The Third Wave
My remarks as prepared for OFN40, the 2024 Opportunity Finance Network Annual Conference in Los Angeles, California.
October 22, 2024
Thank you.
Hello OFN!
Hello LA!
It is my pleasure to welcome you all to Los Angeles and another sold out OFN Annual Conference.
At the conference this year we have to confront a question as deeply and profoundly complex as what we faced in DC one year ago.
Last year it was Taylor Swift or Beyonce, this year its Drake vs. Kendrick Lamar.
Or, how about the LA Dodgers vs. the NY Yankees.
Just remember, we’re in LA. So choose wisely.
Speaking of these storied franchises have me confronting another profound question…is my CEO rookie card still valid?
I’m still new-ish and it is a privilege to be with you as OFN’s new-ish President and CEO.
I want to start with my sincere thanks to the OFN team.
First, to Donna Gambrell, our Board Chair, whose leadership I admire and mentorship I deeply value.
This is Donna’s last year of distinguished service as OFN’s Board Chair.
Please join me in recognizing her service to OFN.
Donna, since I’m the new-ish CEO, you’ll be a former-ish member of our Board, so trust and believe that I will continue to reach out for your perspective.
To the rest of our wonderful Board of Directors, thank you for your stewardship, your partnership, and wonderful karaoke skills.
To our incredible staff for their tireless efforts and commitment to delivering you an excellent conference experience.
Please join me in recognizing the OFN team.
There is someone specifically from the OFN team that I would like to highlight.
To Beth Lipson, whose 27 years of service to OFN, our industry, and our community has left each immeasurably better. Thank you, Beth.
To the kindred spirits who shaped our work over these last 40 years and have joined us here today, it is an honor to take forward and celebrate your legacy.
To the unconquerable souls, like Inez Long and Adina Abramowitz who, though we mark this first year of our journey without them, shaped us and the ideas that carry our work forward.
Thank you.
And last but certainly not least, all of you.
Thank you for what you do every day to make an impact on the lives of so many.
Made by History
This all started with an idea.
A pebble dropped into an ocean of possibility, with a simple notion, that the conditions in our communities can be better.
That capital, not only can, but should be a force for good.
It was an idea shaped by movements.
A civil rights movement that learned that civil rights alone are not adequate or complete without economic opportunity.
A peace movement that came to understand that there can never be a stable peace as long as there are extraordinary disparities of wealth and economic opportunity.
An environmental movement that learned that our best efforts to preserve the natural environment will not succeed unless we address the legitimate concerns of development and overall economic opportunity in our communities.
I would love to tell you that those were my words. But they were, in fact, the words of Chuck Matthei, OFN’s first Board chair, as he stood 40 years ago to address the first gathering of OFN. His speech was beautifully crafted and provides us with not only the insights into the formation of this movement, but guidance for our future journey together.
You see, he understood then what we understand today.
That we are gathered here, 40 years later, as the embodiment of an idea.
A perspective shaped by Dr. King that we don’t make history. We are made by history.
THE FIRST WAVE
This idea was animating the mission of a passionate few from all across the country — gathering in community centers and places of worship, their homes around kitchen tables, meeting in basements in the evenings after full days of worthy work — all being driven by a common cause.
They made their way without GPS and without email, and yes for those of us who remember, life did exist before GPS and email.
They made their way to Waltham, Massachusetts, 60 people from 47 loan funds managing approximately $27 million.
They gathered in common cause because they all believed in the idea that they would emerge collectively stronger.
Chuck believed that we needed to be anchored in purpose. Like the Wizard of Oz putting a heart in the tin man, our purpose was to graft a conscience on the capitalist. As OFN formalized, Martin Trimble, OFN’s first CEO, believed with an unrelenting focus, that our roots are in organizing and that we must stay deeply rooted in community.
Before we were formally known as CDFIs, it was these ideas 40 years ago that began the first wave of our industry.
You see, the real magic of waves, however, is not the water itself, it’s the energy that it creates. That beautiful energy that when harnessed has the potential to power and to create something incredible.
The energy from this first wave took the field of community investment and powered our moment for rapid growth.
We capitalized entrepreneurs to launch small businesses, and made housing actually accessible by funding housing cooperatives. Land trusts, childcare, schools, even drug treatment facilities to combat the scourge of drug addiction. You name the community need, and we began to fill the gap.
