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By Borrower Stories, Community Partners

How Metropolitan Economic Development Association Is Scaling Itself To Shrink Minnesota’s Racial Wealth Gap

Over the course of their careers as inpatient nurses, Murwo Elmi, Ikraan Abdulle, Farhia Abdulahi, and Faiso Abdulle have seen a bit of everything. From their first shifts, the Minneapolis-based health professionals have cared for patients struggling with mental health, chemical dependence, physical and cognitive limitations, and homelessness. After 10 years, however, the group shared a similar realization: once their patients were released back into their communities, they didn’t have the support and stability necessary to avoid becoming either hospitalized or institutionalized again.

The OurPlace Residential Services team: (from left to right) Farhia Abdulahi, Ikraan Abdulle, Murwo Elmi, Faiso Abdulle

In 2017, the quartet started having a conversation about how their marginalized patients could be better served. Rather than establish a group home, the Somali-born nurses wanted to create a community space that fostered healing, independence, and stability. They called it OurPlace Residential Services. “There’s a need for this population to be served in a community setting,” said Ikraan. “Instead of being institutionalized, we wanted to be able to work with individuals and to address their social needs through community support, which is essential to everyone’s health.” “Patients need a stable home where they can see themselves for a long time,” added Faiso. “Not a 30-day shelter.”

According to the nurses, their vision to establish such a space had never been done before — at least not in Minneapolis. However, regardless of how much research the team did to educate themselves on how to create the best possible programs, policies, and protocols, one daunting challenge remained: securing the capital necessary to acquire an apartment building and to renovate it to meet their needs. The entrepreneuring nurses approached multiple banks in Minnesota, but they were told the same thing everytime: they didn’t have the necessary collateral or capital to turn their dream into a reality. 

The Creativity To Say ‘Yes’

That’s when the nurses at OurPlace Residential Services connected with Patrick Pariseau, the vice president of lending and client services at Metropolitan Economic Development Association (Meda). Founded in 1971, Meda is a Minneapolis-based Community Development Financial Institution (CDFI) that works exclusively with Black, Indigenous, and People of Color (BIPOC) entrepreneurs. In its first 50 years, Meda has served more than 25,000 BIPOC entrepreneurs, helping to build generational  wealth and to address the racial wealth gap in the communities it serves. Meda partners with CNote through the fintech company’s Wisdom Fund, which was set up to serve the exact demographic that the CDFI strives to empower.

Eleven years ago, Patrick stepped out of semi-retirement to join Meda’s team. After 30 years of banking, Patrick wasn’t seeking another job, but one of his friends who worked at Meda asked him if he would be interested in helping out with a couple of the CDFI’s loans. Patrick said “yes,” and less than three months later, he was a full-time Meda employee. When Patrick joined Meda, the CDFI had 14 loans in its portfolio. Today, the CDFI has a portfolio of 647 loans, totaling approximately $21 million. That amount is quickly growing to $40 million. 

Patrick Pariseau, Meda’s Vice President of Lending

That growth, in part, is thanks to the work Meda was able to do during the second round of Paycheck Protection Program (PPP) lending. Meda tapped into its local community and told everyone from CPAs to other lenders to send any sole proprietor and small business owner who needed help to contact the CDFI. Incredibly, with only two employees dedicated to PPP, Meda deployed 467 loans to local small business owners: approximately $11 million. Each of those loans went to a BIPOC entrepreneur, and 97% of those entrepreneurs identified as Black or African American. To date, 97% of Meda’s PPP loans have been forgiven. 

While those numbers speak for themselves, Patrick gets more excited about how the CDFI is able to achieve those lofty numbers and to create tangible impact in its community. According to him, Meda’s success is rooted in the following:

1. Creativity is in Meda’s DNA. “You have to be creative in this business,” Patrick said. “There are things we can do as a CDFI that banks can’t do.” For example, like other CDFIs, Meda’s underwriters place less emphasis on a small business owner’s credit score and more emphasis elsewhere, such as the person’s character and the business’ scalability. The CDFI also double weights cash flow, which allows for more entrepreneurs to qualify for lending. “Businesses run on cash flow,” said Patrick. “That’s the way it should be underwritten.”

Meda believes so much in the importance of cash flow that its primary lending product is built around it. Meda is one of the few CDFIs in the country to offer operating lines of credit. According to Patrick, operating lines of credit require fewer dollars and effectively allow the CDFI to deploy more loans to more small business owners. Patrick refers to it as an “equity product,” because the loans have modified, interest-only payment terms and they give small business owners the opportunity to put their cash back into their young businesses. “People need to put payments into their business, not the banking system,” he said.

2. Meda is scaling to the size of the problem. Like CDFIs across the country, Meda invests in small businesses not just so they can keep the doors open, but so they can grow. However, while many small-but-mighty CDFIs bend over backwards to help entrepreneurs scale their businesses, Patrick says that many CDFIs forget that they too need to scale. 

Not Meda. Thanks to a technology grant, the CDFI is currently piloting a new, integrated computer system — the same one commercial banks use — to be able to offer automated loan applications from anywhere in the country. Similarly, Meda invested in state-of-the-art underwriting software that’s been rated as one of the top five scalable systems in the country to help businesses grow. According to Patrick, that’s why Meda was able to meet the community’s PPP demands: the CDFI had already laid the foundation for itself to grow. “We’re scaling Meda to the size of the problems here in the Twin Cities,” he said. “These disparities aren’t going away unless we scale and continue to deepen our impact.”

3. Meda views banks as partners. Having spent three decades in banking, Patrick knows that banks aren’t CDFIs’ enemies: banks are regulated. However, even though Meda can be creative to serve its community in flexible ways that banks can’t, the CDFI still works very closely with local financial institutions. Because Meda strives to help its borrowers scale to over $1 million in revenue in less than 36 months, Patrick says that it’s in banks’ best interests to refer customers to Meda’s technical assistance programs. 

Meda has a few business consultants on staff; however, to scale its impact, the CDFI created what it calls the Volunteer Accelerator Network, where skilled volunteers virtually assist entrepreneurs through curricula designed to prepare small business owners to be successful. “We know that technical assistance works,“ Patrick said, “and if a bank refers a client to us and if they become successful, then I’m going to send that business owner back to that bank, because that means Meda can recycle its cash quicker and deploy another loan. That leverage is crucial for us.”

Additionally, every year, Meda deploys $20-$40 million in companion financing with partner banks, primarily in the form of real estate deals. For example, Meda is involved with a $6 million deal to build Minnesota’s first detox center for women. The CDFI invested $2 million in the project, and a partnering community bank put up the remaining $4 million. “The bank feels more comfortable with it because they got less risk,” Patrick said. “And because we all worked to make it happen, somebody gets a new building and a brand new business opportunity that’ll pay taxes and hire workers. That’s what it’s all about.”

Kari Groth Swan, Meda’s Director of Philanthropy and Investment and Patrick Pariseau, Meda’s Vice President of Lending

It Takes A Village

In fact, after saying “no,” a bank referred the nurses behind OurPlace Residential Services to Meda. The bank knew it was the exact kind of project that Meda would want to fund. That’s because in addition to supporting BIPOC and women entrepreneurs, Meda is committed to revitalizing neighborhoods through commercial diversification. To do that, the CDFI favors working with entrepreneurs in struggling neighborhoods who own non-retail companies like manufacturing facilities, medical clinics, and child care centers. Additionally, Meda works closely with aging small business owners to sell their businesses to BIPOC entrepreneurs to help create neighborhood sustainability. By choosing to take on a more eclectic portfolio of small business borrowers, Meda is doing its part to revitalize neighborhoods in its community. 

Unsurprisingly, Meda was behind OurPlace Residential Services from the very beginning. The CDFI leveraged its contacts in the real estate community to locate a promising apartment building, and it was unfazed by the $2.5 million price tag to acquire and renovate it. Patrick had trust in his construction background, and Meda is engaging with potential funding partners, like the City of Minneapolis, to position OurPlace Residential Services’ new building for success.

Thanks to Meda, OurPlace Residential Services is on course to open its building to its first 14 clients later this year. The nurses have already grown their team to 15 direct support staff members: a number that is likely to keep growing. That’s because, longterm, OurPlace Residential Services’ goal is to help eliminate housing instability and homelessness in its community. To do that, the nurses want to multiply their innovative model for patient-centered care across the Twin Cities metropolitan area, providing long-term housing opportunities to patients, regardless of where they are in their recovery journey.

In pursuit of that goal, OurPlace Residential Services will continue to rely on and collaborate with community partners like Meda. “Sometimes, we look at one another, and we say ‘is this really happening?’” said Murwo. “It’s amazing, and we couldn’t have done it without Meda taking that chance on us. We needed an ally who had the knowledge and understood the community’s needs, and we needed a champion that really loved the idea. That’s what we got with Meda. They made this happen.”

Learn More

  • OurPlace Residential Services
  • Metropolitan Economic Development Association (Meda) was founded in 1971 with a mission of Helping BIPOC Entrepreneurs Succeed.
  • CNote is a women-led impact platform on a mission to close the wealth gap through financial innovation. Using the power of technology and a community-first framework, CNote enables corporations and individuals to efficiently invest at scale in fixed income and time deposit products that advance economic equality, racial justice, gender equity, and climate change initiatives.
By Borrower Stories

Meet Lorain Francis, Whose Full-Time And Volunteer Jobs Are To Fight Food Insecurity In Maine

Although Lorain Francis hasn’t always worked on the frontlines of food insecurity, she’s been surrounded by volunteerism for as long as she can remember. Lorain grew up in Fairport, New York, where both of her parents were active volunteers in the community. Unsurprisingly, when Lorain grew up and owned a local retail business, she started to volunteer with the merchant’s association to revitalize the town’s main street. 

Lorain Francis

Fifteen years ago, Lorain and her husband moved to his hometown of Union, in an under-served area of coastal Maine, where Lorain found a job at the Chamber of Commerce in Rockland. That ultimately led her to the Maine Development Foundation, where Lorain got the chance to work with communities across the state, doing what she loved. However, after about five years working with Mainers near and far, Lorain began to feel disconnected from the last place she expected: the place she called home. “I realized that I lost my sense of my own community, because I was in everybody else’s community,” Lorain said. “I wanted to make a difference in my own community again, so the thing to do was to get involved locally.”

That’s when Lorain took a job at Penquis, a community action organization in Maine. At Penquis, Lorain helps to administer a federal AmeriCorps grant that places senior volunteers in eight food pantries and a soup kitchen in Mid-Coast Maine. Lorain is the program director for an initiative called Knox County Gleaners, which partners with local and backyard farmers and residents to harvest and redistribute fruits and vegetables to nearby food pantries. Last year, Lorain’s team helped to distribute over 22,000 pounds of vegetables to 22 locations in Knox County. 

It was about two-and-a-half years after joining Penquis that Lorain ultimately found what she calls her “volunteer job” at Come Spring Food Pantry, one of Knox County’s food pantries. Come Spring was started over 20 years ago as a community service project, and when the founder decided to retire, Lorain decided that, given her background in community building, she was the right person to step in and help the organization grow.  

A Lender To Dream With

Even before March 2020, Come Spring was bursting at the seams in its cramped, hard-to-find space located in the basement of a town building. The COVID-19 pandemic exacerbated those struggles. According to Lorain, not only did social distancing restrictions limit how many people could be present in the tiny pantry at any one time, but it was challenging for community members to access new pickup locations, even as need increased. To make matters worse, Lorain says that there wasn’t enough space to store surplus food, which meant that the nonprofit had to rent another room, which soon became a financial burden for the organization.

Come January 2021, Lorain knew what she needed to do: find a larger space. She and her team began to look around Union to see what was available. A few weeks later, she toured 27 Common Road. Despite that the 2,800-square-foot building was in major need of repairs (snow was falling through the roof), Lorain knew that it was Come Spring’s new home. The next obstacle? Figuring out how the small (but mighty) food pantry was going to be able to purchase it.

Lorain reached out to a colleague at AIO Food & Energy Assistance, another pantry that had just gone through a building campaign, to ask for advice. That’s how Lorain learned about a Community Development Financial Institution (CDFI) called The Genesis Fund. Since 1992, The Genesis Fund has been working to develop and support affordable housing and community facilities across Maine, mainly by providing both financing and technical assistance to increase the supply of affordable housing. CNote partners with CDFIs like The Genesis Fund in communities across the country, channeling capital to fund social missions like affordable housing, women’s empowerment, entrepreneurial funding, and more. 

When Lorain connected with The Genesis Fund, she instantly knew she found the right financing partner. Not only did the CDFI have an impressive portfolio of similar projects, but, as Lorain describes, the CDFI “dreamed with us as a fledgling pantry wanting to grow big.” The Genesis Fund offered Lorain and her team everything Come Spring needed, including assistance with the loan application and coaching. In the end, being challenged to think about Come Spring’s past, present, and future ultimately helped the food pantry to “grow up,” Lorain said. 

On February 12th, Come Spring made its purchase offer to the building’s owners, and, incredibly, the deal closed on March 31st — 64 days after Lorain and the CSFP Teams initial decision to move the pantry’s location. Meeting the March 31st deadline was significant, Lorain explained, because doing so meant that Come Spring didn’t have to pay taxes on the building for the next year. Therefore, the speed for which The Genesis Fund and the lawyers were able to help Come Spring close on its offer saved the food pantry $3,500. “For us, that’s huge,” Lorain said. “Genesis was amazing to work with. They believed in us from the beginning, and everybody pulled together and made it happen.”

Food Brings People Together

These days, Lorain has a lot on her plate. Once the real estate deal was finalized and the pantry secured its larger space, it was time to get to work. The first thing that needed to be done was to repair the building, namely installing a new roof. However, because Lorain wanted the new building to be a beacon for those experiencing food insecurity, it had to be painted barn red. The addition of “huge signs” helped to ensure that the building can’t be missed — it’s now visible more than a half-mile away.

Come Spring officially opened its new pantry on July 10th, 2021 and the location has quickly become a long-term food storage hub for other food pantries and food security groups in western Knox County. Besides the much larger food pantry and a big parking lot, Come Spring now has in its plans a storage room, a classroom, and a commercial kitchen, where volunteers can process food (e.g. make apple cider) and prepare take-home meals. The pantry Knox County Gleaners was also able to acquire a CoolBot, an energy efficient walk-in cooler, which ties back to the work that Lorain does with produce redistribution at Knox County Gleaners. Another way Come Spring has established itself as a community center is by hosting Union’s weekly farmers’ market, which consistently attracts large crowds. 

Today, Lorain and her team of volunteers open Come Spring to the community every Wednesday with both daytime and evening hours. In July the pantry will switch from pre-packed boxes to a client choice shopping model just one year after moving to the new pantry. Providing a small grocery store experience and atmosphere allows people to shop for what their families’ preferences are, she said. “It gives people choices, it gives them dignity, and it empowers them to be able to choose what they want.”

Since moving into its new facility, Come Spring estimates that it will be able to increase its capacity to provide services to additional families, including the elderly, couples, veterans, large and small families and anyone struggling with food security in the region. 

“We encourage people to come and get food basics from us and spend their saved income on gas, heat and to keep their car running so they can get to work and children to school. I don’t want anyone in my community to not know that there are food pantries here where anyone can get food,” Lorain said. “It’s a labor of love, and I love making sure that everybody in western Knox County is fed. It doesn’t get any better than that.”

Learn More

  • Come Spring Food Pantry is a food pantry in Knox County, Maine, with a mission of feeding their neighbors with dignity while promoting health, opportunity and hope.
  • The Genesis Fund provides innovative financing by soliciting investment loans from individuals, churches, corporations, and foundations, and then re-lending the money at favorable terms to nonprofit organizations developing affordable housing and community facilities for underserved people and communities throughout Maine and beyond.
  • CNote is a women-led investment platform that empowers individuals and institutions to invest locally to further economic equality, racial justice, gender equity, and address climate change.
By Community Partners

How Capital For Change Uses CNote To Create More Possibilities In Its Community

For the better part of 15 years, Charles Bodie worked for a large, multinational investment bank and financial services holding company, first in private wealth management, and later in credit risk. Although he enjoyed his work, when Charles relocated to New Haven, Connecticut nearly three years ago, he began to look for other employment opportunities. That’s how he learned about Capital for Change, the largest full-service Community Development Financial Institution (CDFI) in Connecticut. 

Charles Bodie, Capital For Change’s Chief Financial Officer.

While Charles didn’t initially set out to work in the CDFI sector, he says that he was attracted to Capital for Change because of its mission-driven practices. “The loans and other activities that Capital for Change do really make a difference for people that otherwise might not receive those opportunities from other financial institutions,” he said. “For me, that just meant so much.” In 2019, Charles became Capital for Change’s Director of Finance and Reporting, and he’s since stepped into the position of Chief Financial Officer. 

Capital for Change was created in 2016 after three established CDFIs — Community Capital Fund, Greater New Haven Community Loan Fund, and Connecticut Housing Investment Fund — merged into one. Today, each of Capital for Change’s programmatic, product, and service offerings are rooted in those founding CDFIs’ combined decades of experience and expertise. According to Charles, Capital for Change takes a diverse approach to lending, which centers around what the CDFI refers to as “The Core Four.” Those complementary missions include affordable housing, energy efficiency lending, loan servicing, and community development loans. “The need for affordable housing is paramount, but the fact that we can actually touch on multiple missions is even better.” Charles said. “The more we can do in more diverse ways, the better.”

Charles is especially excited about Capital for Change’s energy efficiency loans, which help homeowners to conserve energy usage and decrease costs through audits, retrofits, and alternative/clean energy improvements. Charles estimates that on the consumer side, the CDFI has originated more than $87 million in efficiency loans. These loans stem from various programs and funding initiatives — ranging from replacing 80-year-old oil furnaces to installing solar panels — led by Connecticut’s Public Utilities Regulatory Authority. Because the state utilities cannot be a lender , the utilities funds are “farmed out” to various lending organizations, including Capital for Change. “The utilities created the products, and what we do is we bring the consumers together with the contractors that can do the work and use the utilities’ money,” Charles said. “We’re the ones who bring all of that together.”

Capital for Change also offers multifamily energy loans through a program called LIME (Low Income Multifamily Energy), in which the CDFI works on a project-by-project basis with property owners to make energy efficiency improvements to multifamily properties and condominium developments that meet certain requirements (e.g. no fewer than 5 units and at least 60% of units affordable to households at no higher than 80% of Area Median Income). According to Charles, to make those loans work, the CDFI treats the energy efficiency updates as a kind of collateral. “If we know that you’re going to save, say, $50,000 in maintenance and utility costs over the next 10 years,” he explained, “then when we put these improvements in place, you pay it back to us with those savings. It’s a novel way to approach energy efficiency lending.”

Charles shared an example from a recent project in Bridgeport, Connecticut. A partner organization constructed a charter school on an old manufacturing site, and Capital for Change funded an energy efficiency refurbishment. Capital for Change worked with a company to install a fuel cell so that the school, housing for tutors, and a future housing project would be able to generate its own electricity. “We funded the fuel cell project when no one else would,” Charles said. “That one project in and of itself is a real boon for a CDFI like us because it touched on education, energy efficiency, housing, and urban blight, and it’s been phenomenally successful.”

It’s with that same kind of diversified lending approach and multi-faceted mission orientation that Capital for Change is looking to the future. Specifically, Capital for Change is interested in piloting a small business lending program in the next year or two. Most of the CDFI’s current business loans are greater than $100,000; however, if piloted, Charles said that Capital for Change might offer loans as low as $5,000 to small business owners. Additionally, Capital for Change is considering new ways to find out what its community needs, mainly through survey work and collaborations with community organizations. “Traditionally, we didn’t ask anybody about needs because we know there’s a need for affordable housing and energy efficiency,” Charles explained. “But, what is it that we don’t know? What are we missing? That’s where getting in touch with the community is really important.”

 

‘CNote Wants Exactly What We Want’

Given the diverse nature of Capital for Change’s work, the CDFI is able to get funding from diverse investors, including banks and the state; as is the norm, those dollars come with usage restrictions related to programs or loan types. While Charles and his team are appreciative of every loan and investment that flows into Capital for Change, he says that working with CNote changes the paradigm. “CNote wants exactly what we want, and they follow our mission,” he said. “Because so much of the funding that we receive is specific to project or loan type, there are only certain loans that qualify; but, everything can be funded with the money that CNote provides, and that’s been an excellent resource.”

Charles said that funds that come into the CDFI through CNote’s Flagship Fund create myriad possibilities for Capital for Change. For example, with CNote dollars, Capital for Change can free up capital from existing loans. That means that Capital for Change can replace money in one of its current loans with CNote money to free up capital for another loan. According to Charles, that creates other possibilities for the CDFI, including passing the benefits on to its clients by lowering interest rates on future loans.

Additionally, Charles has found that working with CNote has lightened typical CDFI reporting requirements, freeing up administrative time and costs so that he and his colleagues can focus on perpetuating Capital for Change’s missions. “CNote has really filled the space for CDFI borrowers like us,” Charles said. “For traditional banks, our world is a bit alien to them, but for CNote, they’re showing that lending evolves. They’re at the forefront of that evolution, and that’s another aspect that makes our partnership with them work really well.”

