 But I think let's dive in and get started. And then I'm trusting that we will have a full house by the time we get through the introduction that is sort of good to the introduction point and dive into the conversation. So this panel is Unlocking CDFIs as an Emergency Response System for Communities and People of Color. I'm Tim Freundlich, founder and executive director of Strategic Development at Impact Assets, which is a $1.2 billion donor-advised fund and impact investment complex that just marked its 10th year. Yay. I'll be joined in the discussion, hopefully, by Greg Johnson from Rockefeller Foundation. We're waiting on him. Beth Bafford from Calgary Impact Capital, who I saw pop up on the screen. Michael Liffcott from the City and Investment Partners and Kat Berman from CNOTE. And they'll all each do a short introduction in just a couple of minutes, so I'm going to leave that to them. But it's worth noting up front that our organizations have collectively placed more than $1 billion in CDFIs. I was doing the math, building to that level and revolving in multiples, of course, because it comes in and goes out and comes in and goes out over the years. And this is a great selection of people developing new models to get more and better and faster capital through CDFIs to those most excluded in the system and hit hardest by the pandemic. And that's kind of the framing for this panel. But we wanted to start with just a really quick CDFI 101 because I was remembering last night, back to 1999 when I was still at Calgary Impact Capital, that not everybody knows what CDFIs are, those being community development financial institutions. And in 1999, Microsoft certainly didn't know when Word's spell check helped me send a proposal to an unnamed major foundation with 33 instances of CDFIs replaced with the word codfish. And that did not help our application, needless to say. I can't remember if we got the grant now that I think about it. But let's go to a couple of slides here quick. And thank you, Beth and Calgary Impact Capital for providing these, which saved me having to make stuff up. There you go. I'll click on that. I think you'll see them expand and come kind of front and center for you. I suggest doing that. But just a housekeeping note, if you want throughout, just please feel free to chat into the session tab. Any questions that come up? Obviously comments, posts, link, anything you want. We'll try to bundle those and pull them in a little bit more towards the latter part of the session. And we'll see how that goes. It's kind of trouble multitasking if you see me frantically looking around is because I'm trying to capture that feed. But if you look at CDFIs as an industry, they're, it's pretty amazing. $222 billion across 1,100 institutions. CDFIs were set up as a designation with the CDFI fund in 1994 in the Department of the Treasury. Just a little factoid there. But 1,100 certified revolving loan funds real estate development corporation, banks, credit unions, all serving low to moderate income populations with an emphasis on those locked out of access to capital from the mainstream. Now, $222 billion. You look at JP Morgan Chase, $2 trillion to drop in the bucket on the one hand, but CDFIs matter far more than their relative side, especially in our conversation right now about reaching communities and people of color with a new wave of capital to enable economic recovery and to increase racial justice. That's really kind of the punchline here. And CDFIs are funded by impact investors all across the country, PRIs from foundations like Rockefeller, donor advice funds like impact assets, often coursing through intermediaries like Calvert Impact Capital and CNOTE and structures organized by groups like Obsidian Investment Partners. So there's like a whole system here and then add to that bank, CRA money and Treasury CDFI fund, which kind of fills out the picture. And that's what we're gonna be talking about today in just a couple of minutes. And if you look at the second slide here, if I can advance them, there you go. You know, there's been studies done. I know that the opportunity finding, I've actually seen this study, Beth, in 2015 kind of the 20th anniversary study of the formation of CDFIs, 1.5 million units of housing have been supported during that period of time. 120,000 small business funded, 10,000 community service organizations. And it's just amazing grassroots impact that CDFIs have done. This is a few years ago, and the CDFI scale has really grown since then, both with new CDFIs being minted, new banks signing on, but also just increased growth. On average, 75% of CDFIs serve low income populations with about roughly half women and half non-white. So pretty important kind of impact footprint, all with 1.5% default rates, roughly equivalent to FDIC-insured banking institutions. So it's not like high-risk stuff. And while banks were recoiling in and after the Great Recession, CDFI's leaned in and actually grew their lending in communities, I think that sort of tells the story that we need to really ground ourselves in. And even more recently, the first round of the CARES Act stimulus wasn't really getting to where it needed to go. Second round kind of also really problematic in a lot of ways, there's been a lot of critique about it. But when CDFIs finally got their $7.5 billion allotment of the PPP money, they got it out like so fast and so much for the core of communities and funded more than 100,000 businesses in like a hot CDFI minute, I like to think of it, of just amazing, amazing deployment. So, you know, CDFI's rock, they've rocked for a long time, but the system is on the rocks to an extent. And the system needs innovation, not just incrementally more of the same, you know, going from 200 to 250 billion to 300 billion, not even multiples maybe at the same. And I think we're gonna hear this from the panelists about, you know, sort of what their version of not the same is, what the kind of call to action and audacity needs to be, but the regulating banking system obviously can't get it done. Even the CDFI banks and credit unions are so deeply constrained on taking on risk. But the problem is these frontline community development corpse and revolving loan funds are woefully undercapitalized. They're