Skip to main content
All Posts By


By CNote, Impact Investing

Navigating Greenwashing in Sustainable Investments

The sustainable and impact investing market has grown to nearly $10T in assets under management in recent years and is expected to grow to over $30T by 2026. These investments, geared towards major societal issues are an opportunity to create transformative change and align investments with your values. The recent proliferation of greenwashing poses significant risks to the legitimacy and effectiveness of the entire sustainable investing sector. Read on to see how regulatory changes, methodical investment approaches, and new initiatives like Climate Cash™  can help investors navigate a complex financial landscape. 

Photo from Unsplash

The Growth of Social and Environmental Investing Strategies

Driven by strong consumer and investor demand, impact investments are increasingly gaining traction in corporate America. This trend is characterized by social and sustainable investing, where companies’ investment strategies promote social and environmental benefits while pursuing yield. Environmental, Social, and Governance (ESG) criteria, and other sustainable investment lenses have become pivotal in shaping such investment decisions throughout the financial landscape, reaching an estimated $9 trillion in public markets and more than $1 trillion in private markets. This growth has increased the popularity of sustainable and ESG funds and dispelled the myth that social and environmental investments yield lower returns. 

Capital investments geared toward addressing major societal issues are an opportunity for lasting change in areas like the widening wealth gap, and disparities in gender and racial equity, as well as environmental concerns. With asset managers expecting to increase their ESG-related assets under management to US$33.9T by 2026, they also present significant opportunities for financial gain. 

Challenges in Sustainable Investing and the Rise of Greenwashing

As more sustainable investments come to the market, several challenges including the difficulty in measuring actual impacts, inconsistencies in ESG scoring methodologies, and a lack of uniform regulations have become apparent. This has resulted in a transparency gap in instrument labeling, reporting, and data disclosure, leaving some stakeholders and investors unable to verify whether the outcomes are genuine and if companies truly uphold their ethical commitments. Consequently, concerns about greenwashing are growing among investors.

Photo from Unsplash

According to the European Securities and Markets Authority (2023), the working definition of greenwashing in investments is “a practice where sustainability-related statements, declarations, actions, or communications do not clearly and fairly reflect the underlying sustainability profile of an entity, a financial product, or financial services. This practice may be misleading to consumers, investors, or other market participants.”

Although greenwashing is not new, it has intensified in recent years, as more companies seek to align themselves with this growing market trend. This phenomenon not only undermines investor trust but also poses significant risks to the legitimacy and effectiveness of the entire sustainable investing sector. One Morgan Stanley study found that while investors anticipate increasing their sustainable investments portfolio in 2024, 60% also expressed concerns about greenwashing and the lack of transparency and trust in reported ESG data. 

Regulatory Responses to Greenwashing

These developments emphasize the need for consistent and clear standards in ESG reporting and increased regulation to ensure that the marketed social and sustainable investments genuinely deliver impactful results. Recent efforts include: 

  • SEC Regulatory Actions:
    • Updated Names Rule: The SEC updated the 20-year-old Names Rule to prevent misleading fund names. Under the new rule, if a fund’s name suggests a specific investment focus, it must adopt a policy to invest at least 80% of its assets in that focus, reducing the risk of deceptive or misleading implications.
    • Climate and ESG Enforcement Task Force: This task force is dedicated to identifying ESG-related misconduct. It focuses initially on spotting significant gaps or inaccuracies in climate risk disclosures under existing rules and scrutinizes disclosure and compliance issues related to the ESG strategies of investment advisers and funds.
  • The Federal Trade Commission’s Green Guides:
    • The Federal Trade Commission (FTC) has also been active in guiding sustainable practices through its Green Guides, which are designed to help marketers ensure that the claims they make about the environmental attributes of their products are truthful and non-deceptive. Although not solely focused on ESG investments, these guides set a precedent for transparency and can influence broader regulatory approaches in the financial sector.

As regulations evolve and oversight mechanisms become more robust, the investment community can look forward to greater clarity and trustworthiness in ESG reporting, significantly reducing the prevalence of greenwashing.

Photo from Unsplash

Identifying Authentic Sustainable Investments

While concerns about greenwashing are significant, it is important to recognize that not all sustainable funds are fraudulent—many truly advance climate change initiatives and support communities in need. To distinguish these authentic investments, corporate investors should adopt a systematic approach:

  1. Prioritize Transparency: Choose investments that offer clear, comprehensive reporting. This level of transparency ensures that the environmental and social claims made are not only genuine but are also backed by verifiable actions and results.
  2. Align with Global Standards: Ensure that investments align with internationally recognized standards and benchmarks. Tools like the Global Reporting Initiative (GRI), the Sustainable Accounting Standards Board (SASB), or frameworks that support the United Nations Sustainable Development Goals (SDGs) are a good start. These frameworks provide structured guidance and criteria that help verify whether an investment is truly sustainable and ethically managed.
  3. Engage in Active Due Diligence: Beyond checking for standards compliance, conduct thorough due diligence. This involves assessing the investment’s impact strategy, the track record of the managing entity, and the actual outcomes versus stated goals. Things to look out for:
    1. Assess whether institutions have a history of serving underserved communities that are disproportionately affected by climate change, rather than just entering the market to capitalize on trends.
    2. Evaluate if the proposed solutions are both responsive and responsible, tailored to the unique needs of the communities they serve and importantly, accessible to all,  rather than merely focusing on scalability.
  4. Monitor and Engage: Once an investment is made, ongoing monitoring and engagement are crucial. Participate in shareholder meetings, review regular impact reports, and stay informed about the sectors and regions where you invest. This continuous involvement helps ensure that the fund remains aligned with your sustainability goals and can prompt corrective action if needed.

A Model for Sustainable Investments: Climate CashTM

Climate Cash™ offers a robust example of a sustainable cash management solution that genuinely combats climate change while avoiding greenwashing. This solution provides corporate clients the ability to place FDIC/NCUA-insured deposits across a portfolio of mission-driven banks and credit unions while meeting yield and liquidity targets. 100% of deposits placed go to institutions that fund carbon reduction activities in low to moderate-income communities and communities of color through projects like community solar, commercial retrofits, energy-efficient utilities, and electric vehicle auto-loans and maintenance support.

Solar installations by Flywheel Development, a sustainable development company supported by mission-driven lender, Locus Bank

Climate Cash Institutions are vetted not only for their green lending initiatives but also for their responsiveness to community needs, as per CNote’s proprietary impact framework. These institutions have shown their work in close collaboration with the groups they serve, ensuring that the financial products provided are not only necessary but also tailored to fit the unique circumstances of underserved borrowers. This approach helps avoid the pitfalls of one-size-fits-all solutions, offering instead affordable and flexible financing products that uplift local economies.

In addition to centering community voice, and expertly meeting the needs of underserved communities with tailored products and programs, Climate Cash™ partners are committed to transparent impact. Quarterly data on green financing activities such as solar lending, EV-related lending, and energy efficiency lending are provided by CNote’s participating Climate Cash partners and reflected in regular impact reports back to CNote clients. 

Climate Action in Communities

Locus Bank, a CNote partner depository institution and a pioneer in green lending, operates a Solar Loan Program that is deeply aligned with community needs. This program targets small commercial solar developers across North Carolina to New York. Locus is making an outsized impact with its loan program, as the loan amounts requested are typically too small for larger banks, and the borrowers often lack the capitalization needed for traditional loan approval. 

Locus is a creative and dedicated problem solver. Within the program, their team adapted to providing unique loan structures to meet borrowers where they are to ensure more solar options were made available and affordable in low-income communities.


By embracing rigorous transparency,  and accountability through initiatives like Climate Cash™, investors can not only navigate the complexities of the financial landscape but also contribute to a genuinely sustainable future that meets both environmental and social objectives

Disclaimer: This information should not be relied upon as research, investment or financial advice. This material is strictly for illustrative, educational, or informational purposes and is subject to change. CNote Group, Inc. is not a bank, a credit union, or any other type of financial institution. CNote is not a registered investment advisor with the Securities and Exchange Commission (SEC) or a broker-dealer authorized by the Financial Industry Regulatory Authority (FINRA). CNote is not a legal, financial, accounting or tax advisor. CNote does not negotiate interest rates. Climate Cash is not a security or investment. Climate Cash deposits are insured by the FDIC or NCUA, subject to the terms and conditions of the Climate Cash agreements. We encourage you to consult with a financial adviser or investment professional to determine whether or not the CNote platform makes sense for you.

By CNote, Impact Investing, Impact Metrics

CNote’s 2023 Annual Impact Report

We are excited to unveil the CNote 2023 Annual Impact Report, documenting a year of robust growth and enduring commitment to economic and social justice!

Despite the challenges posed by the SVB Bank crisis and other market turbulences, we’ve advanced our mission through impactful financial solutions and strong community partnerships, and were excited to share those achievements.

This year’s report highlights:

  • The significant expansion of our network of community financial institution partners, demonstrating our deepening impact across the community finance ecosystem.
  • An in-depth look at our fixed income solutions, such as the substantial contributions of Impact Cash and customized fixed income investments that have catalyzed social and economic development.
  • The diligent and thorough process we use to evaluate and onboard new financial institution partners, ensuring alignment with our values and impact goals.
  • The impactful initiatives undertaken by the Wisdom Fund Collaborative to improve capital access for women of color entrepreneurs.
  • A heartfelt acknowledgment from our cofounders, Yuliya Tarasava and Catherine Berman, reflecting on our achievements and the challenges of the past year.

Explore the detailed achievements and stories of change in our 2023 Annual Impact Report:

By CNote, Impact Investing, Impact Metrics

CNote’s Q4 2023 Impact Report

CNote is excited to share our Q4 2023 Impact Report! Check it out here.

You’ll read more about CNote’s proprietary impact framework developed to assess the positive impact made by community financial institutions on our platform. We also share updates on CDFI loan funds’ capital challenges, and how impact-driven depository institutions are embracing fintech partnerships to grow. Here’s more you can expect:

  • Spotlights featuring our mission-driven community partners that leverage investor funds to uplift communities and the small businesses receiving their support.
  • A look at new research coming from the ICA Fund, a Wisdom Fund Collaborative member, on how they are driving wealth creation in diverse communities.
  • New data on the progress of our Impact Cash® portfolio
  • A look inside the corporate client experience with Impact Cash via a conversation with T.Rowe Price Vice President & Assistant Treasurer, Evantz Perodin.

Take a look:

By CNote, Community Partners

Creating an Impact Framework for Impact-Driven Depository Institutions

Impact-driven banks and credit unions provide vital services to under-resourced communities. However, in CNote’s extensive work with these institutions and community finance overall, we recognized the pressing need for a consistent impact framework for the industry.

Existing impact measurement efforts have typically centered around either banks or credit unions or have been limited to CDFI-certified institutions. This fragmented approach hinders the ability to create a unified framework that drives transformative deposits to the industry. Without a clear framework, many impact-driven banks and credit unions lack the necessary resources to fully articulate their impact or effectively measure and communicate their work, especially to the growing community of institutional impact investors.

The team of New Covenant Dominion Federal Credit Union

CNote’s Unique Position // Impact Frameworks

CNote works closely with corporations and impact-driven banks and credit unions nationwide. This unique positioning allows us to serve as an intermediary, bridging the gap and connecting these two powerful and impactful forces.

With support from the W.K. Kellogg Foundation and the Mastercard Impact Fund, with support from the Mastercard Center for Inclusive Growth, CNote conducted extensive stakeholder interviews and developed an impact framework with six impact categories themes and suggested metrics within each theme. Impact-driven depository institutions can utilize this framework to identify impact targets, connect impact strategies to these goals, and substantiate their work with impact data that could one day be the standard for the community finance industry. Furthermore, this framework enables impact-driven banks and credit unions to substantiate their work with consistent impact data, allowing them to measure and articulate their impact more effectively.

“I’ve just come to know CNote this year and thankful for what we’ve done together. I’ve been trying to figure out how to share our [credit union’s] impact and the format that they’ve put it in, using their steps, made it so much easier. If you put it in those steps, it’s really helpful.”

“They’ve helped me organize this mass of data,” says Hank Hubbard, CEO of One Detroit Credit Union.

Hank Hubbard (right) of One Detroit Credit Union

This framework also benefits institutional investors seeking to create impact through their deposits by making it easier for them to identify the impact-driven banks and credit unions aligned with their values and commitments.

As investors increasingly seek out authentic community investments, impact-driven banks and credit unions are an opportunity to leverage cash for lasting impact. By understanding the impact measurement practices in use today, industry stakeholders like CNote will be better able to contribute impact framework solutions that will last.

CNote’s Key Impact Themes

Impact Theme 1 | Addressing Community Social and Environmental Challenges

This theme allows institutions to identify the social and or environmental challenges present in their communities. CNote recognizes the United Nations Sustainable Development Goals (SDGs) as a widely adopted framework for categorizing these goals within the impact investing and impact-measurement industries. By aligning with the SDGs, impact-driven banks and credit unions can effectively identify their social and or environmental impact goals. This guides their efforts and enables investors seeking specific impact themes or SDG alignment to identify institutions making a difference in those areas more easily.

Impact Theme 2 | Serving Under-resourced Groups

CNote firmly believes in the transformative power of impact-oriented banks and credit unions to generate greater economic opportunity and financial inclusion across the United States. Impact-driven depository institutions (DIs) work with under-resourced communities and identify the social and environmental challenges faced by these groups. Examples of such communities include but are not limited to, low-to-moderate-income individuals, BIPOC communities, and rural areas.

Impact Theme 3 | Responsive and Responsible Products and Services

In this theme, DIs provide examples of the products, services, and programs they offer that are tailored, responsive, and address the identified social and or environmental challenges faced by under-resourced communities. These institutions demonstrate continuous improvement over time by offering innovative product/service options and increasing the volume of responsive offerings. Examples of such initiatives include financial education programs, small business lending (loans less than $1M), and affordable housing financing.

Impact Theme 4 | Community Integration

This theme focuses on how financial institutions actively engage with the community and establish mechanisms for obtaining feedback. By remaining responsive to the evolving needs and challenges of the communities they serve, these institutions align their assets and deposits towards community financing, consistent with their primary purpose.

Impact Theme 5 | Promoting Diversity, Equity, and Inclusion.

Recognizing the importance of DEI (Diversity, Equity, and Inclusion), financial institutions integrate these principles into their governance structures. Over time, these institutions strive to achieve their stated DEI goals through the implementation of inclusive practices throughout the organization and tracking organizational diversity metrics.

Impact Theme 6 | Financially Sustainable

Understanding the vital need for financial sustainability in impact-driven institutions, this theme addresses the long-term viability and operational health of the institution. By maintaining financial stability, these institutions can continue providing essential financial products and services to their communities. This category captures data related to financial sustainability, ensuring the institution’s ability to fulfill its mission and support community needs in the long run.

Looking Ahead: Paving the Path to Standardized Impact Measurement

As CNote continues to refine and enhance our proprietary impact diligence and monitoring processes, our impact framework remains a dynamic tool that evolves with the data and feedback we collect from impact-driven DIs and investors.

The team at VCC Bank. Photo courtesy of VCC Bank

By embracing this framework, institutional investors like corporations, will find it easier to identify and connect with the DIs that align with their impact goals. Simultaneously, DIs will gain clarity on the vital impact metrics to measure, enabling them to attract additional deposits. Ultimately, this symbiotic relationship benefits under-resourced communities. Channeling increased financial resources into a unified, compassionate, and transparent system bolsters support for small businesses, enhances financial education, fortifies nonprofits, promotes affordable housing, and catalyzes broader community economic development and wealth building.

Implementing a unified impact framework has the power to transform communities nationwide. Through replicable, reliable, and precise measurement of DI’s impact, we can connect investors with authentic opportunities to support. This facilitates a future where impactful investments thrive, communities prosper, and sustainable change takes root.




Disclaimer: This information should not be relied upon as research, investment or financial advice, or a recommendation regarding any products or any security in particular. This material is strictly for illustrative, educational, or informational purposes and is subject to change. Investing involves risks, including possible loss of principal.

By CNote, Impact Investing

Sustainable Investment Strategies Treasurers Can Use

While corporate treasurers are currently charged with the leading financial strategy within organizations, managing financial risks and investments, sustainability goals have emerged as a new directive for many corporations. Treasurers, with their expertise in cash management, financing and risk, are uniquely positioned to contribute to positive social and environmental impacts that yield return. Read about sustainable investing for corporate treasurers below.

Photo by Unsplash

Sustainable financial management practices have become imperative for treasury teams, allowing them to align their organizations’ long-term goals. Research from TMI indicates that these targeted investments enable treasurers to achieve better risk-adjusted returns, making sustainability an essential aspect of modern financial strategies. Furthermore, studies like the comprehensive analysis conducted by Kroll, underscore the financial advantages of integrating sustainability. Companies with higher ESG ratings consistently outperform their counterparts.

These sustainable treasury initiatives are not just a responsibility; they are a practical benefit. In this article, we will explore actionable strategies for corporate treasurers to drive significant change within their organizations. Through strategic collaboration and innovative approaches, treasurers can navigate the complexities of the modern financial landscape and create lasting positive impacts.

Strategy 1: Impact-Driven Banking Diversification

The need for diversification in investment strategies is underscored by current trends in corporate treasury management. A staggering 18% of treasury teams have allocated 80-100% of their short-term investment portfolio in bank deposits, while an additional 14% have invested 60-79% in the same instrument, as revealed by a report from TMI. Diversifying investments has been used to both mitigate potential financial vulnerabilities and provide an opportunity to further incorporate sustainable investing practices at the treasury level.

Treasurers motivated to include more sustainability in their function should consider diversifying with impact-driven depository institutions. This approach involves leveraging platforms like CNote and Impact Deposits Corp. to distribute a company’s deposits across community financial institutions already aligned with corporate sustainability goals, such as climate justice, affordable housing, racial justice, and financial inclusion. 

Diversification for Climate and Social Justice Initiatives 

In 2022, BankFWD estimated that approximately 24% of funds lent by the six largest U.S. banks support fossil fuel interests. This suggests that for some of the country’s largest corporations, their cash holdings could constitute a significant source of emissions. The emissions funded by these investments have the potential to outweigh any reductions corporate entities have committed to in other areas. Moving corporate deposits to banks engaged in sustainable development, solar lending, or green financing, however, can result in a reduction of the associated carbon footprint by more than 60%, according to a report by the Climate Safe Lending Network, BankFWD, and The Outdoor Policy Outfit.

Bill Greenleaf, SVP of Real Estate Lending and Joey Barnes, SVP, Small Business Lending Manager. Photo credit: Virginia Community Capital / Photographer: Nick Davis Photography

Beyond mitigating environmental impact, Diversifying corporate cash holdings to hundreds or thousands of community development financial institution (CDFI) banks and credit unions holds transformative potential that includes both social and environmental impact. CDFIs are mandated to allocate at least 60% of their funding activities to low- and moderate-income populations or underserved communities. By redirecting cash holdings to CDFIs, corporations can make loan capital and other financial resources more accessible to women- and minority-owned businesses. In addition to CDFIs, low-income designated (LID) credit unions and Minority Depository Institutions (MDIS) similarly are designations earned when institutions focus support and programs on under-served groups, making them another diversification option. Diversifying with community lenders can safeguard against financial risks while also nurturing an ecosystem of sustainable and inclusive growth.

Strategy 2: Addressing Scope 3 Emissions Through the Supply Chain

One strategic avenue for treasurers to enhance their sustainability efforts lies in addressing the environmental impacts within the supply chain. Research produced by CDP highlights that GHG emissions in a company’s supply chain are, on average, 11.4 times higher than its operational emissions. At the same time, environmental risks in supply chains are projected to cost companies USD120 billion by 2026. This stark reality presents a significant opportunity for treasurers to drive positive change right at the source, within their supplier network. With increasing regulations and disclosures concerning a company’s Scope 3 emissions, addressing carbon produced by the supply chain is imperative for a long-term sustainability strategy.

Engaging Suppliers 

Engaging suppliers comprehensively becomes the essential first step. Companies cannot achieve their climate net-zero targets while contributing to mass deforestation in their supply chain. High-performing companies in this area proactively request suppliers to report data and establish targets to reduce their upstream Scope 3 emissions. However, ambitious environmental action has yet to permeate the entire supply chain. CDP’s Global Supply Chain report highlights the opportunity to engage with suppliers as a solution. For instance, only 20% of companies surveyed reported data for Scope 3 Category 1 ‘Purchased Goods and Services’ emissions, and a concerning 62% aren’t engaging suppliers on this critical topic

Photo by Pexels

Treasurers are in a unique position to leverage their influence and encourage suppliers to report data and establish reduction targets. This strategic collaboration was found to support momentum and instigate meaningful change. In 2021, over 200 purchasers, leveraging a combined US$5.5 trillion in buying power, requested environmental data from over 24,000 strategic suppliers through CDP Supply Chain, underscoring the increasing momentum toward sustainability in supply chain management.

Initiating conversations and actions focused on greening their cash management, treasurers not only align their organizations with sustainable goals but also catalyze a chain reaction of environmentally responsible practices. This proactive strategy ensures that the entire supply chain, encompassing financial transactions and investments, aligns with corporate sustainability objectives. 

Strategy 3: Greening Retirement Options

In 2023, U.S. employer-sponsored retirement plans amassed a staggering $11.8 trillion in assets. Yet, within this substantial financial landscape, a concerning trend persists: a significant portion of corporate pensions and 401(k) portfolios remains entangled with fossil fuel investments, raising ethical and environmental red flags.

Photo by Unsplash

This issue gains added urgency amid a changing workforce paradigm. Young professionals, notably Gen Z individuals comprising 6.1% of the current workforce (expected to rise to 30% by 2030), place paramount importance on ESG (Environmental, Social, and Governance) practices when evaluating potential employers. Simultaneously, a 2021 Morgan Stanley report highlighted that 99% of millennials express interest in sustainable investing. For treasurers, decarbonizing 401(k) and retirement options represents a strategic avenue to align sustainability efforts with the burgeoning demand for climate-friendly choices among employees.

Addressing the Challenge 

To address this challenge, treasurers can champion a clear, actionable approach. Firstly, they can advocate for the integration of climate-safe bond fund options within retirement plans. These options shield employees from heightened climate risks associated with high-carbon fossil fuel investments. Secondly, treasurers should work diligently to measure and mitigate the climate risk tied to corporate bond holdings in default plan options. By implementing these changes, treasurers can not only protect employee savings but also contribute significantly to a more sustainable financial landscape.

Furthermore, engaging influential asset managers is crucial. By communicating employee demand for sustainable, climate-safe investment options, treasurers can drive transformative changes in how retirement funds are managed. Employee surveys underline the significance of these actions: nearly 75% of plan participants are willing to increase their contributions when offered sustainable fund options, reflecting a clear opportunity to enhance both financial and environmental outcomes.


By embracing these initiatives, treasurers can empower their organizations to navigate the financial landscape while fostering a sustainable future, embodying a crucial role in the journey toward a greener and more responsible financial ecosystem.




Disclaimer: This information should not be relied upon as research, investment or financial advice, or a recommendation regarding any products, strategies, or any security in particular. This material is strictly for illustrative, educational, or informational purposes and is subject to change. Investing involves risks, including possible loss of principal.

By CNote, Impact Investing, Impact Metrics

CNote’s Q3 2023 Impact Report

CNote is excited to share our Q3 2023 Impact Report! Check it out here.

You’ll find updates on the impact created by the institutional and individual investors that have deployed funds in CNote’s fixed income and cash products. You’ll also learn more about how our community partners respond in a changing economy and tackle growing issues like climate change. 

Here’s more you can expect:

  • Spotlights featuring 2 of our mission-driven community partners that leverage investor funds to uplift communities.
  • A look at the new community development financial institution joining CNote’s Wisdom Fund portfolio.
  • Insight into how CNote’s community financial institution partners are implementing impactful green lending programs.
  • Research highlighting the strength and stability of community financial institutions.

Take a look:

By CNote, Impact Investing, Impact Metrics

Beyond Banking: The Crucial Role of Impact-Driven Banks and Credit Unions in Underserved Communities

Impact-driven banks and credit unions forge a dynamic partnership with under-resourced communities, blending immediate solutions with lasting development. These institutions stand as pillars of community support. Anchored by tailored financial products and programs, spanning affordable housing loans to job creation initiatives, impact-drive banks and credit unions commit to both present concerns and the future prosperity of those excluded by traditional finance.