We even found our footing as financial first responders. Here in LA 30 years ago, CDFIs played a critical role in the recovery and restarting of businesses after the Northridge earthquake.
In the early 1990’s, the energy from this first wave gave birth to many of your organizations, and also led to the seminal moment for the industry.
CDFIs were featured on Saturday Night Live.
If you had ‘SNL CDFI Sketch’ on your bingo card for this speech, you’re one step closer to cashing out.
Now, aside from the SNL sketch, the energy of the movement drove a passionate few to work even harder and advocate for a young Governor who would become President to explore this idea of creating the CDFI Fund.
Having witnessed the impact of Shorebank, America’s first CDFI, and their work in Chicago, then-Governor Clinton was not only moved in the 80’s to support the creation of a new Shorebank in Arkansas, the Southern Bancorp, but was inspired by the audacity of Shorebank’s rallying cry, “let’s change the world”.
With President Clinton’s signature in 1994, the Riegle Act not only set forward the creation of the CDFI Fund, but began the formalization of expanding a movement to an industry with the structures needed to scale.
THE SECOND WAVE
The first wave ended just as the second wave began, in many respects, with the utterance of 4 words in 2003, words that continue to reverberate through the halls of OFN.
“Grow, Change, or Die.”
It was this exhortation from Mark Pinsky that challenged us, and needless to say set tongues a wagging.
This idea, that as an industry, we must grow, change, or die, built on ideas planted by Chuck and Martin years before.
What we bring to our tasks are not only capital but credibility, and that we have to monitor our own performance; that the performance of any one will ultimately reflect on all.
You see, Mark reminded us of the need to be committed to performance, which reflects the ultimate accountability to each other.
Even more, for all the progress toward our shared ideals — there was more work to be done.
That for all our gathering strength, wealth and income gaps continued to grow.
That idea, this commitment to performance, helped spur OFN to create the CDFI Assessment Ratings System, CARS, a due diligence platform that leverages data to not only provide insights, but to drive investments to CDFIs. Today, it’s better known as Aeris.
This year marks the 20th anniversary of Aeris, which was born of our shared commitment to not only transparency and accountability, but performance and industry growth.
Please join me in recognizing Paige Chapel and the Aeris team for reaching this incredible milestone.
During this second wave, we held ourselves accountable, yes, but we also called out the risks of subprime mortgage lending before the collapse of Bear Stearns and Lehman Brothers.
We would be called to duty time and time again to help communities rebound, from the Financial Crisis and Great Recession of 2008, and natural disasters like tornadoes, earthquakes, wildfires, and hurricanes like Katrina in 2005, America leaned on us to provide credit when the banking system retreated from our communities.
The fact of the matter is that we needed to grow to withstand the economic shocks, so that we could stand in the gaps when communities needed us most.
As our second wave began to crest, my predecessor and friend, Lisa Mensah invited us to walk together because this is our time, recommitting our network to the fundamental idea that we will in the old figure of speech, sink or swim together.
That walking together provided us with the only pathway and strength to protect our ideals and the gains that we had achieved over so many years against the country’s troubling inflection point in 2017.
Our history had not only prepared us for the unexpected, but equipped us with the grit to face the unimaginable.
The 2020 pandemic reminded us that we are the Vanguards standing at the gate to ensure that our communities are not left behind. We deployed over $34 billion in resources to restore and restart our communities, to create and sustain livelihoods, to help businesses keep their doors open, to re-open childcare centers, and to stabilize households across the country.
That was only 4 years ago.
Made for the Moment
In many ways, our success and performance during the pandemic served as the culmination of our 40 years together on this journey, and marked the broader discovery of CDFIs, our impact in the economy, and our role in communities.
Our history of performance has proven that we are made for the moment.
We began in 1985 with 47 organizations managing $27 million in assets. By 2016, we managed $20 billion. Today, less than 10 years later, our members manage nearly $50 billion in assets, that’s just accounting for what’s on balance sheet.
OFN members have deployed over $111 billion, supported nearly 1 million businesses, created or retained 3 million jobs here in America, and nearly 2.4 million housing units.
Shall I continue?
Give yourselves a round of applause.
In 2022, Lisa embarked on an ambitious plan to build the Money, Strength, and Voice of our industry. The brilliance of its simplicity laid the foundation for our complexity. We are in the final year of that plan, and I am proud to share all that OFN has accomplished.
