Is There an Award in Your Future? Nominations are open for the 2006 Wachovia Excellence Awards for Opportunity Finance presented by Opportunity Finance Network. We will recognize excellence in four areas:
The deadline for nominating an organization for an award is September 15, 2006.
Nonprofit Finance Fund role. The W.K. Kellogg Foundation has made a $9.3 million grant to the Fieldstone Alliance to improve the performance, effectiveness, and financial sustainability of more than 800 U.S.-based grantee organizations that the Foundation supports. The Nonprofit Finance Fund, a Network Member, will lead development of new financial tools and practices for nonprofits. A national organization with headquarters in New York City, NFF is a pioneer in supporting nonprofits. NFF President Clara Miller, who is widely known for her visionary leadership in the field, is a former Chair of the Opportunity Finance Network.
Conference Plans Take Shape. Terry Clark, the new person on our staff who is putting together the 2006 Opportunity Finance Network Conference, is taking very seriously my instructions to be innovative. We are putting the finishing touches on the Conference Program and more than 80% of the content is new--never seen before at one of our conferences.
I am particularly excited about the closing plenary session on the mid-term elections. Just five days before the elections on November 7th, the session will present leading national pundits prognosticating on what is likely to happen in the mid-terms. Accordingly, we have tried to make sure the conference materials look and feel like ... well, Washington, DC.
You can expect your conference brochure to arrive in mid-August, but plan now to be in Washington, DC, October 30-November 2. We are at an important time in our industry and we hope to capture the spirit of opportunity at the Conference.
The Program is Shaping Up. I had my first chance yesterday to look at the near-final agenda for our 2006 Conference in Washington, DC, later this year. Terry Clark, our new Senior Vice President in charge of the Conference, has had the double challenge of learning the industry and planning the conference. It probably has not helped that I keep telling him that I want this to be "our best conference ever." Fortunately, he has had lots of help from our Conference co-hosts (DC-area CDFIs), our sponsors, and many Members.
The heart and soul of the conference this year will be sessions spotlighting innovations toward our industry's goal of dramatically increasing the volume of financing we do to benefit low-income and low-wealth people and communities. More than 80% of the Conference content will be new. We will pay special attention to Members who have brought important innovations to the field (for example, Clearinghouse CDFI's for-profit, mission-centered loan fund model), strategies with great potential (including our own anti-predatory mortgage strategy), and policy strategies (for instance, how to make New Markets Tax Credits work better for CDFIs).
We have some special events planned, as well. In addition to the historic keynote address by Federal Reserve Chairman Ben Bernanke on Wednesday, November 1st, we will be paying tribute to Senator Paul Sarbanes, who is retiring this year. Senator Sarbanes has agreed to accept a Lifetime Achievement Award from Opportunity Finance Network in recognition of a Senate career dedicated to affordable housing and community development. We will open the conference with a panel discussion of how "grow, change, or die" is taking root in Washington, DC. And we will close the conference with a roundtable on the midterm elections (five days after we end) featuring national journalists and pundits.
Make sure you plan to attend October 30th-November 2nd in Washington, DC. Find out more on our web site.
At the top of the list... . The Opportunity Finance Network Board will meet next Wednesday, May 24th, in Philadelphia.
The two major items on the agenda are a review of Guiding Principles for our financing strategies intended to help the opportunity finance system achieve scale--measured by financing flow, or volume. Our financing team, led by Art Fleming and Beth Lipson, is on the verge of introducing two major new initiatives to the membership--a responsible subprime mortgage product that we will pilot over the next 6-9 months and a financing conduit for CDFIs seeking to help manufactured home park residents purchase their parks to preserve affordability. (We are working closely with the New Hampshire Community Loan Fund, which pioneered manufactured home park conversions, and CFED, which is running the I'M HOME program to support manufactured housing as a choice for low-income households.) Both strategies are "mission rich" and introduce new financing systems that CDFIs will, we hope, be able to use if they fit their individual financing approaches. They will not be for every CDFI, but we have heard lots of enthusiasm so far. After the Board meeting, I will share with you the Board's conclusions.