Deposits power the success of these institutions, driving transformative change and amplifying lending within underserved areas. The Impact Deposit Collaborative, comprised of leading bank and credit union associations Inclusiv, CDBA, NBA and CNote, sheds light on CFIs’ profound societal and environmental impact. Unveiling how they catalyze progress in areas like racial justice, financial inclusion, and climate change, the collaborative’s work also illuminates the crucial role deposits play. For deeper insights into the transformative potential of social impact deposits, explore their findings below:

Check it out:

By CNote, Impact Investing, Impact Metrics

CNote’s Q2 2023 Impact Report

CNote is excited to share our Q2 2023 Impact Report! Check it out here.

You’ll find updates on the impact created by investments in CNote’s fixed income and cash products, learn more about our partners, and gain new insights on our process for identifying and benchmarking impact!

You can also expect:

  • Spotlights featuring 3 of our mission-driven community partners that leverage investor funds to uplift communities.
  • An update on CNote’s Wisdom Fund Collaborative, and how the CDFIs supporting Women of Color (WOC) entrepreneurs with small business lending are improving their impact reporting practices.
  • Resources that corporate finance teams can use to deepen their community investments.

Check it out:

By CNote, Impact Investing, Impact Metrics

CNote’s 2022 Annual Impact Report

CNote is excited to share our 2022 Annual Impact Report! Check it out here.

This report features a look back at some milestones we reached last year, explores CNote’s offerings and their impact, and highlights some of the mission-driven financial institutions we are honored to work with.

In this report you will see:

  • A timeline of big wins from last year, like our B Corp recertification and Series A funding round.
  • An update on Impact Cash and CNote’s fixed income solutions, as well as a look at some of our custom loans.
  • Insight on the diligence process CNote uses before onboarding new financial institution partners.
  • A look into the work the Wisdom Fund Collaborative is doing to create capital access for women of color entrepreneurs.
  • And a note of gratitude from CNote’s cofounders, Yuliya Tarasava and Catherine Berman.

Check it out:

By CNote

Bank on Change: Diversifying Deposits for Financial Stability and Social Impact

In an ever-changing financial landscape, managing assets effectively is a priority for treasury professionals. Balancing risk and reward is crucial, and diversification has become an essential tool for risk mitigation. At the same time, treasurers are increasingly recognized as change agents driving corporate social responsibility. With cutting-edge technology at their fingertips, treasurers can now easily diversify deposits while also increasing their impact on local communities and improving financial performance.

Team members from DREAM, a network of public charter schools and community youth development programs in Harlem, that works closely with MDI Carver Federal Savings Bank.

Make a Difference with Minority Depository Institutions

Diversifying deposits across community banks and credit unions not only offers financial advantages, but also strengthens local economies. These institutions are vital for small business loans and community development initiatives. By investing in minority depository institutions (MDIs), treasurers can support under-resourced communities and contribute to economic growth. According to the FDIC, MDIs have historically served communities in which a higher share of the population lives in low- to moderate-income (LMI) census tracts and in which higher shares of residents are minorities compared to non-MDI banks, demonstrating their crucial role in fostering inclusive economic development and providing access to credit for underserved populations.

Boost Your Financial Returns with Sweep Accounts

Community banks and credit unions can provide higher interest rates on deposits compared to larger banks. Sweep accounts automatically transfer surplus funds into these institutions, allowing treasurers to capitalize on favorable interest rates while reducing risk. According to a study by the FDIC, community banks’ net interest margins were 14 basis points higher than those of larger banks in 2020. This difference in interest rates can lead to substantial savings and increased returns for organizations that choose to diversify their deposits. By adopting this strategy, treasurers can improve their organization’s financial performance, promote social impact, and ensure a stable cash flow.

Leverage State and Private Insurance Programs

To further enhance deposit diversification, treasurers can explore reciprocal coverage programs and extended insurance options provided by state and private programs. These additional layers of protection can offer added security and peace of mind for organizations seeking to optimize their risk management strategies. Programs such as the Certificate of Deposit Account Registry Service (CDARS) and Insured Cash Sweep (ICS) enable organizations to access multimillion-dollar FDIC insurance coverage by spreading deposits across a network of participating banks.

The team at New Covenant Dominion Credit Union, a certified CDFI and MDI.

Experience the Power of Impact Cash®

Impact Cash is a groundbreaking technology solution that simplifies deposit diversification, allowing treasurers to open numerous FDIC and NCUA-insured accounts with ease. By spreading funds across multiple institutions, this approach minimizes risk and maximizes insurance coverage for deposits. Impact Cash offers the added benefit of investing in a socially responsible and impact-first manner, empowering treasury professionals to align their investment strategies with their organization’s values and commitment to social responsibility.

As treasurers navigate the complexities of risk management and impact investing, diversifying deposits through sweep accounts and innovative solutions like Impact Cash becomes an invaluable strategy. By supporting community banks, credit unions, and minority depository institutions, treasurers can drive positive change while securing financial stability. Embrace the future of treasury management and harness the power of deposit diversification for a brighter, more impactful tomorrow.

Diversify Deeper with CNote

By CNote, Equality

Celebrating Women’s History Month: 3 women-led firms changing the financial industry for good

Authored by CNote’s VP of Business Development, Danielle Burns.

As we celebrate Women’s History Month here at CNote, it’s important to recognize the vital role that women have played in the financial industry. 

The financial industry has long been dominated by men, leading to significant gender disparities in pay and leadership positions. A 2020 report by the National Women’s Law Center found that women in finance earn 71 cents for every dollar earned by men. Additionally, women make up only 22% of executives in the finance and insurance industries, according to a 2021 report by Catalyst.

Despite this, women in finance have been at the forefront of making financial resources and opportunities more inclusive and accessible. According to a report by Boston Consulting Group, women-led companies are more likely to invest in women and other underrepresented groups. In fact, the report found that women-led companies invested 2.3 times more in businesses founded by women than male-led companies. Equally, they are often committed to advancing financial literacy and education, particularly in underserved communities, and are more likely to invest in companies that have a positive social and environmental impact. 

Women working together in finance

Image by Freepik

Today, there are a growing number of women-led asset managers, impact investing firms, financial planners and VC funds that are pushing finance forward to better support women, BIPOC communities, and low-income groups with products and services to match their needs. Supporting these companies as we approach a potential economic downturn and continue to grapple with the economic fallout of Covid-19 is an important step towards financial inclusion and opportunity when it could matter most. 

Here are a few examples of women-led firms you should consider supporting this Women’s History Month.

Adasina Social Capital

Adasina Social Capital is a registered investment advisory firm that is led by Rachel Robasciotti. The firm specializes in impact investing and social justice, with a focus on investing in companies that promote social change. Adasina is committed to closing the wealth gap by investing in underrepresented communities and providing tailored financial services to clients.

Zevin Asset Management

Zevin Asset Management is an independent, employee-owned investment advisory firm that is led by Sonia Kowal. The company specializes in sustainable investing and social responsibility, and manages assets with the goal of creating positive social and environmental impact. Zevin Asset Management is committed to promoting diversity and inclusion, both within the company and in its investments.

2050 Wealth Partners

2050 Wealth Partners is a financial planning and investment advisory firm that is led by Rianka Dorsainvil and Lazetta Rainey Braxton. The firm focuses on serving underrepresented communities, including women and people of color, and is committed to closing the gender and racial wealth gaps. 2050 Wealth Partners provides customized financial planning services and investment advice to help clients achieve their financial goals.

Some of the women-led team at Kaua'i Federal Credit Union

Some of the team at Kaua’i Federal Credit Union

Empowering women in finance, and working with financial companies led by women, is an opportunity for all of us to promote a more equitable financial industry. By investing in companies that are committed to social responsibility, sustainability, and diversity, we can help to close the wealth gap. This Women’s History Month, let’s celebrate the important role that women have played in finance and support the women-led financial companies that are making an impact today.

By CDFIs, CNote, Wisdom

Innovating pathways to wealth creation for women of color entrepreneurs: a Wisdom Fund update

Co-authored by CNote’s VP of Business Development, Danielle Burns and CNote’s Director of Impact Evaluation, Tamra Thetford.

Women of color (WOC) entrepreneurs continue to face intersectional and systemic barriers — such as discrimination, bias, and a lack of networks — that limit their access to capital. Business ownership is a powerful wealth-building tool, and supporting WOC in entrepreneurship is a move towards closing the wealth gap. 

The CNote Wisdom Fund (WF) is a fixed income vehicle that increases capital access and lending for WOC small business owners. It was co-created with community development financial institutions (CDFIs) to bring new thinking, experimentation, and sustainable solutions to drive wealth creation. The Wisdom Fund aims to provide or support three key areas:

  1. Economic Empowerment: WOC are often left out of the traditional financial system, limiting their ability to start and grow small businesses that have the potential to boost local economies.
  2. Driving Innovation and Growth: WOC are a rapidly growing segment of entrepreneurs, and research has shown that the businesses they own have the potential to drive innovation and job growth. 
  3. Bridging the Wealth Gap: WOC are more likely than white women to live in poverty, and face significant wealth disparities. By increasing access to capital, WOC are able to build wealth and achieve financial stability.
Read Terri-Nichelle Bradley's entrepreneurial story

Terri-Nichelle Bradley is the entrepreneur behind Brown Toy Box, an educational play-kit company introducing BIPOC kids to STEAM subjects

Bridging the wealth gap through access to capital for women of color

As of September 30th, 2022 the Wisdom Fund has provided extensive capital and business development services to help grow and sustain businesses :

  • More than $16M originated in loans to WOC through the WF
  • 100% of loans have been originated to WOC
  • 70% of loans have been originated to low- to moderate-income women
  • 71% of borrowers received business development services in addition to loan capital
  • 1,299 jobs were created or retained in businesses supported by WF loans

Improving lending through the Wisdom Fund

Despite being the fastest growing group or demographic of business owners, WOC  continue to face significant barriers to success including discrimination, lack of funding, and lack of supportive business networks. Because of this, small business owners are frequently undercapitalized. In 2021, CNote partnered with Impact Experience on a Human Centered Design (HCD) research effort to better understand the institutional and personal barriers that women of color borrowers face. 

The 3 key HCD findings were:

  • Access to Varied Capital Structures: WOC entrepreneurs shared a clear need for more options for financing including lines of credit to support cash flow, lower interest rates, reduced collateral requirements, and higher loan limits. 
  • Rethinking how we assess creditworthiness: Alternative underwriting criteria allow lenders to evaluate creditworthiness beyond the traditional credit scoring system using rent and utility payments, lack of delinquencies, time in business and credit payment performance. Rethinking how creditworthiness is assessed opens the door to capital access to women that may have less of a financial history.
  • Time and Efficiency: Lending applications tend to lack full transparency and are often not easily accessible. The research identified a need for common format loan applications, greater transparency of documentation needed to apply at the onset of a loan application process, and shared portals across CDFIs and intermediaries. 
Read about the women of color entrepreneurs that started a group home serving marginalized patients in Minnesota

The women founders of OurPlace Residential Services, a group home serving marginalized patients in Minnesota

Wisdom Fund CDFIs get busy innovating

CNote shared the HCD research findings with Wisdom Fund CDFIs that quickly got to work identifying how they could improve their products and services for women of color borrowers going forward. In 2021, with support from the Tarsadia Foundation, CNote provided grants and peer learning opportunities to support the CDFIs’ resulting efforts to strengthen their lending to women of color and reduce bias in the lending process overall. Together, Wisdom Fund members achieved great things! 

In an initial survey, WF members indicated that 78% were already offering at least one of the critical products or features identified in the HCD research as supportive of lending. A year later, 100% of members had added an additional product, feature, or service.

  • 77% adjusted their product features by raising loan limits, lowering interest rates or reducing collateral requirements.
  • 69% added a new product such as a line of credit, a credit building loan, or real estate acquisition financing products. 
  • 46% adjusted their process by shortening the loan application or making the document requirements more transparent
  • 46% added business development services such as leadership development, financial management services, and mergers and acquisitions assistance. 
Read about Toni Hopkins, the woman of color entrepreneur that started a successful retail business during the pandemic

Cool J’s Apparel, a retail business started despite the pandemic and one that is still flourishing today, was started by Toni Hopkins, a first-time entrepreneur

Looking ahead and taking action! 

As 2022 came to a close, the economic climate of low-income communities continued to see a drastic increase in needs. More than 93% of Wisdom Fund CDFIs indicated a need for additional capital to support the growing demand of WOC entrepreneurs– in total WF CDFIs have reported more than $70M in demonstrated and unmet need. 

Investing in WOC is not only a moral imperative, it’s also a smart investment strategy. WOC are often underrepresented in the business world, despite being a growing demographic with immense potential. By investing in WOC, you not only support the growth of diverse, innovative businesses, but you also contribute to a more equitable and just society.

If you are looking for ways to support women of color

Educate yourself: Take the time to learn about the experiences and challenges faced by women of color in the business world. Read up on successful businesses led by women of color, attend events and conferences, and seek out mentorship opportunities. Understanding the unique strengths and perspectives that women of color bring to the table is the first step in investing in them. Check out CNotes impactful and inspirational borrower stories

Look for diverse opportunities: When searching for investment opportunities, actively seek out businesses led by women of color. Look beyond your usual networks and search for diverse communities and organizations to find potential investments. The CNote Wisdom Fund is a fixed income vehicle that increases capital access and lending for women of color borrowers. 100% of all investor dollars in the Wisdom Fund support women of color borrowers. 

Advocate for diversity: Use your position as an investor or consumer to advocate for more diversity in your professional and personal communities. Encourage the companies you invest in or buy from to prioritize diversity and inclusion, and push for policies that promote equity and inclusion.

To learn more about the CNote Wisdom Fund, click here! 

Read about Cortegia Collins, the women of color entrepreneur that identified a need for good childcare in her community and responded by founding the Good Shepherd Preschool

Cortegia Collins (right) founded the Good Shepherd Preschool and the Foundation for Strengthening Families in St. Louis when she identified a need for better care

By CDFIs, Community Partners, Equality, Impact Investing

Revolutionizing sustainable growth: Black-led financial institutions unleash potential with capital access and financial resources

Authored by CNote’s Director of Due Diligence, Julia Phipps

In the U.S. much of how we define success can only be achieved with access to sufficient capital. Pursuing an education, providing security and food for your family, and even employment mobility is often limited by an individual’s capital. Inadequate access to capital continues to be a particularly important constraint limiting the growth of small businesses and the development of generational wealth. 

Historical programs such as redlining and persistent racial discrimination have meant access to capital is largely racially biased. This weighs heavily on BIPOC communities and has contributed to the wide racial wealth gap. According to recent economic reports, the median net worth for white households is currently almost 8 times the median net worth of Black households. Unfortunately, the disparity in these numbers has remained consistent for over two decades.

On the frontline of this effort to fund and support communities of color across the U.S. is a network of Black-led, impact-driven financial institutions. For years, these institutions have played a vital role in generating economic growth and opportunity in some of our nation’s most distressed communities. Black-led institutions, which are often located in predominantly BIPOC neighborhoods, work within communities of color and are important for their cultural competence. These institutions maintain close ties with the communities they serve, and can better advocate for the challenges they face – like limited access to capital. 

Image by Freepik

This work is needed most in times of economic or natural disaster, when BIPOC communities are often the hardest hit and slowest to reach recovery. For example, during the housing crisis between 2007 and 2013, Black-owned lenders increased mortgage lending to Black borrowers while other institutions retreated. Similarly, CDFIs, often considered financial first responders in a crisis, stepped up to support Black-owned businesses during the worst of the pandemic. Overwhelming evidence has pointed to community-based businesses as one of the most effective tools to close the racial wealth gap.

At CNote we are poised to work with an array of inspiring, Black-led banks and loan funds with either a community development financial institution (CDFI) designation, a minority depository institution (MDI) designation, or at times both a CDFI and MDI designation. We have seen firsthand the unique ways they are able to show up and support Black communities. 

Baltimore Community Lending (BCL) is a Black-led CDFI serving the greater Baltimore Metro area with innovative and flexible financial resources to promote community development. They are dedicated to delivering these resources to low-wealth, low-income, and other disadvantaged populations to help them join the economic mainstream via loans to small real estate developers and small business owners committed to developing under-resourced neighborhoods

Image by Freepik

In 2021, BCL deployed $7.5 million to real estate developers and small business owners in Baltimore City who had no relationship with or were unable to get a loan from mainstream financial institutions. They supported the creation of 43 affordable housing units, community facilities, and mixed-use developments in Baltimore neighborhoods. 

In addition to their lending impact, BCL is involved in numerous efforts to uplift the CDFI industry as a whole to better serve entrepreneurs of color. Watchen Harris Bruce, the CDFI’s CEO, is also a board member of the African American Alliance of CDFI CEOs (AAA), a nonprofit coalition with the purpose of strengthening AAA members and empowering their organizations to scale efforts to sustainably support low-and moderate-income Black populations and communities across the U.S. As well as working with CNote to deliver investor capital to communities across Baltimore, BCL is a member of the Wisdom Fund Collaborative, a cohort of lenders from across the nation that share loan data and peer learnings to make the lending process more inclusive for women of color entrepreneurs.

Staff from Virginia Community Capital, a CDFI bank CNote deposits investor capital with through Impact Cash

Citizens Trust Bank (CTB), is an impact-driven financial institution that was established in 1921 and is headquartered in Atlanta, GA. Led by a Black, woman CEO and as a designated CDFI and MDI, CTB is committed to closing the racial wealth gap and uplifting Black and Brown communities through financial education and inclusion. CTB has focused on bringing financial services and products to people of color since its inception, with a deepened focus on providing access to unbanked and underbanked individuals. A critical component of this is both assisting community members in establishing a banking relationship and providing access to lending products. One additional area of focus for CTB that has a resounding impact through BIPOC communities is homeownership assistance. 

Homeownership has been the most effective way that Americans build wealth, which can be passed down from generation to generation. CTB-hosted homeownership workshops reach over 4,000 people annually. With over 90% of its assisted home mortgages located in the communities the Bank serves, and more specifically to people of color, this has broad implications for creating sustainable wealth in BIPOC households and communities beyond.

These are two of the institutions innovating supportive financial resources for Black communities across the U.S. We urge you to consider how you can in turn support these financial institutions in their mission and in doing so, further diversity, equity, and inclusion in our financial system and communities at large. 

Here are resources to explore during Black History Month and beyond:


By CNote, Impact Investing, Impact Metrics

CNote’s Q4 2022 Impact Report

CNote is excited to share our Q4 2022 Impact Report.

Our Q4 report features CNote’s exciting firm growth, the impact our mission-driven partners have had in communities, and a deeper look at the Wisdom Fund. Additionally, CNote shares details around some of the events our Director of Impact Evaluation, Tamra Thetford, and our Community Development Director, Stacy Zielinski, attended this quarter.

In this report you will see:

  • More information on CNote’s oversubscribed $7 million Series A Preferred Stock investment round that closed in September.
  • An update on Impact Cash, CNote’s fixed income solutions, and our customizable promissory loans.
  • An update on the Wisdom Fund collaborative and the support collaborative members provide to women of color entrepreneurs in addition to capital.
  • A look at some of the innovative loan fund and depository institutions putting CNote capital to work in under-served communities.
  • Insight into CNote’s belief that all investors should have the opportunity to invest for impact.

By CNote

CNote attends the National Bankers Association’s 95 Anniversary Conference

CNote attends the National Bankers Association’s 95 Anniversary Conference in D.C.

The National Bankers Association’s 95th Anniversary Conference: Honoring the Past, Shaping the Future: MDIs and the Road to Wealth Creation was held on October 13th and 14th in Washington D.C. The conference featured two days of programs and events focused on strengthening minority depository institutions (MDIs). CNote’s Barāta A Bey, director of community finance, was in attendance. 

In addition to connecting in person with banks and vendors in the community and impact-driven finance space, Barāta sat in on talks featuring federal regulators, the U.S. Department of Treasury, and spokespeople from the Federal Reserve on topics including future MDI funding opportunities, advancing financial inclusion, and today’s economy. 

Barāta also attended a session, “Closing the Racial Wealth Gap: How Impact Investing and Reporting is Critical for MDIs,” which was a conversation around the key role investors can play in scaling the impactful work MDIs achieve. National Bankers Association (NBA) is a trade association focused on the priorities and needs of MDIs. NBA works to support and strengthen America’s minority-owned and operated banks through federal advocacy, policy, and programs. NBA’s members include Black, Hispanic, Asian, Pacific Islander, Indigenous, and women-owned and operated banks across the country, all working to help low- and moderate-income communities.Through NBA these members gain more opportunities to participate in national conversations about closing the racial wealth gap.

Dominik Mjartan (far left), CEO of CNote partner Optus Bank, and Nicole Elam (center left), president and CEO of NBA together with other conference speakers.

Major conference themes included the trends, challenges, and opportunities that uniquely impact MDIs. Barāta shared that the conference was “an inspiring showcase of innovative solutions coming out of the industry and the organizations and associations around MDIs that are similarly on a mission to eliminate the racial wealth gap in America.” At CNote we’re excited to fold his key learnings into the work we do with MDIs across the country and the communities they serve. 

To learn more about NBA and their annual conference, visit:

By CNote, Impact Investing, Impact Metrics

CNote’s Q3 2022 Impact Report

CNote is excited to share our Q3 2022 Impact Report.

Our Q3 report features the impact our mission-driven partners have had in communities and the innovative work other industry associations are pioneering alongside us. Additionally, CNote is excited to announce two new hires on our engineering team, and that we have expanded the suppliers we work with to include a women-led and -founded IT and security support company.

In this report you will see:

  • An update on CNote’s growing and diverse team and network.
  • An update on Impact Cash, CNote’s fixed income solutions, and our customizable promissory loans.
  • A look at some of inspiring industry associations CNote works with that are pioneering innovative programs of their own.
  • CNote borrower spotlights that highlight the impactful work mission-driven lenders have done this quarter.

By CNote

CNote Closes Series A Investment, Cementing the Women-Led Impact Platform’s Leadership in Closing the U.S. Wealth Gap Through Financial Innovation

CNote Closes Series A Investment, Cementing the WomenLed Impact Platform’s Leadership
in Closing the U.S. Wealth Gap Through Financial Innovation

September 19, 2022 // Oakland, CA // Building on the momentum of its impact platform—already adopted by corporate leaders including Apple, Mastercard, Netflix and PayPal as a scalable way to address wealth inequality in the U.S.—CNote announced today that it raised $7.25 million in an oversubscribed Series A investment round.

American Family Insurance Institute for Corporate and Social Impact led the round, joined by Astia Fund, BankTech Ventures, Commerce Ventures, CityRock Venture Partners and other investors.

CNote gives corporate treasurers a powerful ESG tool, driving high growth

“We’re addressing a massive systemic problem with a market-friendly platform that has already been adopted by forward-thinking corporations and other institutions,” said Catherine Berman, CEO and co-founder of CNote, which deploys investor funds into community financial institutions that advance economic equality, racial justice, gender equity and climate change adaptation. “By pumping hundreds of millions of dollars into undercapitalized communities, CNote is activating corporate dollars for systemic change while minimizing risk.”

CNote’s technology platform gives corporations a simple, safe way to deploy ESG cash and fixed income in underserved communities at scale. CNote places investor funds into deposit and loan products through a network of over 2,000 impact-driven community financial institutions that serve low- to moderate-income communities, support women and people of color entrepreneurs, fund affordable housing and provide other forms of economic inclusion.

CNote is deploying about $300 million in cash and fixed-income investments via its platform—reflecting over 370% growth since 2020. The platform has 1,900 corporate, foundation and individual investors, including AMD, Patagonia and Xylem, as well as the companies listed above.

Noted Berman, “For CEOs, CFOs and large institutional investors, CNote has the network, the community finance expertise and the technology to provide unparalleled access to ESG cash and fixed-income opportunities at scale alongside trackable impact. We’ve reduced the friction points so they can activate their balance sheets quickly and with minimal effort.”

The Series A investment will enable CNote to advance its technology, expand its sales team and deepen its network of community financial institutions.

Mission-aligned investors aim to advance equality and build strong communities

The Series A round reflects the women-led fintech’s insight that assembling a diverse stakeholder group is key to multiplying its successes. “We’re co-creating the future we want to see, and that requires bringing key stakeholders to the table, including these investors,” Berman said.

“CNote is leading the way in providing capital for CDFIs [community development financial institutions] and minority depository institutions, capitalizing on the exploding ESG market,” said Rob Kornblum, principal and portfolio manager for the American Family Insurance Institute for Corporate and Social Impact. “We know that capital access is one of the keys to producing generational wealth for underserved communities. We are thrilled to partner with Catherine and Yuliya [Tarasava, CNote co-founder] in leading the Series A round for CNote.”