mostly stuck in nonprofit structures, which I love nonprofits. It's the impact assets is a nonprofit, nothing wrong with nonprofits, but they can't really raise equity technically, equity investment that being, like they have to build equity through grants, not that scalable. They operate on very thin margins leading to underinvestment in better processes and technologies, automation, they really aren't capitalized in a way that can lean, I feel, can lean into the need that is presented in particular in this time and what we're gonna see over the next years. And it's just not worthy of this amazing system that's been built and that we've actually lent the mandate to do this great work on the front lines of communities and people of color on the country and just throughout society here. The next, so that's, anyway, that's a little bit of just background and framing. That was a bit of a rant, but I get kind of energized by this topic. I wanna do a lightning round with the other panelists, just the who, the what, where you're coming from, not your framing point of view, but just a quick introduction from each of you would be awesome. Greg, why don't we go to Greg, Beth, Michael, Kat, like a minute or so if you could just dive in, Greg. Sure, good afternoon, everyone, and thanks, I'm excited to share this time and this space with such an outstanding group of people. My name is Greg Johnson, I'm Director of Placed Based Grantmaking and Investments at the Rockefeller Foundation on the Equity and Economic Opportunity Team. By way of introduction at the Rockefeller Foundation, we are quite busy fighting for vulnerable families who have been locked out of prosperity at home and around the world, making sure that innovation empowers all people to rise. In the U.S., our work has been focused on building economic stability for America's low-wage workers, using the levers of public policy and private investment to get the job done. Over. Awesome, great, over. My name is Michael Whitcott, I am just honored to be on this panel of friends and to be speaking at SOCAP, which is probably one of the bravest places for capitalists and people that believe in alternative systems for financing and economic justice. Backed out in this franchise for so long, so thank you. I'm one of the founding partners at Obsidian Investment Partners, firms three years old. I don't do a lot of panels. Josie Van Jones, who's our other founding partner, does most of the panels for us, but he's busy trying to make sure that the election comes up the right way, so you guys got me. We are a real asset fund, focused on tax advantage strategies, primarily trying to move capital at scale, so billion dollars plus, specifically to nonprofits and CDFIs. Wonderful, Kat. I noticed we lost Beth. Beth's computer is freaking out when she's trying to get back in, but we'll just let her do her intro when she gets here, but Kat, go ahead. Certainly, certainly. Well, again, thanks, Tim, for asking us to join, and I'm happy to be on such a great group of speakers and thought leaders. My name is Kat Berman. I am co-founder and CEO of CNOTE, so CNOTE is a women-led impact investment platform on a mission to use financial innovation to close the wealth gap, which I would call wealth chasm at this point throughout the United States. For us, it's very important to use the power of technology to really advance this field. We've been bullish on CDFIs for years, and we personally, for over 15 years, understanding what an incredible opportunity for both impact and investment CDFIs are. We are excited to use the power of technology to make it easier for investors of all sizes to identify, underwrite, and invest in this incredible industry called CDFIs. Great. Sara is just trying to figure out how to get Beth back in off to the side there. Okay, well, we will grab her when she arrives and have her break in with an introduction, but why don't we do a bit of a round robin now, and Greg, we're starting with you. The idea of kind of framing how you come to this work and how you come to this system too, and think about it, kind of the big issues that we need to be cognizant of, sort of what gets you up in the morning, but more like what keeps you up at night, perhaps, and kind of just give us a couple minutes each on sort of what your framing is, and you can riff off of anything I said, or just go off in a completely different direction. Totally fine. You may not want to give me such a broad license, Tim. But we'll never get back to where we intended to go. But no, no, no, thank you for the question. I think that the pandemic, I know that the pandemic has triggered and exacerbated multiple crises and catastrophic effects on health, on wealth, and the overall well-being of black and native and Latinx communities across the country. And to be clear, and it's not an understatement, those black and native and Latinx communities and people and places are experiencing an emergency. And I think that it's important to further distinguish that it is not an emergency for black and Latinx and native people, but it is a national emergency that is disproportionately affecting black and native and Latinx people and places. So if we can understand that context and in the context of a national emergency that disproportionately affects black and Latinx and native communities, in the context of a national emergency where nearly half of all Americans would have trouble paying a $250 unexpected expense as of October 2020, in the context of a national emergency where the number of small businesses in the U.S. have declined by more than 2.2 million between February and May, with black-owned businesses being especially hard hit. In a national emergency where black and Latinx and native means that you have a higher chance of contracting the virus because you work in an essential industry, you run an essential business, you live in a housing situation that is more close to people, more closely approximated to people, that you have a higher chance of contracting the virus and a lower chance of receiving care. And even if you receive queer care, you'll probably receive a lesser standard of care than anyone else who receives care. So in the context of all those things and a national emergency, I think it's fair to suggest that