MONEY
This year marks the 10th anniversary of OFN’s first issuance under the CDFI Fund’s Bond Guarantee Program. Our goal in the strategic plan was to close $200 million in bond loans, and I’m thrilled that we’ve closed on $300 million, including our largest ever issuance of $173 million that we announced two weeks ago.
We have deployed over $200 million through our Finance Justice Fund to over 150 members. I’m particularly proud that over the last two years, over 50% of the capital deployed was to members with less than $25 million in assets.
And, the majority of members in our portfolio are either minority-led, rural serving, or native CDFIs.
OFN now manages over $1.3 billion in total assets, solidifying our position as one of the nation’s leading investment intermediaries in the community development finance industry.
STRENGTH
Since 2022, our membership has grown from 281 members to over 450 members and solidified our network as the largest and most diverse in the community development finance industry.
Since 2023, over 3,200 people and 1,300 organizations have attended an OFN capacity-building event, training, or webinar.
We’ve advanced a strategic research agenda for the industry, publishing greater insights and reports on CDFI output and outcome tracking, industry activity and performance, and priorities for advancing financial inclusion through evidence-based practice. And if you are a data nerd like me, you likely attended our inaugural symposium, the CDFI Research Consortium, organized and hosted in partnership with our friends at the Center for Impact Finance.
VOICE
Our team has led the way working for years on two critical rules that have shaped the CDFI industry: modernization of CDFI certification, and reform of the Community Reinvestment Act. While they are not perfect, these two areas alone are wins for our industry.
This is in addition to our team holding hundreds of meetings with The White House, executive agencies, and members of Congress through advocacy meetings and Hill visits on critical policy and budget areas such as protecting and growing the CDFI Fund budget, to other community investment programs and policies.
The accomplishments of this network, our growing strength and impact show that we are made for this moment.
So, it’s no surprise to me that we celebrate, today, our largest gathering with over 2,500 people in attendance, surpassing last year at 2,200, and selling out the last 3 annual conferences.
I promise to not make a joke about crowd sizes.
What’s important is not the number of attendees. It’s the why we gather.
We gather because I believe like those that gathered 40 years ago, that each year we come together in common cause to emerge collectively stronger for the task ahead.
The Decisive Decade
This year is on track to be the hottest year ever recorded. So, we are experiencing the dubious distinction of this year possibly being the warmest year in our human history, and possibly the coldest year of the rest of our lives.
This may sound very familiar. It’s because I said exactly the same thing last year.
Our climate isn’t changing, it’s changed.
We’re not even a month out from the devastating impact of Hurricanes Helene and Milton, of which some of you, I know, are still recovering.
We have entered the decisive decade and with it the third wave of the community development finance industry.
The ideas that set forth our work now confront the greatest challenge of our time.
But, we have all heard the statistics, and I have spoken before about the accelerating pace and cost of climate-related disasters. We all have seen the headlines.
So, we’re not going to focus on framing the threat, you got that. Instead, we’re going to focus on the enormity of the opportunity before us.
I know none of you are familiar but please raise your hand if you’ve heard of a small program called the Greenhouse Gas Reduction Fund.
Only a few of you, that’s what I thought.
The success of this initiative was placed on the shoulders of CDFIs as the fullest recognition that in order for this $27 billion to leave no community behind, we are needed to ensure its success.
With OFN’s history, and my firm belief that we are made for this moment, it was no surprise to me that OFN not only received an award under the Clean Communities Investment Accelerator, but that we received the largest award.
The difficulty of this effort makes it an all or nothing gambit.
It’s not just a victory, it’s a call to action for all of us, one that you’ve already heeded, and let me know that we are all in.
Last year at OFN39 in Washington, DC, I issued a call to action to all of you to become climate lenders. As I have talked to many of you over the year and discussed the launch of climate focused lending programs and new products, the response has been resounding and you could not have made me prouder.
And now, through our partnership with the EPA, we are bringing in $2.3 billion to help you get there.
There are a couple of areas that I want to be clear, and I want you to hear it directly.
We are working with members only, and made it clear from the very beginning that OFN was created specifically for the purposes of supporting this network, and because performance has been at the center of our work, we know that our members are focused on community AND capital, not just capital.
On October 10th, we launched our CCIA program with you at the center. After 2 years of gathering feedback, our approach is simple. We launched a pilot round ahead of a full program launch in 2025, so that we could test, learn, and build a program equal to the task ahead.
