“Economic justice is actually having the opportunity … a real opportunity.”
— Arlo Washington, president and CEO of People Trust CDFI, featured in “The Barber of Little Rock”
Established by the United States Congress in 1994, Community Development Finance Institutions (CDFIs) work to expand economic opportunities in low-income communities by providing access to financial services and products for local businesses and residents. They provide responsible and affordable lending opportunities within historically disinvested communities lacking in more traditional financial services. CDFIs traditionally report high rates of successful loan repayment and then — as borrowers repay their loans — the CDFIs recycle the funds back into the community through new borrowers.
The MassMutual Foundation is no stranger to the CDFI concept, having provided funding for CDFIs, notably Common Capital in our hometown of Springfield, Massachusetts. More recently we were a funder of the Oscar-nominated short documentary The Barber of Little Rock which tells the story of how one man — Arlo Washington quoted above — changed the trajectory of his economically-blighted community and its residents through his hard work and the establishment of what is now a thriving CDFI in Little Rock, AR.
This week, I had the honor and pleasure of announcing the MassMutual Foundation’s grant of $25 million to be paid out over five years to Opportunity Finance Network (OFN) to help create and implement a new CDFI Innovation Initiative for the benefit of CDFIs nationwide.
OFN is the premier leader in supporting the CDFI community throughout the United States. With over 420 member CDFIs — plus being a CDFI in its own right — OFN is seen as the authority in “all things” related to the establishment and support of successful CFDIs in underserved communities, working to strengthen the CDFI industry through research, innovative network platform development, and convenings, among other means.
Their mission is to ensure that underserved communities and financial deserts have access to affordable, responsible financial products and services.
The CDFI Innovation Initiative is structured to support CDFIs via three pillars:
- The creation of an Innovation Advisory Council, with investments in thought leadership and data-driven insights into scalable innovations.
- The establishment of an Innovation Center, an action tank that will take insights and promising solutions and seed them with capital and support.
- The launch of an Innovation Fund, a blended capital pool that will help take innovative and promising solutions to scale.
For several years now, the focus of the MassMutual Foundation’s work has been dedicated to ameliorating the financial capability and resiliency for communities — and residents of those communities — where current economic prospects and access to sound financial instruments and investment are sorely lacking.
We’ve met hundreds of wonderful people along the way and joined forces with amazing organizations in local communities in Springfield, Boston, and Memphis, Tennessee, throughout the course of our work. The lessons we’ve learned through these encounters have been instrumental in bringing us to this important milestone today: establishing a national platform — to the benefit of communities everywhere — that supports and fosters the prospect of financial prosperity where previously it hasn’t existed.
Partnering with OFN to launch the CDFI Innovation Initiative goes to the heart of our mission and reflects our shared commitment to further advance financial opportunity where it is truly needed through the proven, positive impact that CDFIs present to communities across the United States. We are excited to get started.
Learn more from MassMutual …
An Oscar nod and the MassMutual Foundation
Building social capital: A path forward
When a hospital and the MassMutual Foundation aligned
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