A conversation with members of the African American Alliance of CDFI CEOs about the impact their member organizations are having in communities across the nation.
Wealth is defined as the total financial value of that which a household owns, minus all debts. According to recent economic reports, the numbers for the racial wealth gap between average households are nothing short of chilling. The median for white families is currently $184,000 compared to black families with a median of $30,000. The disparity in these numbers has been consistent over the last twenty years, and the African American Alliance of CDFI CEOs (The Alliance) is in the perfect position to move the needle.
For years Community Development Financial Institutions (CDFIs),, have played a vital role in generating economic growth and opportunity in some of our nation’s most distressed communities. So what is a CDFI, you ask? CDFIs are specialized financial institutions that provide financial products and services to populations and businesses located in underserved markets. CDFIs across the country have become known for providing access to capital, advocating for more robust financial policies that serve all, and finding ways to close the racial wealth gap.
While no one CDFI has the exact same mission, the common thread has been to ensure underserved communities have access to the capital, financial services, and knowledge they need to prosper. We got the opportunity to sit down with a particular group of CDFI leaders who are members of The Alliance which happens to be an organization that brings together Black-led CDFIs from all over the nation with funds of all sizes.
The Alliance is a membership-driven intermediary organization that aims to:
- Build the capacity of member organizations.
- Build bridges to economic stability, well-being, and wealth for Black individuals, families, and communities.
- Build power in Black communities by challenging and influencing financial sectors to operate more equitably.
“The Alliance was conceptualized in February of 2018, after a meeting of several Black-led CDFI CEOs,” said Lenwood V. Long Sr., President and CEO of The Alliance. “There was so much synergy and energy around Black-led CDFIs coming together around three areas. One, how do we use our collective knowledge and begin to impact public policy? How do we start to use our collective knowledge and share it with each other to build our communities? Thirdly, building the capacity and capital of Black-led CDFIs to help them scale, grow, and be relevant.
The Alliance has established a network of 69 CEOs of Black-led CDFIs, which includes loan funds, credit unions, and venture capital funds. Members cover all 50 states and are focused on various sectors, including small businesses, affordable housing, commercial real estate development, education, and health.
We had the opportunity to talk with Thelma Adams Johnson, a member of the Alliance who serves as the President and CEO of Albany Community Together Inc., a CDFI located in Albany, GA. Their mission is to create opportunities for low-wealth individuals who are not served or underserved by traditional financial institutions. Under Johnson’s leadership, the CDFI has provided access to $7.6 million in capital, leveraged $21.4 million in private capital to over 175 businesses, assisted in creating and retaining 730 jobs, and provided business development training and technical assistance to over 1200 businesses.
“Think about the past two years and our communities having had to deal with COVID. We know that over 40% of African American businesses closed, and most would never reopen because they were undercapitalized. From the very beginning, they didn’t have the resources, they didn’t have the capital, and they did not have the business development services or the support to weather such a storm,” said Johnson. “We are uniquely positioned to create and build wealth for small business owners by providing access to affordable capital, coaching, and connections. And we do that through our loan programs, our business development services, and partnering with our loan borrowers to scale their business, and we help them create a lasting legacy.”
Click to hear highlights of our interview with Thelma Adams Johnson, President & CEO, Albany Community Together, Inc. https://youtu.be/9ZLttZGwXKs
Since joining the Alliance, Johnson says she has significantly benefited from the circle of like-minded women within the Alliance’s Women-Led Initiative. She has connected with other Black-led CDFI CEOs that have served as mentors and shared resources to help Albany Community Together, Inc. scale, thus giving them the ability to service more people within their communities.
We talked with other members of the Alliance like Marshall E. Crawford, Jr., President and CEO of The Housing Fund Inc., a CDFI that provides resources and creative leadership to help individuals and communities create and maintain affordable and healthy places to live located in Nashville, TN. Through those conversations,we learned that Black-led CDFIs are necessary vehicles for real economic impact in underserved communities.
Since The Housing Funds, Inc. (THF) incorporated in 1996, it has assisted over 3,500 first-time homebuyers in receiving over $25 million in down payment assistance loans. THF provided more than $47 million in financing to help individuals and organizations purchase, rehabilitate, or construct homes for low and moderate-income families, and to put these numbers in perspective, THF has lent over $75 million, which has leveraged over $400 million in private financing for more than 4,900 units.
Mainly financing affordable housing and neighborhood revitalization projects throughout Middle Tennessee, including Montgomery County, Crawford says they serve the entire state of Tennessee in helping low to moderate communities become core economic engines. THF ensures individuals are able to enjoy the American dream just like anybody else would, and serving the African American community is a particular interest of THF.
“As CDFIs, our core business model allows us to provide additional resources to individuals who can’t use mainstream financial institutions. For so many of us, we have capital that is more nimble and flexible. We are able to look at our underwriting criteria or grant-making criteria through a different lens,” said Crawford. “And what makes us so different is that many of the people that work for us are mission-based. CDFIs provide an opportunity to help individuals create wealth that they may otherwise not have been able to get by utilizing mainstream financial institutions because of their underwriting criteria. So it’s very important that CDFIs play a critical role in the communities they serve.”
These Black-led CDFI CEOs across the country are doing a tremendous job investing, providing financial services, along with technical assistance to underserved populations and communities, and they deserve their flowers. More importantly, they deserve national recognition for being the substantial economic drivers that they are. Since launching in 2018, the Alliance has established a network of 69 CEOs of Black-led CDFIs. This network includes loan funds, credit unions, and venture capital funds with members in all fifty states. This ecosystem of support is brought to life by various sectors including small businesses, affordable housing, commercial real estate development, education, and health.
The Alliance is on a mission to shine more light on these incredible institutions and the Black leaders that run them. Stay tuned for more as they look to elevate their members’ impact across the nation and visit their website to learn more.
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