we should focus the national response on those communities and those places that are disproportionately feeling the impact or the affect of what's happening right now. And right now, there are consumer and small business needs that I just kind of highlighted in black and Latinx and native communities. And I think that CDFIs have demonstrated that they can be a critical element on the front line of providing an emergency response by doing things like restructuring the terms of current financing, providing access to new types of capital. They can serve as a channel to access government support like PPP, which for black and Latinx people was not the most successful, but we saw some examples like ACE, which is a small business lending CDFI in Georgia, who in the wake of the pandemic connected with all of their existing customers and where they needed to, they restructured their financing. They also helped their clients access PPP loans from others and originated PPP loans directly when the SBA opened up the process to CDFIs. I'm using ACE as an example, but ACE is not the only one. In cities across the country, organizations like the Black Business Investment Fund, the Opportunity Fund and others are meeting some of the emergency needs of entrepreneurs and of people of color. So wrapping up here, because you only gave me four minutes. It's important to strengthen CDFIs, Tim, and to build on their good work. And I think that with the right innovations, the right innovations, and that's why I'm so happy to see note and others are here today, CDFIs can be focused on purposefully, on purposeful financial, becoming purposeful financial intermediaries who make a real impact in black and Latinx and native communities and for the boroughs of color. I'll just add this because you know this is my point of view, is that at the same time, while CDFIs are necessary, acknowledging that they are a necessary part of what has to be in place and strengthen to get us from where we are to where we didn't want to be, is that I'm also acknowledging that in their current state, they are not sufficient. So I do believe that in tandem with the good work being done by CDFIs, that we need to accelerate the development and scaling of new financial mechanism and investment models to better meet the needs of people and the places where they live. So that's the path that we've chosen at the Rockefeller Foundation. Our emerging RLC portfolio will focus on strengthening the community of CDFIs who best serve the needs and interests of black Latinx and native communities and supporting the alternative structures as necessary to respond to the national emergency, the national emergency that is disproportionately affecting black, native and Latinx communities. Over. Kat, why don't you jump in and give us your perspective? Absolutely. I mean, I think for two points, number one is I think most of us on this webinar understand that that communities of color are being disproportionately affected by pandemic, right? Not telling you anything new. I think what most folks may not know, though, is the funding levels that would be needed to actually address that has not been met. And while many of us are sitting there with some pockets that we can distribute, we've absolutely not seen that adequately addressed. And so I think what we're excited to talk about are what are the opportunities to be blatant, overt and direct about where we put our sources of capital right now. I will share it. We believe it's not enough to fund CDFIs broadly. We're at a time that it is critical that we acknowledge that certain communities are being hit much, much harder and not only funding those communities, but communities. And so we advocate strongly both podium but also through our investments, making sure that there is funding going to CDFIs led specifically by people of color, smaller CDFIs. CDFIs that are hitting the hard way communities that maybe have never received a dollar of CRA funding in their life, but are doing that critical work. We know that's hard to do. We know that over the years there's been plenty of reasons why not. Everything from underwriting so expensive, they can't take enough capital. How do I even identify them? And I'm happy to say, you know, in 2020, we have been able to address most of those pieces of friction. And so whether it's a foundation that wants to double down on their work with racial justice or place-based investing, whether it's a bank that is excited to look at new ways to deploy their CRA, whether it's a family office or other institutions that want to step into CDFIs for the first time. We're more advanced than we've ever been across the country to say, great, I care about this. I care about how communities of color are being affected right now. And I want to invest in them thoughtfully, intentionally, in a way that's strengthening that community, not just to fly by, you know, drop of a grant or drop of an investment that is not really building up the leadership in that community. So I think, you know, we're strong advocates of the CDFI industry as a whole and what they can do and how they continue to step in right now at such a critical time in our economy as economic first responders, but also acknowledging that we cannot fund CDFIs the way they've been funded traditionally over the last 30 plus years. We now is the time to pull back the curtain, recognize that smaller CDFIs, and specifically Black-led, Latinx-led, native-led CDFIs deserve funding, need the funding, and it's time for us to step in. Yeah. Yes. Yes, plus five. Michael, go ahead. Hi, Matt. You're muted. Still muted. Hey, Michael, you're muted. Sorry. Working with CDFI is directly on the ground. We focus on the other end of the spectrum. We focus with the large family offices, institutions. Our clients are top 50 high-network families, ultra-high-network families in the country across both sides of the aisle, who really want to address the fact that we have problems that are growing in scale and the trillions. We've hit hundreds of billions of dollars in terms of need for housing, even hundreds of billions of dollars in terms of the need for economic justice and racial justice equality, and the solutions that we're putting out now are really in the millions of dollars, or sometimes