H/L Ventures, a longtime advisor to CNote and a prior investor, manages a family of companies and funds that comprises a holistic company-building system.

“CNote is breaking new ground in impact investment, enabling some of the largest organizations in the world to make a difference with their treasury dollars,” said Oliver Libby, co-founding Managing Partner of leading New York venture firm CityRock Venture Partners, H/L Ventures’ opportunity fund. “Our firm seeks startups with high growth potential, positive impact and diverse leadership teams; under Catherine and Yuliya’s inspired management, CNote exemplifies the extraordinary, scalable business potential of investment for impact.”

Other investors in the round include return participants The Artemis Fund, BLD Ventures, Golden Seeds, Lateral Capital V LP, ManchesterStory Venture Fund, Oxford Angel Fund and Rebalance Capital.

About CNote
CNote, co-founded by Catherine Berman and Yuliya Tarasava, 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, institutions 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 adaptation. 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 U.N. Women’s Empowerment Principles program in 2020.

About The American Family Institute for Corporate and Social Impact
The American Family Insurance Institute for Corporate and Social Impact is a venture capital firm and partner of choice for exceptional entrepreneurs who are building scalable, sustainable businesses in a long-term effort to close equity gaps in America. It also recognizes that capacity building and supporting organizations and experts who have been working toward social causes are equally important in making a positive impact within our communities around the country.

Media Contacts

Thinkshift Communications for CNote

Sarah Grolnic-McClurg,

510-898-1837 (primary), 415-828-3143 (cell)

By CNote

CNote attends 24th Annual AACUC Conference

CNote attends the 24th Annual AACUC Conference in St. Pete Beach, Florida to connect with our credit union community

CNote was honored to attend The African American Credit Union Coalition’s (AACUC) 24th Annual AACUC Conference held in St. Pete Beach, FL in August. The conference was a weeklong event offering training, networking, and educational opportunities for current and future credit union professionals and was a celebration of Black excellence in the credit union industry.

This year’s theme was “Reunite and Reignite” and the event featured an array of panels and speakers covering topics like technology and DEI, helping credit union managers recognize best practices to help engage and retain talent, and how to navigate today’s complex financial and economic environment; the inaugural Small Credit Union Summit; and the African American Credit Union Hall of Fame Induction Ceremony. The conference concluded with a gala-style Pete Crear Lifetime Achievement Award ceremony, dinner and after party.

AACUC is a non-profit organization made up of diverse and multicultural credit union industry professionals and volunteers. The organization was created to increase the strength of the global credit union community and is recognized for shaping diversity, equity, and inclusion in the credit union movement. AACUC supports programs that offer benefits for African American credit union professionals and volunteers, credit unions, and credit union vendor partners. Their goals and objectives include

  • expanding the interest and increasing the number of minorities in the credit union movement
  • increasing outreach of the credit union movement in African countries and in the United States through credit union mentoring
  • providing scholarship programs and educational opportunities to credit union professionals and volunteers toward professional development and advancement
  • enhancing internship and scholarship programs for African American college students in pursuit of financial services careers to introduce them to and encourage them to seek employment within the credit union movement.

Barāta Bey, CNote’s Director of Community Finance, speaking to a room full of credit union professionals at the AACUC conference

At the conference, CNote participated with more than 30 other industry partners, and presented on the work we do to support credit unions and minority deposit institutions by streamlining their process of accepting outside deposits, providing tools and resources to better share and highlight their community impact, and by bridging long-term relationships between corporate investors and credit unions for sustainable funding relationships. Additionally, CNote’s booth at AACUC’s vendor fair provided a  chance to connect personally with diverse credit unions from across the country on their needs and how we might partner to address them.

Barāta Bey, one of the CNote team members to attend the in-person event said, “We’re taking away from this event a lot of great conversations, a lot of great new relationships, and new tactics for supporting these financial institutions at the front lines of supporting under-resourced communities. I’m really excited to see where these new connections take us when it comes to innovating smarter for credit unions and serving more communities in the US overall.”

To learn more about AACUC and their annual conference, visit:

By CNote, Impact Investing, Impact Metrics

CNote’s Q2 2022 Impact Report

CNote is excited to share our Q2 2022 Impact Report.

As of June 30th, 2022 CNote achieved $303M assets on platform. Additionally, we welcomed a new Community Finance Director to the team. As we grow and reach more under-resourced communities throughout the US, we’re excited to share this progress.

In this report you will see:

  • An update on CNote and some of our new enterprise investors.
  • An impact investing trend highlight.
  • An update on CNote’s Impact Cash and fixed income solutions.
  • Partner spotlights highlighting the work mission-driven lenders have done this quarter.

By CNote, Impact Investing, Impact Metrics

CNote’s 2021 Annual Impact Report

CNote is thrilled to release our 2021 CNote Annual Report.

Throughout 2021, CNote investors have helped us expand our nationwide work and impact to reach more low-income and underserved communities than ever before.

In this report you will see:

  • A firm update on key accomplishments in 2021
  • CNote’s 2021 impact metrics
  • Recognition of our corporate investors
  • Several partner spotlights highlighting the work mission-driven lenders are doing
  • A message from our co-founders

By CNote

CNote’s Community Investment Platform Nears $300M, a Sign of Balance Sheet Activism Rising Across Business Sectors

CNote’s Community Investment Platform Nears $300M, a Sign of Balance Sheet Activism Rising Across Business Sectors

Apple, Netflix, Xylem and others put corporate cash to work in financially underserved communities by moving money to CDFIs, LID credit unions and MDIs throughout the U.S.

June 2nd, 2022 // Oakland, CA // Recent commitments from Apple, Netflix and Xylem have pushed the total funding being deployed to communities via CNote’s investment platform to nearly $300 million. The milestone reflects accelerated momentum for the women-led fintech firm’s work to unleash corporate balance sheets for racial and gender equity.

“We’re seeing continued interest from large corporations in balance sheet activism. It’s a movement, not a moment,” said Catherine Berman, CEO of CNote, adding that “this interest runs across industries, as our newest clients illustrate. They’re looking at the corporate treasury as a tool to deepen their DEI, ESG and racial justice goals.”

CNote enables finance leaders to advance corporate goals while minimizing risk

Apple’s $25 million commitment to CNote, announced on May 5, is part of its broader Racial Equity and Justice Initiative, an effort to address systemic racism in America and expand opportunities for communities of color. According to Lisa Jackson, Apple’s vice president of Environment, Policy and Social Initiatives, “By working with CNote to get funds directly to historically under-resourced communities through their local financial institutions, we can support equity, entrepreneurship and access.”

Diversity, equity and inclusion are critical elements of Xylem’s sustainability strategy, the global water technology company said in announcing its initial $5 million commitment, noting that CNote’s platform “provides an easy-to-use and measurable tool for streamlining Xylem’s investment with one interface while maximizing the impact created for underserved communities of color across the U.S.”

CNote’s platform enables corporations and other institutional investors to contribute to racial and gender equity while generating returns on fixed income and cash allocations. It places money in CDFI loan funds and in depository products, such as money market accounts and CDs, from vetted FDIC- and NCUA-insured community development financial institutions (CDFIs), low-income designation (LID) credit unions and minority depository institutions (MDIs).

Funds deployed through CNote’s platform grow the deposit base of mission-driven banks and credit unions that serve low- and moderate-income people as well as Black, Indigenous, and people of color (BIPOC) communities, allowing those institutions to improve their reach and service. CDFIs fund women- and minority-led small businesses, affordable housing and economic development. LID credit unions serve communities where most people have household incomes well below the national median. And MDIs are financial lifelines for communities of color.

CNote’s impact reporting highlights ESG’s social dimension

Apple, Netflix, Xylem and others  using CNote’s platform—including Mastercard and PayPal—receive quarterly impact reports showing how their dollars were deployed and how communities benefited. That is a significant advantage given the heightened attention to ESG reporting, Berman noted: “When companies activate their balance sheet to expand access and opportunities for communities of color and other underserved communities, they are authentically addressing the social dimension of ESG.”

Find out more about CNote’s platform and see illustrative beneficiaries here.

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 advance economic equality, racial justice, gender equity and climate change initiatives. Platform users can track their impact via CNote’s quarterly reporting on the social benefits of their deposits and investments. 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 U.N. Women’s Empowerment Principles program in 2020.

Media Contact

Thinkshift Communications

Sarah Grolnic-McClurg | | Primary: 510-898-1837 | Mobile: 415-828-3143

By CNote, Community Partners

Authentic and Shareable Impact: Best Practices for Credit Unions

On May 24th, 2022 CNote hosted a webinar alongside CUNA Strategic Services where they discussed best practices for credit unions to follow when measuring impact and sharing their impact stories.


Authentic and Shareable Impact | Best Practices for Credit Unions

Brief Summary:

Credit unions and other mission-driven depository organizations create financial inclusion and further sustainable community development. Today, the organizations that get the impact piece right and showcase that community impact effectively, gain more opportunities for growth, visibility, and deeper partnerships with mission-aligned investors. “Mission is now the opportunity for greater margin,” as Cathie Mahon of Inclusiv puts it.

In this webinar, you will learn about the business case for sharing the difference you’re making in communities and how that can contribute to short-term and long-term success.  You will also learn best practices for impact measurement and reporting and resources to help credit unions in this effort.

Topics include:

  • What impact investors are looking for and where your impact story fits
  • 5 keys to sharing your impact story
  • Storytelling and impact measurement in practice
  • Impactrelated resources

Speakers include:

  •  Tamra Thetford, Director of Impact Evaluation, CNote
  •  Catherine Berman, Co-founder, and CEO, CNote
  •  Hank Hubbard, President, and CEO, One Detroit Credit Union
  • Jenny Jackson, Alliance Manager, CUNA Strategic Services
  • Michelle Christie, Senior Manager, Financial Inclusion and Impact, National Credit Union Foundation
By CNote

CNote Expands Access to Capital for Community Financial Institutions With $25 Million From Apple to Support Communities of Color

CNote Expands Access to Capital for Community Financial Institutions With $25 Million From Apple to Support Communities of Color

March 5, 2022 // Oakland, CA // Today, CNote, an Oakland-based fintech, announced that Apple will use the CNote platform to deploy $25 million into underserved communities across the country.

Apple’s $25 million commitment is part of its broader Racial Equity and Justice Initiative, an effort to address systemic racism in America and expand opportunities for communities of color. The new funding builds on Apple’s previously announced commitments to expand economic empowerment and support entrepreneurs of color.

“We’re committed to helping ensure that everyone has access to the opportunity to pursue their dreams and create our shared future,” said Lisa Jackson, Apple’s vice president of Environment, Policy and Social Initiatives. “By working with CNote to get funds directly to historically under-resourced communities through their local financial institutions, we can support equity, entrepreneurship and access.”

“Corporations have an enormous opportunity to help communities across the U.S. thrive by changing the way they manage their cash reserves, and we’re excited to see Apple at the forefront of this emerging trend,” said Catherine Berman, CEO of CNote. “Through our platform, we have already started moving Apple deposits into low-income communities and communities of color.”

Initial deposits are already at work in communities

CNote has deployed an initial round of Apple deposits to mission-driven financial institutions, including ANECA Federal Credit Union in Louisiana; Bank of Cherokee County in Oklahoma; Carver State Bank in Georgia; Education Credit Union in Texas; First Southwest Bank in Colorado; Hope Credit Union, which serves Alabama, Arkansas, Louisiana, Mississippi and Tennessee; Kaua‘i Federal Credit Union in Hawai‘i; Latino Community Credit Union in North Carolina; Legacy Bank in Missouri; Optus Bank in South Carolina; Self-Help Federal Credit Union, with locations in California, Illinois, Washington and Wisconsin; and VCC Bank in Virginia.

“Partnerships like the one we have with CNote and Apple are essential to our efforts to expand access to capital, as well as to financial products and services, in a historically underserved market,” said Susannah Plumb Scott, executive vice president at Bank of Cherokee County. The bank, formed in 1907 by a group of prominent Cherokee Nation members, invests 95% of deposits back into Cherokee County.

Eric Jenkins, president and CEO of Education Credit Union, founded by Amarillo schoolteachers in 1935, said deposits like Apple’s “allow ECU to serve more consumers and meet a broader range of needs.”

CNote’s platform provides insured deposits across a network of vetted mission-driven financial institutions

CNote’s platform fills a gap for corporate and other institutional investors that want to support financially underserved communities across the country while generating returns on cash allocations. CNote moves client deposits into FDIC- and NCUA-insured accounts across a wide network of mission-driven deposit institutions, including community development financial institutions (CDFIs), low-income designated (LID) credit unions, and minority depository institutions (MDIs).

Funds committed through the CNote platform increase the deposit base of mission-driven banks and credit unions that serve low- to moderate-income people as well as BIPOC (Black, Indigenous, and people of color) communities. These types of deposits help fuel affordable housing and small business loans, and provide a just alternative to predatory lending. Apple and other CNote clients—including Mastercard, Patagonia, PayPal and Netflix—receive quarterly impact reports that provide details on which institutions have received deposits and the populations benefiting from those investments.

Find out more about the CNote platform and see illustrative beneficiaries here.

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 advance 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 U.N. Women’s Empowerment Principles program in 2020.

Media Contact

Thinkshift Communications

Sarah Grolnic-McClurg | | Primary: 510-898-1837 | Mobile: 415-828-3143

By Equality, Small Businesses

Investing In Black-owned Small Businesses To Close the Racial Wealth Gap

There is a staggering disparity between the wealth of Black communities and their white counterparts in the United States where wealth is the difference between financial and social mobility and terminal economic insecurity. In 2019, Black households, on average, had 14.5 percent of the wealth of the average white household. This disparity is reflected throughout racial inequities in financial access, educational attainment, and health outcomes for people of color.

Entrepreneurship and business ownership are crucial and proven ways to develop community wealth that benefits business owners and the people they employ. Black business owners have historically had unequal access to the benefits of business ownership and dealt with disproportionate barriers to accessing capital. Investing in the success of these enterprises owned and led by Black entrepreneurs is a critical component to closing the wealth gap and improving Black equity in America.

All of us can participate in supporting Black-owned small businesses. Here are a few ways to make a difference.

Ethel Brooks (right) is the cancer survivor and entrepreneur behind Bennett Construction

1. Shop and support Black-owned small businesses directly

In 2020 consumer spending accounted for 70% of economic growth. By taking the time to divert some of that purchasing power, buyers can contribute to strengthening Black businesses as a direct line to supporting Black communities and their economy with job growth and wealth generation. Black-owned businesses tend to be smaller, local establishments and multiple studies have shown that these small businesses reinvest in the local economy at a higher rate than chains do.

By shopping at Black-owned businesses, we can create more opportunities for meaningful savings, property ownership, credit building, and generational wealth. And luckily, this can be easy to do! Below we have compiled a list of resources to find Black-owned enterprises in your area.

  • Support Black Owned: This website and mobile app helps you find Black-owned businesses from all over the country.
  • African American Literature Book Club: This database is dedicated to the many Black-owned bookstores across America.
  • EatOkra: The EatOkra app is great for specifically finding Black-owned restaurants and food services.

The Tackett Firm is a Black woman-owned and led law firm that received a PPP loan to stay open during the pandemic

2. Encourage Your Company to Participate in Racial Justice Pledges 

In the aftermath of 2020’s racial justice protests, large corporations pledged billions of dollars to either support or directly spend money at Black-owned businesses.

​​Sephora, for example, announced last year that they will increase their shelf space for Black-owned businesses from 3% to 15% and Target pledged to increase the number of Black employees by 20%. Not only is there a strong business case for companies to follow through on these promises, but supporting Black-owned businesses has far-reaching positive implications for Black communities and the economy overall

You can advocate for greater diversity, equity, and inclusion within your own organization by pushing for similar commitments. Consider taking The 15 Percent Pledge, which is a call to action for major retailers and corporations to join their peers creating supportive ecosystems for Black-owned businesses to succeed. 

Otherwise, explore racial equity pledges that work for your firm. Check out Just Capital’s Corporate Racial Equity Tracker to get inspired by other corporations’ approaches to racial justice. 

Tanesha Sims-Summers is the female entrepreneur of color behind Naughty But Nice Kettle Corn Co.

3. Bank with Black-led Financial Institutions 

A 2017 study by the National Community Reinvestment Coalition found that traditional banks were twice as likely to provide business loans to white applicants than Black ones. This is reflected in the finding that 30 percent of black families are underserved by banks and 17 percent are disconnected from banking opportunities.

Intentional about helping the Black community, Black-led financial institutions tend to serve African Americans more than other banks do. Growing the deposit base for these organizations directly expands their capacity to increase financial access and wealth generation within the communities they serve.

Consider transitioning your banking relationships to include Black-owned or led financial institutions. Investopedia, Mighty Deposits, and Business Insider all offer comprehensive guides to Black-led financial institutions available by state, and equally share further background on the history and merits of Black banking. 

The Harlem Entrepreneurial Fund is one such Black-led financial institution.

4. Explore CNote’s Wisdom Fund

A report found that Black-owned businesses decreased by more than 40% in April 2020, which was more than other racial and ethnic groups. Today, the number of Black-owned businesses has since recovered, and currently, there are 30% more Black-owned businesses than there were pre-pandemic. Much of this growth is being driven by women of color

Historically women of color entrepreneurs have faced the compounded barriers of racist and sexist lending practices endemic to the financial system. Black women entrepreneurs have a median net worth 10 times greater than that of their nonbusiness-owning peers. Investing in the success of Women of Color entrepreneurs, therefore, has an outsized effect on the development of Black economies.

CNote launched the Wisdom Fund product to directly address the disparity in small business lending and further investigate the barriers to capital that burden Women of Color entrepreneurs. Capital invested in the Wisdom Fund is deployed with mission-driven lenders across the US as affordably-priced loan capital targeting female small business owners. 

You can learn more about the Wisdom Fund and the work we’re doing to dismantle capital barriers for Women of Color here or inquire about investing directly via

Ebony Harris and her staff at In Good Hands Learning Center in Jackson, Tennessee

Supporting Black-owned businesses is a direct line to supporting Black communities and advancing racial equity. Above we’ve listed just a few avenues to explore, but the truth of it is today there is a myriad of options to authentically advance inclusive economies and shrink the persistent racial wealth gap year-round.

Learn More

  • 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 CNote, Community Partners

Free Resources for Growth in 2022

On January 26th, 2022 CNote hosted a webinar alongside Inclusiv and CUNA Strategic Services where they discussed key resources to help mission driven community financial institutions grow in 2022 and deepen their community impact.


Deepening Community Impact: A Discussion on Key Resources to Help Your Organization Grow in 2022

Brief Summary:

Credit unions and other mission driven depository organizations that focus on financial inclusion and community development outperform their peers. “Mission is now the opportunity for greater margin,” as Cathie Mahon of Inclusiv puts it. In this webinar, you will learn about the supports which exist to help credit unions and depository organizations transition to a financial inclusion mission and the benefits that kind of transition has on the growth of an organization. You will also learn about the importance of using data based measurement systems to capture the impact and mission fulfillment financial institutions achieve as a way to build the industry and reach new communities. Lastly you will learn about the visibility, partnership, and capital opportunities mission-driven organizations gain through capital intermediaries like CUNA, Inclusiv, and CNote.

Topics include:

  • How to access new sources of growth capital
  • How to tap into non-brokered, low-cost deposits
  • How to tell your story better to drive increased membership
  • How to access government programs that may support your growth or TA efforts

Speakers include:

  •  Mike Schenk, Deputy Chief Advocacy Officer for Policy Analysis and Chief Economist, CUNA
  •  Cathie Mahon, President, and CEO, Inclusiv
  •  Catherine Berman, Co-founder, and CEO, CNote
By CNote

Black Equity at Work Certification Program and CNote Partner to Unleash the Corporate Balance Sheet for Racial Equity

Black Equity at Work Certification Program and CNote Partner to Unleash the Corporate Balance Sheet for Racial Equity

Management Leadership for Tomorrow joins with women-led impact investing platform to activate every aspect of corporate operations for racial equity, starting with the Fortune 500

November 2, 2021 // Oakland, CA // Management Leadership for Tomorrow and CNote today announced a new partnership that will help industry-leading employers deliver on their social justice commitments.

MLT’s Black Equity at Work Certification, co-developed with Boston Consulting Group, requires employers to pursue Black equity with the same rigor and results orientation they apply to other core business priorities. The certification, tied to a comprehensive three-year plan, focuses on three areas—people, purchasing and philanthropy. Participating employers receive benchmarks, best practices and insights on how to achieve racial equity in the workplace across five pillars:

  1. Black representation at every level
  2. Compensation equity
  3. Inclusive, anti-racist work environment
  4. Racially just business practices
  5. Racial justice contributions and investments

Forty-five industry-leading employers have committed to the certification, including BlackRock, Cargill, and ViacomCBS.

Partnership with CNote Puts the Corporate Balance Sheet to Work for Racial Equity

Oakland-based CNote, a women-led Certified B Corporation, deploys corporate deposits and investments to its national network of community development financial institutions, low-income designated credit unions and minority deposit institutions. The company has helped corporations including PayPal and Mastercard move millions into underserved communities to advance economic inclusion and start to close the racial wealth gap.

Together, CNote and MLT will give corporations a comprehensive pathway to combining workforce action with Black-equity–focused corporate deposits and investments—at a time when corporations are looking for solutions and expertise to meet the commitments they’ve made to racial equity. The two organizations will collaborate on educating corporate partners, and investments and deposits made through CNote’s platform can earn points toward Black Equity at Work Certification.

“Our partnership with CNote is a natural complement to the Black Equity at Work Certification Program, allowing us to help committed corporations use their balance sheets to contribute to racial justice,” said Indy Adenaw, managing director of the MLT Black Equity at Work Certification Program.

Catherine Berman, CEO of CNote, commented, “MLT’s Black Equity at Work Certification is one of the most effective actions corporations seeking to drive greater racial justice can take. CNote’s ability to use the power of the corporate balance sheet to align around greater Black equitywhile staying true to a corporation’s risk and return needscreates an actionable and integral road map that complements MLT’s dynamic work.

Peloton’s senior vice president of Diversity, Equity and Inclusion, Dr. Christal Morris, explained the value of the certification in an earlier announcement: “Partnering with MLT to achieve the Black Equity at Work Certification is our latest step to make sure all of our team members can bring their true, authentic selves to work. We’re excited to raise the bar and be part of a larger movement investing in Black equity.”


About Management Leadership for Tomorrow

Management Leadership for Tomorrow (MLT) is a national nonprofit working to transform our country’s leadership pipelines and increase access to the American Dream. MLT, founded by John Rice, provides Black, Latinx, and Native American talent with the coaching, playbook and networks they need to excel in high-trajectory careers, secure economic mobility for their families and become high-impact senior leaders equipped to advocate for vulnerable communities. MLT also provides a comprehensive solution for institutions, which combines best-in-class recruitment, retention and diversity strategy offerings. Learn more at

About CNote

CNote is a women-led social enterprise on a mission to close the wealth gap through financial innovation. Using the power of technology and a community-first framework, CNote’s platform enables corporations, institutions and individuals to efficiently invest and deposit cash at scale in community financial institutions. CNote is a Certified B Corporation that has earned “Best for the World” honors from B Lab and was named “Best Women-Owned Business” by the United Nations’ Women’s Empowerment Principles program.

Media contacts


Sarah Grolnic-McClurg, Thinkshift Communications | | office:  510-898-1837 mobile: 415-828-3143

Management Leadership for Tomorrow:

Simone Manee, Marketing & Communications Director | | mobile: 434-327-7359

By CNote

New CNote Research Delivers Insights from Entrepreneurs on Improving Access to Capital for Underserved Women of Color

New CNote Research Delivers Insights from Entrepreneurs on Improving Access to Capital for Underserved Women of Color

By reimagining the lending process through an equity lens, lenders can make decisions that yield economic returns and have a significant social impact, says report.

October 20, 2021 // Oakland, CA // CNote, a women-led community investment platform with a mission of closing the wealth gap, today released new research conducted to fix a persistent problem: Women of color start businesses at a faster rate than anyone yet remain underserved by lenders. 

Redesigning Lending: Improving Access to Capital for Women of Color Entrepreneurs reports on research conducted by Impact Experience and funded by the Tarsadia Foundation under the umbrella of CNote’s Wisdom Fund. The fund funnels accredited investor capital into small business loans for women of color and aims to help lenders modernize lending programs using a human-centered design approach. 