Learn More

  • Capital For Change is the largest full-service Community Development Financial Institution (CDFI) in Connecticut.
  • CNote is a women-led investment platform that empowers individuals and institutions to invest locally to further economic equality, racial justice, gender equity, and address climate change.
By Community Partners

Easy As C-C-C: How Access to Capital for Entrepreneurs Uses Capital, Coaching, and Connections to Help Georgia’s Small Business Owners Thrive

Martina Edwards knows what it’s like to be given an opportunity to break down barriers. Thanks to a nonprofit that helps place high-achieving graduates of color in Wall Street firms, Martina started her career in 2001 and became Merrill Lynch’s first Black female broker on the floor of The New York Stock Exchange in 2004. She spent the next 10 years working on and off Wall Street, including time running the alternative investments program for the same organization that helped her land her job at Merrill Lynch. According to Martina, that’s when she truly began to understand the importance of capital, particularly in terms of creating generational wealth and economic growth.

Eventually, Martina returned to her southern roots and moved to Atlanta, where she started to reflect on what she wanted to do long term with her career. She knew she wanted to be on the forefront of working with minority women in business enterprises, but she didn’t know exactly what that might look like. That’s when Martina found herself listening to a panel discussion featuring Grace Fricks, the founder and CEO of Access to Capital for Entrepreneurs (ACE), a Community Development Financial Institutions (CDFI). Grace started ACE in 1997 in rural northern Georgia with an initial grant of $50,000 to support small business owners across the state. Like many financial services professionals, Martina wasn’t aware of CDFIs when she worked on Wall Street; however, as she learned more about ACE’s impact, especially with women business owners, she knew she wanted to get involved. 

Twelve months later, Martina joined ACE’s team as the CDFI’s chief of strategic partnerships. For the past three years, Martina’s main focus has been fundraising so that ACE can create more access to capital for small business owners. “We give folks a chance when others can’t or won’t,” said Martina. “But it’s not just helping one small business owner. When we create financial security for a business owner, that creates more financial security for their employees, and that allows their households to thrive.”

The Three C’s

ACE is the largest small-business-oriented CDFI in Georgia that focuses on women, people of color, and low- to moderate-income business owners. An important part of the organization’s mission is to decrease the gender and racial wealth gaps, particularly for Black and Latinx communities who continue to face the racial discrimination inherent to our modern financial systems. Importantly, ACE’s staff is a reflection of the ethnically diverse communities that the CDFI serves, and Martina and her colleagues live in rural, suburban, and urban communities throughout North Georgia. That representation is essential, especially as ACE works to build trust with small business owners who’ve traditionally been overlooked and undercapitalized by traditional lenders.

 

Like all CDFIs, ACE is mandated to deploy at least 60% of its capital to its target markets. While ACE has historically funneled at least 80% of its capital into those markets, in 2021, the CDFI managed to bring that percentage up to 94. Martina credits those percentages to intentionality on the part of her and her colleagues, but also to the geographic footprint in which ACE operates. ACE’s headquarters is in Cleveland, Georgia, a rural town of fewer than 4,000 residents, and while the CDFI supports metro hubs like Atlanta and Savannah, it also works in suburban counties such as Gwinnett, which is the most diverse county in the Southeast. In total, over the past 22 years, ACE has provided loans and business advisory services to support more than 2,000 small business owners across 68 counties in Georgia. 

According to Martina, ACE’s target demographic of small business owners face a host of challenges, including a knowledge gap, a capital gap, a trust gap, and, more often than not, a social capital gap (i.e. the lack of a network) — all of which are rooted in decades of inequality. To address these challenges, ACE employs what it calls the three C’s: capital, coaching, and connections:

1. Capital. Lending is at ACE’s core, and the CDFI offers small business loans (up to $50,000) and commercial loans ($50,001 to $1 million). However, ACE also collaborates with other organizations to deploy capital in different ways. Such creative collaborations have focused on interest rate buy-downs, loan guarantees, and longer term limits. ACE also participated in a number of initiatives that emerged during the COVID-19 pandemic, including the Southern Opportunity and Resiliency (SOAR) Fund, a program that matches small business owners with CDFIs across 15 states and Washington D.C.

ACE was actually able to increase its lending during the pandemic. In fact, between 2020 and 2021, ACE deployed more capital than it had in the previous five years combined. ACE was able to do this, in part, through the Paycheck Protection Program (PPP). In 2020, ACE lent just over $25 million, $4.5 million being PPP loans. In 2021, those numbers grew to $37.3 million and $10.5 million, respectively. Of the $10.5 million PPP dollars deployed in 2021, 54% went to women and $68% went to Black borrowers. Overall, 90% of ACE’s PPP loan recipients had five or fewer employees, and many were sole proprietors. “There were businesses that were on the brink,” Martina said. “Through the PPP process, we were able to stand with them in the gaps. We were really blessed to have great long-term relationships with lending partners like CNote that were willing to lend us low-cost capital that we specifically needed for PPP loans.”

2. Coaching. ACE knows that the key to growing sustainable businesses is to pair capital with coaching. As Martina puts it, “you got the capital, but what do you do with the capital?” To help small business owners answer that question, ACE has a growing team of business advisors who work hand-in-hand with entrepreneurs. ACE currently has a six-to-one client-to-employee ratio, which helps to explain why the CDFI’s default rates are typically  under 2%. In 2021, the CDFI dedicated more than 18,000 hours to business consulting. ACE’s “high-touch” approach, as Martina describes it, is especially centered around financial operations, business operations (e.g. cybersecurity best practices and human resources), and resiliency. “There’s relief, there’s recovery, and there’s reinvention,” she said. “We want our borrowers to be better operators, to be stronger, and to be sharper around those particular skill sets.”

3. Connections. Because ACE knows that many of its clients don’t have a network of other small business owners to rely upon, it strives to forge connections, whether between entrepreneurs or to resources. The CDFI has two women business centers that are certified through the Small Business Administration. It’s important to note that each women’s business center is gender agnostic and open to everyone. Although business coaching is an integral part of these hubs, these spaces are an ideal place for ACE to host lunch and learns, webinars, and training workshops. For example, in the wake of the COVID-19 pandemic, ACE partnered with LinkedIn to train local entrepreneurs how to pivot their brick-and-mortar businesses to e-commerce marketplaces.

ACE also offers small business owners the opportunity to participate in four different cohorts depending on where an entrepreneur is with their business at a given point in time. “As a business owner, it can be a lonely world,” said Martina, “and sometimes you feel like you’re the only person going through something. At the end of the day, it’s helpful to give small business owners a network of people that they can depend on, rely on, learn from, and possibly cross pollinate and share ideas.” 

Unlocking Opportunities

ACE recently engaged a strategic planning firm to help determine long-term strategy. In the coming years, Martina says that ACE sees a unique opportunity  to deepen their work and expand operations across Georgia, and the CDFI believes it can  deploy $100 million in capital to support women, BIPOC, and low- to -moderate income business owners in the next three to five years. Should the CDFI achieve its goal, it will be a noteworthy accomplishment: in its entire 22-year existence, ACE has deployed $140 million in capital. Martina notes that investments in improving the capacity of our people, technological infrastructure, and capital resources will be critical given the overwhelming volume of demand and the speed at which clients need capital. To set itself up for success, she says that ACE will establish new partnerships and deepen current ones. For example, ACE is a CNote Wisdom Fund Partner, which has given the CDFI access to a targeted pool of funds to further its lending. “Our mission is growing sustainable businesses, but the vision is also closing  wealth and opportunity gaps,” said Martina. “The Wisdom Fund is supporting us so that we’re able to do that.”

Additionally, just like ACE offers its clients an opportunity to network, Martina says that CNote has helped ACE connect with peer CDFIs across the country who’ve shared best practices, strategies, and ideas that have helped to make ACE more efficient. Similarly, ACE has gained visibility from CNote’s platform, which attracts impact investors, donors, and individuals from localities well beyond Georgia’s borders who want to support women business owners. “I feel like we’re the best kept secret, but we don’t want to be the best kept secret,” Martina said. “That’s why CNote is such an instrumental partner for us beyond capital, because CNote can talk about us in rooms that we don’t necessarily get access to.”

Learn More

  • Access to Capital for Entrepreneurs (ACE) is a Georgia 501(c)(3) nonprofit and community development financial institution (CDFI) that provides capital, coaching, and connections to help borrowers create and grow sustainable businesses that generate jobs.
  • CNote is a women-led investment platform that empowers individuals and institutions to invest locally to further economic equality, racial justice, gender equity, and address climate change.

 

By Community Partners

Meet Education Credit Union, Whose Scholastic Roots Sprout Innovative Programs In The Texas Panhandle

While Education Credit Union (ECU) may be 86 years old, it’s finding new ways to empower its community in Amarillo, Texas. Founded in 1935, the credit union was originally named Amarillo School Employees Credit Union, and it catered to teachers and administrators in the district. However, in 2010, the credit union rebranded itself and dropped the requirement that members had to work in education. Rebrands, however, can come with a steep learning curve, and ECU soon discovered that it had to come up with new approaches to connect with new members.

To help educate community members that they don’t have to be employed by a school to join the credit union, in 2020, ECU decided to pair its decades-old brand recognition with a new tagline: “Learn More, Live More ®.” According to Eric Jenkins, ECU’s CEO, those words say it all. “We’re staying true to our scholastic roots, because we wouldn’t exist without the educators who founded us,” he said, “but the ‘education’ part of our name is we are striving to teach consumers financial responsibility and wellness so that they can live more.”

The new tagline seems to be working. Today, the credit union has seven branches (with another one on the way), and it serves more than 30,000 members in a 16-county radius. Like many financial institutions, ECU offers its members a variety of services, including checking accounts, savings accounts, and loans. Additionally, it offers free financial education classes focused on all ages from preschool to adults. However, what separates ECU from traditional lenders and other credit unions is its array of innovative, community-centric programs. 

Eric Jenkins, the CEO of Education Credit Union

Here’s a look at four of ECU’s most unique offerings:

1. New Teacher Loans: True to its roots, one of ECU’s flagship services is new teacher loans, which are offered to recently hired educators who have yet to receive their first paycheck. Because it can take upwards of six weeks to receive that first paycheck, the credit union wanted to provide new teachers with a non-credit score based product to help fill that gap and allow those employees to meet whatever financial needs they have during that time. 

2. AmTech Career Academy: This past fall, the Amarillo School District opened up a state-of-the art, 231,000-square-foot vocational campus called AmTech Career Academy. The academy is dedicated to training more than 2,800 high schoolers to pursue one of 37 career paths, free of charge. In early 2022, ECU will not only open its first branch inside an Amarillo School District school, but it will staff that branch with senior apprentices from AmTech’s School of Business, Marketing, and Finance. These students will be hired as paid interns, and they’ll receive high school credits while they gain valuable financial services experience that could one day translate into a full-time role with a credit union or bank.  

3. BUFF $MART Program: In partnership with West Texas A&M University (whose mascot is a buffalo), ECU launched a financial literacy boot camp designed for college students. Since 2018, more than 300 students have gone through the program, and many of those participants actually received college credit for completing the coursework. Additionally, graduates of the program are invited to return and help lead future iterations of the boot camp. According to Eric, this program could easily be replicated by other credit unions that serve university partners in their footprint. “You would think that college students would have a base level of education on financial services,” he said,” but it’s discouraging how little many know about basic things like how checking accounts and credit cards work. These are smart kids from diverse backgrounds and it is so rewarding to see them benefit from what in reality is financial success training.  We really hope other credit unions will build similar programs and stand ready to support those efforts and share our lessons learned.

4. Pocket Change Grants: ECU takes team members giving back to the community to another level and focuses on the importance from day one of employment. As a result, more than 98% of ECU employees donate a portion of their paychecks to help fund Pocket Change Grants. The credit union’s board matches all contributions, and every year, ECU awards grants up to $500 to local teachers to purchase learning tools, address students’ basic needs, or fund activities and field trips. Notably, grant recipients do not have to be members in order to be eligible to receive funding from ECU. Since the program was launched in 2009, ECU has donated more than $500,000 to school districts across the Texas Panhandle. In 2021 alone, ECU donated $149,753 to 325 local teachers. 

For Lindsey Murphy, ECU’s senior vice president of marketing and business development, Pocket Change Grants are arguably her favorite part of her job. Lindsey grew up in the community, and her mother was a teacher in the Amarillo School District. As soon as Lindsey turned 16 and got a job, her mom drove her to ECU to open her first checking account. All these years later, she feels blessed to be able to give back to local schools in such a meaningful way. “It’s so rewarding to see the smiles on our team members’ faces when they get to go into the schools and deliver the checks,” Lindsey said. “Every employee that donates gets the opportunity to go out and physically deliver one to a teacher and enjoy that experience and see that donation go to work.”

Lindsey Murphy, Education Credit Union’s senior vice president of marketing and business development

According to Lindsey, ECU is able to come up with and deliver on such unique programs because, collectively, her and her colleagues have their fingers on the pulse of what’s going on locally: not just in the area school districts, but holistically in the surrounding communities. Recently, that heightened level of awareness led ECU to be more intentional about attracting and recruiting bilingual employees who can better serve the credit union’s Spanish-speaking members. After strategizing with its HR team, ECU updated its job posting preferences, created an all Spanish ad and translated one of its job applications into Spanish. The credit union’s efforts were rewarded: 40% of its new hires are bilingual. “We knew that in order to effectively serve the communities where we exist in the language that they need, then we were going to have to make changes,” Eric said. “We had to be intentional, and we’re going to continue to make that a priority.”

As ECU continues to strive to look more like the community it serves, both Eric and Lindsey are excited for what’s to come for the credit union. As they look forward to exciting announcements in 2022 and beyond, one thing is clear: after 86 years, ECU’s best years are still ahead of it. “We have the opportunity to create more value for consumers in the Panhandle of Texas than any other institution here,” Eric said. “Like I said before: we’re going to help people learn more about their financial lives so that they can make their whole lives better.”

Learn More

  • Education Credit Union’s mission is to excel in service, care and financial protection for members and their families. The Education Credit Union proudly serves members in Amarillo, Bushland and Canyon, Texas.
  • CNote is a women-led investment platform that empowers individuals and institutions to invest locally to further economic equality, racial justice, gender equity, and address climate change.
By Borrower Stories

How Toni Hopkins Embraced Her Entrepreneurial Side To Open Cool J’s Apparel During The Pandemic

In the years leading up to the COVID-19 pandemic, Toni Hopkins and her husband talked about moving from their home in Springfield, Illinois to North Carolina to pursue what she describes as “something different.” They’d even gone as far as to meet with a real estate agent to explore selling their house. Ultimately, the couple abandoned their plans to pursue a fresh start at the onset of the pandemic. However, Toni’s desire for “something different” persisted. That’s when she began to listen to the entrepreneurial voice in her head that had spent the past three years telling her to start her own business.

Toni Hopkins, Founder of Cool J’s Apparel.

For Toni, the idea of opening her own business was something of a fantasy. After more than 18 years working in accounting and finance, she was tired of the monotony. Over her career, she’d heard people — coworkers, friends, family members — vocalize wanting to do something different with their lives but never acting on those wants. Toni’s problem was that she knew she wanted to start a business, but she didn’t know what kind of business she wanted to start. She’d even stumbled across a vacant commercial space near her home in Springfield that she determined would be perfect for her nameless, yet-to-be-created future store.

During the early weeks of the COVID-19 pandemic, when stay-at-home mandates went into effect and Toni began to work from home, something changed inside of her. Not only did she and her husband decide to stay planted in Springfield, but that’s when she decided that she was going to shift from talking about opening her own business to actually making it happen. “The pandemic hit, and I said ‘okay, this is the time for me to actually do this,’” she said. “Like everybody else, I started working from home, and I realized that I could be doing something else with my time that I wanted to do instead of pushing numbers.”

Fortunately, Toni was surrounded by a supportive husband, daughter, and son who encouraged her to embrace her entrepreneurial side. She set her fears aside and began to look for the right business opportunities in her community. It didn’t take her long to connect the dots between one of her passions — fashion — and the fact that there weren’t many black-owned clothing boutiques in town that sold trendy yet affordable clothes and accessories. Toni had found her business idea: Cool J’s Apparel. Amazingly, the “perfect” commercial space that she’d seen from her car window a year earlier and fallen in love with was still available. Even more amazing was the fact that Toni was able to work with the landlord to sign a lease.

Falling Into Place

According to Toni, every aspect of her business seemed to effortlessly fall into place. Through her research, she’d learned that women were continuing to purchase clothing during the pandemic and that boutiques like the one she wanted to open continued to be profitable amidst the wide-scale economic uncertainty. That helped to shape the business plan that Toni wrote and carried with her to her local bank to apply for a small business loan. Although the banker told Toni that he couldn’t help her because the loan request wasn’t big enough, he told her to reach out to Justine PETERSEN, a Community Development Financial Institution (CDFI) that offers a variety of financial tools and service to help low- and moderate-income individuals and families achieve their personal financial goals. CNote partners with CDFIs like Justine PETERSEN in communities across the country, funding loans and empowering local entrepreneurs like Toni through CNote’s Flagship and Wisdom Funds.

Toni reached out to the CDFI in November 2020, and she quickly connected with Aida Richardson, Justine PETERSEN’s chief lending officer. “Aida was so helpful from the very beginning,” Toni said. “She just knew so much, which was the biggest help. This was my first time opening a business, but she’d done this hundreds of times, so Aida just made it so easy. She answered all of my questions and emails and didn’t hesitate to always point me in the right direction.”

With micro-enterprise lending from Justine PETERSEN, Toni was able to do everything she needed to open Cool J’s Apparel on May 28, 2021. According to her, the loan money from the CDFI helped her with every aspect of her business, from paying rent to completing renovations and from purchasing inventory to buying the iPad that she uses to complete sales. Additionally, Toni says that the CDFI helped her to make her business “become legit and successful,” meaning she was able to leverage those loan dollars to invest in marketing, advertising, and signage. Most importantly, even though Toni received her small business loan roughly 12 months ago, Aida and her colleagues at Justine PETERSEN continue to tell Toni that they’re always available whenever she needs anything, whether that’s a quick question that can be answered over the phone or ongoing technical assistance to help take her business to the next level. 

Unsurprisingly, Toni’s positive experience with Justine PETERSEN is largely why she describes opening Cool J’s Apparel as “so easy.” In the process, she’s inadvertently become one of the CDFI’s biggest cheerleaders. “I’ve been telling everybody about them,” she said, laughing. “They’ll let you know right away if they can help you or not, and if they can’t, then they’ll put you on the right path and they’ll give you the steps to help you. It’s a relationship that I’m really appreciative of, even today.”

‘I Love Doing What I’m Doing’

Although the COVID-19 pandemic couldn’t deter Toni from opening Cool J’s Apparel in May 2021, it did limit her ability to have a grand opening celebration — something she’s considering remedying in the coming weeks. That doesn’t mean that the women’s clothing store where “cute meets comfortable” has struggled to find its footing in Springfield. Business is going well, and Toni says the store enjoys support from both local customers and shoppers who drive down from Chicago. The broad geographic interest in Cool J’s Apparel stems from the fact that Toni carries stylish yet affordable clothes and accessories for all ages. “My customers are Black and white, young and old, and just really diverse,” she said. “I’m not joking. It’s craziness. I don’t know how people target one specific group, because I have such a big range of customers here.”

Cool J’s Apparel even attracts the occasional male customer, which has prompted Toni to consider incorporating a menswear section into her store — or perhaps into a larger location. In the nearterm, Toni would like to hire some help. Currently, Toni operates the store while she continues to work her part-time, remote nonprofit job, and although she appreciates the help she gets from her family, including her niece, she wants to either hire two part-time employees or one full-time staff member as soon as she’s able to. Additionally, Toni is interested in deepening her small business’ connection to the surrounding community, such as sponsoring events where all proceeds go to donating backpacks to the local school.

Even though Toni has the occasional quiet day at Cool J’s Apparel, she’s pleased knowing that when customers do come into her boutique, they tend to walk out with a bag of new clothes. “People that have never been my customers before, they come in and they find something that appeals to them,” Toni said. “I love that. Even on slow days, I still love being here and doing what I’m doing.”

Learn More

  • Cool J’s Apparel
  • Justine PETERSEN is a CDFI that connects institutional resources with the needs of low-to-moderate-income individuals and families in Missouri, helping them to build assets and create enduring community change.
  • CNote – Interested in helping create another story like this? CNote makes it easy to invest in great CDFIs like Justine PETERSEN, helping you earn more while having a positive impact on businesses and communities across America.
By Borrower Stories

How Project Fighting Chance Is Going Beyond The Boxing Ring To Build Trauma Resiliency In San Bernardino’s Youth

When Terry Boykins was first approached to serve on the board of directors for a nonprofit called Project Fighting Chance, the social entrepreneur politely said “thanks, but no thanks.” It wasn’t because Terry wasn’t aligned with Project Fighting Chance’s mission to function as a viable safe space and trauma resilience support system for youth in San Bernardino, California. Terry’s own work was similarly rooted in community engagement; however, his background was admittedly in the corporate world, and Terry was hesitant to get involved with a nonprofit. 

Terry Boykins

A few years later, in 2016, Terry got his next offer to consider joining Project Fighting Chance’s board, just months after a terrorist attack left the community — and the country — in shock. This time, Terry visited the organization, he spoke with current board members, and, most importantly, he saw the nonprofit’s potential. Terry joined the board, and a year later, he stepped in as the organization’s interim executive director. In July 2020, he dropped the “interim” label and became the nonprofit’s full-time executive director.