in the thousands of dollars. So when you talk about CDFI, these smaller institutions, when you listen to other talks at SoCAP, you really hear the kinds of numbers people are deploying. The land to be alone by itself is not even nearly big enough on an annual basis to address the problem. So the question is, a low-interest rate environment like we have now where there are plenty of people investing in things on a market-rate basis that are less than 2% return, how do we, and that's in the tens of trillions of dollars, how can we create capital solutions that allow CDFIs and others to access market-rate low-cost capital? And that's fundamentally different, I think, than other approaches that try to take risk capital and ask people to take a discount on that. And we are primarily focusing that lower-cost capital on CDFIs and nonprofits. So in our view, by CDFIs, we can create a more healthy ecosystem that will allow all CDFIs and MDIs and nonprofits to grow the pie. So for us, it's really important that the funding community and others start talking about this problem at the scale at which it exists, which is really hundreds of billions of dollars. And plenty of people are complaining about their people's in capital. We'd like to see more of that come to the people in the work that is so critical. Great, Michael. Yay, Beth. You vanquished your computer and got it in line. First, make sure you take a minute and introduce yourself and kind of where you're coming from. And then the question or the sort of prompt for everybody that we were just going around, it was really just to amplify or inject your point of view and Calvert Impact Capitals into the sort of the state of play in CDFIs and the system, kind of how you approach it, what's keeping you up at night, but any other comments you want to layer in? No, thank you. And hi, everyone. It's Beth Bafford. I work at Calvert Impact Capital. We're in two days. So our 25-year anniversary is in October 25. Tim, you'll probably remember this in 1996-5 when we sold our first note. And we are a global financial institution investing in community and economic development in the U.S. and around the world. So, you know, this conversation is so important. And I think of the threads that I was able to catch at the end of CAD and Michael's talks, I think really come together nicely, because I think what we see is basically how do we better tie the work of CDFIs and the work that has been done for so long with it so much closer to this broader conversation around stakeholder capitalism and investor activism and thinking about the whole economy and the whole planet as consumers and investors. Things are very linked, very often don't, those ecosystems often don't overlap. And so I think that's one of the things that we look to do, because we land across sector, across geography and are really trying to translate the capital markets to understand the needs of communities, really trying to see how we can better position market and show the incredible work that CDFIs are doing as a part of the solution as people think about broader, the next generation of investments and broader stakeholder capitalism movements. And there's no reason why the CDFI industry should not be a front and center in that conversation. I think everybody is looking to activate their dollars, to activate their decisions, to activate their time and their work in pursuit of a more equitable and sustainable world. And I think that the work that CDFIs do on the ground in communities every day is a perfect example of that. And so as Kat mentioned, love the call to action, get more money to these people faster, certainly want to be doing that. As Michael mentioned, think differently about scale and think about how to channel capital. And I think I'll just add wanting to make sure that we look at the full investor universe, we look at the full scale and scope and power of the capital markets and understand how we can create the financial structure as an infrastructure to get a dollar that sits in the savings account or the retirement account of a teacher to support the work of ACE and BBIF and True Fund and communities unlimited and all the other incredible CDFIs across the country. Thank you. Those are really important points. And I think what it makes me want to hear from each of you about, which we talked about a little bit, was what's your, give us a solution. Like give us something that you can inject into the system or that you're working on injecting or you've seen or you've thought about injecting into the system that you think is really going to be a difference maker and name its terms, name its skeleton, like whatever you can about its specificity. I'd love to just see your best thought on that. And I don't know how about Beth, why don't you start since we are just on here to really get you off back on your heels. Thank you. Dusting off. So yeah, so one of the things, we've been lending to CDFIs for 25 years. So we, we know them, we love them. We have seen their evolution over the last 25 years plus and we know the limitations of the structure that a lot of them sit in. So one of the things that we started to do when COVID hit, basically in close coordination with a bunch of CDFIs that we have been lending to for a long time, we said, you know, we are in a moment where demand for capital from small businesses is going to vastly outpace supply of capital available on CDFI balance sheets. It's just a fact to the slide that Tim put up earlier, that CDFI balance sheets, particularly the loan funds are, you know, are limited in their scale and they require equity in the form of grants to scale their work. And so pulling all of that together very quickly is difficult. And so how do we bridge this divide between supply and demand? So we created in close partnership with our, with friends at community reinvestment fund and LISC and others created this kind of concept of community recovery vehicle, which is essentially, there was just an article that came out this morning and they called it securitization plus blended finance equals impact, which is a good tagline for it. But essentially it's a secondary market vehicle that purchases locally originated assets from CDFIs, a standardized loan product that they are then able to sell