The 2023 Opportunity Finance Network (OFN) Conference left the LIIF team feeling both inspired and energized. It was a distinct pleasure to be in our nation’s capital to spend three jam-packed days networking, learning, sharing and ideating. We are continually amazed by the CDFI sector’s abundance of talented professionals and their passion for the work.
This year’s theme of “Capital Meets Purpose” spoke to how we collectively meet our stated goal of nimbly deploying capital into historically excluded communities. With CEO Harrold Pettigrew Jr. now at the helm, OFN is uniquely positioned to guide us toward all-the-more impact. We are aligned on so many timely priorities, including the need for CDFIs to incorporate climate mitigation into all areas of community development.
LIIF Organization Showcase
We know this work cannot be done in a silo. That is why since LIIF’s inception in 1984 we have forged strong partnerships. LIIF was honored to bring together over 50 funders, investors, partners, rating agencies and policymakers to hear about LIIF’s impact and work moving forward (photo).
LIIF’s presentation, kicked off by CEO Daniel A. Nissenbaum, focused on everything from our past impact to where we are headed. Over the decades, our CDFI has invested $3.2 billion into communities, serving 2.5 million people. Yet our expanded Board and visionary leadership team hold an ever-grander vision for the future. We have transformed our child care work and continue to scale by implementing a comprehensive, three-pronged early care and education (ECE) business plan focused on facilities fund management, capacity building and advisory services. We are amplifying the nexus among racial and gender equity, economic mobility, climate, young children and the built environment. We have an enhanced affordable housing strategy balancing production and preservation to ensure all have quality, stable homes. That includes leveraging the strengths of our affiliate, National Affordable Housing Trust (NAHT), which is a Low-Income Housing Tax Credit (LIHTC) syndicator and provider of advisory services to affordable housing developers. Despite environmental regression and blatant attacks on focused initiatives, we remain steadfastly committed to centering racial equity throughout it all.
At our convening, LIIF CFO Panagiota Mahendru outlined our CDFI’s continued fiscal strength, affirmed by our high Aeris and S&P ratings. The latter wrote of “LIIF’s general creditworthiness and capacity and willingness to meet financial commitments when they come due.” Despite being in a time of inflation and rising interest rates, LIIF is best positioned to combat such economic vicissitudes. Our organization is committed to fiscal responsibility, while continuing to push for deeper impact.
The numbers highlight how we have met recent economic challenges: FY23 saw a record $292 million in loans closed, earmarked for affordable housing (77%) and community facilities (23%). LIIF’s indefatigable Lending Team is driving capital to Black, Latino, and other people and communities of color. Also, at the end of FY23, LIIF had already met 43% of its Big, Hairy, Audacious Goal (BHAG) to drive $5 billion in investments to advance racial equity (2020-2030).
The above has positioned LIIF to meet our newly stated priorities. Now with a dedicated team of 150 strong, we know our goals will continue to be met.
LIIF Panels and Conversations to Ideate and Share Best Practices
At this year’s conference, LIIF was invited to be part of three panels on timely topics. Our team is often asked to share their expertise and learnings, being seen as subject matter experts. LIIF strongly encourages such participation.
Being in the vanguard of racial equity in lending, LIIF Director, Racial Equity and Impact Lending Eliisa Frazier was invited onto two OFN panels: “Counting vs. Learning: The Complicated Shift from Output Reporting to Impact Assessment”; and “Designing Products that Advance Racial Justice.” Eliisa spoke to LIIF’s internal – and still evolving – journey around this topic. That evolution includes our new Impact-Risk-Profitability (IRP) Framework, which seeks to create power and agency in under-resourced communities. The topic of Special Purpose Credit Programs (SPCPs), such as LIIF’s Black Developer Capital Initiative (BDCI), intrigued attendees. They learned how BDCI was devised, with the innovative fund structured as a below-market, unsecured loan product to provide catalytic capital to for-profit Black developers. The result was eight Black developers receiving loans for 22 projects in five markets. With our lessons from the first round of funding, another $20 million is now ready to be deployed, as we extend the geography served. Programs such as BDCI accelerate our learning curve around racial equity lending, as we distill key aspects, challenges and lessons from the field. We are launching a formal evaluation of this product and look forward to sharing our learnings.