One of the reasons that Project Fighting Chance was established in 1999 was to give youth a safe place to go after school. According to Terry, the hours between 3 p.m. and 7 p.m. are the most deadly for young people, especially in San Bernardino, the second-most dangerous city in California. That’s why the nonprofit opened its doors: to create a place for students to escape the pervasive poverty, food insecurity, prostitution, drugs, violence, robberies, car jackings, and home invasions around them. “When you talk about PTSD in the hood, it’s here,” Terry said. “These students are trying to navigate an environment where they’re confronted by violence and destruction on a daily basis, so we created a space for them to get away from that, where they can focus on their academic well-being, their emotional well-being, and getting an afternoon meal five days a week.”Since its inception, Project Fighting Chance has built itself a championship reputation within the national amateur boxing community. For example, in 2018, PBS released a docu-series following three of the nonprofit’s top boxers. However, when Terry came onboard, he set out to expand the organization’s programmatic offerings beyond boxing. “The boxing program was already a place where kids wanted to go,” he said, “but I’d been focusing on the obstacles that youth were confronted years down the road. I asked ‘what exactly can be done that will help these young people apply the techniques of boxing as they relate to overcoming issues or struggles or problems to get somewhere else in life?’ That’s when we began to have a different dialogue.”

Through that “different dialogue,” Terry and his colleagues at Project Fighting Chance have put together a dizzying assortment of programmatic offerings for youth between the ages of eight and 18 from San Bernardino and the surrounding communities. While boxing and workouts are still an integral part of Project Fighting Chance, the nonprofit has expanded to offer additional after-school enrichment programs like chess, art classes, horticulture, tutoring, and spoken word. There’s also a mental-health tranquility garden, where students can sit outside and eat lunch, meet with a counselor, or learn about nutrition. Additionally, the San Bernardino City Unified School District helped the nonprofit secure 40 guitars — a mix of acoustic and electric — for its Guitars Not Guns program. “We have a trauma-informed staff, so we understand who’s coming in the door,” Terry said. “It’s a very interesting time here when the guitar instructor and the students are able to come together through music to deal with some social-emotional dynamics that happened in their day.”

Going Toe-to-Toe With A Global Pandemic

Every Monday through Friday, Project Fighting Chance welcomes roughly 120 students through its doors, and in its 22-year existence, it has trained and mentored over 6,000 youth, free of charge. However, the nonprofit’s ability to fulfill its mission was thrown into question at the beginning of the COVID-19 pandemic. With both uncertainty around the virus’ transmission and state-mandated stay-at-home orders, Project Fighting Chance had to close its doors to the youth who needed it most. To make matters worse, much of the grant money that Project Fighting Chance relied on was retracted, which meant that the nonprofit was in immediate need from the Paycheck Protection Program (PPP) to keep afloat. 

Fortunately, a pastor from a nearby church referred Terry and his team to Self-Help Federal Credit Union. Self-Help is a low-income designated credit union that was chartered in 2008 to build a network of branches that serve working families and underserved communities. It currently has more than 78,000 customers across 19 branches in California, 10 branches in Illinois, and one branch in Wisconsin, and it has over $1.2 billion in assets. Like many credit unions in the U.S., Self-Help rose to the challenges presented by PPP loan issuance and forgiveness and acted as an economic shock absorber for the economy. CNote partners with low-income designated credit unions like Self-Help across the country through its Impact Cash Solution. 

Thanks to Self-Help, Project Fighting Chance applied for and received two rounds of PPP loans, which meant that the nonprofit did not have to lay off any of its six employees. The PPP funding also kept fuel in Project Fighting Chance’s tanks — literally. For the first 18 months of the pandemic, the nonprofit used its two vans to deliver 170 meals every day to youth around San Bernardino, ensuring that those experiencing food and transportation insecurity at home could still be served. “The PPP funding proved critical, because it allowed us to repurpose the organization to support young people and their parents in the community,” Terry said. “We were the place they could count on every day, and we basically got those funds and invested them into the community to make sure that we could stay available to these youth.”

Life Outside of the Boxing Ring

Although Project Fighting Chance had to limit its daily capacity to 15 students at the beginning of the pandemic, today, Terry and his team are back to serving over 100 youth a day. Despite the extended time away from face-to-face interactions, programmatically, Project Fighting Chance didn’t miss a beat during the pandemic. In September 2021, for example, the nonprofit kicked off a program called Civil Liberties for Boys of Color, where students got to speak with law enforcement officials — police officers, probationary staff, employees from the district attorney’s office — for 90 minutes every Friday. “These were real conversations,” said Terry. “These kids were scared of the police and not knowing if they’re going to make it back home today. So these folks came in and talked about the law, about behavior, and they talked to these young boys about having a voice for their concerns about living in their communities.”

To say that Project Fighting Chance has become much more than a place for youth to learn about boxing is an understatement. Today, youth are exposed to programs related to nutrition, mental health, sex trafficking, partner violence, civic engagement, and career development. Whether or not a student walks through the nonprofit’s doors wanting to be the next Muhammad Ali or the next Jimi Hendrix, they’re encouraged to train in the boxing gym, visit the tranquility garden, talk about mental wellness, and explore every aspect of STEAM (science, technology, engineering, arts, and math). 

Why? According to Terry, it’s not only about reducing childhood violence, trauma, and food insecurity, it’s about preparing these youth to be productive members of society. That means developing the coping skills to thrive in the labor force and the civic engagement skills to become informed voters and taxpayers. Therefore, it isn’t surprising that Terry’s most exciting day as executive director of the nonprofit was when he and the youth at Project Fighting Chance were invited to attend a San Bernardino City Council meeting to learn about how local government works. The organization filled every seat in the house, and, as Terry put it, the students got “a lesson outside of the boxing ring that was priceless.

Whether it’s local council members, California state assembly members, school district administrators, teachers, mentors, counselors, therapists, coaches, parents, or credit unions like Self-Help, Terry is quick to acknowledge the broad community support and partnerships that Project Fighting Chance not only enjoys, but relies upon to be successful. “We are not where we are because we’re doing great things,” Terry said. “We are where we are because there are some great people helping us do some very good things after school in this community.” 

Learn More

  • Project Fighting Chance‘s Mission is “to function as a viable safe space and trauma resilience support system for youth and young adults at-progress while assisting them to become positive contributing members of the community.”
  • Self-Help Federal Credit Union was chartered in 2008 to build a network of branches that serves working families and underserved communities. Serving more than 78,000 members, Self-Help Federal is one of the fastest-growing low-income designated credit unions in the country. 
  • CNote – Interested in helping create another story like this? CNote makes it easy to invest in great Credit Unions like Self-Help, helping you earn more while having a positive impact on businesses and communities across America.
By CNote

Impact Platform CNote Announces Conversion to Public Benefit Corporation

New legal designation affirms CNote’s longstanding commitment to closing the wealth gap and uplifting communities with sustainable solutions.

 March 30, 2022 // Oakland, CA // CNote, a woman-led impact platform, has announced its official conversion to a Public Benefit Corporation (PBC).

 Since its founding in 2016, CNote’s fixed income and cash products have streamlined millions in scalable investments from individuals and corporations. Dollars invested and deposited on the CNote platform are deployed with mission-driven financial institutions to fund underserved communities and BIPOC entrepreneurs in line with the firm’s mission to close the wealth gap.

A supermajority of CNote’s stockholders voted to formalize a transition to a PBC, further aligning the company with its practice of enhancing equitable community development through financial empowerment. CNote’s specific public benefit purpose is to advance greater economic and social justice for underserved communities by unlocking access to impact investments. Now, unlike traditional corporations that primarily focus on maximizing only shareholder value, CNote can also ensure that decisions are made in light of achieving this specific purpose.

“Becoming a Public Benefit Corporation has allowed the company’s charter to reflect CNote’s core values that motivate us every day,” said Yuliya Tarasava, COO and co-founder of CNote. “This conversion means CNote will always be pushing for greater capital access for underserved groups that have long been neglected by the financial mainstream.”

As a Delaware Public Benefit Corporation, CNote’s Board of Directors will have a mandate to balance the economic interests of stockholders with its stated public benefit purpose, allowing it to take into account the material interests of all stakeholders affected by the company’s operations, including the underserved communities CNote supports and CNote’s partner financial institutions, clients, and employees.

 

About CNote

CNote is a women-led impact platform on a mission to close the wealth gap through financial innovation. Using the power of technology and a community-first framework, CNote enables corporations and individuals to efficiently invest at scale in fixed income and time deposit products that further economic equality, racial justice, gender equity, and climate change initiatives. As part of its offering, CNote delivers regular reporting on the social impact of deposits and investments made through its platform. A Certified B Corporation, CNote was a B Lab “Best for the World” honoree in 2019 and was named “Best Women-Owned Business” by the United Nations’ Women’s Empowerment Principles program in 2020.

By Community Partners

Meet Michelle Corson, ‘The Car Lady’ Behind the CDFI That Gets Clients On the Road

Since she was a little girl in Texas, Michelle Corson has always loved cars, something that befuddled her parents. “It’s not like I was chauffeured around town or anything,” Michelle laughed. “My mom drove a Honda and my dad drove a Buick, and they were like ‘who are you and why do you like cars so much?’” Despite her inexplicable interest in automobiles, Michelle decided to pursue a career in finance, investing, and real estate development. However, after 25-plus years of carving out a successful path for herself in that world, Michelle had the epiphany that many 40-somethings experience: she wanted to do something different.

Michelle Corson, founder and CEO of On The Road Lending- Photo Credit: On The Road Lending

That something different turned out to be launching an impact investing company called Champion Impact Capital in 2011. According to Michelle, she’d read an article earlier that year about impact investing, and she thought the idea of leveraging investment capital to solve problems was brilliant. With that, she began to look at issues that could be addressed using creative finance, which brought her full circle back to her childhood obsession: cars. Through her initial research in 2012, Michelle discovered that no one was working on transportation, despite the fact that having access to a personal vehicle provides people with better access to food, healthcare, education, and employment options. 

The statistics were eye-opening. Michelle learned that, on average, it takes people five times longer to get anywhere on mass transit than it does in a car in the United States. Similarly, according to an Urban Institute study, unreliable transportation is the number one reason for people losing their jobs. Additionally, people who have their own car are twice as likely to get a good job and four times as likely to keep it as someone without a vehicle. Michelle learned so much about mass transit that she wrote a book on the subject so that she could share her findings with others. “I think that sometimes we focus on the wrong things when we’re trying to solve problems,” Michelle said. “We’re so focused on the end, that we make things unnecessarily hard when it can just be a simple, practical solution.”

Michelle Corson at a client car delivery. Photo Credit: On The Road Lending

With that practical-solution mindset, Michelle launched On the Road Lending in March 2013, which seeks to get affordable, fuel-efficient, and safe cars into the hands of people who don’t have them, freeing them from things like unreliable or nonexistent mass transit, broken down cars, predatory buy-here-pay-here salesmen, and their own two feet. Michelle quickly earned herself the nickname “The Car Lady,” which she couldn’t find more fitting. “I love cars,” she said, “and I love getting people on the road to a much better life. Cars change everything for people who don’t have them.”

Putting Character-Based Lending in the Fast Lane

Over the past 10 years, with Michelle behind the wheel, On the Road Lending has gone on to become an officially designated Community Development Financial Institution (CDFI), thus cementing the organization’s mission to strengthen communities. Unsurprisingly, because On the Road Lending’s clients are transportation challenged, Michelle and her team do everything online, including reviewing and signing loan documents. To date, the organization has expanded its footprint to four states to include Texas, Alabama, Georgia, and Mississippi. While Michelle says that client acquisition is the hardest part of her business, she and her team are focused on forging more partnerships with trusted intermediaries like social service agencies, employers, and churches who can help assuage the fears of those who’ve previously fallen victim to predatory lenders and who’ve developed an understandable wariness toward anyone who says “we’ll cut your car payment in half.” 

Despite those hurdles, Michelle is confident that On the Road Lending is connecting with the right clients: more than 90% of On the Road Lending’s clients are people of color, and 65% of its clients are single Black mothers. On average, the CDFI’s clients have an average credit score of roughly 500, meaning that the interest rate for most of its clients for a car loan would typically be between 21% and 28% on a car loan. However, because On the Road Lending takes a holistic, character-based lending approach instead of relying on credit scores, it’s able to offer clients a flat interest rate of 9.75% for all of its loans, which cuts monthly payments from $700 to about $350. Compared to predatory lenders’ average default rate of roughly 30%, On the Road Lending’s default rate hovers around 3%. “With a client-equity-focused mindset, we start from an assumption that people are going to succeed instead of that they’re going to fail,” Michelle said. “Banks and traditional lenders don’t do that, but if they did, that would be a game changer for our economy.” 

Photo Credit: On The Road Lending

Besides reasonable loan terms, compassion, and flexibility, there’s another reason why Michelle refers to On The Road Lending as a “second-chance factory:” clients are paired with financial coaches who work with them on an ongoing basis. These remote, judgement-free consultations are complemented by online financial literacy classes that every client has to take. According to Michelle, the overall goal is to help clients distinguish between financial needs and wants and to be able to understand how to make important financial decisions in the future, whether that’s purchasing a home or going to college.

A Green Light to Grow

On the Road Lending has come a long way since making 16 loans in its first year; according to Michelle, the CDFI has been asked to expand into almost every state in the country, including localized requests from cities like New York City, Chicago, and San Francisco that have robust mass transit systems yet see the value that On the Road Lending could bring to their communities. Given the seemingly limitless potential, Michelle and her team are being very conscientious about their growth, with plans in place to be in 10 states by the end of this year.“We’re trying to think about markets that tend to be overlooked,” Michelle said, “and that tends to be driven by partners that want to bring us pretty heavily into a certain market.”

Photo Credit: On The Road Lending

Incredibly, On the Road Lending is just one of eight entities under Champion Impact Capital’s umbrella, meaning that the CDFI’s daily operations and scalability challenges represent only a fraction of Michelle’s day-to-day workload. Another entity under Michelle’s domain is On the Road Garage, a business that trains skilled technicians to do commercial collision repair for insurance companies. Currently, On the Road Garage has five registered apprenticeship programs with the Department of Labor; however, Michelle is confident that that number will grow in the coming months, fueled in part by partnerships with major corporations to work on their vans. “Without a four-year degree, these technicians can make $150,000 a year working on cars,” she said. “This is real life-changing money for people, and we’re teaching them the business so that they can go on once they’re done with us and have really great opportunities everywhere.”

Michelle is fortunate that within each of her business entities, she’s surrounded herself with incredible colleagues who match her passion, mile for mile. Although the individual business endeavors differ, they’re in many ways complementary to each other, as each focuses on a different aspect of the same overarching objective: to create a vertical integration strategy that brings down transportation costs across the value chain to make transportation more accessible and affordable for everyone. “We want to build prosperity and remove transportation barriers for people,” Michelle said. “We are busy, but we’re all very committed to the mission, and we love what we do. We’re very lucky for that.”

Photo Credit: On The Road Lending

Learn More

  • On the Road Lending formed in 2013 to help people find cars that worked for them and to teach them how to make good financial decisions. Through their loan funds, they make low-cost loans on reliable cars based on who people are—not their credit scores.
  • CNote is a women-led investment platform that empowers individuals and institutions to invest locally to further economic equality, racial justice, gender equity, and address climate change.
By Borrower Stories

Meet Mellaney Williams, The Big Dreamer Behind American Home and Commercial Services

Mellaney Williams

When Mellaney Williams and her husband graduated college and moved to South Carolina in 2001, Mellaney’s husband got himself involved in the irrigation installation trade. However, what started as a side hustle quickly turned into something much bigger, as demand for him and his services grew. Soon, American Home and Commercial Services LLC was doing much more than irrigation; it was doing landscape design and installations, lighting, hardscapes, water features, and even interior paint jobs and flooring projects. 

By 2010, Mellaney’s husband needed help with the business, so Mellaney quit her job and took over the financial side of the operation, as well as marketing, to take some of the administrative burden off of him. The arrangement quickly proved itself to be a win-win. “My husband is very gifted and he was doing fine, but the business had become overwhelming,” Mellaney said. “When I joined, I found my little groove to help it stay consistent. It’s been a miraculous ride.”

However, that “miraculous ride” was put in jeopardy in March 2020, when the COVID-19 pandemic immediately affected Mellaney’s business. Suddenly, there were fewer opportunities to land jobs, and it was difficult to retain workers. With more money going out than coming in, Mellaney had to cut back on things like advertising in order to keep the doors open. She even started going out on projects to help her husband in the field. That’s how she learned how to change sprinkler heads, install lighting systems, and construct ponds. Despite Mellaney and her husband cutting back and being resourceful to make ends meet, American Home and Commercial Services still needed help to ensure that the company could continue to pay its bills and cover its expenses.

Initially, Mellaney wanted more information about the Paycheck Protection Program (PPP). She ventured online, but struck out because she couldn’t connect with a person to ask questions and get support. Instead, she ran into red tape and confusion. According to Mellaney, the experience left her feeling lonely. Those feelings were exacerbated when she turned to a credit union where she’d done business for more than 10 years and was told that her PPP loan application wasn’t formatted correctly. “Instead of elaborating and saying ‘if you do this, then we can approve it,’ they did nothing,” Mellaney said. “I felt abandoned. Out here in this pandemic as an African American woman business owner, and no one was there to help. It was very hard.”

Fortunately, someone in Mellaney’s network suggested that she reach out to Optus Bank. Optus Bank is a Columbia-based community bank with a mission-driven purpose. For the past 100 years, it’s been working to strengthen communities throughout South Carolina by closing the wealth gap created by systematic disparities in the financial industry. Optus Bank is a certified Community Development Financial Institution (CDFI), and its main goal is to ensure that wealth building is not just for the wealthy. CNote partners with CDFIs like Optus Bank across the country through its Impact Cash™ Solution, empowering woman small business owners like Mellaney.

According to Mellaney, her experience working with Optus Bank was “amazing,” “transparent,” and “a breath of fresh air.” She said that the application was straightforward, deadlines were clear, and her questions were answered — by real people. Within two weeks of contacting Optus in July 2020, Mellaney was notified that she was approved for her PPP loan. “I can’t put it into words,” she said. “I was so elated. They extended that hand to help me, and they gave a lifeline to my business. They made me a believer, and I can’t recommend them enough. Optus Bank will have my business for all of my future endeavors, because I have plans for big things.”

‘You Gotta Dream Big’

As Mellaney alluded to, she doesn’t intend to slow down anytime soon. Roughly seven years ago, American Home and Commercial Services had the opportunity to be a subcontractor for one of the largest landscape irrigation companies in the southeastern United States. The project was incredibly challenging, and it required an immense level of physical and mental fortitude to complete; however, Mellaney says that the project, including getting a glimpse into the operations of a much larger company, opened up her eyes to what was possible. “I knew that was a stepping stone to take us to another level,” she said. “If we could have the tenacity to complete that project, then we can do anything. That was the most challenging moment, but it was also the most rewarding experience, because we learned that there is no limit when you put your mind to whatever you want.”

What Mellaney wants for her business’ future is to expand into other cities, to grow its operations, and to bring as much of its supply chain as possible in house. Her ultimate goal, however, is to franchise American Home and Commercial Services and to one day go public. She’s a vocal promoter of Dun & Bradstreet, a global company that helps small businesses to connect with potential partners and investors. Mellaney discovered the company earlier this year, and she says having a D-U-N-S number has allowed her to both grow her business and talk confidently about her company’s future. “I love dreaming big,” she said. “If you don’t have a dream, then what’s the use — life is boring. You gotta dream big.”

Today, in the wake of losing her mother to COVID-19 in October, Mellaney has the joy of dreaming not only about her future, but the future of her infant daughter. According to Mellaney, while owning a successful business is fulfilling, it’s impossible to compare that to having a beautiful baby girl waiting for her at home. “Nothing else is more rewarding,” Mellaney said. “Now, I work even harder for her.”

Learn More

  • Optus Bank is a community bank, with a mission-driven purpose. They help strengthen their community by closing the wealth gap created by systemic disparities in the financial industry. By providing loans and banking services to local businesses and individuals they serve to turn deposits into direct support for the communities where their customers live and work.
  • CNote – Interested in helping create another story like Mellaney’s? CNote makes it easy to invest in great banks like Optus, helping you earn more while having a positive impact on businesses and communities across America.
By Community Partners

These Maine CDFIs Are Showing Mainstream Lenders How to Open Doors For Muslim Borrowers

When Yassin arrived in western Maine in 2008 as a refugee from Djibouti, he knew that he wanted to start his own business one day. In recent decades, Maine has become a destination for a growing population of immigrants like Yassin, who are seeking to build a life for themselves in the U.S. According to Yassin, however, new Mainers often find themselves in difficult living situations due to a shortage of quality affordable housing and other cultural and structural barriers. Therefore, although Yassin was trained as an accountant in Djibouti, his entrepreneurial spirit led him in a different direction.

