Interview by Greg Hedgepeth
The Alliance serves Black-led CDFIs Nationwide. Founded in 2018, The Alliance has grown with 56 Black-led community development financial institutions (CDFIs) committed to the support and growth of Black communities and the Black executives leading CDFIs that serve those communities. Wait, back up, what’s a CDFI you ask. CDFIs are financial institutions that provide credit and financial services to underserved markets and populations. The Alliance led by Lenwood Long, Sr. is on a mission to build the capacity of member organizations; build bridges to economic stability, well being, and wealth for Black individuals, families, and communities; all while building power in Black communities by challenging and influencing financial sectors to operate more equitably. Substantial had the opportunity to sit down with Lenwood to learn more about the history of CDFIs, their importance and the work of The Alliance.
SM: Tell us about the history of CDFIs
LL: CDFI’s are the best-kept secret in our communities, that honestly shouldn’t be secret at all. CDFI’s have been around since the early 90s and were initially created through The Riegle Community Development and
Regulatory Improvement Act of 1991 which after being signed into law created the Community Development Financial Institutions Fund (CDFI Fund) and the
Community Development Advisory Board. This is a part of the U.S. Department of Treasury which provides funds to CDFIs through a variety of programs.
CDFIs are mission-driven organizations focused on the unmet needs of their communities. Whether that’s housing, small business lending or other community development needs, but primarily most of them focus on small businesses.
SM: So talk to us about the forming of the African
American Alliance of CDFI CEOs (The Alliance for short).
LL: We brought together 21 at the time Black CEO’s of CDFIs in the Raleigh area back in 2018, and it was from that synergy and enthusiasm in the room that we started to develop something special. It’s amazing what Black folks can do when we put our minds together and start thinking about the future and start thinking about what could make a real difference in our communities and what our CDFIs could do to make it happen. Quite frankly we’ve been working hard ever since that meeting. In fact when COVID hit in 2020 we met in DC and were talking about what we could do to support our communities. Of course we had to pivot and do a lot of stuff virtually but we never stopped working. We collaborated on our first concept paper called the “Fierce Urgency of Now” that talked about the case for investing in Black businesses, the case for investing in Black-led CDFIs, the need gaps and the widening racial wealth gap in our communities. We officially announced and launched The Alliance during the OFN (Opportunity Finance Network) Conference which is the largest CDFI Industry event in the nation and we immediately got a favorable response, growing The Alliance from 21 to roughly 64 organizations and we’re still growing. We were all surprised when we started to realize just how many CDFIs are out there.
SM: Talk to us about the future of Black-led CDFIs.
LL: Listen, double and triple check this but during COVID, 11 of our member organizations put out $4.4 billion in PPP loans to primarily Black businesses across the nation. I would venture to say we may have lost that money or it wouldn’t have went to our businesses because not all financial institutions are primarily focused on serving our Black businesses. And shame on us for putting up barriers that prevent members of our community from accessing capital.
Listen the future is bright for Black-led CDFIs and I’d like to offer this challenge. We’re going to have to look at the changing landscape. Black businesses don’t need more debt, we need to find ways to complement or supplement. We’re starting to look at ways to add equity capital into Black businesses. We’re also looking at new market tax credits. The NMTC Program attracts private capital into low-income communities. There’s a lot on the horizon and The Alliance is here to help both our Black-led CDFI’s and Black businesses.