The research findings reflect insights from BIPOC women entrepreneurs collected through survey responses from over 75 women, more than 40 hours of individual interviews, and a two-day convening of 20 women. 

Women identify major barriers to capital access

These racially diverse women business owners—66% Black, 28% Latina and 5% Asian or Pacific Islander—identified widespread barriers to capital access, including these key issues:

  • 87.5% of respondents felt that race or gender bias contributed to how they were treated during the lending process.
  • 69% of respondents needed working capital but were not able to find this type of loan product.
  • A majority found the lending process convoluted and labor-intensive, and experienced drastic differences between lenders, significant application processing delays and high denial rates with no explanations. 

The way forward: how lenders can better serve this growing market

The researchers’ in-depth discussions with women about their lending experiences yielded recommendations in four areas for improving the process and enabling women entrepreneurs of color to build their businesses:

  • Offer larger loans and more flexible loan terms, including credit lines for working capital.
  • Revamp credit scoring to more accurately reflect creditworthiness—by considering rent and utility payments, lack of delinquencies and revenue under contract, for example. 
  • Standardize loan applications across lenders to reduce the time and administrative burden of applying.
  • Provide transparency in decision-making as well as post-lending resources, such as financial and leadership coaching, to increase the likelihood of business success. 

“This research highlights lenders’ opportunity to better meet the needs of these potential customers and contribute to thriving communities,” said Danielle Burns, vice president and head of Business Development at CNote. “If we can fund businesses led by women of color with the type of loans they actually need, that will jump-start wealth creation in places where it’s most needed.” 

Research partners center women’s experiences

CNote’s Wisdom Fund is a collaboration with community lenders that includes cataloging and leveraging research findings to improve the lending experience of BIPOC women business owners.

“We invested in the Wisdom Fund because of its community-driven approach to improving access to capital,” said Priya Bery, CEO of Tarsadia Foundation. “This study empowered women of color to tell us how small business lending programs are serving them, and we hope these findings will serve as a blueprint to address barriers to wealth creation that BIPOC women face.” 

Burns observed that the Wisdom Fund is attracting growing interest from corporations and other institutional investors, such as PayPal, that are focused on furthering racial and gender equity. “These investors are looking for measurable impact, and while we are delivering that now, we know that a lending process that better serves BIPOC women from start to finish is essential to closing the wealth gap.”


About CNote

CNote is a women-led social enterprise on a mission to close the wealth gap through financial innovation. Using the power of technology and a community-first framework, CNote’s platform enables corporations, institutions and individuals to efficiently invest and deposit cash at scale in community financial institutions. CNote is a Certified B Corporation that has earned “Best for the World” honors from B Lab and was named “Best Women-Owned Business” by the United Nations’ Women’s Empowerment Principles program.

Media contacts

Thinkshift Communications 

Sarah | (office) 510-898-1837 (mobile) 415-828-3143

By CDFIs, CNote

CDFI Loan Fund Capital Needs Survey: Why and What’s Next?

CDFI Loans Fund Capital Needs Survey: Why and What’s Next? 

The CNote CDFI Loans Fund Capital Needs Survey supports a data-driven approach to investing in communities.

What is the CNote CDFI Loans Fund Capital Needs Survey?

CNote seeks to empower investors to make informed decisions and target investments where the need is greatest. To specifically assess and catalog current and expected needs for CDFIs, CNote has undertaken a bi-annual CDFI Loans Fund Capital Needs Survey to make CDFI-data easily accessible. 

Community Development Financial Institutions (“CDFIs”) are private organizations fully dedicated to principled, affordable lending that enables under-resourced individuals and communities to participate in the economic mainstream. 1

Their commitment to keep capital flowing into communities is crucial to ensuring healthy local economies. The need is great. The data to drive investment is the missing piece.

The initial CDFI Loans Fund Capital Needs Survey, published in Spring 2021, polled 52 CDFIs across the country (around 10% of the existing CDFI loan funds in the US) about their capital needs and expectations. The data collected included the amount of capital the CDFIs hoped to deploy, optimal interest rates, segments that are underfunded and underserved demographics. 

We believe in data-driven investment

Why This Survey?

The goal of the survey is to give investors an understanding of the landscape of opportunities in the CDFI industry so they can make data-driven decisions and increase impact. Additionally, it provides useful benchmarks for growing and emerging CDFIs as they assess the price of capital and other concerns. 

Bridging the knowledge and opportunity gap between investors (large and small) and the options to invest in CDFIs is the best way to align expectations among investors and CDFIs. The result should be increased investment in the CDFI industry, as investors and partners better understand demands and opportunities. That means more crucial dollars to local businesses, first-time entrepreneurs and homeowners and jobs created in underserved communities across America. And more investment in women and people of color. When it is needed most.

CDFIs are a powerful engine for economic change

What the Future Holds 

CNote will continue to commit resources to the CDFI Loans Capital Needs Survey and provide more data about CDFI capital needs to drive efficient and high-impact investing decisions. 

The CDFI Loans Fund Capital Needs Survey will become a longitudinal study (with discrete findings as well), with bi-annual reports released in mid-April and mid-August every year. CNote will devote resources to growing the number of respondents and continue to chart the expanding landscape for investors and CDFIs alike. 

Because the industry is diverse (some CDFIs only originate small business loans while others focus on affordable housing or other priorities), an integrated snapshot of trends may help investors refine baseline expectations for impact investing that meets their goals. 

A Reliable Source for Investors

By capturing longitudinal data around how capital needs evolve and identifying areas where investments are needed, CNote hopes that the Survey becomes a reliable, information-rich source for investors to consult. 

Some of the ways the Survey can support investors and other entities are by: 

  • Enabling investors to make better allocation decisions by providing timely, relevant and up-to-date data.
  • Educating new CDFI investors about the state of the market and how to work with CDFIs. 
  • Highlighting areas for investment and hopefully filling gaps by driving capital towards them.

For example, according to the initial findings:

The most underfunded groups according to responding CDFIs: 

  • 74% Low-to-Moderate Income (LMI) borrowers
  • 55% Black borrowers 
  • 44% Latinx borrowers 
  • 41% Women borrowers

The most underfunded segments according to responding CDFIs:

  • 55% affordable housing lending 
  • 39% small business lending

The hope is that this data will encourage investors to commit more capital to these groups and segments. 

  • Providing a robust data set that could have utility outside of investment such as informing policy decisions, government funding, and awards programs.
  • Demonstrating the nature of CDFI funding, whether static or evolving, and how broader economic trends may impact community lenders. 

What’s At Stake?

Economic and racial justice can be furthered through enlightened investment.

Economic and racial justice can be furthered through enlightened investment. Job creation, funding of BIPOC-owned small businesses and support for affordable housing development can make a significant difference in leveling the economic playing field. 

That’s why CNote is doing the work on the CDFI Loans Capital Needs Survey, to increase the impact of impact investing.

By CDFIs, CNote

CNote survey shows major opportunity for corporations, foundations and other accredited investors to meet demand for capital in underserved American communities

  • 52 CDFIs could pump at least $182M into underserved communities within a year if they could access capital at favorable rates
  • CDFIs serving Black and low- to moderate-income communities report a persistent capital shortfall, with housing and small business lending the most underfunded

Oakland, CA—Loan funds certified as community development financial institutions (CDFIs) have an urgent need for capital over the next six to 12 months, particularly to meet the needs of low- to moderate-income, Black, Latinx and women borrowers, finds a new report from CNote, a women-led fintech firm working to close the wealth gap for women and people of color.

CNote’s CDFI Loan Fund Capital Needs Survey Report, the first in a planned semiannual series, is designed to map CDFI capital needs and point corporate, foundation and other accredited investors toward high-impact investment opportunities. As an intermediary between these mission-driven institutions and investors, CNote seeks to provide a frictionless platform that steers capital to where it’s most needed.

“This survey shows that CDFI loan funds are open to new investors, and corporations and foundations increasingly are stepping up to work with them,” says Catherine Berman, CEO and co-founder of CNote. “We also see that the communities most in need of capital continue to be underfunded. Institutions that want to fully deliver on their diversity, equity and inclusion commitments have a real opportunity here.”

Key Findings

Capital demand: Over 75% of survey respondents expressed an “urgent” or “somewhat urgent” need for capital over the next six to 12 months, and 65% said their capital needs had increased during the past 12 months. Collectively, the 52 CDFIs surveyed (about 10% of the total CDFI loan fund market) said they could deploy at least $182 million within the next year.

Unmet needs: CDFIs surveyed said their most underfunded lending areas are affordable housing (55%) and small business (39%).

Underserved borrowers: Asked which demographics are most underserved due to lack of capital, CDFIs most frequently cited low- to moderate-income borrowers (73%), followed by Black (59%), Latinx (45%) and women (41%) borrowers.

Rising capital partners: Asked which investor segments are showing increased interest, 55% of CDFI respondents cited foundations, over 37% cited corporations and 33% cited high-net-worth individuals. Those that work with capital intermediaries like CNote said the primary benefits are access to new investors (more than 69%), followed by industry knowledge (57%), infrastructure (53%) and due diligence simplicity (49%).

“CDFIs strive to drive more capital into the neighborhoods they serve, to reach the next layer of borrowers and to finance the next critical community development need. These plans are often stifled by lack of affordable capital—as this survey demonstrates,” said Amir Kirkwood, chief investment officer at Opportunity Finance Network, the national association of CDFIs. “Capital deployed through impact-forward financial vehicles like OFN’s Finance Justice Fund and CNote’s Wisdom Fund fuel real progress on affordable housing, small business creation and retention, clean energy and other community priorities.”  


CNote received survey responses from 52 CDFI loan funds, about 10% of the 554 CDFI loan funds across the U.S. that were active during the December 5, 2020, to January 19, 2021, survey period. Participants were sourced from CNote’s partner network, network referrals, online CDFI forums and direct outreach.

CNote plans to repeat the survey every six months. The firm will open a new survey in June and publish data in the fall. CDFIs are encouraged to participate here:

About CNote

CNote is a women-led impact investment firm 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 foundations to efficiently invest and deposit cash at scale in community development financial institutions (CDFIs). It also delivers timely and transparent impact reporting. CNote is a Certified B Corporation that has earned “Best for the World” honors from B Lab and was named “Best Women-Owned Business” by the United Nations’ Women’s Empowerment Principles program.

By CDFIs, CNote

PayPal Announces Investments In CNote’s Wisdom Fund and Promise Account

Today, PayPal Holdings, Inc. (NASDAQ: PYPL) today announced it will deposit $135 million of its capital into mission-driven financial institutions and management funds that help underserved communities of color to fight barriers to economic equity, including  CNote’s Wisdom Fund and various smaller depository institutions through a CNote Promise Account. These investments are part of PayPal’s $535 million commitment to strengthen Black businesses and underserved communities, and help drive financial health, access , and generational wealth creation.

You can read PayPal’s full announcement here.

Dan Schulman, President and CEO at PayPal, shared these comments on this initiative “A critical component to closing the racial wealth gap is economically empowering underrepresented communities that have traditionally been shut out of opportunities to build and sustain wealth. Whether it’s helping someone purchase a home or open their own business, these institutions are on the front lines of creating financial stability and expanding opportunity for traditionally underserved communities. We are proud to partner with them as we work together to advance economic equity and racial justice.”

Ebony Harris is the type of small business owner PayPal’s investments support. Her business, In Good Hands Learning Center, served families in Jackson, TN throughout the pandemic so essential workers in her community could continue to work. Read her story.

John Rainey, Chief Financial Officer and EVP Global Customer Operations at PayPal, added “through strategic, sustainable investments in these institutions we can tangibly address inequality and work to help close long-standing lending gaps, creating opportunities for communities to build and sustain wealth.”

“PayPal’s investment in the Promise Account will mobilize deposits across CNote’s nationwide network of mission-driven depository institutions, fostering greater capital access and economic justice for communities of color,” stated Catherine Berman, CEO, CNote. “PayPal’s Wisdom Fund commitment is an investment in the future of women of color, providing the loan capital, business coaching and funding research to fuel greater economic freedom and wealth creation for BIPOC women business owners across America. Working together, we can help address the system, not just the symptoms, behind economic inequality in America.”

Michea Rahman is the founder of Children’s Language Learning Center, a speech therapy center with a mission of providing quality pediatric speech therapy services to children. Another illustrative beneficiary of this PayPal investment, Michea received a PPP loan from a CNote Partner which allowed her business to weather the effects of COVID-19. Read her story.

About CNote

CNote is a women-led investment platform that empowers individuals and institutions to invest in communities to further economic equality, racial justice, gender equity, and address climate change. With the aim of closing the wealth gap, CNote’s fixed income and depository products provide a diversified and scalable way to support job creation, small business creation, affordable housing development, and lasting economic growth in communities that need it most. CNote technology allows anyone, from large corporations to first-time investors, to generate measurable social and economic returns by investing in the causes and communities they care about.

Make an Investment Today | Learn more about CNote | Products | Home

By CNote

CNote Celebrates Five Year Anniversary, Thousands of Jobs Created in Underserved Communities

CNote Celebrates Five Year Anniversary, Thousands of Jobs Created in Underserved Communities

Women-Led Community Investment Platform Has Helped Individuals, Institutions and Corporations Invest Millions in Equity and Inclusion

April 22nd, 2021 // Oakland, CA // CNote, a women-led community investment platform with a mission of closing the wealth gap, today celebrates its fifth year in operation. CNote partners with Community Development Financial Institutions (CDFIs) and mission-driven deposit institutions, which are high-impact local lenders dedicated to delivering financial resources to underserved communities. Dollars invested and deposited on the CNote platform are deployed with these frontline lenders to fund women- and BIPOC-owned small businesses, affordable housing development, and further racial justice and economic development across the United States. 

Investments on CNote’s platform have created or maintained over 4,000 jobs. In the past 12 months over 40% of newly deployed capital has gone to women-led businesses and over 50% to BIPOC borrowers. CNote catalogs the on-the-ground impact of its community investments with regular quantitative impact reporting and by profiling the small businesses, people, and organizations that are positively impacted.

CNote’s long-term commitment to racial and gender equity investing earned it the Best Women-Owned Business Award from the U.N. Women’s Empowerment Principles and the firm has been recognized on the ImpactAssets 50 list showcasing top impact fund managers for two consecutive years. CNote is a Certified B Corporation, which means it meets rigorous social, environmental, governance, and community performance standards.

This logo, created for CNote’s five-year anniversary is comprised of photos of every success story we’ve profiled since 2016


In 2016, CNote launched The Flagship Fund, the first 100% CDFI-focused investment vehicle available to all investors with no minimum. Since then, CNote has introduced two new products: The Wisdom Fund, an investment vehicle for accredited investors designed to increase capital access and lending for women of color; and the Promise Account, a federally insured cash management solution that gives corporations and institutional investors a simplified way to deliver on DEI commitments by depositing cash for competitive returns and positive social impact. 

After launching with a retail product, CNote has moved to serve foundations and other institutional investors, and most recently to help corporations mobilize cash deposits and investments to improve their performance on ESG measures. In October of 2020, Mastercard expanded its relationship with CNote by committing $20M to the Promise Account to fund underserved communities and help women- and BIPOC-owned businesses. 

CNote CEO Catherine Berman said, “I’m proud of the team for what we’ve accomplished over these last five years, but given how challenging 2020 was for low-income people and communities of color, our mission of closing the wealth gap is more urgent than ever.” 

Berman added that “we’re most proud to say we’re aligned with CDFIs, which have acted as economic first responders throughout the pandemic. They are critical to getting investor capital authentically aligned behind community development that leads to lasting change. We look forward to supporting the CDFI industry and underserved communities for many years to come.” 


About CNote

CNote is a women-led impact investment platform that uses technology to unlock diversified and proven community investments to generate economic mobility and increase financial inclusion. Every dollar invested on CNote’s platform funds small businesses owned by women and people of color, affordable housing, and economic development in financially underserved communities across America. With the mission of closing the wealth gap, CNote’s customizable products allow anyone to generate social and economic returns by investing in the causes and communities they care about.


Media contacts

Thinkshift Communications 

Christine O’Connor | | 203.927.1753

By CDFIs, CNote

How does CNote optimize for positive social impact within its portfolio of CDFIs?

A common question we get from investors is: How do you know investments on CNote’s platform are generating a positive impact in communities across America?

The CDFI Certification Process

For the majority of our offerings, we partner solely with Community Development Financial Institutions (CDFIs). CDFIs are federally certified by a program within the US Department of Treasury called the CDFI Fund. The CDFI Fund was established as a bipartisan initiative by the Riegle Community Development and Regulatory Improvement Act of 1994. This certification acts as an initial gauge to measure impact, however, our assessment doesn’t stop there. 

It’s true – it’s no small feat to get certified as a Community Development Financial Institution (CDFI). To become a CDFI, an organization must meet all 7 eligibility requirements: 

1) Be a legal entity at the time of the application

2) Have a Primary Mission of Community Development

3) Be a Financing Entity

4) Offer development services in conjunction with its financial services

5) Primarily serve one or more underserved Target Market(s)

6) Maintain accountability to that Target Market

7) Be a Non-Governmental entity (unless Tribal).

The federal approval process is rigorous and can take months, but with that designation, comes the highly coveted recognition as a specialized financial institution serving low-income and other disadvantaged populations. Once certified, the entity is then held to strict reporting standards that illustrate its commitment to its designated Target Market. In fact, from that point on, the organization must annually prove that 60% of its financing activities support its certified Target Market.

Ebony Harris and the In Good Hands Learning Center Team

But does certification alone tell us all we need to know about the lending practices of a CDFI? 

Does it automatically mean they are making the right decisions for the borrowers? 

Can we be certain that their impact is positive?

While the foundation of the CDFI model is to align its interests with people in the communities it serves to foster economic development and opportunity, sometimes, in practice, lending policies can negatively affect the people they aim to empower. 

Taking a deeper look at community impact

CNote’s diligence framework takes this potential weakness into account. Though heavy emphasis is placed on financial health and sustainability factors, almost equally important consideration is given to the potential repercussions of an organization’s lending systems as well as the organization’s intended community impacts. 

CNote’s diligence team looks beyond an organization’s financials to affirm it is acting in the best interest of its clients. 

Factors CNote considers, include but are not limited to:

  1. Understanding an organization’s underwriting guidelines; 
  2. Considering its portfolio management procedures; 
  3. Reviewing its collection practices; and 
  4. Confirming its stated impacts are truly improving the lives of residents in LMI communities.

CNote recognizes CDFIs’ constant balancing act between practicing flexible yet prudent lending. In acknowledging that distinction, first and foremost, it is important to keep in mind that borrowers of CDFIs, for one reason or another, are not welcomed into the financial mainstream. Therefore, they cannot be held accountable to standards they don’t qualify to participate in. As an example, many traditional institutions place a high value on collateral while underwriting potential borrowers. If a person does not own assets, they are at an immediate disadvantage trying to navigate a process through which they plan to build assets. CDFIs take this into account and don’t disqualify a potential borrower based on a single factor. It is through this lens that CNote evaluates potential partners. 

Gloria Dickerson and her team at We2Gether Creating Change

Overall, CNote’s mission is to reduce the wealth gap by building a more inclusive economy for everyone. We strongly believe that CDFIs have the institutional knowledge, federal support, and capacity to deliver on that promise. That said, we not only evaluate potential CDFI partners on the sustainability of their financial underwriting practices but their net community impact as well. We believe this approach yields the largest net returns to both CNote investors and the communities we look to empower and help access the economic mainstream. 

By CNote

Women-Led Fintech Platform Debuts Impact Customization Service That Lets Corporate Treasuries Invest to Meet DEI Goals


  • CNote’s enterprise-level, one-stop-shop service channels corporate capital into community development financial institutions and offers quarterly impact reporting
  • New customization service responds to shareholder and employee demands for change while simplifying investments in Black-led CDFIs and underserved communities

Oakland, CA – CNote, a women-led fintech firm working to close the wealth gap for women and people of color, has launched a new customization service that allows CFOs and corporate treasury departments to invest in community development financial institutions selected to meet their particular diversity, equity and inclusion goals and improve their performance on ESG measures.

CNote can customize a portfolio of CDFI loan fund investments by region and focus. Treasury teams can choose to invest in Black-led CDFIs, for example, or CDFI loan funds focused on low-income women entrepreneurs or climate adaptation in disproportionately impacted communities. CNote then does all the work, funneling funds to mission-aligned institutions exactly when they need them.

According to Catherine Berman, CEO and co-founder of CNote, “With this new customization service, we’re giving treasury leaders an easy way to invest in support of their company’s social and environmental goals.”

“Corporations are facing mounting pressure as shareholders, employees and customers call on them to address racial, gender and community disparities. Investing corporate funds to specifically target impact goals is low-hanging fruit for business leaders looking to gain a competitive edge,” says Berman.

Unlocking CDFIs as an asset class: CNote connects the dots  

Black-led CDFIs remain underfunded, despite a wave of interest following last summer’s racial justice protests. The Hope Policy Institute found that support for minority-led CDFIs was declining: From 2014 to 2017, the assets of white-led CDFIs grew $21.8 billion (a 163% rise), while the assets of minority-led CDFIs grew just $682.5 million (13.6%).

Using technology and a proprietary underwriting process, CNote provides a frictionless way for corporations to invest in CDFIs, which are essential frontline resources for businesses and communities not served by big banks.

Individual CDFIs can’t always handle the amount of money a corporation seeks to invest, and it’s impractical for corporate treasury departments to handle diligence, deployment and reporting on investments in a large ecosystem of community institutions. CNote solves this problem by investing funds throughout its vetted nationwide network of CDFIs.

Benefits include impact reporting and talent recruiting and retention

Berman notes that impact reporting is a key piece of the puzzle for businesses, given a growing level of public scrutiny on impact claims. CNote provides quarterly impact reporting to share with all stakeholders.

She adds that CDFI investments can be a risk management strategy for companies. “Just as companies make gains from diversifying their boards, treasury departments can improve financial performance along with impact performance by diversifying their cash holdings and investments,” she says.

CNote can also work with corporate partners that want to help their employees make impact investments. Increasingly, says Berman, corporate leaders are seeing impact investments as an opportunity to attract and retain talented people who care deeply about racial justice and inclusion and aren’t satisfied with splashy CSR reports and a few community grants.

About CNote

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. Every dollar invested on CNote’s platform funds small businesses owned by women and people of color, affordable housing and economic development in financially underserved communities across America. With the mission of closing the wealth gap, CNote’s customizable products allow anyone to generate social and economic returns by investing in the causes and communities they care about.

By CNote

Where We Are and Where We’re Going: A Look at the Wisdom Fund

When we launched the Wisdom Fund in 2019 as an investment vehicle that increases capital, access, and lending for businesses owned by women of color, no one was anticipating 2020, with its pandemic, political divisions, and socio-racial upheaval. Among 2020’s most poignant lessons, however, was one that inspired the fund: women of color don’t have equal access to opportunity in this country. That’s why the work we’re doing with the Wisdom Fund today is arguably more necessary than it was when we launched it two years ago. Therefore, in the spirit of Black History Month, not to mention Women’s History Month in March, we’d like to provide an update on the Wisdom Fund, including sharing the progress we’ve made, the lessons we’ve learned, and the work that remains.

A First-of-its-Kind Fund

If you’re unfamiliar with the Wisdom Fund, it’s an impact investing opportunity that we created in partnership with CDC Small Business Finance and four Community Development Financial Institutions (CDFIs) in 2019 to funnel money from accredited investors — institutions, funds, foundations, family offices, and individuals — into business loans for low-to-moderate-income women, especially women of color. While we knew that women are the fastest-growing group of entrepreneurs in the country, we also knew that women of color don’t have the same access, privilege, and opportunity as their white counterparts. Therefore, we wanted to create an innovative investment opportunity to address these disparities, fix these social injustices, and provide women of color with more access to capital and small business coaching.

Early Results

Through Q3 2020, The Wisdom Fund initiative has deployed 100% of capital to small businesses led by women of color. This lending activity has gone on to create or maintain over 225 jobs in communities across America. Further, the average loan size for program participants was right around $47,000. We’re excited to share these early results but have aspirations for the program, both around growing the amount of investor capital that’s committed to these under-funded borrowers and around the coaching services and changes, we hope to champion around the lending process for women of color entrepreneurs.

Providing more than capital: Funding Change

A key component of this initiative from the very beginning was to learn how we, as the financial services industry, can improve the lending process for women of color. For us, that meant taking a holistic approach to better understand how women of color are being treated, assessed, and evaluated from a risk perspective as it relates to lending.

Donica is the kind of entrepreneur the Wisdom Fund looks to support.