Photo credit: The Genesis Fund/Flax Studios

To address the renter-rentee issues in his community, Yassin wanted to purchase apartment buildings and rent out units to immigrants who could relate to him. Despite his desire to start his own business, Yassin wasn’t able to go to a traditional lender to apply for a small business loan. That’s because many Muslim borrowers like Yassin are prohibited by their faith practice from paying or receiving interest. As Yassin discovered, most traditional lenders weren’t willing to modify their conventional lending practices or to consider non-interest-based lending models in order to accommodate aspiring Muslim entrepreneurs like him.

Photo credit: The Genesis Fund/Flax Studios

That’s when Yassin connected with Coastal Enterprises Inc. (CEI), a community development financial institution (CDFI) that’s been working in Maine since 1977 to build livelihoods, wealth, and a more equitable and sustainable economy. CEI received a grant to focus on immigrant and new-Mainer entrepreneurs who needed small business start-up funding but who weren’t able to access conventional lending. What the CEI team came up with was a fee-based lending program designed and developed with Maine’s Muslim community in mind.

Fee-based lending works like this: First, these loans are loaned out with a 0% interest rate. Second, the principal of the loan is divided into equal monthly segments depending on the loan terms (e.g. 84 segments for a seven-year business loan). Then, any fees associated with the loan (e.g. costs associated with closing and administering the loan) are calculated and transparently shared with the customer. Depending on the size and terms of the loan, a borrower can either prepay the fees upfront (i.e. pay a $750 fee on a five-year, $10,000 small business loan) or, in the case of larger loans (i.e. a $300,000 commercial real estate loan), the fees can be divided into flat, even monthly allocations that are added to the monthly principal payments.

John Egan and Yassin. Photo credit: The Genesis Fund/Flax Studios

John Egan worked at CEI for 20 years and is now the chief lending and program officer at the Genesis Fund, another Maine CDFI. He adapted the fee-based lending approach to the Genesis Fund’s work, which is centered around affordable housing and community facility finance, including multifamily and commercial mortgage offerings. Through this new loan product, the Genesis Fund has now provided loan capital to Yassin for three properties, which provide rental housing and space for childcare providers serving the immigrant community in Lewiston. According to John, one of the reasons why fee-based loans work is because they’re designed to make sense. “Folks that have a prohibition against paying interest because of their religious convictions do not have the same prohibition about understanding how business works,” he said. “The idea that a fee is attached to the activity of lending money at 0% is not a philosophical or religious conviction challenge, and from what we’ve found, everybody can get behind the concept.”

Photo credit: Soggy Dog Designs

John pointed out that, besides a small distinction in how promissory notes are written and how loans are packaged in the loan software, these fee-based loans “live, breathe, serve, and pay” in CDFIs’ portfolios the same way as interest-based loans. 

John said that when Genesis was crunching the numbers on fee-based loans, he and his colleagues determined that if the loan remains outstanding for seven to ten years, which is typical in Maine, their returns would be about the same as they would with an interest-based loan. “These aren’t a net deficit on our portfolio,” he said. “Instead, we saw that fee-based loans would allow us to actually deploy more capital, further our mission, and reach a group of people that have no access to the mainstream banking system. When we saw that, we were pretty quick to say ‘of course we’re going to do this.’”

‘That’s Part of Our Job as CDFIs’

To date, Genesis Fund has a handful of fee-based loans in its portfolio, and although John and his colleagues hope to increase that number by double digits in the next two years, he’s arguably more enthusiastic about getting local banks to adopt fee-based lending in the near term. According to him, that’s part of the innovative role of CDFIs: to find new ways to fill gaps in the lending market that can in turn be picked up by traditional sources of capital. “That’s part of our job as CDFIs,” John said. “It’s to demonstrate these community projects so that next time, they can be financed by banks, not by us.”

This isn’t the first time that Genesis has led by example in order to get traditional lenders to innovate. For example, Genesis currently has 10 resident-owned manufactured home parks in its portfolio. Although “that’s a drop in the bucket” for a local bank that might have thousands of loans in its portfolio, John says that being able to share data from even a small sample size helps to assuage the concerns of risk managers and risk-averse bankers. By demonstrating the sound economics of deploying loans to manufactured home parks, Genesis helped pave the way for three Maine community banks to participate in financing these resident-owned communities.

Importantly, John isn’t nervous about losing business to local banks; he’s more focused on ensuring that banks understand what CDFIs like Genesis are and aren’t doing, especially regarding fee-based lending. “We’re not a granting agency, and we’re not giving away money like a foundation,” he said. “We’re lending with sound finance principles. We proved the concept and demonstrated how to mitigate the risk, and now it’s time to get banks involved because their volume is so much bigger. We’re confident that we’ll be successful in doing that.”

Meanwhile, John and his colleagues at Genesis are exploring other innovative lending programs in their community, including advocating for a fee-based home mortgage product for immigrant families to buy their first home in Maine. John says that he’s working with state housing officials, local credit unions, and developers to make it happen; however, anecdotally speaking, he said that the first lender to come out with such a product “is going to get run over with applications.” That’s because there is so much demand from immigrants who want to put down roots in Maine. “It’s not a secret,” John said. “When somebody can own property in their neighborhood instead of rent, they have a much louder voice. When you’ve got a higher concentration of owner-occupants in a neighborhood, those people take pride in their properties and reinvest in those properties, and community conditions improve. That’s what Maine needs.”

Photo credit: The Genesis Fund/Flax Studios

In the meantime, small real estate investors like Yassin — entrepreneurs who’ve benefited from fee-based loans from CEI and the Genesis Fund — are stepping up to provide affordable and accessible housing for the immigrants in their community. Today, Yassin owns 12 properties, and he estimates that 90% of his residents are immigrants. According to him, without having the opportunity to simultaneously borrow money and adhere to his Islamic faith, he wouldn’t have been able to pursue his entrepreneurial dreams, including hiring two full-time employees. “Honestly, if that program wasn’t there, then I wouldn’t have my business,” Yassin said. “[Fee-based lending] opened up the life I have today.”

Learn More

  • The Genesis Fund provides innovative financing by soliciting investment loans from individuals, churches, corporations, and foundations, and then re-lending the money at favorable terms to nonprofit organizations developing affordable housing and community facilities for underserved people and communities throughout Maine and beyond.
  • CNote is a women-led investment platform that empowers individuals and institutions to invest locally to further economic equality, racial justice, gender equity, and address climate change.
By Borrower Stories

Meet Danielle Mahon, The Entrepreneur Whose Company, Topsail Steamer, Has The Wind At Its Back

Although Danielle Mahon identifies as a late-in-life entrepreneur, she’s more of a waiting-for-the-right-idea entrepreneur. Danielle grew up in southern New Jersey, and she spent her summers on the Jersey Shore with friends and family. Danielle pursued a career in sales, but it was her husband’s job that took her and her children to Raleigh, North Carolina, where Danielle quickly put down roots on (and fell in love with) nearby Topsail Island. She spent the next 10 years working in biotech before going on a girls trip to the Outer Banks in 2016. It was there, having lunch with her mother and sister, that Danielle found her business idea: the restaurant where they were eating offered make-at-home seafood steam pots, where patrons could take the black-and-white enamel pots home and return them the next day. The concept struck Danielle, and a business plan that didn’t require a full-service restaurant began to take shape in her head.

For Danielle, the timing seemed right to open a business. She and her husband were preparing to send their youngest child to college, and the soon-to-be empty-nesters were more than ready to move from Raleigh to Topsail. In no time at all, Danielle quit her job in corporate America, moved to the beach, and with a $75,000 loan from a family member, she opened Topsail Steamer in Surf City in March 2017. Topsail Steamer’s business model is straightforward: sell customizable, one-time-use steam pots — filled with fresh seafood, sausage, veggies, and homemade seasonings — so that people can take the buckets home, add water (or beer), and cook, eat, and enjoy them. Topsail Steamer even includes cocktail sauce, butter, and brown paper for the table, adding to the at-home dining experience. Despite the steep learning curve, Danielle quickly mastered how to handle and source all of her seafood locally (when possible), and a strong first year paved the way for Topsail Steamer to open a second location in neighboring Wrightsville Beach in May 2018.

Business continued to be strong until September of that year, when Hurricane Florence walloped Topsail Island, effectively devastating the area’s tourism-dependent shoulder season and many of the residents’ homes. It’s never easy to be hit by a hurricane, but for a new business with a three-month-old second location, Topsail Steamer struggled to regain its footing after the storm. That’s when Danielle connected with Thread Capital, a Community Development Financial Institution (CDFI) that offers North Carolina small business owners capital, coaching, and networking opportunities. According to Danielle, she received funds to shore up her business and to make Topsail Steamer more resilient so that it could face — and survive — a future natural disaster. For Danielle, building resiliency into her business meant figuring out a way to ship her seafood pots straight to customers’ front doors. With a loan from Thread Capital, Danielle was able to buy a generator, build out her business’ refrigeration systems, and get the necessary packaging in place to start Topsail Steamer’s shipping services.

Wind In Her Sails

In April 2019, Danielle and her growing team shipped their first seafood bucket. Around that same time, another opportunity to make Topsail Steamer more resilient presented itself: the building across the street went on the market in Surf City. Until that point, Danielle had been a renter, which opened her up to tremendous risk in the face of another hurricane, as a flattened, uninsured building would have been the end to Topsail Steamer. Danielle wanted to purchase the building, but she again needed help from a CDFI. This time, Thread Capital connected her with one of its partners called Natural Capital Investment Fund (NCIF), a CDFI that provides loans and technical assistance to innovative entrepreneurs across a nine-state region. CNote partners with CDFIs like NCIF in communities across the country, providing business coaching, funding loans, and empowering local entrepreneurs like Danielle.

NCIF lent Danielle the capital she needed to purchase the building in Surf City, and by August 2019, Topsail Steamer was shipping 25 orders a week. That’s when, once again, a vacation with friends and family spurred Danielle to make another big entrepreneurial move. This time, she was back in Ocean City, New Jersey trying to visit one of her favorite fudge spots; however, the store had shuttered. Danielle had never considered taking Topsail Steamer to Ocean City, but the vacancy at the “million-dollar,” highly trafficked location was enough to convince her otherwise.

Danielle rented the space, and in January 2020, while she was moving forward with renovations at her Ocean City location, she came across Goldbelly, a curated online marketplace for regional and artisanal foods crafted by local food purveyors throughout the United States. Danielle applied and a few days later, Goldbelly asked her to send a seafood pot to Manhattan. Within a month and a half, Topsail Steamer was on Goldbelly’s platform. Incredibly, Danielle’s business went live with Goldbelly during the first week of March 2020, just as the COVID-19 pandemic was beginning to shut down everything. As people shifted to primarily ordering food online, business exploded for Topsail Steamer, and Danielle and her team went from shipping 25 buckets a week to shipping 400 buckets a week.

For a third time, Danielle needed assistance from one of her trusted CDFI partners. This time, she needed both capital — again, for refrigeration — and business mentorship and advice. “We went from about $350,000-worth of business in 2017 to $3.2 million in 2020,” Danielle said. “It all happened so fast, and so we just needed a growth advisor to make sure that we’re creating a foundation that’s both going to support what’s happening and to allow us to intentionally grow and maintain our high standards. As somebody who is a new business owner, there are so many areas that you have to either be an expert in or have somebody who is a subject matter expert to help advise you, and NCIF has really been that partner for us.”

Full Steam Ahead

Today, Topsail Steamer has six locations between North Carolina and New Jersey, and via Goldbelly, the company has shipped seafood buckets to all 50 states. Danielle has no plans of slowing down her business’ expansion anytime soon, and according to her, she wants to open anywhere from two to four more stores every year, but only if she and her team find the right places in the right markets. She’s also resisting going down the traditional franchising route, instead favoring to keep Topsail Steamer family-, friend-, and employee-operated. That means cultivating her base of 100-plus talented employees, creating professional development opportunities internally, and growing her leadership team from within her stores. Point in case: Danielle’s brother-in-law, Brian, is Topsail Steamer’s director of store operations, and her two children, Emily and Jimmy — the company’s first two employees — continue to work full-time in local store marketing and business development for Topsail Steamer.

Given where she was and what she was doing five years ago, it may seem unbelievable what Danielle is doing today as the founder and CEO of Topsail Steamer; but, for Danielle, something like this was always in the cards for her. She grew up watching her father, who happened to be a small business owner himself, and according to her, one of her strengths has always been to identify opportunities around her. In the case of Topsail Steamer, while it’s been a blend of opportunity, timing, and serendipity that has contributed to its success, the business’ skyrocketing trajectory is in large part a result of Danielle having faith in herself. Unsurprisingly, when asked what advice she has for other late-in-life entrepreneurs, it’s the same advice that she’s told herself time and time again: “just have confidence in yourself.”

Learn More

  • Topsail Steamer offers seafood steam pots prepared with fresh local seafood, meats, veggies, and homemade seasonings to take home, steam, eat and enjoy!
  • Natural Capital Investment Fund (NCIF) is a CDFI that provides loans and technical assistance to innovative entrepreneurs across a nine-state region.
  • CNote – Interested in helping create another story like Danielle’s? CNote makes it easy to invest in great CDFIs like NCIF, helping you earn more while having a positive impact on businesses and communities across America.
By Community Partners

How Credit Unions Rose To The Challenges Presented By PPP Loan Issuance And Forgiveness

When Jim Barnhart pushed pause on his 34-year-long career in banking, he never could have imagined that a global pandemic was right around the corner. Instead, Jim was looking forward to some quality time at home with his family, particularly so he could help his son, a senior in high school, transition to college. As would be the case, however, Jim’s time away from the financial sector would ultimately be cut short by the demand for SBA commercial loan officers, whose expertise was essential to addressing the staggering economic toll inflicted by COVID-19.

Even before the pandemic sent the U.S. into a lockdown in March 2020, entrepreneurs around the country feared that their small businesses wouldn’t be able to survive an economic shutdown. However, when President Trump signed the roughly $2.2 trillion Coronavirus Aid, Relief, and Economic Security Act (CARES Act) into law on March 27, there was a glimmer of hope. The unprecedented stimulus package allocated nearly $350 billion for small businesses to continue to pay their employees through the Small Business Administration’s (SBA) loan program. Called the Paycheck Protection Program (PPP), the loans were originally designed to cover eight weeks of expenses. Moreover, if employers didn’t lay off employees or cut payroll, loans spent on payroll costs, mortgage payments, rent, and insurance could be forgiven.

Almost immediately, there were headaches. Not only was the window to apply for initial PPP funding short, but the understanding was that as soon as the $350 billion was deployed, that was all the help that was available. To complicate matters, while SBA’s usual demographic is businesses with 500 employees or less, special circumstances allowed for PPP money to flow to much larger, national enterprises that had 500 or fewer employees at individual locations. That’s how businesses like Shake Shack and Ruth’s Chris Steak House — restaurants with thousands of employees —  got $10 million and $20 million loans, respectively, from the SBA. Although these businesses, and others, returned their loans to the SBA after public outcry, one thing was clear: larger and well-known businesses were receiving PPP funding while small businesses and nonprofits up and down Main Street America were struggling.

For example, John Highkin’s San Diego-based nonprofit, Fern Street Circus, had banked with two big-name banks for more than 30 years, but neither of those banks was willing to help him get PPP funding. Similarly, Barbara McCullough, CEO at Brighter Beginnings, was confident that the bank where she did business for over 10 years in the Bay Area would want to help her nonprofit secure a PPP loan: she was told “no.” As frustrating as an outright rejection was for small organizational leaders like John and Barbara, for many, they didn’t even get a response from the banks where they’d held accounts for decades. Instead, while the application window began to shrink and the pool of PPP money was being rapidly depleted, desperate emails went unanswered, and phone calls went straight to voicemail.

Rising To The Occasion

Although a few important things happened regarding PPP, including a deadline extension for the initial round of loans and a second round of funding that brought the forgivable loan program up to $953 billion, for many small business owners, the experience of being let down by their bank at such a critical point in time led them to take their business elsewhere, including to community development financial institutions (CDFIs) and credit unions. Not only could these community financial institutions distribute PPP funding as SBA-approved lenders, but because these mission-driven organizations focus on character-based lending, financial literacy building, and business skills training, they were uniquely prepared to help small business owners and nonprofit leaders who’d been neglected by their traditional banks to both get PPP dollars and weather the pandemic.

Take Michea Rahman, the owner of the Children’s Language Center in Houston, for example. Michea enrolled in a business resiliency class through TruFund, a CDFI that invests in small businesses in New York, Alabama, Louisiana, and Texas, after her business came to a standstill at the beginning of the pandemic. In addition to business coaching, TruFund provided Michea with real-time information about PPP loans, and when the time came, the CDFI helped her with her application and forgiveness paperwork. While Michea credits the PPP funds for helping her business to stay afloat, she says the training and support from TruFund have allowed her to grow her business to the point that it’s doing better than it was before the pandemic. That includes expanding the number of families she’s helping, hiring a full-time employee, and moving into a larger space.

While hundreds of credit unions and CDFIs like TruFund were able to play their part as economic shock absorbers throughout the ongoing COVID-19 pandemic, these financial institutions faced great operational strains, and for many, they needed to quickly grow their teams in order to meet the needs of the small business owners and nonprofit leaders in their communities. For Self-Help, a nonprofit financial institution with branches across Florida, North Carolina, South Carolina, and Virginia, that meant hiring Jim Barnhart, who stepped in as an experienced, albeit temporary, loan forgiveness officer in October 2020. “[Self-Help] hadn’t seen this type of loan volume on a regular basis before,” Jim said. “With the amount of applications coming in, they were the bottleneck, and they couldn’t get to them as quickly as they needed to. The clock was ticking, and that’s when they realized they needed to hire some more help.”

‘We’re Gonna Need A Bigger Boat’

According to Jim, he was happy to step out of his semi-retirement to join Self-Help’s PPP efforts, and although he remained at home and worked remotely, he says his colleagues’ camaraderie and dedication were palpable, even through phone calls and Zoom meetings. Jim says that inspired him to hit the ground running, so that he could help as many small business owners and nonprofits as possible with their PPP forgiveness applications. Additionally, because everyone from Self-Help executives to Self-Help area managers were working on various aspects of the PPP process (in addition to their day jobs), Jim says there was a feeling of “all hands on deck.” Although that led to long hours and late nights, Jim claims that his colleagues’ collective commitment to get through the pile of PPP applications helped to keep a fire lit under him.

That, and the desperation he could so clearly hear in Self Help’s clients’ voices. Not only were people’s livelihoods on the line, but for nonprofits and social enterprises dedicated to serving communities, the PPP loan applications were about more than paying employees: they were about keeping things like youth programs running, health clinics operational, and food banks open. “If someone called me at 8:30 pm while I was at a football game with my son, I was gonna take it,” Jim said. “You can’t take care of everybody, but at the end of the day, if you take care of the people that are taking care of the people, then people will be taken care of. That’s what Self-Help does.”

Jim wasn’t the only new addition to Self-Help striving to “take care of the people … taking care of the people.” According to him, between October 2020 and January 2021, the credit union doubled the size of its staff of forgiveness officers. Similarly, Self-Help brought additional loan officers and underwriters on board to help meet the needs at the front end of the PPP process. Jim credit’s Self-Help’s leadership team with having the wherewithal and foresight in order to address PPP holistically, from the beginning of the pipeline (i.e. eligibility and applications) to the end of the pipeline (i.e. forgiveness), in order to meet its members’ needs. He also says that the credit union’s leadership did a great job of keeping abreast with changes at the SBA, getting information, and channeling it down to its team so that they would be better prepared to do their jobs and answer questions. That transparency and real-time communication ultimately allowed Jim to be proactive with helping Self-Help’s customers adjust to PPP changes.

Perhaps not surprisingly, Jim won’t be returning to his life of semi-retirement anytime soon — he signed on full-time with Self-Help in July of 2021. According to him, he fell in love with the credit union’s focus on minority-owned businesses, nonprofits, and other enterprises that traditional banks typically don’t consider, and he’s already feeling like he’s making a difference. “You go home every night feeling like you did some good,” Jim said. “I haven’t felt this good in my 30-something years in banking, where my stress is a blessing because I get to come back tomorrow and ask ‘how do we do more?’ At Self-Help, that really is the goal every day.”

Learn More

  • Self-Help is a nonprofit financial institution with branches across Florida, North Carolina, South Carolina, and Virginia.
  • CNote is a women-led impact investment platform that uses technology to unlock diversified and proven community investments to generate economic mobility and financial inclusion.

CNote’s Quarter Impact Report Q2 2021

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We’re excited to announce that CNote investors helped to create/maintain over 400 jobs in Q2 of 2021.

In this report you’ll see:

  • An update from CNote’s Head of Community Development Director
  • CNote’s Q2 impact metrics
  • Three new CNote impact stories
  • A CNote firm and portfolio update

Since Inception, CNote has created or maintained

5,232 Jobs

In Quarter Two of 2021, CNote Deployed:

71% of Dollars to BIPOC-Owned Businesses 

From the time that Dr. Alexia McClerkin broke her ankle in high school, she knew she wanted to become a doctor. She chose to study kinesiology so that she could work with athletes, allowing them to get better and to return to their sports. That passion led Alexia to become a registered nurse and study chiropractic medicine.

In June 2016, she started her own private practice- The Beauty and Wellness Doc, which offers a variety of traditional services, including adjustments, deep tissue massage, stretching, dry needling, athlete recovery, therapeutic laser, and cupping.