to the SPV. It brings centralized source of capital, centralized leads and a support system of technical assistance providers to a network of community development financial institutions across a certain place so that they have everything that they need to lean into this moment and do new lending to small businesses to bridge that divide between supply and demand. So we set up the first step in running now, we're replicating that across California and across 13 states in the South and all in I think working with 35, the local CDFI, local nonprofit loan funds to implement the work. So really just trying to set up structures to support them so they can lean into this moment and think about recovery for communities. Kat, how about you? What are you working on? I'm a huge supporter of what Beth and the team are doing, incredible opportunity for the industry as we think about specifically place-based opportunities for CDFIs to access. Yeah, I think we think again, I would say two main areas that we're really trying to push on to unlock more capital. And again, the theme for us is how do we use technology to unlock a lot more capital for CDFIs? And I'll stress what's important for us at CNOT is it's got to be money CDFIs want, right? Where is the patient capital? Where is the low cost debt? Where is the capital that's serving the needs that community has? Not what we as investors think is important. And that's a real shift in power and trust that we're trying to advocate for that is not about what we think is important, it's about what that community needs right now. And so we do think that by incorporating community voices and using technology to facilitate, we can make it more transparent, more unbiased and faster and cheaper for everybody. So the two ways we do it right now that we're really pushing for, one is unlocking deposits, talk about the importance of shifting large deposits into CDFI banks and credit unions. And so we're doing that through our promise account, which again uses the, you saw that friction of opening up 12 accounts or having to work with the bank that may not even be open for business right now, but it's still open for deposits. How do we get those deposits into where they're needed in the CDFI community? That's on the CDFI deposit. And then on the CDFI loan fund side, again, it's using technology to unlock the friction around getting any investor. So again, whether you're a foundation who has never worked with the CDFI and doesn't even know where to start, whether you've been working with CDFIs for years, but no longer have your team at full capacity to underwrite them or whether you're just trying to figure out how to create towards a certain cause like racial justice, things we can do through the power of technology. So I think we're clearly bullish on, this is an asset class in an industry that deserves to be funded to new levels. And a lot of those reasons why not are no longer. And so we're excited to just introduce more and more of that infrastructure to the industry and to investors to make it happen. Great, Michael. What would you put forward? So before we, we'll do a little under a billion dollars this year lending to CDFIs and nonprofits, mostly because in response to our high net worth clients on separate account, they said, look, we have several billion dollars in aggregate in uni bonds, tax exempt, tax free bonds that are not earning less interest and given the pandemic are pretty risky. How can we think differently into CDFIs, nonprofits and others? Well, there are a number of existing mechanisms that just poorly used to get tax exempt, tax free capital at scale to those organizations. So we have several tools, one of which is the 501C3 bond. So we credit enhance our nonprofits so that on aggregate credit risk to other credit risks for other securities that sit in our clients portfolios. We have to do some things like change of duration, I think, meaning typically our investors will have municipal bonds that have a three to four year duration. We'd like to see the money in there for 12 years or longer, sometimes 15 years, sometimes 30 years, because again, patient capital is so critical. So we work a lot of times with their fixed income advisors to help adjust the duration of the entire portfolio such that we can pool together similar to what NET and CAD are doing, large portfolios of projects and then create a special purpose vehicle which would be a nonprofit, and then give that nonprofit access to capital that's below 2%. And that's really our we're piloting that now with about 30 families. I think next year we're going to bring another 50 or 60 families on board and the idea really is to tap into market based low cost capital. Really using the tools that I think we're all kind of playing with on the edges, securitization less friction, less underwriting, less fees, better use of technology. I think all those tools have to come into play so that we can really reduce the cost. When you're talking about such low cost capital, you need a lot of volume for it to be profitable for intermediaries or other people trying to pull these things together to actually have a business that make it work. So scale, we get scale and I find that our first question which works all the time we sit down with one of our prospective clients is how much are you making in your munis and your treasuries right now? And they're all going to laugh and look at it and believe it or not most people think ultra high net worth families are primarily invested in the stock market, they're not most of their money is in preservation assets like municipal bonds and treasuries and so you'll have 60, 70% of their capital income and so the vast majority of their wealth is really earning a very small return and so the question is if you were concerned about the credit risk, would you rather make more money and have impact? And then if you're playing in a bigger bucket of capital you can just deploy more capital. So that's something I would encourage everyone to do every county basically has the ability to issue a 501c3 bond and other tax exempt structures and so in general that's just one tool we have four or five structures, opportunity zone, equity, very small amounts of that is something that we like to put in the CDFI