The Data Speak for Themselves — So Do Women

Thanks to our partners at ICA, an Oakland-based CDFI that invests in high-potential businesses, we’ve been able to do a historic, 10-year look back at women of color borrowers’ experience with lending. ICA’s preliminary analysis produced three key findings. First, women of color were not riskier borrowers than other demographics. ICA’s analysis shows that there was no statistically significant difference between the credit risk1 among women of color and other groups of borrowers. Second, women were, on average, a lower credit risk than men: ICA found that the probability of defaulting on loans was between 2 to 4.5 percentage points lower for women than men. Lastly, despite those other two findings, our analysis also shows that women of color typically receive lower loan amounts than other borrowing groups, but are sometimes charged higher interest rates.

As we conduct additional research we hope to isolate causes for these disparate outcomes and work with our partners to change the lending process to address them. To that end, The ICA team is working to expand on the research and looking for additional CDFI partners to join the initiative by sharing lending data. They are hosting a webinar on February 18th for those interested in partnering with them.

These preliminary findings are demonstrative of a foundational goal of the Wisdom Fund: to collect borrower data on demographics, business characteristics, loan terms, performance metrics, default rates, missed payments, and more. Given that our CDFI partners, unlike traditional financial institutions, can collect this kind of lending data, we stand to build a unique data set based on historical performance that stands to inform mainstream lenders, shape the future of our industry, and create more opportunities to support women of color.2

Whereas we anticipate the data being able to speak for themselves, part of what we want to do going forward is to similarly give women of color borrowers the chance to speak for themselves: to share their stories, challenges, and successes. We can’t and don’t assume that we knew how women of color borrowers feel about the life cycles of their loans. Therefore, over the next five months, we’re taking a human-centered design (HCD) approach to better understand the human side of the data we’re collecting.

To do this, we’ve partnered with Impact Experience, an organization that works with businesses to help generate trust, think about strategic initiatives, and dive deep into biases and structural racism in the financial services space. Impact Experience is taking the lead on surveying between 50 and 60 women of color borrowers, half of whom are Wisdom Fund borrowers, to gain insights into the various ways that lenders can better serve them. Additionally, Impact Experience will survey 20 CDFIs to better understand the challenges that community lenders face when women of color come to them for lending. 

After Impact Experience completes its surveys, we’ll invite roughly 30 participants — including women of color borrowers and lenders — to a two-day, virtual experience where we’ll collectively take a deeper dive into the core challenges and opportunities around unlocking more capital for women of color. This will be a chance for these women to share their first-hand stories with us, including the good, the bad, and the ugly of our current lending practices. By the end of this virtual gathering, we want to not only identify the mechanisms for removing barriers for women of color to acquire loans but also create broader networks for these women so that they can grow both their wealth and their businesses. 

From start to finish, we anticipate this being a five-month process, and the final phase will include a report out of stories, insights, and solutions that we’ll share broadly with our peers across the financial services sector so that we can collectively create systemic change and unlock lending opportunities for women of color.

We know that change won’t happen overnight, but we also know that change won’t happen by itself. Therefore, as we continue to channel impact investment dollars into women of color-owned businesses through the Wisdom Fund, we, along with our partners, are equally committed to giving those same women the opportunity to have their voices heard and to share their struggles, successes, and ideas with us. After all, if we’re going to drive wealth creation for women of color in the United States, then we need to emphasize listening to, collaborating with, and learning from these same women of color borrowers as much as we can.

This piece was authored by Danielle M. Burns, MBA, AIF®, VP of Business Development at CNote. She is also an internal champion of the Wisdom Fund and is leading the human-centered design work on this project.




By CNote

CNote’s January Impact Roundup

Welcome to the January edition of the CNote Impact Round-Up, a monthly publication, where we take you through some of the most impactful and popular things we recently shared, discovered, or learned.

From big industry news to op-ed pieces, we’ll paint an entertaining and full-spectrum picture of everything that you need to know in the sustainability and impact investing space.

How Did Business’s Role in Society Change in 2020? By Harvard Business Review

Harvard Business Review takes a look back at some of the biggest stories of 2020, and how they’ve changed business’ role in society forever. Among these stories is how investors continue to trend towards accepting ESG. According to a Morgan Stanley survey, “80% of asset owners are integrating ESG into the investment process, up from 70% in 2017.”

Check out the full article here

How a Biden Administration Will Boost ESG and Impact Investing by Barrons

What can the Biden-Harris administration do to ensure that the ESG and Impact Investing fields continue to grow? This article discusses some of the policy changes and investment trends that investors can expect to see; such as prioritizing social businesses, supporting clean energy, and boosting CDFIs. 

Check out the full article here 

Biden Administration Pledges Support for CDFIs & MDIs by the Credit Union Times

The Biden Administration made a commitment to support the CDFI program when Janet Yellen met with representatives of CDFIs and Minority Depository Institutions. 

“Dr. Yellen and Mr. Adeyemo pledged their commitment to increasing CDFIs and MDIs’ small business lending capacity – including capital and technical capacity – so they can continue to expand and grow and deliver support to those hardest-hit by this crisis and lift up communities that have been denied access to mainstream banking and lending services,” the Biden Team said.

Check out the full article here

How Investing in Women Helps Everyone During a Pandemic By Ebony Perkins

The United States is facing what some experts are calling a “female recession’.  Many of the most deeply affected industries during the pandemic, such as retail, childcare, and entertainment, have a majority female workforce. This has resulted in women being more susceptible to economic hardship and layoffs. 

Perkins discusses how investors seeking high impact can have a direct and positive effect on women and their families by tailoring their funding choices. 

Check out the full article here

CDFIs plug tech holes to close wealth gaps by American Banker

COVID-19, and the subsequent economic recession laid bare not only the inequities that exist in different communities but also among the organizations, like CDFIs, that support them. 

Check out this article to see how CDFIs are increasing their technological capabilities to be able to process more loans and drive more capital into vulnerable communities. 

Check out the full article here

CNote selected as Real Leaders 2021 Top Impact Company

We are thrilled to announce that Real Leaders has selected CNote as a 2021 Top Impact Company.

CNote was selected based on the calculated impact from our most recent B-Impact Assessment, most recent impact report, and other company financial statistics.

The 2021 award winners include game-changers such as Tesla, Beyond Meat, Patagonia, and 147 other well-respected impact brands of all sizes and from a variety of industries. 

Check out the full article here

How to add Impact Investing to client portfolios through CDFI Loans by Morningstar

A fantastic and comprehensive resource from Morningstar on how CDFI loans can fit into a client’s financial plan and also make a positive social impact.

Check out the full article here

Impact Investors Could Be Credit Unions’ Path to Long-Term Resilience by Yuliya Tarasava

2020 has shown us the value of being prepared for drastic shifts in lifestyle and business; in other words, the value of being resilient. For credit unions, one way of becoming more resilient is through impact investors, who can help them quickly adopt new technology while providing mission-aligned capital. 

Check out the full article here

Black advisers share wide-ranging views of Capitol Hill riot and its fallout by Investment News

On January 6th, rioters stormed the Capitol building. The events from that day highlighted, amongst other things, the racial divide that still exists in our country. CNote’s Danielle Burns shared her views on what happened that day and how we can move forward and heal as a nation.

Check out the full article here

We hope that you enjoyed this month’s Impact Roundup! Was there anything that we missed? Connect with us on Twitter (@gocnote) and leave us any comments, ideas, or feedback that you have. Until next month!

By CNote

Important Update About Product Rate Changes and CNote’s Commitment to Offering Sustainably-Priced Capital

CNote has updated the interest rates for two of our offerings. These changes will only apply to new investors, existing investors will remain at the rates reflected in their executed investment documents. 

These changes are a function of historically-low interest rates prevalent across financial markets and in response to feedback from our community-lender partners regarding capital costs and their ability to lend on various financing terms. 

It is our belief that these changes strike a strong balance between offering CNote investors competitive and impactful financial investments and assuring that our community-lender partners have a sustainable capital source that allows them to deliver on their promise of building a more inclusive and fair financial system for underserved communities and borrowers. 

What are the changes? 

CNote has made the following changes for prospective investors in these offerings: 

  • The Flagship Fund rate is moving to 2.50% from 2.75%. 
  • The Wisdom Fund is moving to 1.00% from 3.50%.  

Who are these changes applicable to?

These changes are only applicable to new investments. Existing investors with outstanding investments will not be impacted by these changes. If an existing investor initiates a new investment into a CNote product or rolls over an existing CNote investment upon maturity those investments would be at these new rates.

Why is CNote making these changes? 

The primary reason we are making these changes is to assure our community lender partners have access to sustainably-priced capital so they can provide financing to their communities on competitive terms and at rates that support their growth. We detail additional reasons for each offering below.  

Wisdom Fund 

The Wisdom Fund aims to empower and build wealth for female-BIPOC entrepreneurs through small business ownership. In the historically-low interest rate market and uncertain economic times, CNote wants to ensure that our community-lender partners are not lending to women-of-color borrowers at a higher rate than for other demographics. Doing so would directly contradict the objective of the offering and impair the ability of our community partners to deploy sustainable financing to those end borrowers. 

The move to 1.00% assures the downstream women-of-color borrowers have equal access to fair capital and supports the sustainability of our community-lender partners. 

In the long run, we believe this change is the correct one as it best aligns with our company’s mission of closing the wealth gap and this offering’s objective of supporting entrepreneurship by women of color across America. 

Flagship Fund

The Flagship Fund is a diversified CDFI investment that offers flexible liquidity and has a broad impact mandate. Over the last year, CDFIs have been highlighted and pursued by investors and philanthropic funders as an efficient and financially responsible tool to reach their impact goals. A change in suggested return to 2.5% is justified given the interest rate market overall and the recent funding dynamics in the CDFI industry. 

I have additional questions, who should I contact? 

Inquiries from institutional investors should be directed to

For retail or existing investors, please contact

You can also contact CNote toll-free at: (800) 449-6275 

By CNote

CNote selected as Real Leaders 2021 Top Impact Company

(Oakland, CA) (January 13, 2021) – We are thrilled to announce that Real Leaders has selected CNote as a 2021 Top Impact Company.

CNote was selected based on the calculated impact from our most recent B-Impact Assessment, most recent impact report, and other company financial statistics.

“These top impact companies prove that businesses can thrive by being a force for good’ said Mark Van Ness, Founder of Real Leaders. “They are the Real Leaders of the New Economy” added Van Ness.

The 2021 award winners include game-changers such as Tesla, Beyond Meat, Patagonia, and 147 other well-respected impact brands of all sizes and from a variety of industries. View the selected companies here.

“We feel honored to have been chosen through a rigorous selection process,” said Catherine Berman, CNote CEO. “Our long-term focus on closing the wealth gap by empowering investors to support the causes and communities that matter most to them, has been a huge part of achieving this award”.

A special ceremony will be held on January 27th, 2021 to honor the winners and will include key impact speakers featuring Seth Goldman, Chairman of Beyond Meat and a musical performance from Michael Franti, world-renowned musician and activist.

About CNote 

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. We empower investors to directly align their values with their investments through innovative cash and fixed income offerings.

We deploy capital through our CDFI partners, which are private financial institutions with a primary goal of delivering affordable lending to aid financially disadvantaged individuals and communities. These community partners benefit from CNote’s investments through access to new sources of capital that are often more flexible and mission-aligned.

Since 2016, CNote has been developing technology to unlock access to investments in racial equity, economic justice, and gender equity and help close the wealth gap in underserved communities across America.

Interested in making a difference with your investments? Learn more about CNote’s Impact Investments.

About Real Leaders

Real Leaders is the world’s first business and sustainable leadership magazine and serves a community of visionaries, collaborating to regenerate our world. Its mission is to inspire better leaders for a better world. Real Leaders is a Certified B-Corp and signatory in the United Nations Global Compact (an advocate for achieving the global goals for sustainable development). Real Leaders positions leaders to thrive in the new economy and to inspire the future. Visit for more information.

By CNote

CNote Team Raises Oversubscribed $3M funding round

We’re proud to announce CNote has closed an oversubscribed investment round. See the full release below.

Selected Early Coverage:

CNote Raises $3 Million to Scale Technology-Enabled Investment Into America’s Most Underserved Communities 

Fintech company focused on advancing economic justice through community investments will use the funding to grow its team and scale its cash and fixed income offerings

December 10, 2020 // Oakland, CA // CNote, a women-founded and led financial technology platform that makes it easy to invest in economic inclusion, has closed a $3 million dollar oversubscribed private funding round to extend its reach in the fast-growing socially responsible investing space. The funding round was led by ManchesterStory, with additional investments from Artemis Fund, SixThirty Ventures, H/L Ventures, Clearstone Capital, and Lateral Capital.

Since 2016, CNote has been developing technology to unlock access to investments in racial equity, economic justice and gender equity and help close the wealth gap in underserved communities across America. 

“This investment is particularly timely, as CNote works to match growing investor demand for impact investments with increased capital needs from our community partners,” said CNote CEO Catherine Berman. “Our partners, community development financial institutions (CDFIs), are leading the economic response and recovery efforts for underserved communities impacted by the pandemic, and our technology can help speed the flow of capital into these communities to support a faster recovery.” 

CNote empowers investors to directly align their values with their investments through innovative cash and fixed income offerings. CNote’s community partners benefit through access to new sources of capital that are often more flexible and mission-aligned. 

CNote is building a suite of tools to make community investing seamless. CNote’s diligence and underwriting technologies reduce the time to onboard community investments while maintaining stringent underwriting standards and risk controls. 

“Historically, there’s been no easy way to quickly source community investments addressing a specific cause like gender equity, and the underwriting process and time to investment has been lengthy,” Berman added, “Today, investors can source, deploy and service community investments through CNote’s platform in a matter of days or weeks, not months, and this funding round allows us to continue reducing the barriers to investing in communities across America.”   

Over the last 18 months, CNote has earned recognition as an Emerging Impact Manager in the 2020 Impact Assets 50 List and as the “Best Alternative Investments Platform” by Finovate 2020. Since CNote’s inception, investors have helped create more than 3,000 jobs across America and CNote has deployed over 50% of investor capital in BIPOC communities. In October of 2020, Mastercard expanded its partnership with CNote and made a $20 million-dollar commitment into CNote’s cash management solution, the Promise Account. In response to the pandemic, CNote launched the Rapid Response Fund to provide flexible long-term, low-cost capital to help communities recover. 


About CNote

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. Every dollar invested on CNote’s platform funds small businesses owned by women and people of color, affordable housing, and economic development in financially underserved communities across America. With the mission of closing the wealth gap, CNote’s customizable products allow anyone to generate social and economic returns by investing in the causes and communities they care about.

By CNote, Impact Investing

CNote Impact Investment Themes

CNote is an investment platform on a mission to close the wealth gap. Led by the belief that everyone deserves a shot at financial freedom and that each of us can play a part in building a more equal world, CNote uses financial technology to unlock investments in Community Development Financial Institutions (CDFIs). CDFIs are community lenders that create new and sustainable capital access in low income and low resource communities. By driving new dollars into high-impact, high-performing CDFIs with an emphasis on serving communities of color and female entrepreneurs, CNote has facilitated investments which are deeply impactful, drive positive social change, and generate competitive financial returns.

In early 20202, CNote crossed the milestone of helping to create over 3,000 jobs in America. This sort of impact is deeply rooted in our commitment to empowering individuals and communities with access to the tools they need to succeed as well as the commitment investors make to generating positive outcomes. CNote technology lowers the operational burden of investing across multiple geographies or themes to enable place-based targeting and make it easier for both funders and CDFIs to drive capital into the communities most in need.

In order to better communicate, report, and target impact, this year CNote has gone beyond the UN Sustainable Development Goals and created CNote’s 26 Impact Themes. This new list of impact themes allows CNote to better target social outcomes while empowering investors with greater control of their funds. To substantiate the claim of impact, CNote will increase data reporting and transparency of impact goals and benchmarks to stakeholders while upholding the industry standard of impact measurement and quarterly reporting.

Financial Inclusion

Despite the US being one of the most developed financial ecosystems in the world, a quarter of households in the country make little or no use of mainstream banking products. Several barriers have especially excluded underserved populations from mainstream financial tools.

Inclusive finance bridges this gap. We aim to support the organizations that increase access to financial services, delivered in a responsible and sustainable way, which will allow low‐income households and those previously underbanked to enhance their welfare, grasp opportunities, and escape poverty.

Racial Equity

Median white American households are projected to own 86 times more wealth than African-American households and 68 times more than Latinx households. Significant racial disparities also exist in employment, educational attainment, access to healthcare, incarceration rates, and many other aspects of American life.

Supporting communities of color is essential to building a system where everyone truly has the opportunity to thrive and these disparities no longer exist. With the understanding that the investment industry is responsible for wealth creation and accumulation in societies, we aim to support and strengthen small business owners of color by partnering with community minded CDFIs to increase economic opportunity in communities of color, building family and community wealth, and increase economic inclusion overall. 

Poverty Reduction

The official US poverty rate in 2018 was 11.8 percent, which represents 38.1 million people in poverty 

We aim to support partners that make financial products and services accessible and affordable for low-income individuals and businesses which serve those populations to help reduce persistent poverty, promote inclusive growth and economic self sufficiency, and build community resilience.

Addressing Homelessness

Some 567,715 people in the United States were experiencing homelessness on a single night in January 2019 during HUD’s Annual Point-in-Time Count.  This homelessness epidemic is economically costly but more importantly costly to human life, mobility, and productivity especially so for people of color. 

We are committed to mitigating the immense financial and health burdens of homelessness that weigh disproportionately on low income and underserved communities by partnering with those that lend and work in that arena. We aim to increase access to essential services and financial opportunity, and help fund homelessness reducing programs, permanent assistive housing, and new access to affordable healthcare and education.

Economic Development and Mobility

More than 32 million children live in low-income families, and racial and gender wealth gaps persist. Social and economic mobility has stagnated and inequality, a recognized hazard for national economic growth, is rising.

We aim to support job and workforce development through our support of small businesses, fund sustainable and resilient infrastructure, and equip communities with financial technical assistance and education to achieve inclusive economic growth and create pathways out of poverty in communities across the United States with our CDFI partners.

Gender Equality

Women and girls represent half of the nation’s population and therefore also half of its potential, but women remain underrepresented. In the workforce they continue to be a minority on company boards and in the C-suite, and a US Census Bureau study found that compensation for women in the United States averages 21% less than for men holding comparable roles.

Gender equality is not only a fundamental human right and moral imperative but improving the lives of women and girls is important to achieving economic growth. We aim to provide women and girls with equal access to education, health care, decent work, increase lending for women-owned and led businesses, and representation in the economy to nurture sustainable communities by supporting the lenders that advocate for and advance gender equity.

Affordable Housing

In 2018 data showed that nearly 38 million households nationwide are paying more than 30% of their incomes on housing. Cost-burdened renters and homeowners in the bottom income quartile are forced to spend significantly less on food, health care, transportation and retirement savings than other families in their income bracket whose housing is affordable.The consequence of this affordability gap is costly for individuals, families, communities, and the economy.

Through our partners, we aim to fund affordable homeownership for low- and moderate-income borrowers and renters, invest in opportunities that promote affordable homeownership and access to rental assistance, and increase the financial resources available to underserved communities.

Access to Education

The most recent Census figures show that 47 percent of white Americans hold at least an associate degree. Degree attainment rates are far lower among communities of color. We know that college degrees, industry certificates, and other high-quality credentials create economic opportunity and increase social mobility. 

Education creates opportunities. Investing in education is among the most powerful ways to foster economic growth and development, higher productivity, employment and innovation. We aim to ensure that communities have inclusive access to quality education by partnering with CDFIs to provide school and educational financing, supporting companies involved in teaching, and increasing the number of educational facilities in communities. 

Mental Health

In the United States, about 11 million adults and 3.2 million adolescents were affected by major depression in 2017.  Living with a severe mental health condition can reduce life expectancy by 10 to 25 years. It also costs the global economy about $2.5 trillion per year in reduced economic productivity and cost of care. Despite this, more adequate infrastructure and services for mental health are needed to provide care for those with mental disorders and to protect and promote mental health.

Our aim is to help expand access to mental health services, increase access to medical facilities in low and middle income communities, and fund projects that service those dealing with mental health diagnoses through CDFI investment.

Empowering People with Disabilities

Twenty percent of the U.S. population– approximately 60 million Americans–identify as people with mental or physical disabilities, making it the single largest minority group in the country. People with disabilities have limited access to high quality medical care, experience higher rates of poverty, have additional personal costs associated with everyday life, and face barriers to education and employment that limit their earning potential and financial mobility.  

We aim to improve and expand the system for addressing a historically underserved population by providing access to financing and services for people with disabilities through community lenders. Our goal is to pursue solutions that promote independence for those with disabilities.

Job Creation

Today, workers of color are overrepresented in the lowest-paid agricultural, domestic, and service vocations and have the least job security. Workers of color, especially women of color, also receive lower wages and have less access to paid sick leave and paid leave for child care than white workers. For communities of color, the labor market is unsteady when the economy is strong and extremely hazardous when it is not. Additionally as the job market is increasingly automated low to middle income jobs are in greatest jeopardy.  

We aim to spur growth by investing in the CDFIs that support small businesses with the potential to create good jobs which provide income above the minimum wage, health benefits, and training opportunities for workers.

Refugee Crisis and Immigration Issues

There are currently more than 65 million displaced people in the world, the highest number on record since the UN Refugee Agency (UNHCR) began collecting statistics – surpassing even post-World War Two numbers. More than 44.7 million immigrants lived in the United States in 2018. That’s 14.4% of the U.S. population. 

Economic Inclusion is assisting and supporting the process of bringing targeted groups, individuals, and communities, including immigrants and refugees, closer to the economic mainstream and capital markets. We aim to facilitate a more diverse and sustainable skilled jobs market, housing, and essential services for refugees and immigrant communities in America by streamlining investments with CDFIs that share our same goal.

Natural Disaster Recovery

In 2020 (as of July 8), there have been 10 weather/climate disaster events with losses exceeding $1 billion each to affect the United States. Research findings reflect a world in which people of low socio economic status are the most vulnerable in the face of these disasters and are more likely to suffer more serious consequences during impact, from property damage to homelessness to physical and financial impacts. CDFIs have traditionally been the first responders to these crises for these populations. 

Our aim is to enable more communities to recover from the physical and financial damages associated with natural disasters quicker as well as build resilience in the face of natural disasters down the line with increased access to financial services and education, funding for the creation of climate-resilient communities, and post-disaster lending. We hope to do this by supporting CDFIs so they can fulfill their role as first responders.

Resilient Communities

Disasters have strongly increased in both frequency and impact, with climate change as one of the main contributors to more extreme, frequent, and unpredictable weather. Of the most recent five years on record — from 2014 to 2018 — the United States has seen an average of 13 billion-dollar disasters every year. Typically communities hardest hit by financial and natural crises are also those previously underserved and low income

Resilience is the ability of a system to absorb disturbance and still retain basic function and structure. We aim to keep communities resilient by fortifying CDFIs that spur growth through the creation of jobs, quality affordable housing, schools, transportation and sustainable infrastructure.

Financial Education

In a 2017 survey conducted by the Federal Reserve, 40 percent of adults reported they would be unable to cover an unexpected $400 expense without selling something or borrowing money. In a recent survey from EVERFI, 53 percent of college students reported they felt less prepared to manage their money than to face any other challenge associated with college. Providing equitable access to personal finance education is perhaps more important to equip communities with the tools to navigate unemployment, financial and natural crises, and wealth generation. 

Our aim is to support increased access to a variety of technical assistance programs by financing our community partners that offer programs that including credit, financial, and homeownership counseling, that will help anyone to navigate their financial needs.

Workforce Development and Retraining

At the start of 2019, 7 million U.S. jobs remained unfilled, and American employers consistently cite trouble finding qualified workers. This “skills gap” represents a massive pool of untapped talent, and it has dire consequences for economic growth and generational inequity.  

Our economy is only as strong as its workforce. High-quality workforce development and training can help workers get good jobs, improve the efficiency of businesses, and boost productivity in the economy. Our aim is to support the growth of America’s workforce by partnering with lenders that fund small business development, job training programs, and investing in the development of qualified workers by providing resources for education and financial wellness.

Climate Change

Climate change is accelerating. The tell-tale signs and impacts of climate change – such as sea level rise, ice loss and extreme weather – increased during 2015-2019, which is the warmest five-year period on record. Climate change is one of the most serious and threatening issues facing the world today and will continue to present food and water security concerns, it will destabilize agricultural economies and communities, and will reverse decades of progress out of poverty for millions of people. 