When Alexia initially looked to furnish her new space with equipment and furniture, she met with a lender who told her that they would give her a loan that wouldn’t affect her credit. After reading the fine print, however, Alexia discovered that the interest rate was 65% and that she would have to pay an exorbitant loan origination fee.

Fortunately, Alexia already had a long-standing relationship with CNote CDFI partner, Trufund, who was able to help Alexia to navigate the second round of PPP funding. Today, business at The Beauty and Wellness Doc is booming. According to Alexia, the pandemic, in a way, has turned out to be good for her business, as the pivot to remote working has left a lot of people with low back, shoulder, and neck pain caused by poor ergonomics and bad workspaces at home.

I had absolutely no idea how to go at it [apply for a PPP loan],” she said. “But Jessica [Whittington] from TruFund walked me through the process. We went through my finances and made sure everything was in place so that I could get it. She was true to her word. It was so
easy and seamless and within a few days, I looked in my bank account and the money was there.”

In Quarter Two of 2021, CNote Deployed:

43% of Dollars to Women-Led Businesses 

Tanesha Sims-Summers is the founder of Naughty But Nice Kettle Corn Co., a gourmet, hand-popped kettle corn company based out of Birmingham, Alabama.

While Tanesha credits the success of her company with having a quality (and addictive) product, she notes that seizing every opportunity to educate herself as an entrepreneur has equally fueled her company’s growth. That thirst for education is what led her to connect with TruFund, a CNote partner and Community Development Financial Institution (CDFI).

Tanesha has taken advantage of a number of TruFund’s programmatic offerings, and through the CDFI, she’s connected with and learned from fellow entrepreneurs. Additionally, in 2019 TruFund provided Tanesha with a $50,000 loan to complete the build-out of Naughty But Nice Kettle Corn Co.’s food truck — Miss Poppy — and to provide some extra cushion for miscellaneous expenses.

Lift Fund seemed really interested in my story,” Tawnya said, “and they wanted to help. I felt like I gave them my life’s history, from financial to personal, but they really wanted to get to know who I was. They wanted to know who they’d be investing in.

In Q2 of 2021, CNote deployed

38% of Dollars to Low-and Moderate-Income Communities

Those dollars ended up supporting individuals like Tawnya Sanford who had opened an in-home daycare center so that she could spend more time with her daughter. Years later, when Tawnya was looking to expand to a larger daycare center, she was put in touch with the owners of The Little Engine Learning Center. But when the time came to purchase the business, Tawnya ran into a problem: finding a bank that would give her a loan.

“Every time I’d call a bank about a loan, they’d tell me ‘no,’” Tawnya said. “They told me I needed to have between $80,000 and $100,000 before they’d even talk to me. It was very depressing.”

Fortunately, Tawnya was able to connect with LiftFund, a CNote partner and San Antonio-based Community Development Financial Institution (CDFI), who was able to provide a 401(k)-backed loan that allowed her to purchase the business portion of the Little Engine Learning Center.

Lift Fund seemed really interested in my story,” Tawnya said, “and they wanted to help. I felt like I gave them my life’s history, from financial to personal, but they really wanted to get to know who I was. They wanted to know who they’d be investing in.

CNote Partner Profile: LiftFund

Portfolio: CNote Flagship Fund

About: CNote continues to profile our CDFI partners to highlight the incredible work they have done and continue to do for their local communities. These profiles will discuss their focus area, the geographies they serve, and a specific impact story that exemplifies the work they do.

Thousands of financially underserved small businesses and entrepreneurs are denied capital daily and need to rely on predatory lenders that cost more than they can afford. According to data released by the Federal Reserve in 2020, while 80.2% of White business owners received at least a percentage of the funding they requested from a bank, that figure was only 60.9% for Black business owners and 69.5% for Hispanic business owners.

LiftFund, a CDFI loan fund, was founded in 1994 in San Antonio, Texas, to level the financial playing field for the financially underserved entrepreneur with the goal of self-sufficiency and success for all those seeking it. LiftFund believes everyone deserves the opportunity to build a company successfully with capital no matter their background, race, ethnicity, sexual identity, or geography.

In 2020 alone, LiftFund equipped 4,500 small businesses with $98.2 million in relief funding in the form of small business loans, forgivable loans, grants, loan payment relief, and PPP, primarily to low to moderate-income, BIPOC communities. But capital is only one piece of the puzzle for small business success. That’s why LiftFund also provided over 7,000 hours of business support in topics like credit review, startup assistance, financial education, and more.

These dollars and business support hours help entrepreneurs like Montina Young, Founder of CIA Media Group, an award-winning digital marketing agency helping companies rethink business for the digital age. Even though business was booming for Montina, she often did not receive payment for her services for 30, 60, or sometimes even 90 days after the project was completed. She connected with LiftFund who provided Montina with funding to have sufficient payroll on hand, purchase video production equipment, and repay debt.

LiftFund was also able to provide technical assistance to Montina, teaching her how to read her cash flow statement, profit and loss statement, and balance sheets. Montina has also taken advantage of the professional gathering opportunities offered by LiftFund, which she says are especially important for BIPOC and women entrepreneurs, who don’t often have mentors or family members who’ve owned and operated a successful business.

I love, love, love, CDFIs,” she said. “CDFIs educate you about the loans you’re taking out, they look at your business plan, and they want to grow and scale with your business. They’re truly phenomenal.”

CNote Firm Update

At CNote, our north star is to close the wealth gap by driving investments and deposits into institutions that are generating long-term positive change for financially underserved communities.

That is why we were thrilled when PayPal announced that it would deposit $135M into mission-driven financial institutions, including depository institutions, through CNote’s Impact Cash™ Program. PayPal also committed to investing in wealth creation opportunities for BIPOC women by investing in CNote’s Wisdom Fund.

In April, CNote celebrated its five-year anniversary. In those five years, we have continued to innovate to best meet the needs of our partners and the communities that they serve. That’s why in response to requests from investors who wanted to support specific geographies and demographics, CNote created a new customization service that allows corporate treasury departments to invest in specific CDFIs that help them meet diversity, equity, and inclusion goals and improve their performance on ESG measures.

Finally, over the last quarter, CNote was featured in publications like Sustainable Brands, Green Money, Green Biz, and NASDAQ. These articles covered topics like democratizing capital, how treasurers can lead their company’s impact investing efforts, and roadmaps for a more equitable future. By continuing to be a thought leader in the space and driving capital towards community needs across the U.S, CNote continues to contribute to a more equal future.

CNote Portfolio Update 

CNote’s portfolio of CDFI Loan Funds continues to demonstrate solid performance and financial stability. Across several weighted average indicators, the portfolio saw minimal changes. Specifically, net assets to total assets saw a slight decline from 29.8% to 29.3%. While delinquency levels did decrease, charge-off levels saw a slight increase from the prior quarter, though staying well below 1% and lower than the historical charge-off levels, including the past 12 months. Overall, the portfolio indicators are comparable or better than the same indicators a year ago.

CNote brings a nationwide network of community partners and the expertise to know when and where capital is needed. They also know how to work with a corporate finance department, and made it easier for us to broaden and deepen our efforts to help underserved communities of color thrive."- Aaron Anderson, Treasurer, PayPal

CNote Portfolio Update

Taken together, these indicators are consistent with a portfolio, like the CDFI industry writ large, that continues to engage in either pandemic-responsive or business-restart lending in a responsible manner; CDFIs are investing built-up cash, reserves, and net assets from prior quarters strategically to respond to the needs of its respective client base as the various local, state, and federal resources have begun to wind down or have sunset. This also includes several CDFIs continuing sustained PPP lending through May 31, 2021, originally extended from the March 31, 2021 program deadline.

In the prior quarter lending summary, CNote mentioned the imminent boost to 863 CDFIs through the Rapid Response Program, a $1.25B supplemental appropriation for the fund to provide grants to CDFIs to support, prepare for, and respond to the economic impact of the COVID-19 pandemic. All CNote’s current portfolio borrowers were awardees of this program, with most receiving the maximum allocation. Several portfolio borrowers report having received or an expectation to receive these funds in the near-term.

If you think about it from end to end, leveraging CNote’s platform for scale and for impact reporting, that's what got us comfortable, and that was the simplification that we were looking for.” -Dena Devaney, Mastercard

Letter from CNote’s Community Development Director

Uneven economic recovery from COVID-19 will be an enduring issue in the US. Employment rates for high-wage workers have already surpassed pre-covid levels, yet job losses continue for low-wage workers. As of May 15th, employment rates for high-wage workers had risen by nearly 9%, while they had decreased by over 20% for low-wage workers.

We partner and deploy capital exclusively to financial institutions whose mission is to support and financially empower underserved communities. These are the communities with low-wage workers whose struggles are far from over. As CNote’s Community Development Director, I listen closely to these partners to ensure that we understand their challenges so we can continue to best serve them and the communities they work with.

In support of these efforts, CNote authored a Spring 2021 Capital Needs Survey, the first report in a bi-annual series designed to help investors understand the capital needs of CDFIs and ongoing investment gaps that most efficiently address community needs.

The survey showed that 65% of surveyed CDFIs noted an increase in their capital demands over the last year. An additional 75% of surveyed loan funds expressed an “urgent or somewhat urgent need for capital over the next 6-12 months.”

Thankfully, Congress addressed the pressing need for capital with its appropriation of $204.5 million to the CDFI Fund. These awards are being distributed to CDFIs across the country and support programming related to technical assistance, persistent poverty financial assistance, disability funds financial assistance, and healthy food financing in low-income and financially underserved communities.

While these awards are critical in creating meaningful impact, it’s worth noting that the aggregate request from CDFIs from across the country totaled $565.3 million, highlighting the opportunity for impact investors to affect tremendous positive change in communities.

Every dollar invested or deposited with our community-first partners works towards reducing the wealth gap through affordable housing construction, connecting entrepreneurs with learning resources, and capitalizing small-business expansion. Combined, these activities create community development, economic empowerment, and wealth creation for communities that are still struggling to make a full recovery from COVID.

At CNote, we have never been more proud to partner with and support our CDFI and community partners. If you have any questions about CNote, our impact, or how you can work with us, please contact me at Stacy@mycnote.com.

Thank you for Reading 

Stacy Zielinski 

CNote’s Community Development Director 

By Borrower Stories

How Deshonda Charles Turned Her Dream Of Becoming A Lawyer Into A Successful Small Business

When Deshonda Charles, Esq. was a little girl, she wanted two things in life: to be a singer and to become a lawyer. According to her, she was attracted to the legal world thanks to Clair Huxtable, the matriarch at the center of The Cosby Show. A young Deshonda watched the television show during its original run when she was still in elementary school, and although she didn’t know exactly what it meant to be a lawyer, she knew she wanted to be a businesswoman like the one portrayed by Clair Huxtable. “I didn’t pursue any other career paths,” Deshonda said. “I’ve enjoyed it from the start. Fortunately for me, as I continued on my journey, I’ve learned that you can do so much more than just lawyering with a law degree.”

Deshonda received her law degree from Tulane University in 2003 and went on to pass four different Bar Exams in four states: Louisiana, Connecticut, New York, and Texas. Deshonda landed a position in a small boutique law firm in Houston, Texas after graduating and for just under six years she thrived at networking and promoting her services. Deshonda’s knack for generating business was recognized by the firm’s managing partner, and her mentor, who occasionally asked whether she’d ever considered starting her own practice. According to Deshonda, not only was he a wonderful mentor to her, but when she decided to initiate a conversation with him about going her own way six years after joining the firm, he told her that she had his full support. More so, he approved of her taking all of her current clients with her.

While attorneys aren’t typically associated with being entrepreneurial, Deshonda said that it came naturally to her. Her grandfather owned a neighborhood sundries shop in New Orleans, where she was born, so Deshonda had a very real-life example of what it meant to be a small business owner. On April 20, 2011, Deshonda founded The Tackett Firm (TTF) and took the role of President and CEO. More than 10 years later, the practice continues to focus on estate planning, employment discrimination disputes, family law matters, and civil litigation. Additionally, TTF handles matters in the states of Texas, Louisiana, and New York, as well as in the U.S. District Court for the Southern District of Texas and the Federal Fifth Circuit Court of Appeals. “I never intended to go into private practice, but it just kind of happened as a natural next step in my career, ” Deshonda said. “It’s pretty exciting to have been in practice all of this time and to have a successful firm.”

Do Better Business

TTF’s longevity, however, was threatened by the COVID-19-induced shutdowns that began in March 2020. According to Deshonda, she began to receive a lot of cold calls from people with questions about their employer’s response to the pandemic — for example, being forced to take leave. While the vast majority of incoming calls didn’t result in new business, Deshonda viewed the conversations as opportunities to cultivate relationships. Still, business slowed. To make matters more difficult, due to the realities created by COVID-19, Deshonda had to part ways with her sole paralegal, who’d been with her for nine and a half years. “That was really, really scary,” she said, “because then I had to start relying on new people who didn’t know my business as well. It takes a lot to train someone and to bring them up to speed. That was a challenge.”

Yet another challenge presented itself to Deshonda when she attempted to secure PPP funding for TTF. She went to the only big bank where she’s ever done business to inquire about resources, guidance, and PPP eligibility. According to her, she might as well have walked into the room and thrown spaghetti on the walls. “They just didn’t care,” she said. “I couldn’t get a banker to even acknowledge that I had submitted the application because I wasn’t a big enough fish.” Frustrated, Deshonda turned to the support group of like-minded minority women business owners that she’s a part of in Houston. That’s when one of her good friends referred her to TruFund, a Community Development Financial Institution (CDFI) that invests in small businesses in Texas, Alabama, Louisiana, and New York. CNote partners with CDFIs like TruFund in communities across the country, providing business coaching, funding loans, and empowering local entrepreneurs like Deshonda. Deshonda reached out to TruFund, and within a few days, she was connected with Jessica Whittington, a program officer who helped to walk Deshonda through the PPP application process. “It’s hard to describe how it feels to have that kind of support from a financial institution,” she said. “It was a game-changer.”

Not only did TruFund help Deshonda secure PPP funding so that she could pay herself, contract lawyers and as-needed, support staff, but the CDFI immediately plugged Deshonda into its suite of programmatic offerings. Thus far, she’s participated in three business support programs, including one called PitchHer, centered around developing a strong business pitch, and another called Empow-HER-ment, a comprehensive business and financial training program to enhance the business acumen of participating women entrepreneurs. The trainings, led by industry experts, range from general business topics to life-work balance challenges, management, strategy, marketing, accessing capital, credit building, and effectively delivering a business pitch to potential investors. Deshonda also completed TruFund’s FinanceHer program, a course dedicated to preparing women entrepreneurs to become capital-ready.

According to Deshonda, TruFund has helped her business in so many ways. The CDFI stayed connected with her so that when the second round of PPP funding became available, it was easy for Deshonda to submit everything and to apply. She also likes how responsive TruFund is to questions, whether over email or by phone, and she appreciates that trainings are held in the evenings and not during business hours. As someone who initially reached out to TruFund based on a word-of-mouth referral, Deshonda has since become a vocal advocate for the CDFI. “It’s one of those things where you’re calling your friends and your colleagues and saying ‘Y’all need to figure out how you’re going to participate in this program,’” she laughed, “Because TruFund is just so fantastic and helpful.”

Today, Deshonda feels good about the state of her business. More importantly, she feels good about the direction that her business is going. In the coming years, she plans to do more professional speaking engagements surrounding estate planning, and she’s focused on building a team around her, including hiring additional clerical staff and another paralegal who can grow with her business. In the meantime, she plans to continue doing what she does best: being a lawyer. “I just want to be able to continue to litigate in the areas that I know,” Deshonda said, “and I want to continue to grow. It’d be nice to bring on a full-time associate attorney — that’s been a goal for two years, but then COVID happened. I’m still definitely working toward that.”

Learn More

  • The Tackett Firm has been providing exceptional legal services and representation to the greater Houston, Texas community for 15 years. TTF’s primary practice areas include estate planning, employment discrimination litigation, and family law disputes.
  • TruFund – is a 501 (c) 3 certified Community Development Financial Institution (CDFI) headquartered in New York City with field offices in Alabama and Louisiana. TruFund tailors its financial and technical assistance to the unique needs of each site—from contractor mobilization lending in New York and Louisiana to rural Black Belt initiatives in Alabama.
  • CNote – Interested in helping create another story like Ethel’s? CNote makes it easy to invest in great CDFIs like TruFund, helping you earn more while having a positive impact on businesses and communities across America.

 

By Community Partners

Turning Dreams Into Reality: How Appalachian Community Capital’s Donna Gambrell Is Helping CDFIs To Thrive

Donna Gambrell’s journey into the world of Community Development Financial Institutions (CDFIs) was, as she puts it, “a crooked mile.” Donna studied journalism at Towson University, and upon graduation, she worked as a writer-editor. That eventually led her to the Federal Savings and Loan Insurance Corporation and Resolution Trust Corporation, where she worked for four years before taking a position at the Federal Deposit Insurance Corporation (FDIC). Donna spent more than 16 years at FDIC, where she oversaw the agency’s bank compliance, community and consumer affairs, and deposit insurance programs. In 2005, following the devastation of Hurricane Katrina, Donna traveled to the Gulf Coast with FDIC. It was during those two years living and working in Louisiana that Donna first encountered CDFIs. “My heart was captured,” she said. “I was so amazed by these organizations’ passion and their commitment to working in low-income communities. It was an amazing sight to see, and I thought ‘this is my life’s work. This is what I want to do.’”

In 2007, Donna returned to Washington D.C. and became the Department of the Treasury’s first Black woman appointed director of the CDFI Fund. During her six-year tenure, Donna oversaw significant growth at the fund, including a two-fold increase in the organization’s flagship program, which enabled CDFIs across the U.S. to provide additional and affordable capital, credit, and financial services to distressed communities nationwide. According to Donna, her time at the CDFI Fund was the pinnacle of her career, a sentiment fueled by the many, many chances she had to crisscross the country to visit CDFIs on the ground. 

By the time Donna left the CDFI Fund in 2013, she was the longest-serving director in its history. After leaving government service, Donna became a consultant, which is how she met Appalachian Community Capital (ACC), an intermediary CDFI that raises and distributes capital to regional CDFI members that in turn make loans to small businesses. When the CEO position opened in 2017, Donna didn’t have to think long about whether or not she wanted to take the reins. She accepted the job, and for the past four years, she’s been leading the CDFI.

A CDFI For CDFIs

ACC was created in 2013 to increase small business lending in Appalachia by providing underserved communities in 420 counties — 107 of which are rural — with new sources of capital. While there are more than 1,200 individual CDFIs in the U.S., there are only a handful of intermediary CDFIs like ACC, which work broadly across geographic regions. According to Donna, one benefit of having an intermediary model is that ACC is able to forge relationships with external investors, including national banks, foundations, and corporations, that smaller CDFIs can’t access. That’s partly because, from an investor’s standpoint, partnering with ACC is easy and efficient. Instead of directly investing in a dozen-or-so individual CDFIs, an investor can funnel money through ACC, which will, in turn, distribute that capital to the appropriate CDFIs in the hardest-hit parts of the community. Another perk: one aggregated ACC report rather than different reports from each individual CDFI. 

Today, ACC provides capital to 26 member CDFIs who are collectively focused on diversifying the economy, creating jobs, revitalizing communities, and developing small businesses in Appalachia. However, like all certified CDFIs, they provide more than lending: they offer wraparound services such as credit counseling classes, financial literacy training, and small business coaching. “That’s very different from a bank,” Donna said. “It’s a longer-term relationship, and it’s a much more engaged relationship. CDFIs really work with customers to make sure that the loan they’ve been provided is going to be workable and not put that customer in a deeper financial hole.”

Unsurprisingly, Donna uses the word “flexible” when describing CDFIs. Whether it’s their willingness to look at non-traditional credit criteria — for example, a person’s utility bill payments instead of their credit score — or their willingness to extend and/or modify loan terms, CDFIs repeatedly find ways to not just work with “unbankable” customers, but to help those traditionally marginalized customers to succeed. “There’s a myth in this country that if you’re poor, you’re unreliable,” Donna said. “If you’re poor, you have no sense of responsibility. You don’t pay your bills. We have found just the opposite. If people aren’t able to pay their loan, a CDFI is going work with them to find a workable solution to get that borrower back on their feet.”

It’s that level of trust — between CDFI lender and borrower — that’s a continuous source of wind in Donna’s sail. According to her, that trust is bolstered by ACC’s member CDFIs’ deep roots in the communities that they serve. “CDFIs know their communities,” she said. “They know the opportunities, they know the challenges, and in many cases, they’re living in the community where they’re working. There’s much more of a connectedness that you don’t often see with other types of institutions.”

In the coming years, Donna has big plans for ACC. The CDFI is in the process of doing an extensive research project to identify minority businesses in all 420 counties within its footprint to collect data and to better meet the needs of minority-owned businesses: an often forgotten demographic in an often ignored, assumed homogeneous, region. Additionally, ACC wants to grow its membership and its asset size, and Donna wants the CDFI to bring even more voices to the table that can help shape economic development in Appalachia. “We want to be the go-to organization in the region,” she said. “It’s nice to survive, but we want to thrive as CDFIs in Appalachia. We play an important role in this economy, but also in the growth of the region itself and the companies that do business here.”