structures as well, nonprofits as well because it's 10 year capital, it's extremely patient and it provides kind of a recoverable grant or credit support to the primary tax exempt loan product that we have. So every situation has been spoke but we're kind of sophisticated investment bankers really looking to move very large capital into these communities. Great, Greg is there something you've seen or something percolating over there at Rockefeller Foundation or some model that you are enticed by at this point? Yeah I guess I'll just say that in our experience we tend to find that place based approaches to directing capital tend to be successful at driving racial justice outcomes that we're talking about black and Latinx and native and indigenous communities who have been disproportionately affected and how to get them the resources they need. We find that three things need to be true in order to do that successfully. One is that we align that capital with the appropriate and often alternative structure. The second is that we attach it to something that ensures absorption capacity and additionality and the third thing is just that it ensures distributed wealth creation rather than allocation of the current patterns and systems that are currently in place. Where we are making investments in CDFIs and we aren't quite ready to announce the initial grants in the RLC portfolio so I can't talk explicitly about them but where we have put dollars out there it's largely risk capital to support and strengthen the institutions and their balance sheets. Whether they're looking to make direct investments to strengthen balance sheets for existing institutions or whether they're concessionary debt instruments that's how we're putting dollars on the ground. The other thing that I'll just say that where we're really putting our dollars behind CDFIs and the like is behind this urgent need for innovation and products and financial instruments and structures that are actually more responsive to the needs of black and Latinx and other people and communities of color so when we think about the typical loan amounts that they need, when we think about the typical type of loan products or financial products that they need the traditional institutions and in many regards CDFIs don't have the types of products that are necessary to meet their needs so in the CDFI space and in the universe of other options we're really pushing and using our dollars to push for what are the innovative models that really allow banking and financial capital providers to serve better serve black and Latinx wealth communities across the country. That's great. I was just catching a question from Blake what our thoughts are on building equity in CDFIs and actually the thing I was thinking about as far as an interesting model that we've run across impact assets actually this was with Calvert Impact Capital. We embedded in our community investment portfolios that all of our donor advice funds can kind of click into if you will a $15 million special purpose vehicle with Calvert Impact Capital is the GP we're the sole limited partner it's technically an equity vehicle and because the GP has control FASB accounting rules allow them to actually incorporate it as net assets into their balance sheet into their audited statements so it actually reads optically I mean that doesn't in and of itself necessarily do anything optically as equity from a technical standpoint but then the real work is how to allow it to actually enhance the capital stack and what we did was kind of put it in not at first loss but above loss reserves and kind of park a zoo with a tier two capital that Calvert has in its balance sheet and so we were effectively both optically technically accounting wise and functionally able to risk enhance with an equity like capital much more effective than EQ2s from CRI banks I think a pretty significant chunk because not only is that 15 million going out into communities through CFI's press country but it's also leveraging from the capital markets from these QCIP notes that people can hold in the brokerage accounts that are Calvert senior stack senior part of the stack like $100 million because their ratio is 7 to 1 I think that's pretty cool and now there's issues about replicating that you really need to do it at scale because it's a pain in the butt to do all the technical stuff that I was just kind of glossing over like it was all fun and games but I was really excited to be able to leverage donor and buy funds that are kind of left to their own devices somewhat passive mattress money waiting to go out to grants to their favorite charity and we can really activate that which I guess my next question speed dialers lightning round what's the I'm sorry go ahead Beth since I was talking about you know I just wanted to note to the equity question because I think it's a really really important one equity capital is so important for both for-profit CDFI banks and holding companies as well as non-profit loan funds obviously the structure based on what Tim just described has to be different depending on the structure of the entity not enough like that is critical for these organizations scale and Laurie Spangler and George surgeon did some really great work putting out their lessons and raising tier one capital for Southern Bank Corp because they recently did a growth push for Southern so that they could could clean up and infuse new sources of tier one capital so that they could continue to grow but one of the things I think that I'm a little fearful of right in this moment is that so many people are shifting deposits into CDFI banks which is awesome but deposits to them are liabilities that they're not equity and so wanting to make sure that as we think about global solutions to scaling this industry we think about solutions whether that's through the federal government state governments or private investors but make sure we keep that equity need front and center because otherwise none the rest of the family we're doing one of the things that we're doing is we are making to some of our CDFI partners and then our firm is taking over the responsibility to pay those back as recoverable so technically it's a recoverable grant because that's how it functions in our waterfall but we