pandemic.

Working in Partnership to Deploy Emergency Funding for Child Care

Days after cities began instituting “shelter-in-place” orders, early care and education operators began sounding the alarm. Parents were pulling their children out of child care, and centers followed mandates to close. Yet, less than one-third of centers reported that they could survive a closure of one month without government support before going out of business. This signaled the potential toppling of an already precariously positioned, vital community resource and a precursor to a devastated economy, which relies on the care and education of more than 12 million children so parents can work and attend school.

LIIF moved quickly to establish the COVID-19 Child Care Relief Effort. We partnered with the Community Reinvestment Fund to enable nearly 60 child care organizations to access more than $6.5 million in PPP financing, which resulted in the retention of 832 jobs. We reached out to funders and partners and were joined by public and philanthropic organizations to raise and repurpose an additional $6 million. This funding was deployed as grants to family child care (FCC) homeswhich often serve the highest need families and frontline workersin Washington, D.C., the San Francisco Bay Area and New York City. In September, LIIF became the administrator of the City of Los Angeles COVID-19 Child Care Provider Grant Program and provided more than $11 million in grants and technical assistance to more than 700 additional providers serving nearly 10,000 children. In December, LIIF joined the Office of the State Superintendent of Education to deploy $2.8 million in emergency grants to D.C. area child care providers in early 2021, bringing our total ECE relief work to $26 million to date.

LIIF provided Juleen Everett, the owner of A Continuation of a Dream Day Care, with a $9,000 unrestricted grant which she used to pay the bills and buy educational games and food. When COVID hit, she went from serving 16 children to 8 and, with less revenue, quickly fell behind in rent.

“I was so happy, I can’t even tell you,” said Everett. “Every little bit counts at this point. Every little penny counts. I’m so independent and was feeling like, I don’t know what I’m gonna do. How am I going to pay [my staff]?”

In the months since the pandemic began, LIIF has deployed ten times the number of child care grants than in the previous two fiscal years combined. Yet at the national level, only $10 billion in federal funding for ECE has been approved since March 2020 and child care small businesses are closing permanently every week. LIIF continues to advocate for at least $50 billion in federal funding to help sustain these vital businesses and ensure that parents can go back to work when the time is safe.


Beyond being a foundational asset to our economy and well-being, we know that investing in quality ECE is a critical part of the solution in advancing racial equity and leveling the playing field. Early care and education and the history of unpaid domestic labor set the stage for racial inequities that persist today among children, families and the mostly women of color and immigrants working as ECE professionals.

Our commitment to strengthening the ECE sector is expressed in LIIF’s latest strategic plan, through which we aim to double the number of children, ECE professionals and child care business owners impacted by our investments and capacity building by 2024.

Continued Lending at Affordable Terms for Mission-Driven Organizations

Despite financial uncertainty in the coming year, LIIF and other CDFIs continue to provide flexible capital where it’s needed most during this crisis, just as we did in the Great Recession. In fact, from 2006 – 2009, our patient capital and long-term focus on borrower sustainability resulted in CDFIs outperforming traditional banks with a minimal 0.21% loss rate and resulting financial resilience.

LIIF is driven by our new strategic plan and $5 billion commitment to mobilize investments that advance racial equity over the next decade, and we plan to get there through impact-led lending. In other words, we’ll be developing a framework to better measure the influence of our investments — beyond outputs — to create access to opportunity and improved health and financial outcomes, among other measures.

In the meantime, our lending work has continued to support developers and community-based organizations that are expanding equitable opportunity and improved well-being in communities across the country. 

For example, we provided Access Youth Academy with a $5.5 million loan as part of a New Markets Tax Credit transaction. During the pandemic, the organization has continued to provide San Diego youth with access to academic and social support that lasts through college and beyond. They have pivoted to virtual outreach to ensure families have access to food and that students are equipped to succeed in school.

We’re also closing loans that help create a more equitable built environment in the years to come. For example, LIIF closed a $2.625 million loan as part of the $15 million Atlanta Equitable Transit-Oriented Development (TOD) Fund to help create the first affordable, new construction apartment complex in decades in the gentrifying Ormewood Park neighborhood in Atlanta.

A crisis like this is a defining moment for all of us, including the neighborhoods, schools, health clinics, social service providers and community-based organizations that support health, resiliency and connectedness in communities. Despite obstacles and an uncertain economic outlook, LIIF and our partners must continue to respond quickly to drive capital to projects that create and preserve quality affordable housing, preserve and expand access to education and foundational well-being with an eye toward expanding racial equity — both in immediate recovery and in long-term resilience.

“How we assess and measure racial equity through our investments is an ongoing focus of our work,” says Lucy Arellano Baglieri, LIIF’s Chief Strategy Officer, “and we are keeping a few commitments top of mind. We’re committed to connecting deeply with and centering community voice to lead our strategy for impact. This includes developing enhanced lending initiatives and programs in communities and geographies facing racial disparities borne of systemic racism. And, LIIF continues to collaborate with and seek new, diverse stakeholders for mutual learning, investment and advocacy. Without an explicit anti-racist investment focus, we will not see a change in the inequities that 2020 made so clear.”

Financing Partners

Project Partners:

  • Good Food Markets: Prince George’s County
  • Crescent Care: Primary Care Development Corporation, Reinvestment Fund
  • Access Youth Academy: City of San Diego, Civic San Diego, U.S. Bank
  • COVID-19 Child Care Grant Relief in the San Francisco Bay Area, Los Angeles and Washington, D.C.: City and County of San Francisco Give2SF Fund, D.C. Office of the State Superintendent of Education (OSSE), Early Childhood Partners Fund in The New York Community Trust, Esther A. & Joseph Klingenstein Fund, First 5 Alameda County, Heising-Simons Foundation, Goldman Sachs Foundation, Greater Washington Community Foundation, Robin Hood, San Francisco Office of Early Care and Education, Silicon Valley Community Foundation, The JPB Foundation

Fund Partners:

  • City of Los Angeles COVID-19 Child Care Provider Grant Program: City of Los Angeles, Economic & Workforce Development Department (EWDD), L.A. BusinessSource Centers
  • Atlanta Equitable Transit-Oriented Development (TOD) Fund: Enterprise Community Loan Fund, Invest Atlanta
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