Stronger Together

Instrumental to ACC’s impact has been Donna’s involvement with the African American Alliance of CDFI CEOs (the Alliance), a coalition that Donna co-founded in 2018 to strengthen Black-led CDFIs’ fiscal and impact capacity in communities across the U.S. by fostering and facilitating knowledge-sharing and expertise among group members. Donna says that the group’s formation was in direct response to the Hope Policy Institute’s research findings that there’s a $6-to-$1 disparity between white and minority-led CDFIs. While many felt that, anecdotally, that asset gap existed for decades, the data served to bring 20 Black-led CDFI CEOs to the first meeting of the proto-organization in 2018. Three years later, AAA of CDFI CEOs has 56 members — including Black CEOs from CDFI loan funds, credit unions, and venture capital funds — that represent a physical presence in roughly 30 states and provide services in all 50 states. 

Donna says that the Alliance has no plans of slowing its growth anytime soon, and the organization is continuing to expand its membership. As part of that growth, the nonprofit is working to build its organizational infrastructure, including hiring staff and building capacity. With that strong institutional foundation, Donna hopes the organization will be better supported internally to build long-term, multi-year partnerships with external funders in different industries.  Additionally, Donna says that the Alliance wants to pursue CDFI certification so that it can serve as an intermediary CDFI and make loans to its members, much as ACC does. In parallel, the pioneering nonprofit continues to make its presence known in the public policy arena, and Donna and her peers are intent on being influential in creating and implementing policy recommendations that would benefit the communities that its member CDFIs serve.

As the Alliance, including Donna in her role at ACC, continues to work to close the wealth gap in both the U.S. and the CDFI industry, Donna is as excited as ever about the role that CDFIs have to play in our country’s future. “Everybody wants to have a roof over their head, food on their table, a healthy neighborhood, and affordable health care: that is all part of the American dream,” she said. “With CDFIs, that dream is played out in real-time. They take someone’s deferred dreams and make them a reality.”

Learn More

  • Appalachian Community Capital: In 2013, the Appalachian Regional Commission and its partners committed to establishing Appalachian Community Capital (ACC) to significantly increase business lending in the region by pooling capital needs, attracting investors at a larger scale, and providing a simplified vehicle for impact investors that reduces transaction costs.
  • The African American Alliance of CDFI CEOs is the only organization leveraging African American CDFI CEOs’ decades of expertise, relationships, and intellectual capital to change the odds and the outcomes for African Americans in underserved communities across America.
  • CNote is a women-led impact investment platform that uses technology to unlock diversified and proven community investments to generate economic mobility and financial inclusion.
By Borrower Stories

How These Boba Tea Entrepreneurs Went From Working Street Festivals To Opening A Successful Restaurant

When Josh Houeye and Magen Hearn went on a date at a local Vietnamese restaurant in 2018, neither of them anticipated that a small business idea would blossom out of their boba tea. However, that’s exactly what happened. The bubble tea was so good that Josh pulled out his phone and Googled the ingredients. Impressed, he did some quick math, turned to Magen, and asked her if she wanted to sell the tea-based drinks with him. She said “yes.”

Making and selling bubble tea was a big leap for the couple: at the time, Magen was the sales director and assistant general manager at a Holiday Inn Express, and Josh had spent six years as a car salesman. Still, they didn’t let their lack of experience hold them back. Within two weeks of their boba business idea, the couple found themselves at their first pop-up event at a street festival in rural Wiggins, Mississippi. Despite their enthusiasm, the event was, as they put it, a complete flop. However, the very next weekend, the couple snagged a well-positioned booth at a festival in Josh’s hometown and tried again. This time, they brought in over $1,000 over the course of two days. With that, the couple was off to the races. For the next two years, Josh and Magen lived for the weekends, continuing to work their full-time, Monday through Friday jobs while chasing festivals and fairs across the region on Saturday and Sunday, selling boba tea.

When the COVID-19 pandemic brought an abrupt pause to public events, Josh and Magen were left to reconsider their pop-up business model. According to them, due to their growing popularity with festival-goers, they’d been talking about starting a brick-and-mortar store for a while, but it was really the ongoing shutdowns — as well as Magen being laid off — that led the couple to explore the idea more seriously. “When the virus shut down all the festivals, we really felt like we needed a store,” Josh said. “We couldn’t make money at festivals, and with a store, we wouldn’t be as restricted, but we had no idea how to get money to do it.”

No Laughing Matter

When Josh and Magen began to look for funding sources, they initially approached a number of banks, but that approach turned out to be a no-go. According to Magen, the banks didn’t pay the fledgling small business owners any mind. In fact, despite their good credit and their modest cash reserves, the couple received more laughs than anything else. Frustrated with being either ignored, ghosted, or laughed at by traditional lenders, the couple ended up contacting Renaissance Community Loan Fund, a Community Development Financial Institution (CDFI) that offers tailored lending services for mortgages, home improvement, and commercial loans across Mississippi. CNote partners with CDFIs like Renaissance Community Loan Fund in communities across the country, providing business coaching, funding loans, and empowering local entrepreneurs like Magen and Josh.

This time, when the entrepreneurs spoke with Renaissance’s director of lending, John-Michael Marlin, in August, they didn’t receive any laughs: just support and encouragement. Like other CDFIs, Renaissance was less concerned about Josh and Magen’s credit history and more interested in their business plan, their vision, and their character. Unsurprisingly, Josh and Magen were prepared with a solid business plan, and they’d already found a prime location and a landlord willing to work with them in Picayune, Mississippi. That was enough to convince the CDFI, and a month after Renaissance did a site visit, Josh and Magen closed on their loan. A little over a month later, in November 2020, they officially opened The Melt Bistro. “Working with Renaissance has been pretty incredible,” Magen said. “They were really supportive, and it seemed more like we had them cheering us on rather than just making sure we paid them back. They made us feel like they were going through opening our store with us, together.”

Living For The Highs, Learning From The Lows

Amazingly, the pandemic hasn’t hindered Josh and Magen’s restaurant. Instead, business at The Melt Bistro is booming. The cafe, which offers bubble tea, Blue Bell ice cream by the scoop, and specialty sandwiches, continues to bring in more than double the initial sales amount that Josh and Magen first projected when they approached Renaissance. More so, the couple has been able to hire 11 employees, exceeding their expectations. Their early — and well-earned — success, however, has them thinking ahead to even bigger and better goals for The Melt Bistro, which include having chains throughout Mississippi and neighboring states. In the meantime, Josh and Magen are more than content to perfect their business operations at their sole location in small-town Picayune, where they can bike to work and where their rent is less than a half of what they’d pay in another town.

Starting a successful small business in a small town hasn’t been without its challenges, and Josh and Magen have had their fair share of headaches. Supply chain shortages, ranging from tapioca pearls to cups, have been a recent source of frustration; however, Josh says that as an entrepreneur, the struggles are a surprising source of motivation for him. “There are challenges every day,” he said, “and that is both the best and the worst part at the same time. In those moments, it’s easy to get frustrated and say ‘here we go again,’ but it’s also cool because then we have a chance to change something, to make something better, and do something differently.”

It’s only been three years since Josh and Magen first hatched their plan to sell bubble tea at street fairs, but the financial security and peace of mind the couple now have that they own a thriving small business have been life-changing. According to Josh, The Melt Bistro earns more money in a day than he did from his monthly paychecks at his previous full-time job, where he didn’t know how much time would pass between one car sale and another. That’s not the case at The Melt Bistro, which has consistent five-star reviews across all platforms and where Josh and Magen are confident that business will continue to grow. “I’m stress-free,” Josh said. “We’ve made such a friendly experience at our restaurant, and people are beating down our door. They just keep coming, and we know that they’re not going to stop — and neither are we.”

Learn More

  • The Melt Bistro
  • Renaissance Community Loan Fund is a Mississippi nonprofit lender that offers unique, tailored lending services for mortgages, home improvement, and commercial loans.
  • CNote – Interested in helping create another story like this? CNote makes it easy to invest in great CDFIs like Renaissance Community Loan Fund, helping you earn more while having a positive impact on businesses and communities across America.

 

By Borrower Stories

How Leslie Rosella Turned Her Passion For Four-Legged Friends Into A Growing Doggie Day Care

For as long as she can remember, Leslie Rosella has loved animals. Pursuing a bright career in the restaurant industry, it never occurred to her that she could turn her childhood love into a profession. That was the case, at least, until she got Brixx: a purebred Rottweiler that Leslie and her boyfriend, Chris Cooley, got soon after the couple arrived in Portland, Oregon in 2001. While Brixx proved to be the perfect companion, she struggled with “insane health problems,” as Leslie put it, from chronic ear infections to gastrointestinal issues to an array of orthopedic conditions. Leslie began to have to take Brixx to see the veterinarian on a weekly basis, and because of the rottweiler’s health issues, Leslie had a difficult time finding a doggy daycare center that was equipped to provide the level of care and attention that Brixx required.

Hoping to learn more about rescues and in an effort to educate pet owners, Leslie became a volunteer with the Oregon Humane Society’s behavior unit. She learned that the reasons most families surrender their pets are due to simple behavior-related problems that could have been solved with simple training. Leslie became passionate about educating prospective pet owners about adoption awareness; as well as keeping pets in their homes. She soon received her certification in dog training.

Around the same time, Leslie and Chris began talking about moving back to Jackson, Mississippi to be closer to family. Leslie felt confident enough in her training to take a leap of faith and step away from the restaurant industry to actually pursue working with dogs as a career. Leslie knew a doggie daycare was a service Jackson desperately needed.

After 11 years in Portland, the couple moved back to Mississippi, and Leslie poured everything she had into creating a business plan. She received mentoring from a local Small Business Administration community college professor, who tweaked her business plan and helped her with her financial modeling. Meanwhile, she built her client base through in-home pet sitting, dog training, and volunteering with local, non-profit rescues. Pippa Jackson, the director for one of these nonprofits, who happened to be a realtor, took a particular interest in Leslie’s dream and set out on a mission to help Leslie find the perfect property where she could open Dog Day Afternoon Canine Social Club, an off-leash dog facility focused on group enrichment.

Six No’s, One Yes

First, however, Leslie had to secure capital in order to purchase the building. She started to visit banks in the area to share her business plan and to apply for a loan. Although each bank showed interest, she got turned down each time because she didn’t have enough collateral to qualify for a loan. Eventually, in 2017, after being shot down by five different banks, the sixth (while also turning her down) suggested she contact Renaissance Community Loan Fund, a Community Development Financial Institution (CDFI) that offers tailored lending services for mortgages, home improvement, and commercial loans across Mississippi. CNote partners with CDFIs like Renaissance Community Loan Fund in communities across the country, providing business coaching, funding loans, and empowering local entrepreneurs like Leslie.

“They weren’t just looking at facts and figures,” Leslie said. “Renaissance actually took the time to get to know me. They were just incredible to work with: very personable and encouraging. Everybody else said ‘No,’ but they said ‘Yes.’ They took the time to realize my vision, and I owe them everything.”

In November 2017, Leslie’s loan — to purchase the building, do renovations, and have the working capital to get her business off the ground — was approved, and despite some rezoning challenges, Leslie was able to move into her new facility on September 1, 2018. A little over one month later, she did her first trial day with clients that she had long-standing relationships with from pet sitting and dog training. By the beginning of 2019, Dog Day Afternoon Canine Social Club was officially up and running.

At the beginning of 2020, she saw a significant increase in new clients, and Leslie and her team were confident that it was going to be their year. That’s when the COVID-19 pandemic struck. Spring Break was Leslie’s most profitable week to date. The next week, her facility was practically empty. As her business is considered essential, Dog Day Afternoon remained open during the pandemic lockdown. It was a tough couple of months, but Leslie considers herself very fortunate to have received grants to supplement the loss in income. Although the pandemic put a strain on her business, Leslie says that since Memorial Day 2021, Dog Day Afternoon is hitting new records every weekend — and that’s through word-of-mouth advertising alone. “The pandemic hit us hard,” Leslie said, “but business is picking up, and this is the best that we’ve ever done. I feel very lucky.”

Leslie credits her Mom, Pam Rosella, for always being there for her. “Every step of the way, she’s held my hand. Every successful moment, every heartache, every impossible hurdle, she’s been my rock. I truly could not have done this without her encouragement.”

A Fur-ever Home

Looking toward the future of Dog Day Afternoon Canine Social Club, Leslie would be interested in opening more facilities but is more focused on making her current location flourish. Currently, she and her team offer doggie daycare and overnight stays (also known as doggie slumber parties) and dog grooming services. In phase two of renovations on the building, she intends to have a full-service grooming salon, overnight suites equipped with TVs and interactive cameras, and a small retail store.

Despite the uncertainties of the next few years, one thing that Leslie is certain about is her commitment to deepening her relationships with local nonprofit animal shelters and her community. Part of her mission is to educate dog owners and promote adoption awareness. Currently, Dog Day Afternoon welcomes some rescue dogs into its doggie daycare to receive enrichment and lots of one on one attention that they wouldn’t get at the shelter. Leslie says this increases their chances of getting adopted as well as success transitioning into their forever homes.

Those efforts don’t just include nonprofits in Jackson — Leslie has partnered with Animal Rescue Fund of MS (ARF) and their animal rescue partners in Maine, 3 Dogs Rescue and Lairbear Transport, which helps to find shelter dogs in Mississippi wonderful homes in the Northeast. Additionally, Leslie and her team have office dogs, which is essentially a hospice/ foster program for shelter dogs nearing the end of their lives. According to Leslie, the dogs get to live at Dog Day Afternoon. They roam freely around the facility and “are spoiled rotten in their final days.”

Leslie’s above-and-beyond approach to caring for the dogs in — and away — from her community is similar to the above-and-beyond approach that Renaissance Community Loan Fund takes to support Mississippians who’re deemed unbankable by traditional lenders. Not only did the CDFI pave the way for Leslie to get Dog Day Afternoon up and running, but Renaissance also loaned Leslie and Chris the money they needed to purchase a home. Because Chris was furloughed during the pandemic and Leslie only pays herself a small salary, the two couldn’t get a loan from a bank. Thanks to Renaissance, the two closed on a house in July. “I hate to be cheesy and say that they make dreams come true,” Leslie said, “but they really do. Renaissance made our dreams come true.”

Sadly, Leslie and Chris lost their Rottweiler, Brixx, which inspired her dream in August of 2019.  A few months later, a Rottweiler came into ARF that was in very bad shape. With a Rottie-sized hole in their hearts, Leslie and Chris jumped at the chance to foster him. The couple ended up adopting Bigg’in a year to the day after losing Brixx. Bigg’in joins their big family of rescue siblings including a Foxhound, MJ,(rescued from an animal testing facility in Oregon), two foster failures from ARF, Goose (whom she nursed back to health) and Possum (a formally feral dog) and four foster failure kitties

Learn More

  • Dog Day Afternoon Canine Social Club
  • Renaissance Community Loan Fund is a Mississippi nonprofit lender that offers unique, tailored lending services for mortgages, home improvement, and commercial loans.
  • CNote – Interested in helping create another story like this? CNote makes it easy to invest in great CDFIs like Renaissance Community Loan Fund, helping you earn more while having a positive impact on businesses and communities across America.
By Community Partners

Meet Harlem Entrepreneurial Fund, the CDFI Aiming to Become ‘Harlem’s  CDFI’

Although Hamil Douglas self-identifies as a reformed banker, he’s appreciative of his extensive experience in the world of finance. Without it, he likely would never have become the president and CEO of Harlem Commonwealth Council (HCC), where he also serves as the managing director of Harlem Entrepreneurial Fund (HEF), HCC’s investment vehicle.

Hamil got his career off the ground in New York City, first as a branch manager at J.P. Morgan Chase and then as a commercial loan officer. He relocated to Chicago with ABN AMRO (RBS) and became part of the bank’s in-house training staff for its corporate finance training program, which recruited recent university graduates to become corporate finance officers and loan officers. That position ultimately led Hamil to Amsterdam and then to Singapore, where he stayed for nearly seven years, working primarily as a global relationship manager serving multinational corporate clients based across Asia-Pacific.

As a New Yorker, however, Hamil couldn’t ignore his longing to return to The Big Apple. In the early 2000s, he briefly returned to Chicago to finish up his M.B.A before moving his young family to New York City. This led to jobs at Merrill Lynch and U.S. Trust – Bank of America Private Wealth Management, where he weathered the 2007-2008 Financial Crisis. That’s when Hamil started to feel antsy. He decided to try something more entrepreneurial and partnered with one of his former trainees to launch a minority hedge fund. While Hamil enjoyed building something from scratch, once the fund merged with another firm, he again found himself wanting to try something new, this time in real estate.

Hamil enrolled in Project Reap, where he met another participant who happened to be the director of lending at HEF (HCC manages a significant real estate portfolio). The two became good friends, and in early 2019, Hamil began to volunteer with HEF to help it build its portfolio. His solid work drew the attention of both the board and the management, who in turn offered him a position as a senior loan officer, providing loans to small businesses in Harlem, Upper Manhattan, and certain parts of Queens. Hamil was in turn promoted to chief operating officer, and in September 2020, he became president and CEO of HEF — 19 months after first coming on board as a volunteer.

The Man for the Job

According to Hamil, his background in credit and training has served him well at HEF; however, his previous work in Asia-Pacific building and managing relationships has arguably been more useful to him as he’s learned to navigate the nuances of HEF’s footprint. “I’ve lived in several countries, and I’ve had to get immersed in the culture,” he said. “That experience lent itself very nicely to what I’m doing here, because New York City is a diaspora of different languages and different people, especially in the village of Harlem, where we have different clients from different cultures.”

HCC established HEF in 2007 to provide low-income and minority entrepreneurs with supportive loan capital and technical assistance in Harlem, Washington Heights, Inwood, and the Bronx. Lending operations began in the summer of 2008, and HEF was certified by the U.S. Treasury Department as a Community Development Financial Institution (CDFI) in 2012, and as a Community Development Entity (CDE) in 2021. Since its inception, HEF has originated 257 loans for over $4.4 million and helped create or retain over 650 local jobs. HEF has successfully raised over $1.5 million in grant funding from public and private institutions. According to Hamil, the CDFI originates loans anywhere from $1,000 to $250,000. Approximately 70% of HEF’s clients are restaurants and retail businesses, and slightly less than 10% of the CDFIs clients are part of what HEF calls its credit builder loan portfolio: a program designed to help entrepreneurs who have good ideas but poor credit.

While credit isn’t the sole criterion for assessing the risk of a loan application, Hamil said it’s still an important factor. “For those people that we think we can do something with in terms of helping them to realize their dream of starting or buying or expanding a business, we say ‘listen, we see what you’re trying to do and we think you’re good for it, but we’re going to start with a smaller loan than you requested.’” In addition to that initial, albeit reduced, capital (typically between $1,000 and $5,000), HEF frequently reports those loan payments to the three credit bureaus so that it has a positive impact on the entrepreneur’s credit score. The CDFI also connects the entrepreneur to either a credit repair course or an individual coach so that they can work to improve their credit score even more.

Another one of HEF’s programs is called Opportunity for Growth, which is based on the Interise Streetwise “MBA” curriculum. The highly interactive program runs for between three to four months, and existing business owners get the chance to meet weekly with outside consultants and managers to come up with a three-year plan to make their businesses better. Hamil says that not only is the program very desirable and highly sought after by business owners in the community, but the program has helped to generate significant business for HEF, as participants who complete the program are eligible for a special, reduced interest rate on a loan from HEF.

Although the CDFI offers a number of other programs and opportunities to local business owners, one of the most impactful things that HEF has been able to do in the past year is to offer PPP loans to its community, something for which Hamil cites as one of his most special days at HEF. “June 19, 2020,” he said. “That’s Juneteenth, but that was also the day we received notification from the U.S. Department of Treasury that our application to become a PPP lender was approved. That opened up a whole new world for us.”

Because there are few lenders in Harlem — outside of traditional big banks — doing PPP loans, Hamil says HEF has seen tremendous growth in its portfolio over the past 12 months. That growth propelled Hamil and his team to join Opportunity Finance Network, which opened up further opportunities through Google, Wells Fargo, Capital One, PNC, and Bank of America for HEF to access external capital. That allowed Hamil to restructure HEF so that “it looks like any other fund,” and he’s anticipating getting SBA approval for HEF to become a microlender any day. Additionally, Hamil has made a point to forge new partnerships both within and far away from Harlem, including with New York City’s Small Business Services, New York State’s Empire Development,  African American Alliance of CDFI CEOs, the Black Chamber of Commerce, BNP Paribas, and Lendistry.

Supporting the Harlem of Tomorrow

Despite the fact that Hamil has the same challenges as many other CDFI CEOs — finding the right employees, securing capital, and “juggling all of the balls in the air” — he says that things at HEF are “humming along very nicely.” The CDFI recently signed an MOU with LendingFront to upgrade its web infrastructure, thus making its online loan application portal more streamlined and user-friendly, while at the same time allowing HEF to screen and respond to applicants much more quickly. It’s all part of Hamil’s goals for HEF to become a durable, accessible, and integral piece of the broader community, where entrepreneurs “can get access to capital, technical skills, and knowledge to help them to maintain their businesses, grow their lives, and grow the economy as a whole.”