Low income and neglected communities are the most vulnerable to these events and typically have few tools to manage risk, lack sufficient support systems, and lack savings to fall back on in times of crisis. Our aim is to support the creation of climate resilient communities, and help prepare communities and businesses with the financial resources needed to ensure food, housing, and economic security in the face of climate change by supporting CDFIs in underserved regions.

Social and Economic Justice

Systemic inequity has perpetuated disparities across racial, ethnic, and socio-economic lines in our education, health, human service, economic, and criminal justice systems. For us, justice means expanding opportunity and correcting the imbalances we have seen throughout history by giving communities to control their financial achievements. 

New access to financial services unleashes the potential of  entrepreneurs and helps to break cycles of poverty and oppression, empowering individuals, families and communities. Our aim is to expand access to economic resources and empower individuals and communities historically neglected with the financial access needed to grow and thrive. 

Closing the Gap Between Rural and Urban

Compared with urban areas, rural populations have lower median household incomes, a higher percentage of children living in poverty, fewer adults with postsecondary educations, more uninsured residents under age 65, and higher rates of mortality, as reported in 2017.

Expanding inclusive economic opportunities for rural Americans is vital to the livelihood of these communities and the future of our economy as a whole. Our aim is to focus on the untapped potential of rural areas and assist the CDFIs there working to expand healthcare and education access, ensure financial services are available to rural communities, and fund the growth of new businesses which in turn will fuel job creation.

Clean Water and Sanitation

More than 30 million Americans lived in areas where water systems violated safety rules at the beginning of 2019, according to data from the Environmental Protection Agency. Others simply cannot afford to keep water flowing. As with all environmental and climate issues, low income people and communities of color are hit hardest. 

Beyond negative health outcomes, unsafe drinking water can pollute the environment, negatively impact local economies, and exacerbate the burden of poverty. We aim to help support communities by partnering with lenders that are expanding access to clean drinking water nationally and by funding sustainable improvements to the currently aging water infrastructure in many communities throughout the US.

Access to Healthcare

Widening economic inequality in the United States has been accompanied by increasing disparities in health outcomes and healthcare access. The life expectancy of the wealthiest Americans now exceeds that of the poorest by 10–15 years. Access to quality, affordable healthcare is a universally acknowledged human right. A lack of access prevents individuals from being healthy, productive members of society and thwarts community development.

We aim to partner with those that increase quality healthcare accessibility and affordability for low income and under-served communities, fund the creation and maintenance of healthcare facilities, and support innovations in the healthcare space that increase access to health services and products.

Improving the Lives of Underprivileged Children/Families

Without a full-time parent caretaker, families with children under the age of 5 typically spend an average of 10.1 percent of their household budget on child care. The burden on low-income families is especially heavy—families making less than $1,500 a month who pay for child care for children under the age of 5 spend on average 52.7 percent of their income on these expenses. Additionally, early childhood care and education have far reaching implications for educational achievement and socioeconomic status later in life.  

Early childhood investments have the potential to address a growing economic inequality and the diminishing rate of upward mobility in the US. Our aim is to invest in the lenders that help expand access to preschool and early learning to support pathways through the educational system, improve access to essential services for children like healthy foods and medical care, and fund childcare support for low income and working families.

Community Revitalization

Much of the recent economic revival seen in some of the nation’s largest urban centers has not been seen across the board: many communities remain unchanged. In every major American metropolitan area, including many of those that have prospered most since the 2008 financial crash, huge gaps still separate white people, people of color, and the low income—not only in terms of average hourly wages, but in terms of educational attainment, health outcomes, employment, accessibility, and affordable housing. 

Community Revitalization is the implementation of intentional efforts that are likely to lead to community development and reduce these gaps. The result is increased access to employment, living wage jobs, healthcare, supportive services, community amenities, transportation, and quality and affordable housing.

Our aim is to support CDFIs making efforts to build stronger neighborhoods, business districts and anchor communities by funding America’s small businesses, investing in resilient infrastructure, and building out community facilities, community health, and community education with the intent of closing these gaps for good.

Sustainable Agriculture

Global agriculture commodity prices have been on the rise since major innovations in the farming industry has lead to substantial gains in food production. The rising prices of food and agriculture has since exacerbated the social inequities in food access and environmental impact of unsustainable and polluting growing practices. As the world population continues to grow at an alarming rate, a projected 9.7 billion by 2050, and as we continue to fight to raise people out of poverty its paramount to invest in smarter solutions.

We aim to fund the CDFIs supporting innovation to safely and sustainably produce more agricultural output to feed the nation and protect our environment. This includes helping small farmers align their agribusinesses with sustainable standards, support water conservation, and spreading increased awareness of alternatives that improve the extended supply chains of commodities which have negative social and environmental impacts.

Responsible Consumption and Production

As increased wealth has coincided with dramatic improvements in the standard of living, the system of consumption and production to satisfy the growing population has strained the planet’s finite supply of resources. In 2015, almost 12 tonnes of natural resources were extracted per person. The transition to sustainable consumption and production of goods and services is necessary to reduce the negative impact on the climate, the environment, and people’s health the current rate of consumption and disregard for its planetary effect is having. Achieving this sustainable development and maintaining economic growth requires that we urgently reduce our ecological footprint by changing the way goods and resources are produced and consumed.

We aim to reduce our environmental impact, promote the use of renewable sources of energy and encourage responsible purchasing decisions by providing capital to community lenders that can instill these values in their communities.

Affordable and Clean Energy

Despite its necessity, Americans in low-income households, communities of color, small towns, and many rural areas do not have equal or affordable access to reliable energy. What’s more, the environmental cost of producing and delivering energy — the pollution of our air, water, and ground — tend to be concentrated in some of those same places.

Inclusive growth in America is a benefit for all, and reducing environmental pollution is an international imperative. Our aim is to mitigate the negative emissions of the energy sector by supporting the CDFIs leading green energy innovation, expanding access to affordable, reliable, and sustainable energy, and enhancing national cooperation to facilitate more open access to clean energy technology.

CNote's impact metrics for Q2 2020 -- 351 jobs
By Impact Metrics

CNote’s Q2 2020 Impact Metrics

We know one of the main reasons you invest with CNote, is because of the impact your investment has.

We’re proud to share CNote’s Q2 2020 impact data.

CNote's impact metrics for Q2 2020 -- 351 jobs

In Q2 2020, our members helped create/maintain 350 jobs!

Over half of all invested capital was deployed with minority-led businesses and we deployed nearly half of all dollars to female borrowers!

If you’d like to see our annual impact data, along with an explanation of how we map CNote’s impact investments to the UN’s Sustainable Development Goals.

Our 2019 Annual Impact Report is also available if you’d like to learn more about the impact CNote is having on communities and individuals across America.


CDFIs: America’s First Responders to Economic Crisis

CDFIs: America’s First Responders to Economic Crisis

Community development financial institutions (CDFIs) have consistently operated on the front lines of economic disasters such as 9/11, Hurricane Katrina, Superstorm Sandy, Hurricane Harvey, and the 2008 financial crisis, providing economic relief to American communities when they need it most. As “first financial responders” CDFIs have demonstrated their expertise in helping communities survive and rebuild. The Federal Reserve has recognized CDFIs as “economic shock absorbers” that continue to effectively serve their communities even amidst the most catastrophic economic conditions.     

The consensus view is that the real economy is in desperate need of support. The question is who is best positioned to support these communities?

Currently, the COVID-19 health crisis is having a traumatic and far-reaching impact on American communities, especially low-income communities of color that were already facing structural inequities before the coronavirus pandemic. In these communities, small businesses play an essential role in sustaining economic growth. As more than 100,000 of these businesses close their doors forever across the nation, an economic cataclysm even worse than the Great Depression looms threateningly on the horizon.

Women and minority-owned businesses are the hardest hit as emergency funding such as the Paycheck Protection loan program (PPP) has not adequately met their financial needs. According to the Center for Responsible Lending, “based on how the program is structured . . . upwards of 90 percent of businesses owned by people of color have been, or will likely be, shut out of the PPP.” 

CDFIs are scaling up to bridge the economic gap by injecting significant capital into nonprofits and small businesses by leveraging their existing close partnerships with community organizations, borrowers, and even traditional lenders. Senator Van Hollen and others are also urging the leaders of the U.S. Senate to quickly deploy funding to CDFIs as they “have the organizational tools and resources needed to immediately provide debt relief, working capital, and consumer loans to their borrowers.”

The critical role of CDFIs in reducing economic turmoil

Every disaster impacts vulnerable communities the most, and many CDFIs have led the way for decades in supporting recovery efforts. As mission-driven lenders with long-standing ties to their affected communities, they’re able to provide the financial and technical assistance that can jump-start economic activity. Whether helping communities rebound after the 2008 financial crisis or natural disasters like hurricanes, tornadoes, earthquakes, wildfires, and floods, CDFIs have consistently shown their ability to provide flexible financial products that effectively address the post-disaster needs of their communities

The Great Recession

After the economic shock of the Great Recession, CDFIs were able to quickly deploy funding to low-wealth communities from coast to coast with the aid of Congressional funding through the American Recovery and Reinvestment Act. The CDFI Fund reported that during the seven years after the financial crisis of 2008, all of the 500 CDFI loan funds certified by the U.S. Treasury didn’t just survive but thrived with loan origination outperforming pre-recession amounts while more than 500 banks collapsed. 

In a 2009 industry assessment, the Federal Reserve Bank of San Francisco noted that the mutual support within the strong network among CDFIs furthers their continued survival and success — an asset that private-sector entities don’t have.     

Superstorm Sandy

In the aftermath of Superstorm Sandy, CDFIs proved to be a crucial contributor to disaster recovery efforts. According to an assessment by the CDFI Fund at the time, despite experiencing their share of physical damage, the majority of CDFIs remained operational and directly provided recovery assistance services and disaster loan recovery funds. 

With fast and flexible financing, CDFIs provided families and business owners with essential relief for rebuilding their communities. New Jersey Community Capital (NJCC) joined forces with the American Red Cross and the Hurricane Sandy New Jersey Relief Fund (HSNJRF) to award CDFI grants to homeowners through the Gap Funding Initiative (GFI) to help them get back on their feet.   

Hurricanes Katrina, Ike, Harvey, Irma, and Maria

Liftfund, a Texas-based CDFI, came to the aid of small businesses and communities during Hurricanes Katrina, Ike, and Sandy. The organization also supported Florida and Texas Gulf Coast communities in rebuilding after Hurricanes Harvey and Irma. After Harvey, Liftfund developed the Hurricane Relief Small Business Fund for small businesses and communities in the impact zone.     

Based in New Orleans, AMCREF Community Capital administered almost $13 million of New Markets Tax Credit financing to construct affordable housing with environmentally safe materials that produced a 75 percent reduction in energy costs. The homes were also constructed to withstand the floods and hurricane-force winds of future storms.

In the post-disaster environment of Hurricane Maria that devastated Puerto Rico, for the first time ever, the CDFI Fund granted $674,000 in financial support to a local financial cooperative to assist the economic recovery of vulnerable communities that were severely suffering from the lack of response by the U.S. Federal Emergency Management Agency (FEMA).     

How CDFIs are relieving the economic devastation of COVID-19

The Coronavirus pandemic has decimated communities throughout the country as businesses, schools, and most services have been required to shut down. Senator Elizabeth Warren has stated that “a half step behind the COVID-19 health crisis is an economy that is falling apart. There is no better way to strengthen this economy than to do it from the grassroots up. If you want to see an economy that does better for everyone, then you have to make those investments going forward.”

In their role as “financial first responders” CDFIs are perfectly suited to provide a rapid response to the pandemic. CDFIs have a long track record of absorbing economic turmoil and thriving during downturns while investing in underserved communities to help them weather unforeseen financial emergencies.    

For example, the NAACP has reported to Congress that minority-led CDFIs are well-positioned to respond to the economic inequities exacerbated by COVID-19. Meanwhile, native CDFIs are creating new loan products to better serve native businesses and communities like the Navajo Nation that have experienced high levels of coronavirus cases while lacking the resources to sufficiently mitigate the dire situation.  

Small businesses are the backbone of our economy and industry estimates suggest that there’s an $87 billion annual market gap in loans below $100,000 for small businesses. CDFIs are providing $2,000 to $10,000 business loans — amounts below the average loan size of approximately $239,000 from the PPP loan program.    

Final thoughts

As the entire country seeks to rebuild after the pandemic, CDFIs are poised to support a more just and stable post-COVID economy to help save small businesses and communities that might otherwise be left behind. By funneling resources to CDFIs and their close community partnerships the country has a better chance of moving towards an inclusive economic recovery that works for everyone. 

If you’re interested in being part of that solution we encourage you to look into supporting a CDFI in your neighborhood. Additionally, CNote’s nationwide network of CDFIs makes it easier for individual and institutional investors to support community development in their backyard regardless of investment size. There’s no better time than now to make a real impact by investing in CDFIs and getting sorely-needed investment dollars into communities across America that otherwise may not be able to return from the brink of economic disaster.

By CDFIs, Small Businesses

Why CDFIs Often Create Better Lending Outcomes for Small Businesses

Small businesses that need financing often find themselves at a crossroads: apply for a traditional bank loan that’s difficult to get but has lower-interest rates or an online loan that’s quickly approved but can end up being inordinately more expensive in the long run. But some business owners don’t realize that there’s an additional option: a small business loan from a Community Development Financial Institution (CDFI).

As mission-driven lenders, CDFIs are focused on helping communities that are underserved by traditional financial institutions become participants in the economic mainstream. CDFIs inject capital into these communities by financing small businesses, nonprofits, microenterprises, commercial real estate, community facilities, and affordable housing with low-interest loans from public and private sources. The CDFI Fund at the U.S. Department of the Treasury certifies CDFIs and mandates that at least 60 percent of CDFI financing goes into low- and moderate-income (LMI) populations and other underserved communities.

Clara in front of CIC Floors storefront

Clara Richardson-Olguin, Entrepreneur, Received a loan from a CNote CDFI Partner

CDFIs also provide the borrowers they serve with technical assistance, financial guidance, and add-on loans for business expansion. They seek to minimize risk for borrowers with simpler and more straightforward loan products than other lenders. CDFIs offer business loans on terms that aim to create the best possible outcomes for both their borrowers and investors.

Here are some important ways CDFIs are best equipped to help close the credit gap for small business owners in low-wealth communities who seek capital. Because of the Coronavirus pandemic, business lending from CDFIs is now more essential than ever.

Pre-loan services: Business coaching, educational resources, and straightforward financial products

Business loans from CDFIs are more flexible and better designed to meet the needs of small business borrowers than those from traditional banks and online lenders. CDFIs have developed innovative underwriting standards to meet the needs of borrowers considered “risky” by other lenders while maintaining their strong financial track record. In addition to their business loans often being easier to qualify for and having lower interest rates, CDFIs offer business coaching and educational services for first-time business owners. They also provide refinancing for businesses struggling with high-cost debt (often from online lenders).

Some CDFIs even tailor their loan programs and financial products specifically to women- and minority-owned businesses (WMBEs) that continue to face a high level of lending disparity. Given the countless barriers the Paycheck Protection Program (PPP) loan required WMBEs to navigate, these businesses were the “hardest hit by the structural limitations built into the program,” according to The Center for Responsible Lending. CDFIs are much more responsive in providing the assistance and tools needed to connect small businesses with PPP loans.

Nonemployer firms and those with under 100K in revenue also often struggle to receive funding. CDFIs offer flexible borrower qualifications and straightforward loan packages for these businesses as well. Some CDFIs will even consider applicants without collateral and who have low (or no) credit scores. The 2016 Federal Reserve Small Business Credit Survey reported that CDFIs’ approval rate for small businesses with less than $1 million in revenue is more than 75 percent.

CDFIs partner closely with business owners to support their needs as they expand and typically work with the cash flow of a borrower. For instance, seasonal business owners might need to pay interest-only payments during low cash flow months. Since small businesses play an essential role in uplifting the communities they serve, CDFIs are dedicated to ensuring they get the funding they need.

Loan services: Clear terms, greater access, and flexible repayment

Many small business borrowers are unaware of CDFIs as a resource for loans. But small businesses often don’t qualify for the business loans they need from traditional banks and instead turn to online lenders for capital. This doesn’t always result in the best lending outcomes for borrowers because online lenders typically have higher interest rates and shorter repayment terms compared to conventional bank loans.

Online lenders are increasingly competing for small business loans due to a number of structural barriers that continue to impede bank lending to small businesses. These include the consolidation of community banks by bigger banks, high search costs, and higher transaction costs associated with small business lending according to The State of Small Business Lending report by Harvard Business School.

The report also outlined that small business loans are less appealing to banks because they are less profitable than large business loans. With more than 60 percent of small businesses looking for loans under $100,000, it is difficult for many borrowers to find willing traditional lenders. This is partly why so many are now turning to online lenders.

But many small business borrowers have discovered that online lenders are not always the best option to fill the void left by traditional bank lenders. Predatory online lenders sometimes take advantage of these small business owners’ urgent need for capital and their businesses end up paying the ultimate price for lack of financial access to quality business loans.

Online lenders make small business loans easier to access but often with high-interest rates and impractical repayment plans. These risky lenders may also use linked bank accounts to collect repayment of loans and extract daily payments. And since the lender is not attached to the success of the business they typically won’t offer flexible terms of repayment. Some small business owners get to a place where every dollar of revenue is committed to repaying the principal and interest on a loan, trapping their business in a cycle of debt that’s almost impossible to escape.

Plus, borrowers who can pay off the loan in full are often discouraged from doing so by pre-payment penalties that serve to increase the borrower’s debt and the online lender’s profits. If the borrower can’t pay back a loan, lenders have obtained judgments and seized assets sometimes worth more than the loan itself. The borrower is then forced to declare bankruptcy as occurred in the case of small business owner, Natalie Bobak.

Needless to say, taking advantage of online lending can become a high-risk situation for small business owners. These concerning practices and an increasing amount of “bad actors” have resulted in investigations of the online lending marketplace by regulatory officials. With the current oversight of the online lending market not being clearly unified and defined, small businesses are forced to take on higher risk and the lending outcomes can be disastrous for both small businesses and their communities.

Conversely, the Federal Reserve Bank of Minneapolis has found that CDFIs have been able to save business owners an average of more than $2,700 per loan compared to market rates. CDFIs are also creating or joining forces with the fintech industry to improve efficiency and boost the speed of their loan origination and underwriting processes. Fintech offers new ways for CDFIs to create partnerships that improve operating efficiencies, customer service, access to capital, and the development of marketing channels.

For example, institutional investors like community foundations can target thematic and place-based investment goals through CNote, a platform that simplifies the deployment of capital across a pool of CDFIs. Investing in CDFIs creates positive outcomes for foundations who don’t want to deliver loans and manage risk, as CDFIs have all the built-in systems required to manage a loan portfolio.

How CDFIs help small businesses stay afloat during the pandemic

CDFIs are stepping up to the challenge when it comes to the Paycheck Protection Program (PPP) loans for small businesses. As business lenders based in their communities, they’re able to be much more responsive to small businesses’ needs in offering pandemic relief to borrowers than other types of lenders. This is especially true for underbanked communities without access to mainstream financial services such as low-income, minority, and immigrant populations.

Luz Urrutia, CEO of Opportunity Fund recently stated that “stimulus dollars don’t normally make their way down to minority-owned businesses. Sometimes CDFIs are the best conduit to get that funding to those communities.” Small businesses that need a lifeline to survive extended closures due to the pandemic are also receiving assistance from contributions made by traditional bank lenders to CDFIs.

With most state and federal grants or loan programs taking months to implement, there’s an urgent need for lending small businesses the capital they need to avoid mass layoffs and defaults. CNote’s Rapid Response Fund was created to quickly extend capital to CDFIs so they can fill the critical lending gap for small businesses that may otherwise fail.

Post-loan services: Additional resources and business expansion loans

Besides connecting small business owners with the capital they need, CDFIs also provide mentoring, training, technical assistance, financial education, and capacity-building support. This in turn bolsters the local economy through job growth and retention in underserved communities. Increasing access to capital for minority and low-income communities provides more economic opportunities for those who would otherwise be left behind.

According to Common Capital, “community organizations are invested in the growth of the community, and therefore will ensure that their lending is responsible and supportive of the borrower.” CDFIs continue to meet the needs of business owners as their organizations grow because the community prospers as they expand.

While many traditional banks offer loans that are guaranteed by the U.S. Small Business Administration (SBA), they cannot offer business assistance services. Banks are not able to be directly involved in the guidance of business operations due to lender liability regulations and online lenders are not attached to the success of the small businesses they’re lending to. Therefore, online lenders don’t typically renegotiate terms or offer expansion loans.

In contrast, CDFIs can offer small business owners assistance with business coaching and with marketing, accounting, and other legal matters. And if small businesses need to expand their operations, CDFIs can easily adjust their lending terms to accommodate this.

Final thoughts

As employers of about half of the nation’s private-sector workforce, small businesses are the backbone of America’s economic well-being. The Small Business Administration (SBA) reports that since 1995, these businesses have created over 60 percent of net new jobs in America.

Since 80 percent of small businesses are nonemployer firms and 40 percent having under $100K in revenue, many are locked out of traditional funding sources. WMBEs still must overcome significant barriers to accessing capital as well. This forces many business owners into high-interest loans from online lenders that can have negative outcomes for both the business and the community its economic activity affects.

CDFIs are stepping in to fill this critical lending gap by adopting online technology to increase efficiency in core operations and underwriting so they are able to get loans more quickly to those in need. Some have even begun partnering with online lenders such as Lending Club and others to process small business loans quickly and with better terms.

For institutions like community foundations that seek to seamlessly scale investments into communities across America, investing in CDFIs gives the next generation of minority and female entrepreneurs the opportunity to support themselves and their communities through fairly-priced small business loans. And with about half of small businesses facing failure due to the business closures of the pandemic, there’s never been a better time to leverage the community-based insights and low-interest small business lending products of CDFIs.

By CNote, Impact Investing, Impact Metrics

CNote’s 2019 Annual Impact Report

CNote is proud to share our 2019 annual impact report.

In 2019 CNote investors helped to create or maintain over 1,100 jobs!

Additionally, of every dollar invested

  • 58% of funds supported minority-led businesses (MLB)
  • 38% of funds supported women-led businesses (WLB)
  • 56% of funds supported LMI communities

*Note, there can be an overlap where a borrower fits into multiple of the above categories!

In the report, you’ll also find details about CNote’s 26 new impact themes. These very targeted investment themes allow investors to achieve a more specific match between their investment activities and the social outcomes they want to target. Additionally, you’ll be able to see some highlights of CNote’s 2019 annual impact!


By Borrower Stories

Meet Dr. Ira Mandel, The Retired Physician Opening Up Recovery Residences Along Maine’s Midcoast

Dr. Ira Mandel self identifies as “the nut” who runs into a burning building to help people when everyone else is running in the opposite direction.

That’s exactly what happened in 2006, when Ira moved to Maine to take over the Pen Bay Medical Center’s hospice program. During his first week on the job, a colleague asked him if he was aware of the severe drug addiction epidemic facing Mid-Coast, Maine. Ira was not.

“He pointed out that there were no doctors at the hospital who were willing to help people with addiction,” Ira said. “He asked if I would be willing to help. I said that I didn’t know anything about addiction, but if there’s a need and I’m here, sign me up.”

Dr. Mandel addresses the community at the Mid-Coast Recovery Coalition Dedication Ceremony

For the next eight years, Ira juggled three jobs. He maintained his position directing the medical center’s hospice program, he ran a private practice as a family physician, and he treated hundreds of patients struggling with drug addiction. During that time, he learned that medication isn’t itself an answer to addiction, but rather, it’s part of an overall approach to help people get their lives back on track and to break the cycle of addiction.

By 2016, Ira had left the medical center and retired from his private practice; however, his work with addicted Mainers was far from over.

Running Deeper Into The Burning Building

Addiction isn’t a new concept to Knox County’s 40,000 residents. After all, at least 2,000 of their family members, neighbors, and coworkers struggle with an opiate drug addiction.

Rockland and Mid-Coast are concentrated areas for fishing, which is an industry steeped in long hours, grueling work, and boom and bust cycles. Ira compares the lives of fishermen to those of professional athletes, who, for a short three to four-month season, must be at the top of their games. That often means relying on drugs to push through the pain, the injuries, and the sleep deprivation, not to mention poverty, trauma, and mental health disorders. When Ira was seeing patients, half of them were either fishermen or from fishing families that sometimes could trace their addiction back three generations.