separate the payment obligation from the CDFI and we take that on internally so that it sits on their balance sheet as equity capital but the investor still makes sort of a zero coupon return. Yeah and I was just going to add take away I'd love everyone listening to say is please be open when we have these conversations with you because I think these are all such important points and we can't keep shifting to pocket without balancing it out with equity so as we talk about ways to really bolster CDFI it comes to you with both opportunities not just one not just two but right the entire package sustainability for those CDFI and couple structures we have a vehicle response fund which is a debt instrument it's 1% five-year capital 100% co-created with CDFI for what they thought the communities needed most right now it cannot function at scale without equal equity right and so all of us stepping into that reality and being open to those conversations is my invitation. That's great and I was just reminding myself and I just posted it that we're going to be able to jump over to the impact assets session booth at half past the hour and just really kind of go deep on anywhere that people who want to follow us over there want to go and we'll stay for you know 20 minutes 30 40 minutes if we have the energy so I just posted a link in there but it's just over the event expo things so that's housekeeping what about what's missing not the solution idea the ingredients that you just talked about because obviously you just put those forward but like is there something in the system that we you know I saw questions from I think it was dug around suitability changing suitability requirements so not accredited investors could invest in their local community loan fund legally or whatever it is like what's the missing ingredient from a policy level at a I mean not like the heart of capitalism because that we all know that it's pretty rancid and it's hard in some ways or we'll have a varying opinions about that and some people don't think that's the case at all but what would you change Greg what would you change sure so our tackle these quickly in the interest of time I just think that at a federal level we have to begin to think about centering people rather than profit right so how do we begin to put community interest before self-interest whether that's the Community Reinvestment Act or any other piece of legislation or policy that's going to have a critical impact on the ability to get dollars into the hands or not into the hands of black and Latinx and indigenous populations of people that we really do have to think about that and then I just think that in a more in a less practical sense rather than thinking about the policy ramifications and the definite need for more equity dollars is that we have to I'm going to go back to the urgent need for innovation in the CDFI space right so some of it is that we need to have some policy change or shift some of it is that we need to have practice change and practice shift and that needs to be balanced between the sense of practicality and the breadth of imagination I know that it's possible their CDFIs again that we've referenced on this call there are models innovative models that people have talked about on this call that are representative of what is possible I think that we need more of that we need to incentivize that we need to figure out which parts of it are scalable and get to the job get to the job of getting it done it's great Kat what would you do what would you change where do I start one thing yeah one go just okay two two things I'm going to do one more philosophical one one deeply practical you know so one at large would be just democratization of this right and I think democratization as you alluded to Tim which is how do we make it accessible for everybody to invest in the backyard invest in their communities invest in economic justice not just high net worth institutions and then make sure that democratization rolls out in terms of who those dollars go to because the lion share of dollars are still going to the largest organization and some of the deepest work is happening in smaller organizations so the democratization piece I would say more philosophically and then pragmatically I would say and this is my soapbox moving to action how do we make it insanely easy for every single one of us to do this whether it's through our you know bank account whether it's through our you know foundation whether it's through our endowment whatever pot of money we're sitting on from investment right how do we make it very easy for us to say yes and step into this and not just from the one off right like let's do it now in the middle of the pandemic and feel good but literally invest in the long term make it this part institutionalized part of how we think about investing that to me is a fundamental shift in terms of seeing CDFIs as a potential remedy when we're at our worst and their economic first responders to a viable critical under underpinning of our economy that we have more economic justice that all of us are investing in the long term what do you think I'll be quick I'm going to use my three T's talent tech and talk and I really just talk is because I couldn't think of another T but talent I mean I think one of the things that we don't talk about enough I'm going to scale the CDFI industry if we're going to scale this work in communities we have to drive talent to those organizations and get people paid better and and get the breath best and brightest working in these organizations I think we're seeing that more and more with MBA programs and other grad programs focused on this intersection I think we're seeing awesome people driving real and CDFIs but we've got to focus on talent technology and I think we've we've gone through the really really hard and arduous process the last three years to update all of our systems so that we are much more scalable and efficient organization and we just have to we have to get the money to invest to allow people to invest in technology one of the reasons why small companies struggle more broadly is because the cost of technology and IT systems and all of that is just so expensive and so we got to invest in tech and then is really marketing so the the