When CNote first engaged with Impact Frontiers’ Investor Contribution Pilot program in 2025, we were exploring a crucial but often overlooked aspect of impact investing: How do we know our investments create change that wouldn’t have happened otherwise? Today, I’m excited to share how that initial exploration has evolved into a comprehensive framework that now guides our fixed income investment decisions.
Building on Our Foundation
Our journey with investor contribution began when CNote participated in Impact Frontiers’ pilot program alongside several community financial institution partners, including CDFI banks, credit unions, and loan funds. As we shared in our initial blog post about the pilot, the experience helped us move beyond simply collecting output data for compliance reporting toward a more proactive approach to understanding and measuring our true impact.
The pilot introduced us to Impact Frontiers’ definition of investor contribution: “investor actions that cause or are expected to cause a change in outcomes for end-stakeholders and/or the natural environment that would not have likely occurred in the absence of those actions.” This framework challenged us to think more rigorously about the “but for” question, what would have happened if CNote’s investment hadn’t existed?
From Pilot to Portfolio-Wide Implementation
Since completing the pilot, we’ve taken significant steps to operationalize investor contribution across our entire platform. Working with Impact Frontiers, we adapted their investor contribution categories specifically for our fixed income products, recognizing that CDFIs face unique capital challenges that create distinct opportunities for additionality.
Through comprehensive analysis, we identified six primary ways our investments generate investor contribution:
Access to Capital (25% of portfolio): Many of our CDFI partners simply couldn’t access the capital we provide through traditional sources, especially in a time when CDFIs’ typical fundraising had slowed.
Flexible Capital (23%): Our capital comes with fewer restrictions than traditional funding sources, allowing CDFIs to respond quickly to community needs and opportunities.
Dedicated Capital (16%): Through products like our ImpactFlex Notes, we provide capital specifically earmarked for targeted impact themes, enabling CDFIs to expand and deepen lending in new areas.
Lower Return Capital (15%): We are able to provide below-market rates to enable CDFIs to offer more favorable terms to their borrowers, particularly in underserved communities.
Diversification of Capital (13%) CNote introduces CDFIs to a broader range of investor types including foundations, corporations, and retail investors, helping them build a more resilient and balanced capital structure that’s less reliant on traditional sources.
Technical Assistance (9%) CNote provides strategic guidance, tools, and capacity-building support to strengthen CDFIs’ operational effectiveness, improve their impact measurement, and help position them for future institutional investment.
Applying Rigor to Our Entire Portfolio
Perhaps most importantly, we didn’t stop at theory. We applied this investor contribution framework to analyze our entire existing portfolio, working through each CDFI investment to assess our contribution. This wasn’t just an academic exercise; it revealed meaningful insights about where our capital creates the most additionality and helped us refine our approach.
The analysis confirmed what we suspected: our most significant contributions often occur with smaller CDFIs that have limited access to alternative capital sources, and in markets where other lenders are less active. But it also revealed nuances we hadn’t fully appreciated, such as the critical importance of our flexible terms and unrestricted capital in enabling CDFIs to respond to unexpected community needs.
Looking Forward: Integration into Investment Process
We’ve now integrated investor contribution assessment into our complete investment pipeline. For every new potential CDFI partner, our due diligence process includes identifying the primary investor contribution category; essentially asking “What specific form of additionality would our investment provide that this CDFI couldn’t access elsewhere?”
This isn’t just about measurement; it’s about intentional impact creation. By identifying the primary contribution opportunity upfront, we can structure our investments to maximize additionality and set clear expectations for what we hope to achieve.
Our next step involves post-investment reassessment. On an annual basis, we’ll return to our initial investor contribution assessment to determine whether our expectations held. Did the CDFI actually lack alternative sources for the capital we provided? Did our flexible terms enable lending that wouldn’t have occurred otherwise? This feedback loop will help us continuously improve our ability to identify and create genuine additionality.
Why This Matters for Impact Investing
This work represents more than just better measurement. It reflects a fundamental commitment to accountability in impact investing. We can point to specific CDFIs that expanded their lending due directly to our investments, communities that gained access to capital they previously lacked, and borrowers who received terms they couldn’t have accessed elsewhere.
As Maryann Sorese from Leviticus Fund noted during the pilot, “The ‘but for’ is not always so clear.” That’s precisely why this rigorous approach matters. By applying evidence-based frameworks to assess investor contribution, we’re moving beyond assumptions to build a more accountable and effective impact investing ecosystem.
The journey from pilot participant to portfolio-wide implementation has strengthened our conviction that investor contribution should be central to how we evaluate and communicate impact. We’re proud to lead in this space and look forward to sharing more insights as we continue refining our approach.
Interested in learning more about investor contribution or CNote’s approach to impact measurement? We’d love to hear from you.