Given the prevalence of addiction in the community, coupled with the overall lack of resources to combat it, it wasn’t surprising that people came together in February 2016 to express their outrage and to publicly acknowledge that addiction was a serious problem. What was frustrating, however, was the lack of collective action that ensued.

That’s when Ira decided to run farther into the burning building. He started the Mid-Coast Recovery Coalition (MCRC), a nonprofit that supports individuals and families struggling with drug and alcohol addiction.

“It was tough sledding to get started,” Ira said. “There was no roadmap, and there wasn’t a lot of guidance out there for a nonprofit like us. We stumbled and we crawled through the wilderness with no paths, and we hit a lot of deadends and tried a lot of things that didn’t work.”

After two years, the planets seemingly aligned for Ira and MCRC when a major donor stepped forward to purchase a former boarding house in Rockland so that the nonprofit could turn it into a recovery house. The house needed a lot of work, but it was too good of an opportunity to pass up: a recovery house can be a foundation for people struggling with addiction to get the employment, support, and sense of purpose they needed to stay sober.

Making A House A Home

Although the Rockland house was big enough to sleep 16, both its front and back stairs weren’t up to code, and MCRC was only given a certificate to host up to four unrelated adult men at a time until the nonprofit could afford renovations. Still, Ira signed the papers, completed the purchase, and opened the recovery house. Four days later, his house manager quit.

“He had 22 years of experience running a sober house in Yonkers, New York,” Ira said. “He was the knowledge base. So, for the next year, we visited a lot of other places and learned what we could, but it was like the blind leading the blind.”

Although MCRC was plagued by staff turnover during its early years as an organization, Ira says the nonprofit slowly turned a financial corner in 2019 and became more stable. Still, it didn’t have the necessary funds to begin a building renovation and attempts to raise funds from the community were unsuccessful.

That’s when Ira connected with 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.

“The Genesis Fund was wonderful right from the very first contact,” Ira said. “They were very encouraging and supportive, and they led us through the process fairly painlessly and gave us $100,000 to start the renovation.”

Those renovations are now complete, and one of the stairways is dedicated to Ryan Gamage, a member of the community who personally wished to help complete the renovations but wasn’t able to because he lost his battle with addiction. That staircase is now dedicated to him that “his memory inspire all to thrive in their recovery.”

During this same time, MCRC raised the necessary $200,000 to purchase a second home in Camden, Maine, to serve as a recovery house for women. Better yet, earlier this year, the nonprofit hired its first full-time executive director to grow the organization, thus taking some pressure off of Ira, who had been doing the jobs of the executive director, board chair, chief development officer, grant writer, bookkeeper, and site supervisor.

“It’s been a rough road to get to where we are,” Ira said, “and it was getting very exhausting; but, for the first time, we have a foothold, and we’re positioned now to fully realize our mission. We’re grateful for the support of the Genesis Fund and of the entire community.”

Iain (Men’s house manager) & Theresa ( Woman’s House Manager and Volunteer Coordinator)

To date, MCRC has helped about 20 individuals in its recovery houses; however, over time, that number will hit 25 per year, and it will continue to increase as the nonprofit gets more and more capacity. Whereas Ira likes to think about the impact of MCRC’s future work, he’s presently focused on shoring up the nonprofit’s foundation.

“Not everyone needs recovery residences, but hundreds do,” he said. “We’re hardly scratching the surface, but we’re making a difference for the people we’re helping now. We know we need to expand our operations, but we need to get a firmer foundation first, because we’re going to be an organization that’s going to be around for a very long time.”

Learn More

By CNote, Impact Metrics

CNote’s Q1 2020 Impact Metrics

We know one of the main reasons you invest with CNote, is because of the impact your investment has.

We’re proud to share our Aggregate Q1 2020 impact data.

In Q1 2020, our members helped create/maintain 173 jobs!

Over half of all invested capital was deployed with minority-led businesses.

If you’d like to see our annual impact data, along with an explanation of how we map CNote’s impact investments to the UN’s Sustainable Development Goals.

Our 2019 Annual Impact Report will be published soon, we apologize for the delay which was caused by the ongoing pandemic.

By CDFIs, CNote, Impact Investing

Webinar, Foundations and CDFIs: Creative Solutions for Crisis Response and Recovery

The webinar is now available for on demand viewing using the link below or via YouTube:


We’re proud to announce that CNote is hosting a webinar on Wednesday, June 17th 2020 – 11:00 AM (PDT). 

The overarching goal of this webinar is to highlight creative ways foundations are deploying investments and grant dollars to support the economic response and recovery in light of COVID-19.

We’ll have a strong focus on the intersection foundations and CDFIs to support communities. The content will be focused on case studies and real-world examples. Our aim is to empower foundations and philanthropic organizations with examples that they can use to drive new investment and grant activity at their organizations.

Register Here


Foundations and CDFIs: Creative Solutions for Crisis Response and Recovery

Brief Summary:

Have you wondered what other foundations are doing to address the growing economic crisis? Is your foundation looking for ways to invest locally or make new investments outside of your typical mandate or mission?

This webinar will share practical and tangible examples of how foundations have effectively mobilized local Community Development Financial Institutions (CDFI) resources to address the economic impact of this pandemic. You’ll hear from two leading foundations about the creative investments they’ve deployed to address this crisis, along with lessons they’ve learned along the way.

You’ll also learn about how CDFIs serve as an option to deploy mission-aligned investments into your community or across the country rapidly and with compelling impact. This is relevant for foundations who are both new to working with local CDFIs and foundations who have some experience but are looking to deepen that effort during this crisis.

Speakers Include:

  • Cat Berman, Co-Founder and CEO – CNote
  • Avo Makdessian, Vice President and Director, Strategic Initiatives and Partnerships – Silicon Valley Community Foundation
  • Michelle Nelson, CFO, Community Foundation for a Greater Richmond
  • Caroline Nowery, Vice President, Director of Investor Relations – Virginia Community Capital
  • Lisa O’Mara, Solutions Consultant – LOCUS Impact Investing

Register Here

By Impact Investing

What’s Behind the Growth of Impact Investing

The Rockefeller Foundation coined the term “impact investing” at a 2007 meeting of investors, entrepreneurs, and philanthropists in Bellagio, Italy. Fast forward two decades and we’ve seen demand for sustainable impact investments grow exponentially

Impact investing refers to investments that generate a measurable social or environmental impact along with a financial return. Over the years, there’s been a movement from “negative screening” of investments (avoiding investments in industries related to alcohol, guns, oil, gas, etc.) to investing based on environmental, sustainable, and governance objectives (ESG) to even more direct impact investing. 

Impact investing is attracting new investors and stakeholders, improving and standardizing data and measurement, all while achieving market-rate financial returns. According to the most recent US SIF Foundation Report on U.S. Sustainable, Responsible, and Impact Investing Trends, sustainable, responsible, and impact investing (SRI) assets now account for one in four dollars in total assets under professional management in the United States.

Why impact investments are on the rise

Before 2019, asset flows into sustainable funds had never risen above $2 billion in a single quarter. Morningstar reported that sustainable funds attracted an estimated $8 billion in net flows in the first half of 2019, vastly surpassing the $5.5 billion for all of 2018.

The impact investing market is rapidly growing because it is:  

  • Attracting individual and institutional investors 

Nearly 80 percent of respondents to a recent ESG Investor Sentiment Study from Allianz Life Insurance Company of North America said that they “love the idea of investing in companies that care about the same issues” as them. 

More individual investors are interested in impact investments, especially millennials and women. According to Accenture and the Internal Finance Corporation (IFC), in the next three decades, $40 trillion in wealth will transfer to women and millennials, populations that have shown strong interest in aligning their investments with their values. 

The Global Impact Investing Network (GIIN) has reported that over one-third of organizations that manage conventional investments, such as Morgan Stanley and private equity firms, are now making impact investments. Several foundations are also making significant impact investments, including the Ford Foundation and the Michael and Susan Dell Foundation. 

  • Standardizing impact measurement and management (IMM)

Although no single impact measurement has achieved mass adoption, the expanding availability of frameworks has given investors more reliable ways to gauge impact. Among the latest methodologies is the Rise Fund’s impact multiple of money that is built around calculating impact in dollars and managed by TPG Capital, one of the largest private equity giants. 

IRIS (Impact Reporting and Investment Standards) from The GIIN serves as the impact industry’s set of terms with standardized definitions that govern the way companies, investors, and others define their social and environmental performance.

Investor reviewing investments on iPad

Technology has also allowed greater ties between investment management and social and environmental impact. Technology platforms such as CNote are making it easier for individual investors to get started investing in funds that used to exclusively be accessible by  institutional investors, like Community Development Financial Institutions (CDFIs). 

  • Achieving comparable returns to traditional investments 

Impact investing has performed well when compared to traditional strategies. A study by Morgan Stanley found that sustainable investments achieve comparable returns with less volatility in contrast to traditional investment products.

A meta-analysis of more than 2,000 studies compared the relationship between ESG and corporate financial performance (CFP) since the 1970s. It determined that “roughly 90 percent of studies find a nonnegative ESG–CFP relation,” with the large majority reporting positive findings.

A 2017 GIIN study that reviewed over 200 impact investors who committed billions to impact investing in 2016, found that about 91% reported that their impact investments were meeting or exceeding their financial expectations. About 66% stated that they were making market-rate returns on their impact investments. 

3 trends supercharging the growth of impact investing

Three emerging trends in the impact investing industry have tremendous disruptive potential according to Antony Bugg-Levine, the previous managing director at the Rockefeller Foundation:

  1. The current urgent need to address social issues;
  2. an increased interest in impact investing, especially among young people, and; 
  3. structural changes within the investment industry. 

All these trends represent important paradigm shifts that are driving the growth of impact investing. 

Barriers are being broken down in public and private capital markets, promoting collaboration and engaging new investors. Meanwhile, there are more advocates for a policy environment that enables the impact investing industry to mature and grow.

How the growth of impact investing benefits us all 

The concept of impact investing as we know it now emerged in the early 2000s as investors saw the potential to receive market-rate financial returns in the global capital markets, while doing good for society. 

Investors began to consider not just investing to avoid certain negative social or environmental factors (negative screening,) but instead to purposefully choose investments that could create more social or environmental benefits. 

Today, with the global challenges facing our planet, such as climate change, inequality and social division, there’s an urgent need for impact investing to become a fundamental part of all investment decisions. Traditional sources of capital, like government aid and philanthropy aren’t enough to effect change, given the scale of the problems the world faces.

Impact investing supports a more inclusive and sustainable financial system that balances the needs of shareholders with those of stakeholders. Impact investments can also help drive the transition to clean energy, improve education, and foster innovative technology solutions to alleviate poverty and inequality.    

Why the future of investing is impact investing

Over the last twenty years, the impact investing industry has achieved incredible growth and captured the interest of mainstream investors. In the future, it will become increasingly impractical to make investment decisions without regard for the impact on society and the planet. 

As impact investing continues to gain momentum among many types of investors, better tools are being developed to help investment professionals understand their clients’ impact goals, and measure and report on the actual impact achieved. The demand for impact investing products is also increasing as fund managers, wealth advisors see the value in providing them. 

There are also groups who have evaluated and compiled impact investments into databases so investors can easily find companies and funds that match their values, including T100, ImpactAssets50, and US SIF Sustainable, Responsible and Impact Mutual Fund and ETF Chart.  

According to the GIIN’s 2019 Annual Impact Investor Survey, the responses from organizations forecast strong future growth. In 2018, these organizations invested over 33 billion into more than 13,000 impact investments. These same organizations planned to invest over 37 billion into more than 15,000 investments during 2019. This indicates 13% project growth in the volume of capital invested and 14% growth in the number of investments.  

Impact investors are also committed to further developing the industry. Most view the impact industry as having a key role in supporting important changes in investment practice, including integrating impact considerations into all investing decisions.   


Not only impact investors, but many across the public and private sectors are striving towards a world where investor mindsets and conventional financial markets are fundamentally reshaped by impact investing. The progress the world needs on intense global challenges like climate change and ever-widening inequality is demanding it.    

By Impact Investing

Does Impact Investing Equate to Lower Returns?

While it may seem like a new trend, impact investing has roots that trace back centuries and it’s here to stay. But like any alternative investment strategy, public endorsement of the approach has varied. Throughout the years, hesitation stemmed from concerns about financial returns, the ability to measure social impact and stability of the markets.

Challenging skeptics’ concerns, socially responsible investments have ballooned to account for over 25%of assets under management in 2018. As today’s investors aim to align their portfolios with their morals, the resurgence of SRI revives the age-old question: Does impact investing have lower returns?

Does impact investing have lower returns?


In short, most studies report that socially responsible investments do not have lower returns than traditional investments. In fact, there is evidence of the opposite; most conclusions point to SRI having higher returns, especially when social impact is taken into account.

A comprehensive review by the Royal Bank of Canada looked into over 40 major studies and found that there was no evidence that socially responsible investing resulted in lower investment returns. This sentiment was echoed by the GIIN’s (Global Impact Investing Network) 2017 Annual Impact Investor Survey, which found that the majority of respondents achieved market-rate returns, with 91% claiming their returns met or exceeded their professional expectations. But in order to understand the full picture, we first need to explore both sides of the argument.

Concerns about impact investing

Much of the doubt surrounding returns on impact investments boils down to three major issues: the implementation of socially responsible principles, investor motivation and social impact. 


According to a study by Morgan Stanley, 75% said that their firm practices sustainable investing. However, 66% felt that there wasn’t enough data to prove that SRI offers a solid financial opportunity. While most investors agreed that a focus on sustainability provides clear competitive advantages to a business, they didn’t believe that socially responsible behavior reliably translated into financial gains. These investors believe there is obvious potential for increased financial returns through SRI, but a lack of framework or guidelines to realize them.

Another section of the report revealed that 70% of respondents agreed that there was no industry standard definition of sustainable investments. Driven by the rapidly-growing interest in SRI, some asset managers are using the ambiguity as a marketing opportunity. Rather than selecting investments based on principles and screenings, they offer products that barely qualify as socially responsible, hoping to attract capital from bright-eyed investors. This leads to the inefficient implementation of SRI principles, which reduces the potential for financial returns. 

Investor expectations

Looking past the implementation of socially responsible principles and creation of sustainable investment products, investor expectations drive some of the concerns about impact investment performance. Some investors are not motivated by financial returns, instead choosing investments based on values or long-term goals. Critics often forget that some people intentionally invest for below-market-rate returns to align with their strategic objectives, a factor that could reduce the perceived performance of impact investments. Generally, impact investors pursue one of three scenarios:

  • Risk-adjusted market rate returns. These investors want to maximize financial returns while pursuing investments that have a positive social impact.
  • Below-market rate returns (closer to market rate). This group aims to achieve steady returns by investing in companies that prioritize social responsibility. 
  • Below market rate (closer to capital preservation). Financial returns are not as important to these investors, who are willing to sacrifice earnings to support their beliefs.



Measuring social impact

Many people choose impact investments because they want their money to be used for good causes. While it’s inspiring to witness the shift towards sustainable investing, critics are rightfully concerned about the difficulty of measuring the social effects of impact investments. According to Morgan Stanley’s study, 70% of respondents agreed that there were no metrics to measure non-financial performance. While this factor doesn’t directly affect the financial returns of impact investments, it makes comparing overall performance to traditional markets more difficult.

Exploring criticisms of impact investing

At the end of the day, the notion that there is a tradeoff between financial performance and sustainability is an outdated myth. While concerns about impact investing are valid, critics suggesting that it has lower returns neglect to mention how poor implementation and profit-seeking behavior can negatively affect financial outcomes. Socially responsible investments and principles should prioritize the underlying cause, not the potential for financial returns.

Morgan Stanley’s study highlighted that most investors understood that SRI provides competitive advantages but didn’t think it translated into financial gains. However, research from Harvard revealed that the relationship between ESG and corporate performance is shaped by willingness to address sustainability issues that are relevant to company operations; when comparing financial returns, it found a difference of nearly 9% between companies that focused on sustainability factors that were fundamental to their industry and those who didn’t. Understanding and implementing ESG and socially responsible principles are key to financial performance. 

Asset managers who use ESG principles as a marketing tactic (greenwashing) often miss the point of socially responsible investing. Their use of exclusionary screens to create sustainable investments loosely qualifies as impact investing, as there is little economic rationale behind the decisions. For example, an exclusionary screen in the car manufacturing industry would exclude all companies, while a proper ESG integration approach would consider firms that are investing in increasing fuel efficiency, electric vehicles, and extending life cycles. This mindset can lead to inefficient investment decisions and jeopardize returns in the process.

The main point of the above examples is that advisors and investors can make a larger impact when they understand how to properly implement investment screens. A 2016 study by Statman and Glushov found that screening methodology can directly impact performance. This finding implies that SRI reduces performance when investors use negative screens to exclude companies, but improves performance when investors use positive screens to select companies with high ratings on ESG indicators.

How do impact investments perform financially?

There have been plenty of attempts to prove that socially responsible investments have lower returns, but most of them come up inconclusive. This study, for example, found that socially responsible investments slightly underperformed, but admitted that there was uncertainty that may have influenced the outcome. The vast majority of evidence we’ve come across suggests that impact investments perform as well – or better – than traditional investments. 

According to the GIIN’s 2017 study, “Evidence on the Financial Performance of Impact Investments,” socially responsible funds generated aggregate net returns of 5.8%. Based on a study of 71 market-rate-seeking private equity impact funds, it found that the top 5% achieved annual rates of return of 22.1% and above and the bottom 5% achieved -15.4% or lower. The report states that this range is similar to that of conventional investing, insisting that fund managers are key to strong performance. 

Performance of impact investments holds stable even in smaller or volatile markets. The GIIN report found that funds investing in emerging markets generated a pooled return of 6.7%, compared to 4.8% for funds with a developed market focus. Bouncing back to Morgan Stanley’s report, evidence suggests that sustainable funds may also offer lower market risk. Of over 10,000 funds analyzed, sustainable funds experienced a 20% smaller downside deviation than traditional funds, even in turbulent markets. Data from 2008, 2009, 2015 and 2018 reveals that the downside deviation of sustainable funds was significantly smaller than that of traditional funds. 

Case studies

Now that we’ve established that impact investments do not have to equal lower returns than traditional investments, we wanted to analyze a few situations to get a better look at how the two compare. To do this, we’re going to consider three case studies:

  1. Index comparisons
  2. Mutual fund comparisons
  3. ESG and credit portfolio performance

Case study #1: Index comparisons (MSCI KLD 400 vs. S&P 500)

Going beyond individual funds, indices can provide a more general look at stock performance over time. The MSCI KLD 400 (formerly the Domini Social Index) (USA) and the Jantzi Social Index (Canada) are two major indices that track performance of socially responsible companies. We can analyze their performance by comparing them to traditional stocks as found on the S&P 500 and the TSX 60 indices.

The MSCI KLD 400, which was founded as the Domini Social Index, was established in 1990 and consists of 400 companies that meet rigorous standards for environmental excellence and social responsibility. Over the past 30 years, it has tracked performance of these companies against the S&P 500. As you can see, the social index has consistently outperformed traditional stocks for the past 25 years. With socially responsible investing gaining more momentum every year, the gap between the MSCI KLD 400 and the S&P 500 continues to grow.

The Jantzi Social Index was founded in 2000 in partnership with Dow Jones Indexes. Like the MSCI KLD 400, it’s a socially-screened, market capitalization-weighted common stock index. It consists of 50 Canadian companies that meet ESG criteria such as community involvement, corporate governance, the environment and human rights. While this index hasn’t been around as long as the MSCI KLD 400, it implies a similar outcome. Companies on this index have generally outperformed traditional stocks, especially after 2012.

In conclusion, the analysis of these two indices suggests that socially responsible investments outperform traditional investments, with a growing disparity in the late 2010s.

Case study #2: Mutual fund comparisons

From an investor perspective, mutual funds are one of the easiest ways to get involved in socially responsible investing. In order to determine whether SRI results in lower returns for retail investors, we are going to refer to a 2019 report by RBC.

The report analyzes 36 SRI fund studies from over 10 countries to compare SRI and non-SRI mutual fund performance. While evidence was mixed, a number of those studies support the conclusion that positive screens can be used to improve portfolio performance; after a certain number of screens have been applied, the companies remaining in the portfolio are lower risk and higher performance than non-sri counterparts. Another major finding was that the aggregate performance of SRI funds could be affected by the labeling (or lack thereof) of SRI funds, since the definition for SRI is so vague.

Overall, there is limited evidence to suggest that SRI funds systematically underperform traditional mutual funds. And while there is considerably more evidence that suggests that SRI mutual funds outperform traditional mutual funds, the results are not unanimous.

Case study #3: Barclay’s impact of ESG on credit portfolio performance

The final case study we want to explore measures the impact of ESG on credit portfolio performance, which is largely dominated by institutional investors. Based on a study done by Barclay’s in 2016, we aim to answer the following question: Does the incorporation of environmental, social and governance criteria in the investment process improve the financial performance of a bond portfolio or hurt it? A finding of that study was that, “a positive ESG tilt resulted in a small but steady performance advantage.”

Like many other forms of socially responsible investing, it can be difficult to measure the relationship due to the many aspects of ESG criteria. Results vary depending on geography, industry and market, but a survey in the Journal of Sustainable Finance & Investment draws a firm conclusion: Aggregating results from over 2,200 primary studies, the report states that roughly half of the published studies show a positive link between corporate social responsibility and corporate financial performance, while less than 10% report a negative link. 

Based on the report from Barclay’s and the summary from the Journal of Sustainable Finance & Investment, we are confident that ESG can improve the performance of a bond portfolio.

Bottom line

In conclusion, there is overwhelming evidence to support the idea that socially responsible investments do not have lower returns than traditional investments, and very little evidence to support the opposing view. However, the guidelines for what makes a company or investment socially responsible are vague, making it tough to draw a fair comparison between SRI and non-SRI investments. However, many studies make it clear that it is possible to invest sustainably without sacrificing financial returns.


By Borrower Stories, Low Income Designated Credit Union

How A Canoe-Building Small Business Switched To Making Face Shields To Weather The COVID-19 Storm

If there’s one thing Kamanu Composites has done well over the past 13 years, it’s been finding a way to stay afloat as a small business. The O‘ahu-based company, which specializes in outrigger canoe manufacturing, is one of the last of its kind on the islands. Most of Kamanu’s competitors have packed up and taken their businesses to China, where labor costs, materials, and rent are less expensive. However, despite the gradual decimation of the local industry, Kamanu has always found a way to persevere.

Photo credit: Kamanu Composites

“We’ve barely been surviving,” said Luke Evslin, one of the company’s co-founders. “Every year, we wonder if it’s going to be our last.”

Not surprisingly, when the COVID-19 pandemic hit the islands, Luke saw the end in sight. On March 21, O‘ahu’s mayor issued a stay at home order, effectively giving Kamanu one day to close up shop. Luke and his business partner, Keizo Gates, went through the difficult process of telling their employees that the next day of work would be their last. They encouraged their 17-member team to go on unemployment. 

“We thought we were done for,” he said. “We weren’t going to make payroll if we couldn’t get canoes out the door that were in stock, and we certainly weren’t going to make rent or be able to pay the insurance companies. It was pretty devastating to write those emails saying ‘sorry, we’re not going to be able to pay you.’”

Kamanu’s owners donated all of the company’s personal protective equipment — gloves, paper suits, and special masks with respirators — to local hospitals and did their best to mentally prepare for the uncertainty of the coming months. Instead, they stumbled upon something that would allow them to help keep people safe and potentially save their small business. 

Seeing that there was a need for protective face shields in his broader community, Luke’s business partner used materials lying around the shop — foam for the canoe seats, bungees, and Mylar — to try his hand at making one. He posted the prototype on Instagram, saying that Kamanu could probably make “a couple hundred” if anyone was interested.


View this post on Instagram


A post shared by Kamanu Composites (@kamanucomposites) on

The response was overwhelming.

“We had no idea what the demand was for shields in Hawaii,” Luke said, “or that there was such a lack of shields on the islands.” 

Now, Kamanu is making more than 3,000 face shields per week, and the company has been able to hire back most of its employees, who are able to assemble the masks at home. Kamanu is selling most of the shields at cost with small margins for some sales, and Luke says the company has met the demand in Hawaii and has started to fill mainland orders. Additionally, Kamanu set up a program where people can purchase masks to donate. Thus far, it has donated over 2,000 face shields to local frontline workers and hospitals.     