Interestingly — especially when taking into account Hamil’s long tenure in the world of finance — HEF’s CEO wants the organization to, in a way, be viewed by its community as a “mini bank,” or, as Hamil puts it, “Harlem’s Own-CDFI.” “I want it to be a place that people talk about when thinking about where to go to get a small business loan,” he said. “I want my organization’s number to be at the top of the speed dial. I want Harlem Entrepreneurial Fund to be where people can walk in the door, be treated fairly, and have their stories listened to. I want it to be a destination.”

Learn More

  • Harlem Entrepreneurial Fund (HEF) has a mission to serve low-income and minority populations by providing lending capital and technical assistance to facilitate small business expansion and job creation in underserved Harlem, Washington Heights, Inwood and Bronx communities.
  • CNote is a women-led impact investment platform that uses technology to unlock diversified and proven community investments to generate economic mobility and financial inclusion.
By Change Makers Series

Change Makers Interview: Jamie McCall

To say that Jamie McCall is passionate about research is an understatement. Fortunately, as the Vice President of Economic Development Policy at Carolina Small Business Development Fund (CSBDF), a statewide community development financial institution (CDFI) based in Raleigh, research, policy analysis, and program evaluation are at the core of what Jamie gets to do each and every day.

Through his research, Jamie explores the importance of small- and medium-sized businesses for sustainable and effective regional growth, and besides peer-reviewed articles, organizational white papers, and presentations at national conferences, Jamie has also authored several academic book chapters on topics related to community economic development. In addition to his role at CSBDF, Jamie is an adjunct instructor within the University of North Carolina at Chapel Hill’s School of Government, where he received his Master of Public Administration.

We caught up with Jamie to talk about his unique research, and we got the chance to hear his thoughts about the idea of CDFI self-sufficiency, the need for better impact reporting, and how the CDFI industry can elevate the role of research.

CNote: Can you talk a little about your background and how you found your way to CSBDF?

Jamie McCall: After graduate school, I started working for the state government’s nonprofit development corporation as a research analyst. When any public or quasi-public entity says they are engaging in “economic development,” it almost always means a focus on recruiting large businesses. Thus, most of my work involved supporting business recruitment and/or expansion efforts. I got to work on things that were interesting and challenging, but I didn’t have a passion for it. I knew what the research says: small business is the cornerstone of community economic development. I started looking for other positions, and one of my former colleagues was on the policy and research committee here at Carolina Small Business Development Fund. She said, “you’re gonna love it.” I applied and obviously took the job. I was immediately thrown into a world that I was not familiar with, but it was a world that I was really excited about. Though I knew CDFIs were essential actors for holistic and sustainable development when I took the job I was only vaguely aware of the industry.

CNote: How do you explain CDFIs to someone who’s never heard of them?

Jamie McCall: I usually give the example of a big business like Amazon. Even when they were early on in their growth, if they needed money to do something like build a new warehouse, they could go to a bank. As a company, they’re stable, and so they have no problem getting credit for expansion purposes. But when you deal with small- and medium-sized businesses, which are really the foundation of regional economies, in most cases, they cannot get any sort of financing to start or grow what they’re doing. That’s because those businesses don’t have enough scale to be financially stable enough that banks find them to be good targets for financing. They don’t fit traditional lending profiles, and for the most part, banks view those businesses as being higher risk.

CDFIs come into the picture because they do not have that sort of framework of profit motivation that banks have. There are of course for-profit CDFIs, but they are the exception and not the rule. So, the role of CDFIs is to come in and fill in that gap for businesses that are higher risk. They don’t make loans with the goal to make money, but they know that those businesses are going to take that loan money and they’re going to expand, add staff, and buy things. For every $1 that you give a small business that does that, there are multiple dollars in return in terms of economic impact. So, if a CDFI does its job well and a business is able to grow and expand, then that business can now access more capital from the traditional banking system. And from there, it’s sort of like a snowball effect. It often seems strange to people that debt is an economic development tool, but it’s really how you get businesses to grow.

CNote: Can you talk a little more about that multiplying effect with regards to small business lending impact in your region?

Jamie McCall: For our last fiscal year, for every dollar that went out, the return to the economy was $1.01. With a $1.01 multiplier, you are doubling your money in terms of economic impact. That multiplier changes a bit from year to year, which is why we conduct yearly economic impact analyses. In some years, it’ll be lower or higher, and it’s very industry-dependent. We know that it is hard to measure the economic impact of small businesses, which is why one of my lines of research is also looking at social impact multipliers. If a CDFI does its job correctly and a small business is given a level of debt that it can handle, then what you end up with is successful entrepreneurs who become embedded in their community. These small businesses end up building these really robust social networks with other small firms, with their suppliers, and within their community. We saw with COVID how the businesses that were able to survive were those that have those really strong social networks in place. So, there’s both an economic return on investment and a social return. The social return is much harder to measure, but I think it’s just as important.

CNote: Can you explain that idea of social capital network a little more? Why is it so important?

Jamie McCall: When you look across the CDFI industry and people talk about impacts, it’s most often expressed as the number of jobs created or saved, amount of capital lended, number of loans, the average size of loans, and things like that. Those are not necessarily bad indicators. They are one type of indicator, but they do not tell the full story. I often say that jobs are not the primary impact of CDFI work, because if we go in and we give people lots of loans and they create lots of jobs, the question which usually comes up is what is the “quality” of those jobs. But we know in general small business jobs they’re not going to be as good as a similar position would beat larger corporations. To me, the question that we should be asking is: how do the people in those jobs improve the community?

For example, we know that when people work in a small business, they tend to come from that community and they tend to live and work in the same place. That’s extremely important for community economic development because that allows relationships not just between small businesses and other small businesses, but relationships between small business employees and their community to really develop. Those interactions have such a high return on investment. Importantly though that return is mostly social (and not economic) because what they do is increase levels of community trust. It also increases trust in institutions, which is really important, especially for urban problems like trying to find ways to lift people out of poverty, because people have a legitimate distrust of institutions.

What we have found again and again, and what the research shows, is that social networks have immense economic value, but that value is hard to measure. It’s not that jobs aren’t important: we want to create jobs. But, we have to acknowledge the limitations of that. As a CDFI researcher, I would much rather say we didn’t create a single job, but we increased trust in this community and its institutions by two percentage points. That has a much higher impact than creating 200 jobs.

CNote: As a researcher, what role do you think research has to play in the CDFI industry, and what research gap are you trying to fill?

Jamie McCall: I think people, and especially policymakers, tend not to view CDFIs to be as integral to community economic development as they really are, and that’s where I think the role of research and education comes in. CDFIs do not have a foundation of research like other economic development interventions do. I can give you volumes on affordable housing. I can give you volumes on business recruitment. But when it comes to CDFIs, especially small-business-oriented CDFIs, there’s nothing. For me, that’s what I want to do: lay out why these institutions are important and why supporting small business is important, empirically. It’s not just me. The Federal Reserve’s community development division has lots of great work here in this area, and some CDFIs have research staff, but because CDFIs are low-capacity organizations, most of them don’t have research staff. Even those that do, they’re still capacity constrained.

What I’ve found with CDFI research, however, is there’s a lot of good qualitative research that I think is really important, but there’s no willingness to engage critically with it. I want people to ask me critical questions about what I’m doing in terms of research because that’s the only way we get better. I would much rather somebody in the CDFI industry find a flaw in an article I’ve written than somebody in Congress. That kind of engagement isn’t a personal attack. For example, we recently had an article on CDFI program evaluation accepted at Community Development and six independent peer reviewers who are experts in this area reviewed it. Their job is to basically tear it apart, but what that does is essentially make sure that the quality of the research is unquestionably high. No peer review system is perfect, but I’m willing to subject my work to the highest levels of scrutiny, and I think that as an industry, we need to do more of that. If we do, we’ll be in a much stronger position.

CNote: What are your thoughts on CDFIs who’re aiming to be self-sufficient, financially sustainable organizations?

Jamie McCall: I think that’s probably one of the hardest things to do in the CDFI world. Most of the things that we do that help people the most are not profitable. What happens when CDFIs are self-sustaining, they sort of have these lines of business that maybe aren’t what you would consider to be targeting traditional CDFI borrowers. For example, let’s say a CDFI engages in some profitable line of business that really in some way benefits larger, white-owned businesses, but then they use that money to benefit smaller minority-owned businesses that are more in line with CDFI demographics. Are they doing good? To me, the main challenge with self-sufficiency is that it requires that sort of activity, and I don’t think we have enough research or data to really confirm if this is a net positive or not.

In an ideal world, I think CDFIs should be subsidized. This isn’t an activity that is innately profitable, but it does a lot of good for the money that you put into it. So, in a perfect world, CDFIs would receive public subsidies, and although sufficiency is admirable and I think it should be a goal, I don’t know how you do it in a way that doesn’t cause net bad or net harm, at least not until we’ve done more research on it. That’s an example of where we need research and why we need to do research on these kinds of questions.

CNote: Any current research or recent findings that you want to share with us?

Jamie McCall: Yes, the peer-reviewed article on CDFI program evaluation I mentioned earlier, which was accepted at Community Development. I’m excited about it because it is the first article in many years that looks at CDFIs specifically and not in the context of something larger. Like I said before when you look at most types of economic development interventions, there’s a body of literature I can point you to, but I can’t do that with CDFIs. From a policy perspective, that’s important to long-term sustainability.

In this article, we explore the role of program evaluation for CDFIs and try to outline some best practices. What we found is, besides capacity constraints, funders of CDFIs often have competing demands for what they want in data and evaluations. There is no validated sort of model of evaluation or agreed-upon performance metrics for the industry, so everybody uses different definitions, so you can’t compare anything. What we suggest in this article is that this is the starting point for a serious conversation: this isn’t going to be solved overnight.

CNote: What’s holding CDFIs back from doing the kind of impact evaluations that you talk about in your research article?

Jamie McCall: I believe CDFIs want to do evaluations, but they’re not incentivized to do them, and evaluating impact costs time and money. So you have very few CDFIs that do any sort of robust evaluation work in the first place. Then funders either inconsistently use the evaluations that do exist or worse, they use them as sort of a weapon if the evaluation doesn’t show good things. So, CDFIs are like “well, nobody asked for one, and if it ended up being bad, we’d probably be punished for it, so we’re just not going to do an evaluation.” That means we just keep doing this thing where we talk about the amount of money we give in loans, and what percentages went to what demographics, and how many jobs were created or saved. That frustrates me extremely because the work that CDFIs do is so much more. And I am the first person to admit that it’s so hard to measure, and the smaller the CDFI, the more limited the resources, the harder it is. The theory of change that most CDFIs are operating from is extremely complex. But that doesn’t mean you can’t start somewhere. You acknowledge the limitations and say “we care enough about the communities we serve that we have to start somewhere because it’s far better than what we’re doing.”

I want to stress that this isn’t a criticism of CDFIs. Throughout the Community Development article for example we say that CDFIs are vital to community economic development. The question is not whether or not CDFIs are important. They are. The question is not whether or not CDFIs are having a positive impact. They do. The question is how can we better show that in a manner that creates a positive feedback cycle for CDFIs to get more resources and be more effective.

CNote: Thinking about impact, what kind of impact or impact metric do you think doesn’t get enough attention in the CDFI industry?

Jamie McCall: I can provide evidence up and down about the social capital impact that CDFIs have and how people’s lives are positively influenced by their work, but I’m never asked for that. I’m asked for how many loans, what percentage went to minorities, what’s the default rate, and how many jobs were created. And I understand why those types of questions are the ones that get asked. Because the goal is to take people that have really, for either institutional or personal reasons, been unable to access credit and make sure the capital goes to those places, and I understand the need for that, but it cannot stop there.

The next question should be “what was the net impact,” and with so few exceptions, nobody ever asks that. And again, I am not saying that is an easy question to answer. I get that CDFIs are financial institutions, but if I’m being asked about default rates, I should also be asked about what impact we were also able to make. Instead, it’s almost like any sort of thought about impact or how these things have improved the lives of the community is thought of as something that’s good if it happens. But it often doesn’t seem like the primary objective. So what we end up with is a very odd incentive structure where the CDFIs that are the most successful are those that tend to act most like banks.

It’s not their fault: the incentive structure we have does not always encourage mission-oriented lending. To me, that’s a problem, because mission-oriented lending is the entire reason why the CDFI designation was created. If CDFIs are incentivized to simply do more loans, it can encourage things like giving loans to people who could go down the street to the bank and get one. That is why I am against merely counting loans as impact. I would much rather give 50 loans where we have built a relationship with somebody to where they really know that we’ve invested in them and they want to invest in their community then give 1,000 loans to people who have no idea who we are and who just fill out an application on the website.

CNote: With recent announcements about the federal award program and increased investor interest, do you think it’s accurate to say that CDFIs are having a moment?

Jamie McCall: I know the Vice President has made CDFIs one of her issues of importance, and I think, to my knowledge, that is the first time that that has been done since probably the Riegle Act was signed during the Clinton administration. The challenge is keeping that level of high visibility support up. I think in order to really take advantage of this moment in the policy cycle, what CDFIs have to do is take this opportunity to be honest and say, “in our industry, evaluating our impact is hard, but we believe it’s important. Here’s what we can show now, and here’s our commitment to continuing to show the story of the people we support in the future.” CDFIs aren’t a partisan issue, but today, I think that you have to be very intentional in that in a way that’s bipartisan.

I also think that, for example, with the PPP loans, which were very profitable for CDFIs, we need to have a retrospective on that, because CDFIs are going to have to deploy forgivable loans again in the future, god forbid after another Hurricane Katrina-type scenario or another pandemic. There have been questions about whether or not PPP loans got CDFIs away from their core mission. I think that’s a valid question, especially with forgivable loans that were available so widely and not just targeted at marginalized constituencies. We need to have a retrospective to make sure that in some future time, we can do those types of things in a way that doesn’t hurt the other things that we should be doing.

CNote: How can the CDFI industry elevate the role of research?

Jamie McCall: When I think about CDFI research, the case studies I’ve seen are really impressive. That kind of qualitative research is usually what CDFIs produce to show their impact, and they do a good job at highlighting that.  Because when done correctly, CDFI methods of intervention can change lives. That fact is one of the reasons why CSBDF’s slogan is “We are dreamcatchers.” But what I have struggled with is sort of attempting to acknowledge that good part, and then have people have a willingness to have a conversation about these other issues around impact measurement and evaluation. These issues are things that need to be elevated by the industry. I know that there have been attempts in the past, and again I know it’s hard, but this is something that could be elevated by organizations like OFN. This is also something that the really big CDFI funders should step in and say “we care enough about this that we’re going to do things like fund research because we want to better show the impact of CDFIs. We currently can’t, so let’s find out ways to do it.” Then we could make more than incremental improvements.

The responsibility for these issues is not just CDFIs’. It’s everybody involved in this industry: it’s the advocacy organizations, it’s the funders, it’s the regulators. They all have a role. That has to be recognized, and there has to be this agreement that it’s worth the very hard work of trying to improve things. I dream big.

 

 

By CNote

CNote Has Successfully Moved Over $100 Million Dollars into Financially Underserved Communities

CNote has deployed over $100 million dollars into financially underserved communities across America–a significant milestone for investments and deposits in Community Development Financial Institutions (CDFIs), low-income designated credit unions, and other mission-aligned partners that previously were difficult for investors to access.

By making it easier for everyone from retail to institutional investors to invest in these institutions’ communities, CNote expands the pool of capital available to low-income, BIPOC, and underserved communities. That means more money to help individuals build credit and purchase their first car or home, provide capital and coaching to small business owners, finance affordable housing development, and make communities more economically resilient.

This access has been critical in the wake of COVID-19 and the movement for racial justice sparked by the murder of George Floyd. These events highlighted stark inequities in the United States. Corporations and institutional investors have risen to the challenge of supporting historically marginalized communities by investing to advance racial and social justice and further economic development.

This interest has started a new chapter for CDFIs and credit unions, CNote’s primary partners, which have seen investments from large corporations including Netflix, PayPal, Mastercard, and Google. Additionally, the White House recently announced a federal award of $1.25 Billion to CDFIs to help speed the economic recovery from COVID-19.

Capital that is invested or deposited into these community financial organizations supports entrepreneurs like Tanesha Sims-Summers, founder of Naughty but Nice Kettle Corn, a family-owned and -run kettle corn company based in Birmingham, Alabama. Tanesha received a loan from CNote CDFI partner TruFund in 2019 to complete the renovation of her food truck and provide some extra cushion for other expenses. “As entrepreneurs, we have to be intentional about utilizing services and asking for help, and TruFund is here to help us make changes to our businesses that impact our bottom lines and that align with our community investment goals,” Tanesha said.

Tanesha Sims-Summers (far right) and the Naughty but Nice Kettle Corn team

“While CNote is incredibly proud to have reached this milestone, the real success metric is seeing this money deployed into underserved communities. There it can build wealth and drive fundamental and enduring change,” said CNote CEO Catherine Berman.

“Our work is far from over,” she continued. “The data shows that economic recovery from COVID has not been equal, and that job losses continue for low-wage workers. The work of our credit union and CDFI partners is more important than ever, and we will continually innovate to support underserved communities and drive hundreds of millions in new capital investment for years to come.”

 

By Borrower Stories

Meet Cortaiga Collins, Whose Quest For Quality Childcare Led Her To Open Her Own Small Business

Cortaiga Collins, Founder of Good Shepherd Preschool

Cortaiga Collins never intended to open her own business, let alone her own early childhood education center. Instead, Cortaiga received her bachelor’s degree and was on track to become a CPA. However, when she had her second child in 2000, everything changed. After having her first child as a senior in high school, Cortaiga felt like she got a second chance at parenting. The St. Louis, Missouri-native wanted to do everything perfectly, but when her three months of maternity leave finished and it was time to find a daycare center for her son, Cortaiga discovered that it was difficult to find a place that she trusted with her baby. After a series of bad experiences at both commercial daycare centers and home-based operations, Cortaiga decided to quit her job at a city government agency to create a childcare solution that offered quality services to families.

Before Cortaiga could open her own center, she had to immerse herself in early childhood care. She enrolled in classes at community college and took an administrative job at her church’s elementary school. Soon after, she became the director of the school, where she gained valuable experience. Finally, in 2009, the then-single mother of two found herself on the brink of being licensed and opening her own center, Good Shepherd Preschool and Infant/Toddler Center, with the social mission to raise the standard of childcare and to create a quality early childhood program that equips children for school and the world. “Getting open was the most cumbersome part of it all,” Cortaiga said, “I had no experience with permits and licenses and inspectors and building requirements. I didn’t have thousands of dollars saved or a mentor. I got a $35,000 grant, but that wasn’t enough.”

Fortunately, Cortaiga was able to get the rest of the capital that she needed to open her business from Justine PETERSEN, a Community Development Financial Institution (CDFI) that connects institutional resources with the needs of low-to-moderate-income individuals and families in Missouri, helping them to build assets and create enduring community change. CNote partners with CDFIs like Justine PETERSEN in communities across the country, funding loans and empowering local entrepreneurs like Cortaiga. With capital from Justine PETERSEN, Cortaiga was able to finish renovations to her space and open the doors to Good Shepherd. The CDFI also connected her with an accountant that she continues to work with today.

Since it got up and running, Cortaiga’s business has been full steam ahead. Good Shepherd opened in March 2009, and by Halloween, it’d already outgrown its space. Cortaiga decided to open a second location, and again, Justine PETERSEN provided funding to help Cortaiga with her expansion. Then, in 2018, Cortaiga bought land in the same low-income community to build a $2.5 million state-of-the-art childcare center that would bring both of her centers together under one roof. The new development is set to open in October 2021, and with the larger space, Cortaiga will be able to grow her team from 14 employees to over 20. Better yet, the larger facility has the capacity to serve over 100 children at a time. “I never knew that this journey would take me to where I am and where I’m going,” Cortaiga said. “I’m just a former single mom who wanted a safe place to take her kid. Now, I’m in uncharted waters with this space. It’s scary and exciting, but you know what they say: ‘if you build it, they’ll come.’ I’m counting on them coming.”

Investing in the Future

While it’s incredible how far Cortaiga — and her business — have come since she quit her job 21 years ago, all of that success was nearly erased by the COVID-19 pandemic. The perfect storm of shutdowns, remote work, fear, and uncertainty almost shuttered Good Shepherd, and according to Cortaiga, despite the fact that she was able to begin to bring a limited number of infants and toddlers back into her centers last November, she’s still working her way toward full capacity. “At one point,” she said, “I began to prepare my staff and my parents that we were going to have to lay off everybody if we didn’t fill our available slots. For months and months, we were dangerously close to having to shut our doors.”

Thankfully, Cortaiga didn’t have to close her business. Instead, she and her team are preparing to move into their new expanded center. To help get the word out, Cortaiga has been getting digital marketing assistance from a marketing and social impact consultant introduced to her through Pacific Community Ventures (PCV), another local CDFI referred by Justine PETERSEN. After tackling her business’s website and social media presence, Cortaiga said that she plans to work with a PCV-provided business mentor to help her with more Human Resources-related elements of her small business. According to her, recruiting and retaining qualified employees are her biggest challenges. Despite those headaches, Cortaiga says it’s the children that keep her motivated to run her business. “No matter what’s going on, kids just love so freely,” she said. “They’re so forgiving and resilient, and seeing their emotional and academic development and progress makes it all worth it.”