I know you’re asking — is my CDFI eligible for the pilot round of funding?
For those of you who are new to climate lending, we want you to participate in this program, but that means building your capacity to manage it.
The team has done a phenomenal job with outlining eligibility criteria, and have created resources for you to successfully navigate this opportunity.
We will announce up to 20 awards from the pilot round in the 1st quarter of 2025.
This will allow us to refine the program ahead of our full program launch in the second quarter of 2025.
We have designed this conference and engagements after to ensure we are demystifying the program and reducing any barriers to accessing these resources.
I want to put it into context. The $6 billion that will be deployed through the 5 CCIA awardees matches nearly the entire amount of funding deployed from the CDFI Fund through its Financial Assistance awards over its 30-year history.
Let me say it again. The $6 billion that will be deployed through the 5 CCIA awardees matches nearly the entire amount of funding deployed from the CDFI Fund through its Financial Assistance awards over its 30-year history.
So, we require your patience, your grace, and your partnership with ensuring that we all can be successful.
There will be plenty of opportunities through multiple rounds of funding over the coming years.
This past April, when Vice President Harris met with the GGRF awardees in Charlotte, she left one simple message. The country is counting on us to get this right.
I don’t take that responsibility lightly, and I know you don’t either.
We are in uncharted territory, so I ask for your patience. We may not always get it right or articulate things perfectly, but we have for the first time an opportunity to combine two segments of finance, community development finance and climate finance, to lead in building a new industry, community development climate finance.
Our legacy is now tied to this generational task.
But we’re not alone.
In this we have joined a global community all committed under common cause.
This year alone, our work has taken us to the stages of places we’ve never been before like NY Climate Week, Aspen Ideas Climate, and the UN Climate Change Conference, COP28.
What’s abundantly clear is that in climate finance, CDFIs are needed to ensure that communities are not left behind.
The Challenges Ahead
But, enthusiasm about our opportunities and successes must be matched by the realism of the challenges ahead.
Our history, and the founding ideas that set forward our work, tells us that growth cannot be for its own sake.
It must be in service of us meeting our greatest challenges.
We don’t have the convenience of being singularly focused on one issue at a time, because we know that our communities are not dealing with single issues at a time.
How we remain steadfast in our focus on housing, small businesses, childcare, and any other community investment that has been the hallmark of our work over the last 40 years must remain our goal.
But the role we play in shaping the spaces that touch our work, the spaces that impact our industry, and the spaces that define our path, will come into greater focus.
We have reached an inflection point, that not only means a change for the industry but also for OFN.
From our work closely with you, our members and partners in the industry, to our work with investors as an intermediary raising and deploying capital, to the conversations and convenings we hold regionally and nationally, to advancing industry interests in Congress and the White House, we know and represent community development finance.
We’ve done this work for 40 years.
Whenever a financial institution, corporation, philanthropy, government, or any other partner sets a table to talk about our industry, OFN will be present.
Representing you.
Presence and representation — being around the table — are critically important even when the issues are most contentious.
Absence is not strength.
Absence is not representation.
When the issues are most contentious, absence is an unacceptable risk.
It’s a risk that I am not willing to take.
Whether it is related to CRA or community benefits negotiations to issues of race, OFN will be present in ways that represent a new frontier for our involvement.
In 2 weeks, we finalize for this cycle the renewal of our most sacred responsibility as being citizens.
On November 5th we will determine a new president, vice president, a third of the Senate, all of the members of the House, governors, mayors, and members of state legislatures all across the country.
We find ourselves at another moment where the work that we have committed our lives to presents a clear understanding also that elections have consequences, and we must ensure that we are deepening our work from advocacy to influence in the days ahead.
We exist in a reality where in Congress, it’s difficult to find any topic that receives universal support from both Democrats and Republicans. Yet, for CDFIs, 12 Republicans and 12 Democrats came together to form the bipartisan Senate Community Development Finance Caucus.
I don’t need to add to all that has been said of what’s at stake for this election. We have been preparing for the possibility of political and policy uncertainty, and know that we remain steadfast in our focus on ensuring that we protect our ideals and the gains that we have achieved over these 40 years.
Infrastructure for Scale
If we’re clear-eyed on our history, and have a deep sense of who we are and the accomplishments we can celebrate, we must also be clear-eyed and embrace the possibilities of a future that includes unprecedented opportunities and unthinkable challenges.
