Jennifer Hayes, Senior Vice President of Operations and Policy, on our combined efforts to effect change in underserved communities through policy, programs, and process.
Over the past several months, Invest Detroit has been working with partners to increase awareness of the CDFI community among state leaders. What’s a CDFI, you ask? Community Development Financial Institutions (CDFIs), like Invest Detroit, are mission-driven financial institutions created to invest in underserved communities and to ultimately improve the lives of their residents. We are highly collaborative, semi-regulated organizations that finance and support businesses and real estate projects with responsible, affordable lending tools in areas where traditional financing is difficult to find. When repaid, these dollars come back to the organization and are then redeployed to other businesses and projects; this means the impact of philanthropic and grant dollars go much further. There are 50 active CDFIs in Michigan and other national CDFIs that are investing in Michigan through lending tools in the following areas: consumer lending, including personal, auto, and mortgage; micro and small business lending; real estate lending, including mixed-used property, commercial and industrial; workforce development; affordable housing; and health care.
There is so much I love about the CDFI industry and the work we do, but one of my favorite things is the collaboration that exists across partner organizations. We come together to learn from each other, support each other, refer borrowers to one another, invest with each other and advocate for important public policy together. Our response to the economic crisis caused by COVID-19 has been no exception.
Working with the Detroit CDFI Coalition and CDFI partners from around the state, we developed policy priorities to ensure that our state leaders are aware of our mission and impact. The last 18 months have been difficult on communities, families, small businesses, and local economies. Although many of us are excited to get back to “normal,” we don’t know exactly when that will be. Unfortunately, our small businesses and communities continue to feel the impact of the COVID-19 pandemic and are struggling to fully recover, much less think about growth. The CDFIs across the state are doing everything we can to help support the businesses in our communities, but we want to do more.
With Congress passing unprecedented levels of federal support for our state and local communities, our leaders have to navigate the process of negotiating an agreement on how to allocate the approximately $5.7 billion American Rescue Plan Act funding for COVID-19 economic recovery. This funding can be used to help address immediate needs, but it’s also an enormous opportunity to leverage local investments to build profound, long-lasting support for broad economic growth through policy, programs, and process. Policy that focuses on long-term growth in addition to recovery. Focusing investments to support or modify high-impact programs that provide resources and tools that help make businesses sustainable. Process improvements that eliminate barriers and hurdles for new and existing businesses and business owners.
Invest Detroit has been advocating for public policies that will support not only the recovery, but also the growth of small businesses, startups, and community development investment. Our current efforts are focused on three key state priorities that will have an immediate and long-term impact on all of these areas.
- Create a Michigan CDFI Fund to award funding to CDFIs for lending programs to underserved communities across the state.
- Work with the Michigan Economic Development Corporation (MEDC) to develop transformational SSBCI programming that the CDFI industry can use to support Michigan micro and small businesses with resources and financial support.
- Increase investment in Michigan startups through venture capital funds for early-stage startups that can bring jobs and opportunities to the state.
These policy priorities will not only help our communities, micro and small businesses, and startups to recover and grow, it will also grow the capacity and strength of Michigan’s CDFI community around the state. This is important because the more CDFIs can strengthen their financial stability and increase lending capacity, the more lending programs we can offer to those communities and populations that are traditionally overlooked and underserved. This means more affordable, flexible funding to create housing, stable businesses, stronger neighborhoods, and better supported residents in our most vulnerable communities.