For the foreseeable future, Kamanu will continue to make face shields to subsidize its business while the stay-at-home order remains in place; however, Luke doesn’t expect it to be a long-term solution. Like any high volume, low-margin product, face shields can be made more cheaply in China. Kamanu’s pivot is simply to meet the demand spike in the short-term. And to give their employees flexibility during the shutdown, they come in and pick up the parts for the face shields and assemble them at home on their own time. 

“We still don’t know if we’re going to be able to build canoes, but at least we have the certainty of some cashflow coming in,” he said. 

Because Kamanu is technically open for business, with cashflow coming in and payroll open, Luke and his business partner were able to apply to the Small Business Administration’s Paycheck Protection Program (PPP), which authorized hundreds of billions of dollars in forgivable loans to small businesses across the country to pay their employees during the COVID-19 crisis. However, the two co-owners decided not to apply for the loan through Hawaii’s largest bank, where they’d been customers for the last 13 years and have “done everything.” Instead, the two reached out to Kauaʻi Government Employees Federal Credit Union (KGEFCU), a local credit union and CNote partner that has been very responsive to their needs. While Kamanu is based on Oahu, the three founding partners: Luke, Keizo and Kelly Foster all grew up in Kauaʻi, which also remains a significant source of their sales. 

“I had an existing relationship with KGEFCU, because they’re in my community and I know them,” said Luke, who serves as a Kauaʻi County Councilmember. “I thought rather than going to the bank where I’m anonymous and have no relationships with anyone, even after 13 years, we should go to KGEFCU.”

They made the right choice. Kamanu received a PPP loan through KGEFCU. Luke received a response to his initial PPP inquiry, on the same day, from KGEFCU’s CEO. Luke said he feels “lucky,” given that most of the other small business owners he knows, including his mother, who has a small retail store, didn’t get a PPP loan. 

“Small businesses are always in a similar position,” he said. “Most owners don’t have the margins or the savings or equity to make it through a little crisis. What we’re going through now is unprecedented. You have companies that have survived a long time, and they don’t know how they’re going to cover costs. You hear that story over and over and over again.”

Kamanu Headquarters, photo credit: Kamanu Composites

Even though Luke and his business partner received a PPP loan, they still haven’t received any money. More so, many in Luke’s community have struggled to navigate how to even apply for assistance set up by The Coronavirus Aid, Relief, and Economic Security (CARES) Act. That has a trickle-down effect, he says. If small businesses and individuals can’t pay rent, then property owners can’t pay their mortgages. 

“We feel blessed to have gotten this PPP loan,” Luke said. “It enables us to survive, but it really seems like those who need it most aren’t even really eligible for it. If we lose these small businesses from our communities, they’re the backbone. The PPP loan coming through for us has been such a big burden off of our back, but we need to do everything we can to try and keep these other businesses afloat.”

Luke with his family, photo credit:

As entrepreneurs like Luke and Keizo come up with innovative ways to keep their small businesses open during the COVID-19 crisis and the resultant economic downturn, it’s small lenders across the country like KGEFCU that are on the front lines of responding to small business’ needs in these uncertain times, ensuring that “the backbones” of these communities have the resources, funding, and support they need to weather this storm. 

Learn More:

Restricted access to wealth in a wallet
By Equality

Wealth Inequality: The Secret Cost of Unequal Access to Credit

America, “the land of equal opportunity”, isn’t delivering on its promise for the 90 percent that find themselves on the wrong side of the ever-widening wealth gap. In fact, the United States has a level of wealth inequality between the rich and poor that is larger than any other major developed country. According to the National Bureau of Economic Research, the richest 5 percent of Americans own two-thirds of the wealth in the nation

While there are many reasons for this divide, one of the key contributors is unequal access to credit and other mainstream financial products and services. Unlike the top one percent who invest their wealth in stocks and mutual funds, homeownership is the main source of wealth for 90 percent of Americans. This is also the asset type that suffered the biggest setback during the Great Recession of 2008. 

Financing for homeownership

Financing for homeownership.

For those who find themselves locked out of being able to access credit, getting a mortgage to buy a home seems like an impossible feat. This most often hits low-income communities the hardest, as many have historically been discriminated against through unfair practices like redlining, which despite efforts to halt still exists in some form today

The lack of access to credit also negatively affects Main Street America because, without business loans, many small business owners struggle to grow their companies. For minority- and women-owned businesses (MWBEs or WMBEs) this can be catastrophic because investment in MWBEs is 80 percent lower than the average investment in businesses overall.        

Not only are working and middle-class American households severely impacted by unequal access to credit, but these negative effects trickle down into their communities and the country as a whole by stifling productivity and innovation while continuing to increase wealth inequality.    

The challenge of accessing credit for lower-income households  

In a 2017 survey by the Federal Deposit Insurance Corporation, over 8 million households were found to be unbanked. And 80.2 percent of unbanked households had no access to mainstream credit. The survey also found that lower-income, less educated, black and Hispanic, working-age, disabled, and foreign-born, noncitizen households were more likely to not have access to mainstream credit. Differences in credit access by income, education, race, and ethnicity were the most striking, with the youngest households (aged 15 to 24 years) following close behind.   

Without access to traditional banking products like savings accounts, many of these households are one paycheck away from financial ruin. Seemingly minor financial rules about fees, fines, interest rates, and minimum balances made in the boardrooms of banks and other companies make life much more difficult for low-income families. These practices often force families to rely on alternative financial services such as payday lenders, check cashing services, pawnshop loans, and auto title loans that charge extremely high-interest rates. This exacerbates the wealth gap by keeping borrowers stuck in a cycle of crushing debt.   

While some may argue that the deregulation of these alternative financial industries is the solution, in reality reducing barriers to economic inclusion is the only way forward for households unable to access mainstream credit products and services. According to a recent article by the Brookings Institute, “Economies that extend opportunity widely not only maximize their productive potential but also minimize the fiscal and social costs of exclusion. These costs are significant.” 

The author, Joseph Parilla states that “Childhood poverty—one outcome of insufficiently inclusive growth—costs the U.S. economy an estimated $500 billion a year, or four percent of GDP, due to lost productivity, higher crime and incarceration, and larger health expenditures. Cities end up bearing these costs, at the expense of other important investments in growth and opportunity. The final cost of unequal opportunity gets beyond the numbers. Inequality of opportunity provokes hostilities that fray social and political cohesion and good governance, which affects economic growth.” 

Why lack of credit access curbs small business and community development

Small businesses rely on access to credit as much as American households. In fact, access to credit is so essential to businesses that a government agency called the U.S. Small Business Association is dedicated to “connecting entrepreneurs with lenders and funding to help them plan, start and grow their business.”    

Coastal Enterprises, Inc. (CEI), an SBA 7(a) lender has financed 2,555 businesses for over $1 billion in Maine and other rural areas across the nation. Betsy Biemann, CEO says, “These are businesses that often would have trouble accessing traditional capital from traditional lenders.”

Many small businesses depend on credit access for startup costs, capital improvements, and to meet everyday expenses like payroll. While it’s easier for larger companies to attract lenders, for small businesses, lack of credit can cause them to close their doors forever. 

Howard Schultz, Starbucks CEO who is credited with transforming the coffee giant from a regional company into a top global brand has stated that “the lifeblood of job creation in America is small business, but they can’t get access to credit.”

With a less stable job market, many more millennials are also becoming entrepreneurs than previous generations. According to a recent study by America’s SBDC, 62 percent of millennials have a dream business they would love to start while nearly half reported that access to capital is the biggest barrier to starting a business.    

How unequal access to credit threatens the US economy 

Despite the expansion of the United States’ economic power throughout the past century, the growth in household wealth outside of high earners has not been inclusive. In 2016, white households had more than ten times the wealth of black families according to economic research by McKinsey.  

The racial wealth gap alone constrains the entire U.S. economy. McKinsey estimates that “its dampening effect on consumption and investment will cost the US economy between $1 trillion and $1.5 trillion between 2019 and 2028—4 to 6 percent of the projected GDP in 2028.” 

Black families still must contend with systemic discrimination, poverty, and a lack of social connections in the effort to build wealth. The National Fair Housing Alliance (NFHA) is a trade association that works to eliminate housing discrimination and to address the lack of access to credit that severely limits the accumulation of wealth for people of color.  

In tandem with practices like redlining, housing policies were established from the inception of this nation that “were expressly designed to assist whites in gaining land and homeownership rights while simultaneously denying people of color the same opportunities” states the NFHA.

The shocking millennial wealth gap

Millennials have the undesirable distinction of being the first generation to accumulate less wealth than previous generations. The Federal Reserve report, “Are Millennials Different?,” disclosed that Millennials have “lower earnings, fewer assets and less wealth” than previous generations at the same age. The Federal Reserve’s Survey of Consumer Finances also reported that despite making up about a quarter of the population, millennials own only 3% of the country’s wealth. 

This is due in part to coming of age in the job market during the financial crisis of the Great Recession. During this time, the labor market was at historically weak levels and credit conditions were unusually tight. Also, increased higher education and health costs contributed to millennials carrying greater levels of debt and having far less money to spend. And even when working full-time hours, millennials can’t afford to buy homes according to a 2017 National Housing Survey by Fannie Mae. 

Restricted access to wealth in a walletThe impact of restricted credit access and lack of economic inclusion among racial and generational lines is having a ripple down effect on the U.S. economy that is maintaining a persistent and widening wealth gap for the majority of Americans. And when the gender pay gap, education level, immigration status, disability, and other factors are added to this as well, addressing wealth inequality and credit access is even more critical.   

What’s the way forward to improving access to credit? 

The Consumer Financial Protection Bureau (CFPB) estimates that “26 million Americans can be classified as credit invisible and 19 million have a credit history that is insufficient to produce a credit score.” CFPB is urging lenders to deploy innovative ways of increasing access to credit. Upstart Network is a nonbank lender that deployed a machine learning model to improve access to credit that abides by fair lending practices. 

Community Reinvestment Act (CRA) reforms that include the expansion of CRA credit to banks that work with Community Development Financial Institutions (CDFIs) have also been proposed. This would modernize the current rules to require banks to lend and invest in all regions where they receive significant deposits, also taking into account internet banks that have only one physical branch. Although, some community groups and low-income advocacy associations have voiced concerns about these changes placing an emphasis on the dollar amount of CRA projects that would lead to receiving less capital from bank partners.

Using alternative credit data to support those who are underbanked and have limited access to credit is another possible solution. Alternative credit scoring models take into account a broader range of criteria than current models that require an individual to have at least one active credit account that displays activity for over six months. The latest FICO 9 score model excludes paid and unpaid medical debt from credit scores and a new credit scoring model from VantageScore ignores accounts referred to collection agencies that have been paid off.   

Fintech startups are also innovating financial services and banking as millennials adopt new investment vehicles like cryptocurrency, point-of-sale lending alternatives, digital-first banks like Simple and Chime, AI-based budgeting and expense monitoring, robo advisors, micro-investing apps like Acorn and Stash, and virtual credit cards. Impact investing is also increasingly popular among millennials who have a strong interest in investing in small business.

Smartphone apps allow people to invest from their fingertips.

Smartphone apps allow people to invest and manage accounts from their fingertips.

SBA and first-time home buyer loans along with other government programs can assist in paving the way for opening up opportunities to grow wealth for more Americans. Ultimately, many essential reforms are needed within the financial, housing, employment, healthcare and many other sectors of America’s infrastructure to achieve lasting change. 

Six essential policy solutions have been pinpointed by the HAAS Institute for a Fair and Inclusive Society for reversing inequality, closing the wealth gap and expanding economic inclusion. Access to fair, low-cost financial services and increasing homeownership is listed as crucial for building American households’ wealth. 


An important part of financial health is building assets to generate wealth. Historically, the working and middle class in the U.S. have grown wealth through homeownership and creating small businesses. The wealth gap grows when only some populations in the U.S. are able to access credit and the mainstream financial products that are oftentimes necessary to do so.

The Federal Reserve Bank of New York developed The Credit Insecurity Index to collect various Community Credit indicators to understand the impact of credit constraints on U.S. communities. Through their research, they found that communities with more access to credit are better off than communities with less access, as they are able to strive for upward economic mobility and weather unexpected financial hardships such as the subprime mortgage crisis that happened during the Great Recession.     

Woman holding a protest sign for change.

Woman holding a protest sign for change.

Without far-reaching, structural reforms to our society, the deep and persistent wealth gap in America cannot be bridged. Public policies such as redlining and housing and wage discrimination have suppressed the wealth of many generations of women and people of color. To ensure subsequent generations have a better chance of building wealth, expanding economic inclusion is imperative. This, in turn, supports the closing of the wealth gap, and the growth and stability of all communities, the country, and even our planet. 

Looking to support increased access to financial resources in underserved communities? CNote recently launched The Promise Account for foundations and other institutional investors that provides capital to financially vulnerable communities and is optimized for returns, insurance, and impact. Every dollar invested in our platform goes towards funding MWBEs, affordable housing, and economic development. 

By Borrower Stories

Impact Story: Mountainside Community Cooperative

How Capital and Coaching Allowed Mountainside Residents To Purchase Their Park and Control Their Own Destiny

Margaret Jones grew up and went to school in Camden, Maine; however, that didn’t make things any easier for her when she moved back to the idyllic town of her youth after 30 years of being away.

Although Camden is a town of less than 5,000 people, it is a well-known summer colony in Maine’s mid-coast and the town’s population more than triples during the summer months due to tourists and wealthy out-of-state summer residents who come to enjoy Maine’s scenic coastline.

“When I finally had the opportunity to come back,” Margaret said, “I couldn’t afford to buy here. I rented, but that was getting to be ridiculous.”

Margaret, President of Mountainside’s Board

Like many small towns and big cities across the country, home prices in Camden are increasing. Depending on which real estate website you look at, average home prices hover between $300,000 and $400,000, and a robust short-term vacation rental industry continues to drive up rents. For people like Margaret, there are few — if any — truly affordable housing options left.

Therefore, like approximately 22 million other Americans, Margaret decided to buy a manufactured home. Given that median-priced homes are unaffordable for average wage workers in roughly three quarters of the country, the number of Americans relying on these prefabricated homes is expected to increase, especially with young people, older individuals on fixed incomes, and renters.

When Margaret bought her home four years ago, she was fortunate to find a plot to rent in Mountainside Park, one of two manufactured housing communities in Camden. She loved living in Mountainside, and she appreciated how her neighbors took care of their yards and how the property owner treated the park’s 52 renters. However, all of that changed last August, when Margaret received a letter from Mountainside’s owner informing her that he and his wife were retiring. “There was a lot of nervousness,” Margaret recalled.

She had good reason to be worried. That’s because big investors are gobbling up manufactured home parks across the country.

As the Financial Times reports, manufactured home parks are enticing to investors because they offer a reliable annual rate of return: usually 4% or higher. However, these profit-driven investors, typically based out of state or overseas, rarely care about those living in these long-established communities. Some investors either dramatically increase rents or they evict renters and redevelop the land. Either scenario is a nightmare situation for individuals like Margaret who live on a fixed income.

Because it costs tens of thousands of dollars to move one of these manufactured homes, most residents can’t afford to transport their homes elsewhere. However, staying put after the property changes hands means having to pay more and more on rent, even as the state of the community deteriorates due to lack of regular maintenance, oversight, and upkeep. Sadly, in some cases, people who can’t afford to transport their manufactured homes and who can’t keep up with rising rents are forced to abandon their homes, because the land beneath is too expensive to stay.

That’s why Margaret was so nervous when she learned that Mountainside’s owner was looking to sell — she owned her home, but she didn’t own the land underneath her. Therefore, Margaret’s future at Mountainside, not to mention her very financial wellbeing, hinged on what was about to happen next.

Trust The Process

Jeanee Wright knows this story all too well. She’s the cooperative development specialist at the Cooperative Development Institute’s (CDI) New England Resident Owned Communities (NEROC) program. Through its ROC Program, CDI helps owners of manufactured homes to preserve and protect their homes by helping these communities purchase and secure the rights to the land.

Jeanee of CDI pictured at Mountainside Board Meeting

Jeanee’s work is centered around communities in Maine, so she was already familiar with Mountainside Park even before she heard that the owner was looking to sell. In early 2019, she worked with a nearby manufactured home park in Arundel. There, she also helped organize the residents to purchase their park leading to a similar positive outcome.

Fortunately, Mountainside’s owner didn’t want to sell to an outside investor. Instead, he wanted to work with 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.


“The reason the Genesis Fund and CDI got involved is because Mountainside’s owner was familiar with the Genesis Fund’s work,” Jeanee said. “He wasn’t sure exactly how the model worked, but he liked it, and he was interested in it. Once he reached out, we brought everybody else to the table.”

Jeanee provided technical support to the residents to create a nonprofit cooperative and assisted the coop and Mountainside’s owner in negotiating a deal.  The Genesis Fund provided the loan that allowed Mountainside’s residents to officially purchase the park in December 2019. 

Financing from CDFIs like the Genesis Fund is often essential to making these deals work, because traditional banks may be hesitant to finance an inexperienced member-owned cooperative making such a large purchase. 

But Liza Fleming-Ives, Executive Director of the Genesis Fund, says this type of financing is central to their mission. “The Genesis Fund actively seeks out opportunities to invest in Maine communities and ensure that they are accessible to members at all income levels. The Genesis Fund exists to go where others won’t and meet the needs of underserved communities.”

For Fleming-Ives, mobile home park cooperative financing is one of the best examples of what Genesis can do to build equity in Maine communities. “To date we have financed 10 mobile home park cooperatives, collectively preserving over 500 units of housing for Mainers, and each of them is successful and thriving using their cooperative governance model and ensuring access to that affordable housing for their residents into the future.” 

Now named Mountainside Community Cooperative, the strictly 55-and-over community operates the park. More importantly, they own the land. Better yet, because rents in resident-owned communities are proven to remain stable, residents have the comfort knowing that they’ll never be forced out because of redevelopment, evictions, or rent spikes. They literally have a vote on what direction their community is headed.

Better Than Before

Because many of Mountainside’s inhabitants were content prior to the formation of the cooperative, they didn’t want things to change. As Jeanee put it, “they wanted to keep on loving where they lived.”

It turns out, the only changes have been for the better.

Paul, a Mountainside resident

Paul Harding moved into Mountainside last summer, just a few weeks before receiving the letter telling him that the property was going to be sold. Paul says that before the co-op was created, people barely spoke to each other. Today, he says, that’s a different story. “Now that we have a co-op, people know each other and communicate with one another. It’s a much better atmosphere. People are always reaching out to each other to see if they can help one another. It’s been very beneficial.”

Phil Amoroso, another resident, agrees. Like Margaret, he and his wife, Anne, live on a fixed income and were priced out of Camden’s housing market. Initially, he viewed the co-op as “a lesser of two evils.”

Phil & Anne outside their home

“When I heard that Mountainside’s owner was selling, I was disappointed, because I liked the way the park was being run,” he said. “But I knew we’d probably be a lot better off trying this co-op thing rather than taking a chance on somebody from outside coming in who could either raise rents outrageously or evict us so they could put in condos or houses. This was the only way we could do it.”

Phil said that over time, he’s warmed to the co-op model, and he’s happy with the outcome. He said that without Jeanee, it would have been “next to impossible” to have navigated the mechanics of it all. Margaret echoed his sentiments. “We’re grateful to The Genesis Fund for stepping in to help us make this possible.”

Jeanee, however, was quick to redirect all praise to every one of the involved stakeholders. “We use the same process time and time again,” she said. “That’s the value.”

“These folks would probably not be able to stay in Camden if it weren’t for this co-op,” she continued. “What they have created is not just long-term affordability, but many empowered people who live here and build community. Together, they’re building a beautiful community.”

Learn More

By CNote

Webinar: Investing in Indigenous Communities through CDFIs

CDFIs have a strong history of providing economic resources to financially underserved communities across America, helping to create jobs, fund small businesses, and support affordable housing development.

Often, many of the success stories you hear about CDFIs relate to urban or rural development projects and small business lending.

This webinar will focus on CDFIs that have been formed specifically to serve the needs of their local indigenous communities, providing economic resources, coaching, and other support to increase economic mobility and resiliency.

You’ll hear from two experienced practitioners who have been working in these communities for decades. You’ll learn about the common challenges they face, the work they do, and how you can get involved in investing in and supporting their efforts!

Please join us for this hour-long webinar dedicated to CDFIs working to empower Native and Indigenous Communities across America.

You can watch using this link or via the youtube video below.

Click here to download the slides.

This presentation was co-hosted by:

This webinar is co-hosted by the First Nations Oweesta Corporation and the Native American Community Development Corporation Financial Services, Inc. (NACDC) Candide Group and CNote.


By Change Makers Series

Change Makers Interview: Mary Houghton, Community Finance Pioneer

When Mary Houghton partnered with Milton Davis, James Fletcher, and Ron Grzywinski to purchase what was then South Shore Bank in Chicago in 1973, she had no idea that she was shifting the course of community finance in the U.S. The quartet of “mutually respecting” entrepreneurs created ShoreBank, which was committed to fighting redlining and economic inequity in Chicago and across the country until the bank went under in 2010.

Mary has, in many ways, become the godmother of community finance and community development financial institutions (CDFIs). Aside from ShoreBank, Mary served on the Board of Directors of Accion International and Calvert Foundation and she currently serves as a director of Craft3, Northern Initiatives, Grassroots Business Fund and Rapid Results Institute.

We sat down with Mary to talk about ShoreBank’s origin story, and we got the chance to hear more about the history of community finance, the biggest challenges we face today, and her advice for other social entrepreneurs.

CNote: Can you talk about the genesis of ShoreBank?

Mary Houghton: The turmoil of the ‘60s and the riots in ‘68 created more interest in economic empowerment and in the problems of access to capital in black communities. So, I hooked up with a group of three other people who were all living in Chicago and who were interested in a big idea. It was two African American guys, one Polish-American guy, and me. We found each other when the Polish guy had the big idea of creating a minority small business lending department at the bank he ran in the University of Chicago community and hired us.  We went to town doing a lot of lending. After a while, we said, “Why don’t we try to do something even bigger?” And that something even bigger was to see if we could raise the capital to acquire an existing community bank and use that platform in one Chicago neighborhood suffering from racial change.

That idea evolved into creating some affiliated non-bank companies alongside the bank and then the four of us raised $800,000 in capital from eight sources, got a bank stock loan and acquired South Shore Bank of Chicago, which was then a $43 million asset bank, having lost half of its deposits when its neighborhood suffered rapid racial change. That became the base of our activity. It grew steadily to the early 21st century, and we operated in Chicago’s South Side and West Side, as well as in four other locations around the country. We were an early proponent of the idea that investors might invest for a social purpose to build the bank.

CNote: When you took over ShoreBank, were you following any certain models or examples, or were you building the blueprint in real time?

Mary Houghton: During our research phase, we looked for models, and we looked at credit unions as an alternative to banks. We were observers of the community development corporation (CDC) movement, which were by and large nonprofit economic change agents in communities. However, I think that we were innovating, particularly in the idea that a bank itself could be the base of a strategy and that that would be more powerful than the existing nonprofit base of community development corporations. We believed that by having access to a regulated bank, that could raise deposits to fund itself and that could grow larger than most not-for-profits could grow. We believed that might be a stronger vehicle for community change.

CNote: Was there a turning point at ShoreBank where you realized that what you were doing was working?

Mary Houghton: The first 10 years were all kind of a slow progression. We had acquired an existing bank, and the economics of running a high volume retail deposit operation were daunting. Although we had early successes in finding good loans and good investments, just getting the basics of building the bank took a while. We bought the bank in ‘73, and in about ‘76 or ‘77 we started raising out-of-market institutional deposits essentially as a more profitable source of deposit growth, and we had early success with that. But, there really was no one time when we all said “a-ha, we made it.” It was always just sort of evolving and growing.

CNote: What progress do you think we’ve made since ShoreBank was founded in 1973?

Mary Houghton: Probably the most important thing that’s happened in a while was the Community Reinvestment Act, which passed in ‘77. It was a huge step in the right direction, but it hasn’t been enforced very aggressively for quite a long period of time now.

If you look at history, what you will see is that certified community development financial institutions, or CDFIs, essentially took over from the CDCs of the ‘50s and ‘60s, and they had a more business-like model because they were trying to be self-supporting and not just project focused and grant dependent. Then Clinton came along and created the federal CDFI Fund, which is now 25 years old and has been consistently a good source of capital.

There is now an industry of 1,200 CDFIs, and they’re growing slowly. They’re not big enough, but they’re the only mission-focused, community-focused financial institution vehicle that exists, because the banks have consolidated and withdrawn. You can’t go to