The question is no longer whether we are made for this moment. I believe we are without a doubt.
The question now is how far we can go to meet the moment and face the new and unknown threats ahead.
I believe that we have to embrace a new set of ideas.
We have begun laying the foundation for a new strategic framework — Infrastructure for Scale.
Infrastructure for Scale emerged from my conversations with so many of you and a shared recognition that we have to shift the paradigm of pushing CDFIs to scale versus creating a new focus on scaling structures, systems, and solutions.
Infrastructure for Scale also honors the fact that we need both small CDFIs and large CDFIs to meet the needs of communities.
We will invest in new structures for capitalization, mobilization, and policy influence to catalyze new resources, organize the industry, combat policy and legal threats, and sustain industry growth.
The fact of the matter is what got us here won’t get us there, and we need to invest in greater innovations and industry-based solutions to scale our impact.
This agenda already has momentum.
After I conclude my remarks, you will hear from our new partners at the MassMutual Foundation on an exciting new partnership we will launch, the CDFI3 Innovation Initiative.
I want to thank the Mass Mutual Foundation team — Dennis Duquette, Matthew Konsa, and Ali Mathias — who worked with us to co-create this investment in CDFI infrastructure and new industry systems and solutions that create economies that work for all.
This signature partnership will drive foundational innovations in three key areas:
First, the mobilization of an Industry Advisory Council that will guide the initiative and drive engagement with members to prioritize areas for innovation
Second, the development of an Innovation Center, an action tank to seed innovations specifically designed to meet the needs of CDFIs.
And third, the creation of an Innovation Fund with a blended capital pool to fund innovative and promising solutions.
Infrastructure for Scale is a transformative agenda — it will take multiple partners to help animate our efforts.
I say that both to welcome partners to join us in this work, and to celebrate another partnership.
I am thrilled to announce that OFN is also partnering with Mastercard’s Center for Inclusive Growth to support Infrastructure for Scale, with a focus transforming the small business CDFI industry for the future.
Our partnership with Mastercard will be used to drive small business innovation.
These partnerships build on a foundation of innovation — established by strategic partnerships with Citi, MacArthur, Kresge, and others — whose support has positioned OFN to embrace an innovation agenda for the future.
Finally, as OFN reaches the end of 2024, and with it the end of our current strategic plan, we are embarking on a new long-term strategic planning process.
That work will culminate with the unveiling of our strategic plan at OFN41 in Washington, DC next year.
I use the word ‘our’ intentionally — my intention is that this plan represents the fullest perspective from all of you on the investments needed to scale our impact.
As I conclude my time with you this morning, I think back to a recommendation I received for a book to read to my 2-year old son.
The book is “What Do You Do With An Idea?” by Kobi Yamada. It tells the story of the whimsical journey of a little boy who had an idea.
The idea energized him, though at times the idea seemed strange and fragile to everyone else. The boy was uncertain.
But there was something magical about this idea.
The idea not only stayed with him, but when he needed it most it was there.
With support and care, it demanded more attention. It began to color his path.
The idea grew bigger and with the right nurturing the idea found a safe place to dream. And it pushed the little boy to see things different, to think big and then, to think bigger.
One day, with amazement, the idea changed right before the little boys eyes, spreading its wings, taking flight, with a burst in the sky.
The idea went from being only with the little boy, to now being part of everything, and the little boy realized that there is only one answer to the question that’s been with him along his journey.
“What Do You Do With An Idea?”
It’s the same refrain that energized the founders of Shorebank to embrace the radical idea of challenging redlining in the South Side of Chicago 50 years ago.
It’s the same refrain that motivated and mobilized 60 people from across this country to think big and act bigger 40 years ago.
It’s the same refrain that inspired a young President to create the CDFI Fund 30 years ago.
It’s the same refrain that energized me as a young executive when I stood in the ballroom of my first OFN conference in Detroit 10 years ago.
It’s the same refrain that drives us today.
The little boy realized the answer to what do you do with an idea, it’s simple, you change the world.
We are grafting a conscience to capitalism, as Chuck inspired us.
We remember Mark’s challenge to grow, change, or die.
We are the truth of Lisa’s assurance that this is our time.
We are made by history.
We are made for this moment.
We are made to change the world.
Congratulations for 40 years of impacting the lives of so many, and here’s to another 40 more.
Thank you all for being part of this magical journey.
Let’s get to work!
Let’s go change the world!
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