Bridges Summer 2019

Bridges is a quarterly review of regional community and economic development issues, projects and regulatory changes for practitioners from community-based organizations, as well as for Community Reinvestment Act officers, academics and government of

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T H E F E D E R A L R E S E R V E B A N K o f S T . L O U I S | C E N T R A L T O A M E R I C A ' S E C O N O M Y I N D E X S U M M E R 2 0 1 9 The Challenges and Promises of Rural America 5 8 11 CRA: AN EXAMINER'S PERSPECTIVE A Rundown of Community Development Investments A N D M O R E > > More than Capital: Exploring the Continuum of Community Development Projects By Joe Neri E ffective community development finan- cial institutions (CDFIs) spend enor- mous amounts of time doing two things: (1) assembling capital—both scarce debt dollars and even scarcer equity dollars; and (2) deploying those dollars in communities we care about. But as challenging and time-consuming as raising and deploying capital can be, it's not enough. Our goal is not only to raise and deploy capital—most banks do that. Our goal is to align capital with justice. at means deploying the capital we raise in ways that mitigate and eventually solve our communities' economic, health, education, environmental and social prob- lems—that's what successful community development projects look like. To do that, CDFIs must engage across a continuum of activities—beyond raising capital and deploying loans—that build the pipeline of community-driven "investable projects" in all of our communities. >> continued on Page 3 Food Hubs: 10 Lessons on Viability The Continuum CDFI capacity is a vital part of a mature community finance ecosystem, which also requires cooperative and collaborative infrastructure from government, philan- thropy, business, nonprofits and the civic community. Within that ecosystem, CDFIs can facilitate successful community projects in multiple ways—this is the basic premise of the continuum. Put another way: While many stakeholders are responsible for the success of the entire ecosystem, CDFIs can and must lead the way. Assembling capital for communities—on which CDFIs typically focus—is only one element along the continuum that will lead to successful projects. In fact, since every bank assembles capital to lend, I would argue that the other components of the continuum are much more important to the CDFI industry's focus on aligning capital with justice.

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