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
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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.