Another panel at the conference included LIIF’s Vice President, National Community Facilities Lending and New Markets Tax Credit Amir Ali. The topic was “Embracing the AI Revolution: Navigating Ethical and Operational Challenges in CDFIs,” with Sarah Hope Marshall of Profound Hope Industries. While LIIF has not incorporated AI into our lending practices, we applaud Amir for sharing his insights as an experienced CDFI lender piloting such applications. Always front of mind is the ethical and safe use of AI tools to increase efficiency, for the sector should remain aware of all tools that could assist us to serve our communities.
Additionally, LIIF Executive Vice President and General Counsel, Denise Noel, was part of a timely and trenchant roundtable conversation with industry association leaders, including OFN and the NAACP Legal Defense Fund, about CDFI strategies in face of impending legal challenges to DEI work. Of focus were SPCPs, such as LIIF’s BDCI program as noted above. LIIF remains committed to our work to advance racial equity. The insightful discourse will continue, with CDFIs remaining vigilant as this topic unfolds.
As a co-host, LIIF led a tour showcasing our work in the District. LIIF’s Director of Strategic Communications and Influence Christopher Gil took a group of 20+ OFN attendees on a tour named “CDFIs in Action: Preserving Ecosystems of Community Support.” The outing spanned the three adjacent neighborhoods of Columbia Heights, Park View and Petworth, all experiencing pressures from escalating income disparities in the northwest part of the city. (photos)
The three stops included:
1. Kenyon House, a 49-unit building where LIIF provided an $8 million loan, coupled with $2.1 million from our partner, the DC Preservation Fund. This funding kept in place longtime Latino residents vulnerable to being priced out by speculators. This $50 million preservation work is part of Keeping Homes Affordable, LIIF’s partnership with Calvert Impact Capital and Arnold Ventures..
2. Aurora Market, with owners/spouses Pablo Ortiz and Rahel Kassa graciously offering a tour of the family-serving market. Joining the tour to explain technical assistance and other small-business support provided were Capital Impact Partners and Latino Economic Development Center.
3. GAP Community Child Development Center, with LIIF providing a Brighter Futures Fund loan so they could buy the building, plus facilitating one grant to expand the lower level (eventually adding space for 32 more children) and another grant to reimagine the playground area. President and CEO Travis Hardmon spoke of GAP’s 41-year journey, with context added by LIIF ECE team members Angie Garling, Shelly Masur, MPH, Kim DiGiacomo and Laura Jackman.
Keeping longtime residents in place is vital, but equally important is to keep an ecosystem of support in place and to create community ownership of spaces in historically excluded communities. That is the collective mission of CDFIs.
Convening Leaders in CDFI Child Care Work
The 2023 OFN Conference offered an opportunity for members of the National Children’s Facility Network to hold an in-person meeting. LIIF co-chairs the NCFN Executive committee and, together, NCFN is elevating the importance of high-quality early care and education facilities and advocating for more equitable policies and investment. This renowned coalition of nonprofit financial and technical assistance intermediaries and other interested stakeholders is involved in planning, developing and financing for high-quality ECE facilities and business models, with a focus on underserved areas across the nation.
Hosts for the in-person meeting were LIIF’s Angie Garling and Nicole Barcliff of LISC. The robust agenda ran the gamut from a policy update to a treasurer’s report to Executive Committee terms. There was also a panel called “Early Care and Education (ECE) Facilities: The Role of CDFIs in Policy and Practice.” The powerhouse panel included: President, Core Business Solutions Kirby Burkholder of IFF, who served as moderator; Senior Advisor for Early Childhood Development and Education Mario Cardona of White House Domestic Policy Council; President and CEO Nicole Riehl of EPIC; and Program Director, Health and Human Services Rashida Brown of National Association of Counties.
As delineated in our Strategic Plan 2020-2025, LIIF’s mission is that “everyone in the United States should benefit from living in a community of opportunity, equity and well-being.” A key takeaway from the conference was simply a reminder of the power of CDFIs to collectively and synergistically create change.
At LIIF, we believe that capital is our greatest vehicle for impact. Our organization looks forward to continuing conversations around lending solutions and policy priorities as we together break down systemic inequities to foster racial justice nationwide. This epitomizes the 2023 OFN Conference’s inspiring theme of “Capital Meets Purpose.”