From Kids to Community Development

When asked about the future of Good Shepherd Preschool and Infant/Toddler Center, Cortaiga doesn’t just share her dreams for her small business, she shares her dreams for her community. Through her more than two decades of working with children in her community, Cortaiga has learned that it’s not just children who need care — it’s entire families. That led her to launch a nonprofit called Foundation for Strengthening Families with the goal to help families rise above poverty through education. Not only does the organization offer early childhood education programs, but it also has adult education classes on topics such as health and wellness and financial literacy. “They say if your dreams don’t scare you, then they’re not big enough,” Cortaiga said. “I see me in a lot of people in this community — especially the single moms. I grew up in poverty, and I know how my life has changed as a result of not living in poverty anymore.”

Cortaiga’s vision for her slice of St. Louis — and her desire to help families break out of generational cycles of poverty and to purchase local homes  — is inspired by the work being done by the Harlem Children’s Zone in New York and the East Durham Childhood Initiative in North Carolina. As much as she’s looking at communities across the country to see where she can borrow from already established community development playbooks, Cortaiga is hoping to forge local partnerships to bring her vision to fruition, including with Mayor Tishaura Jones, the city’s first Black woman mayor. “No one organization can get all this done,” she said. “Collaboration is such an integral part of being able to create lasting change in a community. We want to rebuild and restructure this community by rebuilding the residents so that this can be a thriving place to live.”

Learn More

  • Good Shepherd Preschool and Infant/Toddler Center
  • Pacific Community Ventures is an Oakland-based CDFI that empowers small business owners and helps impact investors make investments that create shared prosperity and sustainable communities through a “Good Jobs, Good Business” model.” 
  • Justine PETERSEN is a CDFI that connects institutional resources with the needs of low-to-moderate-income individuals and families in Missouri, helping them to build assets and create enduring community change.
  • CNote – Interested in helping create another story like this? CNote makes it easy to invest in great CDFIs like Pacific Community Ventures, helping you earn more while having a positive impact on businesses and communities across America.
By Borrower Stories

How Fern Street Circus is Bringing Social Change to the Streets of San Diego

John Highkin, Executive Director of Fern Street Circus

When most people think about social justice, they don’t think about circus arts; however, for John Highkin, social change is at the center of his community arts nonprofit, Fern Street Circus. John grew up in Los Angeles and became a musician before moving to England to get a master’s degree in English. In 1987, while in Europe, John had the opportunity to spend a few months at the world-famous Berliner Ensemble in East Berlin, where he became fascinated with both political and physical theater. By chance, when he returned to Southern California to intern at The Old Globe Theatre in Balboa Park, Cirque du Soleil happened to be in San Diego for a month during its first U.S. tour. “I looked at them,” he said, “and I thought I was seeing what circus could be. I really dreamed about being able to have my own circus one day.”

Following that dream, John went on the road as a production manager with a single-ring circus in St. Louis called Circus Flora. Although that led to other jobs with different shows in different states, including the bus-&-truck tour of The Soviet Acrobatic Revue, John always wanted to return to San Diego to start something of his own. In 1990, he learned about some local grant opportunities, and with the help of both his future wife, co-founder Cindy Zimmerman, and his favorite aunt, John started Fern Street Circus, a community-building social circus in San Diego’s Golden Hill neighborhood. The next year, the nonprofit unveiled its first show to more than 500 community members. “That’s what attracted me to circus,” John said. “It isn’t stuck in one building. Instead, it’s an art form where we could actually go out into neighborhoods and play in parks and play for people where they live, work, and learn. It’s something that transcends barriers between people of varying cultures and languages.”

For the next 13 years, John and Fern Street Circus continued to create memorable experiences in and around San Diego, and the community arts nonprofit quickly built a reputation for itself of providing people with unusual, albeit entertaining experiences close to home. Additionally, in 1993, Fern Street Circus launched a free-of-charge after-school program in the local recreation center. During that time, John learned a lot about how to create stories through circus and to make contact with diverse communities, and how to bring people together to mix and mingle around the spectacle, music, and acrobatics of his talented team of circus artists. “We want to talk to people in communities, and we want to be a way for people to come together,” John said. “Even if the story is subtle and doesn’t immediately hit people, it’s entertainment that they don’t usually see in their neighborhood parks.”

In 2003, however, John felt worn out. A looming budget crisis led to huge drops in government funding at the state and local levels. Despite the success of the organization, more than a decade of serving as the nonprofit’s de facto grant writer, artistic creator, financial officer, human resources director, and community relations guru left him ready for a change. John passed over the nonprofit’s reins to a committed group of internal stakeholders, moved to Kansas to be closer to Cindy’s family, and took a government arts job in the city of Salina.

It was ultimately grandchildren, not the circus, that brought John and Cindy back to San Diego in 2010. Although John became the executive director of an arts education organization called Young Audiences of San Diego and felt fulfilled by his work, he couldn’t escape his previous association with Fern Street Circus. According to him, people would come up to him on the street and ask him what happened to it, mentioning how much their kids loved the music, how much they missed the shows, or how much they enjoyed the quick-witted, bilingual ringmaster. At that time, the circus had been on a hiatus for a few years as it struggled to raise money. That didn’t stop John from wanting to bring it back to life. In 2014, John left his job, and with a new board of directors, Fern Street Circus kicked off a revival campaign. “We started basically from nothing again,” John laughed, “except this time we had our name and goodwill. That has carried us through very well over the last seven-plus years.”

A Responsive, Personable, and Proactive Lender

When the COVID-19 pandemic struck in early 2020, Fern Street Circus had to adapt. It immediately started offering online classes on Zoom to youth in the community. Amazingly, without the scheduling constraints of working out of its local rec center, the nonprofit’s teaching artists were able to connect and serve after-school families even more deeply. Additionally, Fern Street began to do socially distanced performances for families standing in line to pick up groceries at their local food distribution sites with the San Diego Unified School District. Between May and mid-November 2020, John estimates that Fern Street Circus did nearly 40 events and reached upwards of 12,000 community members.

While those community-based performances and classes buoyed the nonprofit’s spirits, it still required funding in order to remain operational; however, when PPP funding became available, John was skeptical that Fern Street Circus would even qualify. Unfortunately, neither of the big-name banks that the nonprofit had banked with for 30 years was helpful. After “striking out,” John received a note from Self-Help Federal Credit Union informing him that the credit union had received funding support through The California Endowment to distribute PPP loans. Self-Help is a low-income designated credit union that was chartered in 2008 to build a network of branches that serve working families and underserved communities. Self-Help currently has nearly 80,000 customers across California, Illinois, and Wisconsin, and it has over $1.2 billion in assets. CNote partners with low-income designated credit unions like Self-Help across the country through its Promise Account program.

John recognized Self-Help’s name — the credit union has an office two blocks away from Fern Street Circus’ gym. He sent an email, and this time, the person on the other end wrote back with good news. “From the start, they were responsive and personable,” John said. “A real human person was assigned to walk me through the process, which was a very sharp contrast to [those big banks], which were impenetrable. Self-Help was proactive, and they helped me at every stage. Once we got the PPP, they kept in touch afterwards.”

That ongoing communication proved critical for Fern Street Circus. Not only was the nonprofit able to have its first $30,000 loan forgiven, but it was also able to receive additional funding during the second round of PPP lending. According to John, the first thing the nonprofit did with the PPP money was to hire seven teaching artists who weren’t getting unemployment but who had great need. Fern Street Circus put them to work leading classes and supporting students near and far. “That’s a concrete result of what we were able to do through the PPP loan. I’m pretty savvy and well-educated, and I was nonplussed by the PPP application,” John said. “We would not have gotten funding without Self-Help. It had a huge impact on us.”

A Circus In Good Hands

Given all of the years that John has been involved with Fern Street Circus, it’s not surprising that he has countless memories to smile back on; however, when asked to share one of his most memorable moments with the community arts organization, interestingly, he chose to recount a story about crossing a street and falling down. Ever the producer, John is usually the first person to arrive at an event and the last one to leave, and on this particular production date, he happened to be carrying an open container of oil (although he doesn’t remember exactly why). As he hustled from one side of the street to the other, John slipped; yet, as he tumbled to the ground, he managed to prevent the oil from spilling.

Although he doesn’t know why this particular memory lodged itself in his brain, the story is representative of John’s innate drive to put others ahead of himself, including Fern Street Circus, and as the nonprofit moves further into its third decade of existence, John is intent on ensuring that its future isn’t tethered to him. In that way, Fern Street Circus recently hired its second full-time employee, Marcela Mercado, a well-respected community member and activist who serves as the organization’s general manager. Additionally, the nonprofit recently opened its Outdoor Circus Community Center in the City Heights neighborhood of San Diego, giving Fern Street Circus a temporary space to host after-school programs, show rehearsals, and performances by the Circus and other artists. According to John, the organization’s long-term dream is to hire more staff and to have its own building where it can continue to serve families and transform neighborhoods through circus arts performance and teaching.

At 70, John jokes that he’s not getting any younger, and although he’d like to remain involved with Fern Street Circus for a long, long time, he wants other leaders in the neighborhood — who, he says, don’t share his white privilege — to be a part of the organization’s long-term vision and future. “I want to phase myself out,” John said. “It’s not just about age. What has kept us vital is that we’re equal parts circus arts and social justice, and for us to be truly representative of a neighborhood as broad and diverse as ours, Fern Street Circus’ leadership needs to reflect that.”

Learn More

  • Fern Street Circus is a nonprofit that serves families and transforms neighborhoods through performance and teaching of circus arts.
  • Self-Help Federal Credit Union was chartered in 2008 to build a network of branches that serves working families and underserved communities. Serving more than 78,000 members, Self-Help Federal is one of the fastest-growing low-income designated credit unions in the country. 
  • CNote – Interested in helping create another story like this? CNote makes it easy to invest in great Credit Unions like Self-Help, helping you earn more while having a positive impact on businesses and communities across America.
By Borrower Stories

How a Cancer Diagnosis Gave Ethel Brooks the Strength to Start Her Own Business

Ethel Brooks

For many people, a cancer diagnosis can derail them. For Ethel Brooks, it ignited her. It was January 2017 when Ethel learned that she had breast cancer. Her mind instantly concocted the worst-case scenario, and her first thought was about what she was going to leave behind for her three daughters and seven grandchildren if something happened to her. However, the moment she found out that her chances of surviving were high, she chose to fight like never before. “When I saw that I was going to live,” she said, “I took off like lightning. They say cancer breaks people, but cancer gave me strength and made me look toward the future. I wasn’t gonna let it take me down because I have too much to live for.”

Ethel went through 21 weeks of chemotherapy; yet, she didn’t let that keep her from her day job at Franklin Primary Health Center in Mobile, Alabama, where she was hired in 1986 as a 20-year-old Medical Receptionist. Over the years, Ethel has skyrocketed up the ranks, with stints as an intake clerk, accounts receivable, office manager, operation manager, and most recently, billing supervisor.  Amazingly, Ethel would do her chemotherapy on Mondays, and she’d be back in the office on Tuesday to finish out the rest of the workweek. Eventually, after the hair loss, a double mastectomy, and seven surgeries, Ethel triumphed over cancer with the support of her mother, eight siblings, and daughter Darralyn, who surrounded her with love and support throughout her treatment. Additionally, the fight helped her to realize that she needed to start thinking about how she could create a financial legacy to pass down to her family when the time came.

That’s when Ethel partnered with Mr. William McGlasker, a local contractor and concrete specialist, to start her own business. She’d met Mr. McGlasker at Franklin Primary Health Center, after which he’d built a driveway for her. The two became good friends and he told her that he had his own construction company, but was limited on how much money he could make since he did not have his subcontractor license.  He suggested that Ethel get her license and create a company that would, in essence, absorb his business. In 2017, Mr. McGlasker dissolved his business and Ethel started Bennett Construction. All of Mr. McGlasker’s employees joined the new company, and Mr. McGlasker stayed on as superintendent. “To be honest,” Ethel said, “he was really the person who pushed me to take this leap of faith. He’s been doing this for 50-some years, and once people learned that he was with Bennett Construction, everything fell into place.”

Ethel went back to college to work toward receiving a bachelor’s degree in business management so that she’d be better equipped to manage her company. Meanwhile, in August 2019, Bennett Construction was awarded a $600,000 contract from Mobile Asphalt Company. That paved the way for Ethel to begin renting a building for her business and to land additional smaller contracts from the City of Mobile. Ethel’s next goal is to be certified as a Disadvantaged Business Enterprise (DBE), which will allow her to bid on bigger Department of Transportation contracts that will give her more income. Her primary goal is to become a General Contractor so that she can have other subcontractors working under her. Once she achieves that, Bennett Construction will be able to bid for contracts worth millions of dollars.

One Step at a Time

In the short term, however, Ethel wanted to purchase a dump truck, which could help her make an additional $10,000 a week for her business, given that 100 million tons of dirt need to be removed from a construction site in Leroy, Alabama. That’s what brought Ethel to TruFund, a Community Development Financial Institution (CDFI) that invests in small businesses in Alabama, Louisiana, Texas, and New York. CNote partners with CDFIs like TruFund in communities across the country, providing business coaching, funding loans, and empowering local entrepreneurs like Ethel.

Ethel was already familiar with TruFund. Last year, during the pandemic, she attended a virtual presentation hosted by the City of Mobile to learn more about the PPP process. She connected with TruFund, who was able to help her secure PPP funding for Bennett Construction’s payroll.

Through a TruFund small business loan, Ethel was able to purchase the dump truck she so desperately wanted. “Ms. [Tamika] McNeal has been very helpful,” she said. “There were several times I would get discouraged but she reminded me to take it one step at a time. When I thought about it like that, then it wasn’t so bad.”

Incredibly, as Bennett Construction continues to grow and to land more and more work across both Mobile and Alabama, Ethel has continued to work her 8 a.m. to 5 p.m. job at Franklin Primary Health Center. She’s thankful that her supervisors have been so flexible and understanding with the arrangement, as sometimes Ethel has to go to a job site for Bennett Construction during working hours; however, once she gets her DBE and primary contractor licenses, Ethel doesn’t think she’s going to be able to balance both jobs with her side hustle. Instead, she’s readying herself to make Bennett Construction her main focus. Mr. McGlasker, who is 77, similarly has no plans of slowing down anytime soon. “He told me he’s going to work until God tells him he can’t work anymore,” Ethel said. “That’s what keeps him going, so I don’t argue with him.”

When asked whether or not she’d believe it if someone told her 20 years ago that she’d own and operate a construction company in 2021, Ethel laughed. Despite the fact that Bennett Construction wasn’t in the cards for her until relatively recently, Ethel loves her company and the work that it produces. Unsurprisingly, it’s getting the chance to see and hear about Bennett Construction’s good work in and around Mobile that brings her the most joy, and she continues to be motivated by the knowledge that she’s building a financial legacy for her family that will outlive her. “As a Black woman running a business,” Ethel said, “there are a lot of opportunities for me. All I need to do is to get to those opportunities, and that’s what my focus is on now. Getting those certifications, and getting those opportunities.”

Learn More

  • TruFund – is a 501 (c) 3 certified Community Development Financial Institution (CDFI) headquartered in New York City with field offices in Alabama and Louisiana. TruFund tailors its financial and technical assistance to the unique needs of each site—from contractor mobilization lending in New York and Louisiana to rural Black Belt initiatives in Alabama.
  • CNote – Interested in helping create another story like Ethel’s? CNote makes it easy to invest in great CDFIs like TruFund, helping you earn more while having a positive impact on businesses and communities across America.
By CDFIs, CNote, Impact Investing

Diversity in CDFI Capitalization Planning Webinar

On September 7th, 2021 CNote hosted a webinar where CNote, two CDFI partners, and a foundation discussed diversity in CDFI capitalization.

The goal of the webinar was to educate CDFI attendees about capitalization diversity and the associated challenges and benefits of working with various capital sources. The panelists also shared investor trends they were seeing in the marketplace, and how those trends could affect the availability of new capital.

Listen below to learn more:

YouTube video

Title:

Diversity in CDFI Capitalization Planning: A CNote Webinar targeting CDFI Loan Funds

Brief Summary:

CDFI Loan Funds rely on various sources of capital – local and federal government funding, philanthropic support, CRA dollars, locally sourced private capital, and others to fulfill their mission of economic inclusion and development. Securing new investors and partnerships can unlock access to diverse funding sources that help CDFIs expand impact and growth. In this webinar, you will hear from two seasoned CDFIs talk about how they approach capitalization planning and navigate associated challenges. You will also hear from an impact investor, Sierra Club Foundation, as they talk about current impact investor trends and why CDFIs are an important part of their portfolio.

CDFI attendees will learn about:

  • Considerations to keep in mind when evaluating the sources of capital – cost, restrictions, compliance, etc.;
  • Benefits and challenges associated with working with various capital sources;
  • Investor trends in the marketplace and how those trends could affect the availability of new capital.

Speakers will include:

  •  Kevin McGahan, CFO, Sierra Club Foundation
  •  Josh Brackett, CFO, Access for Capital for Entrepreneurs
  •  Paul Quintero, CEO, Ascendus
  •  Stacy Zielinski, Community Development Director, CNote (moderator)
By Borrower Stories

How McAuley Residence and The Genesis Fund are Redefining (and Rolling Out) Recovery Centers Across Maine

For over 30 years, McAuley Residence has been a safe place for women in need in Portland, Maine. When the opioid crisis hit 13 years ago, however, the residence — a longstanding project of The Sisters of Mercy — needed to rethink its services. “We were seeing a significant need for women with children who had a diagnosis of substance use disorder,” said Melissa Skahan, Vice President of Mission Integration at Northern Light Mercy Hospital. “Women throughout the U.S. were experiencing more overdoses and more admissions, and we were also seeing an incredible number of children being removed from their homes by child protective services from families affected by substance use disorders to ensure their safety. It was clear that we really needed a more comprehensive approach.”

All photos were taken in McAuley Houses’ Bangor location.

That’s when the McAuley Residence partnered with Community Housing of Maine to solely focus on families affected by substance use disorders. The residence adopted a two-generational approach, with robust services and interventions targeted at both mothers and their children. Notably, McAuley Residence doesn’t provide treatment on-site. This was intentional. Most recovery centers offer treatment in-house; however, when someone leaves the facility, that means she leaves her treatment team behind. That’s very disruptive — and, when considering the cyclical nature of substance use disorders, it’s also dangerous.

“What we designed after examining patient outcomes from reoccurring residential stays was a model that builds the best treatment team for our clients external to McAuley with seamless integration into onsite services,” Melissa said. “This way we could ensure that the outpatient space was transformative and sustained, while really focusing on capacity building regardless of where mom and child laid their heads at night. None of the progress would be disrupted when they left us.”

Instead, what McAuley does offer in-house is a family-centered, evidence-based suite of supportive and clinically oriented- services that help families break the generational cycles of addiction and poverty. These services range from preparing women to re-enter higher education to providing cooking classes and workshops on healthy eating; however, before any of that can happen, McAuley staff work with women to help them stabilize physically, mentally, and emotionally so that they can reunify with their children if they’ve been separated. That includes one-on-one coaching as well as group sessions on parenting education. According to Melissa, she and her team are most often able to reunify women with their children within the first three to five months of their stay at McAuley.

While McAuley helps to develop healthy routines for both mom and child(ren), it also offers mothers financial coaching and career planning. In total, the women put in 35 hours a week to McAuley Residence’s programming, which further establishes the discipline and stabilization needed to successfully transition out of the program. When the time comes, McAuley also helps McAuley residents leave the residence and land on their feet. For most women, their total length of stay at McAuley Residence is 24 months. “It’s pretty rewarding work to watch these women truly have the opportunity to flourish and to reunify with their families and then re-enter higher education and the workplace and become highly productive mothers, citizens, and people,” Melissa said.

An Approach Worth Replicating

Based solely on the numbers, McAuley Residence’s innovative approach is a resounding success. Well over 200 women have completed the program, and the facility reunifies 95% of the families that come to it. More so, 80% of the women who commit to the program remain abstinent from illicit substances. “It is remarkable what we are able to see families that have experienced homelessness, incarceration, and trauma accomplish when they are provided safe housing, comprehensive services, and access to the very best treatment,” Melissa said.

Unsurprisingly, demand to get into McAuley Residence is high. Therefore, McAuley Residence wanted to open a second location. Fortunately, in 2019, Maine’s legislature passed a law called An Act To Stabilize Vulnerable Families, which provided funding to replicate McAuley Residence’s model across the state. Through a partnership with Community Housing of Maine and The Genesis Fund, a Community Development Financial Institution (CDFI), McAuley Residence was able to open a second location in Bangor. Since 1992, The Genesis Fund has been working to develop and support affordable housing and community facilities across Maine, mainly by providing both financing and technical assistance to increase the supply of affordable housing. CNote partners with CDFIs like The Genesis Fund in communities across the country, channeling capital to fund social missions like affordable housing, women’s empowerment, entrepreneurial funding, and more.

Not only did The Genesis Fund provide financing for the Bangor project, it also provided the necessary capital for McAuley Residence to renovate the location, including the kitchen, each bedroom and bathroom, and the big dining room. “It’s a beautiful older building,” Melissa said, “and the funding from Genesis really helped us to bring it back to life.”