CDFI industry has done a pretty poor job because they haven't had any money to do it in marketing themselves in the industry who they are what they do how they help and how like Kat mentioned how you can engage and I think you know we need a broad public campaign more awareness more understanding of of the role of this grassroots financial infrastructure so that we see more money moving and more people served that's great Michael what would you change well how everyone sort of spoke to the main things that I would focus on democratization talent technology but primarily I think the key issue is just access and to speak to the point about retail investors getting more activated or high-neighborhood investors just having more broad access and awareness to this product because I think primarily it's a very low risk group of lending and equity and I think it's great I would massively fund the CDFI fund and create some kind of an equity caret vanguard position that all of philanthropy would be sticked in the following like a sort of a trillion dollar mandate to like move all those idle assets in endowments and donor advise funds for that matter there's about a trillion between foundations and if we had it sort of a center of gravity maybe Fran over at US impact investing alliance could work on this inside the Beltway something there something to really go at a national mandate and facilitation of equity like capital because as you've all said quite elegantly that's one of the major major versions so we're going to run out of time in just five minutes or so I know there were some questions about suitability I don't know if we're going to I think we'll take those with us to the after party which I encourage everybody to come join us if you would like we can really take some time and bring people up on screen and talk about it but just in close out for people who aren't coming over and I'd love to hear from each of you a call to action I mean and it could be for any sub-segment of the audience I know socap is a kitchen sink of amazingness in terms of who the heck comes to these things and there's 84 different answers to how many different sorts of folks are eyeballing us right now but what would you say to them or why don't you say it Kat what's the call to action and it could be specific or general but go for it advocate if you don't know the CDFI industry and you're just learning about it please there are so many great resources including OFN opportunity finance network to learn about the industry invest there are so many great ways right now you've heard a couple today and I think Calvert C note and Rockefeller Michael's group there's so many great avenues and then of course through your donor advice fund and I want to stress that I think DAF is a tremendous opportunity to engage the CDFI sector through great DAFs like impact assets and last is advocate if you are hurting and educated around it you're already invested let's advocate for those big wins like Tim's referencing to really make this the sustainable part of our economy not just a small segment that only a few people know about that's great Michael what's your call to action I would add just one one I to what Katja said which is imagination once you sort of advocate to the point of advocacy really imagine new ways and tools for people like myself and others to push more capital and more intentionality Greg Sure so what the expert said and a little bit investigate educate negotiate and demonstrate there's a very real need for patient capital we have to deal with the equity issue and ultimately this won't get done unless we do it intentionally and specifically to the benefit of the express communities that we've called out for this afternoon's panel so let's get to the work of doing it that's great I mean I think I think that that covers like all the best things you could do other than I mean I guess I would say our sphere of concern you know our sphere of influence it is so easy to forget how relationships drive capital and there's a lot of bad in that and there's but there's also a lot of power in that and so don't underestimate you and your sphere of concern and relationships and how you can activate people by not just walking the talk and having your own story straight but really really challenge and push your family and you know and your organizations to find the way to step into this you know this incredibly important gap and also this opportunity to I think take what is bones of a great system and turning it into one that can really scale into the kind of recovery and resilience we're going to need over the next it's not months, years, years and also firmly and focus in on communities of people of color that have been frozen out of the system that we're all in our ways maybe it's still supporting so get aligned, get out there get out the vote and also don't forget to vote by the way so we're going to pop over to I think to our our after party booth which I just posted again and the I think that it would be great if people can come over there and we'll keep talking for a bit I want to think I'm sorry that we lost Beth again to technical difficulties I think her computer acted up I'm not sure what her call to action would have been but I bet it was well represented somewhere in something that you just heard and thank you so much for being here and listening and thinking about CDFIs they really are an amazing system that we have I think really not yet activated fully at all and we really can oh Beth what's your last call to action that we've just gotten in time I'll let you close this out what what do you want people to do invest every dollar you have invest in C note invest in invest in our community investment and invest in your local CDFIs and then move your money take your bank account wherever it's sitting move it into your local CDFI bank we did it we are all of our business and checking accounts are with city first bank in DC and we love them so just I think your assets at your disposal and do something about it thanks okay bye everybody thank you for watching and maybe we'll see you over at the other room if we can find our way there you just go to expo and then click on impact assets and you'll probably run right into us see you soon see you around the so cap