The second major topic is our efforts to leverage the remarkable policy gains we have made in a difficult time and environment. With 62 Senators--comprising 23 Republicans, 1 Independent, and 38 Democrats--supporting our call for an $80 million appropriation for the CDFI Fund, we have crossed two important thresholds behind the leadership of Sandra Kerr and the support of Cheryl Neas. First, in the Senate's eyes, at least, this is no longer "that Clinton program." Because so many of you have taken the time to explain to your Senators what you are accomplishing in your markets, we have achieved broad support that we expect will only grow in the next 2-3 years. Second, because 60 is a magic number in the Senate--60 votes is what you need to override a veto--we have flexed our muscles in a way that people in Washington notice. It is unlikely that the CDFI Fund on its own will ever become the subject of a veto, but 62 supporters--not to mention the appropriations committee members who support us in committee but who do not sign letters like ours as a matter of good governance--sends a clear message.
Look for updates on the Board's discussion and decisions in about a week.
Thinking Outward. Some annual gatherings are taking on new, externally focused roles. PeopleFund, formerly Austin CDC, annually hosts an economic summit to focus civic discussion on their markets and their work. Last year, The Reinvestment Fund launched an Economic Markets, Public Purpose annual series of lectures as part of its annual meeting. This year's lecture by Alice M. Rivlin, Senior Fellow at The Brookings Institution, will take place on Thursday, June 8th, in Philadelphia.
Have you used your annual gatherings for civic purposes? Please let me know (mpinsky@opportunityfinance.net).
Clearinghouse CDFI. You can learn a lot about an organization's sense of itself from the tone of its annual meetings. I got to a lot of them, so I should know. Clearinghouse CDFI's 10th Annual Meeting, "10 Years of Impact," which I attended in Anaheim, CA, this past Tuesday, gave the impression of a very strong organization that is just starting to realize how good a job they are doing.
The meeting featured compelling presentation by three Clearinghouse CDFI borrowers. The presentations scratched the surface of the organization's $100+ million financing last year.
Stop Gap is a nonprofit that Clearinghouse CDFI helped to buy a building, giving it a permanent and stable home and saving it $20,000 per year in expenses. The financing story could not begin to capture the power of the financing itself, however. Stop Gap uses drama and drama therapy to address difficult issues such as HIV/AIDS, drug and alcohol abuse, homelessness, and spousal abuse. They appear in schools, at other nonprofit support organizations, in civic settings, and elsewhere. Stop Gap delivers more than 1,000 "appearances" each year in and around Orange County. We had the painful but moving experience of watching two monologues--one by a woman acting as a homeless and mentally ill woman and another by a woman acting as victim of spousal abuse--that conveyed the power of their work.
A second borrower, John Nese, owns and operates a small retail business in the Highland Park neighborhood, Los Angeles's original close-in suburb that now has been absorbed by the city. Although Nese's family had run the business as an Italian deli since 1897, he could not get bank financing to purchase the store after his father died in 2005 because the banks concluded his cash flow was insufficient. Fortunately, one of the bankers who turned John down sits on Clearinghouse CDFI's board.
Compelling in that irresistible way that so many small business owners are, John explained how his business was not just important to his family or his community but to scores of communities across the nation. A few years back, John had transformed his store from a deli to a specialty outlet for small "soda pop" producers--he carries several hundred types of sodas produced by small business nationwide. His success has led to job growth in places as diverse as Natrona, Pennsylvania, and Brooklyn, New York--not to mention Highland Park. After John's presentation, Clearinghouse CDFI CEO Doug Bystry asked me, "How do you measure the impact of that?"
The third borrower was the Harbor City Boys & Girls Club, represented by a group of six kids. The Harbor City Boys & Girls Club built a model club with financing from Clearinghouse CDFI in Harbor City, a small community just southeast of Torrance in Los Angeles. The kids were terrific, as kids usually are, but the thing that made a lasting impression on me was that the two adult staff chaperoning the kids had come up through the Club. The sense of community was palpable.
Clearinghouse CDFI today is a $145 million CDFI based on a for-profit loan fund model that deserves more attention than it has received. Later this year, Opportunity Finance Network will profile Clearinghouse's model in a Spotlight on Innovation report, part of a new series we are launching to help practitioners learn in-depth about important innovations in the field.
If you can't wait, you might want to check out Clearinghouse CDFI's web site.
Who is Hamilton's Heir? Alexander Hamilton is well known as the brains behind our nation's financial system, although that was just one of his remarkable accomplishments (chronicled thoroughly and most recently in Ron Chernow's biography). Now, according to a front-page story in today's Wall Street Journal, former Treasury Secretary Bob Rubin and current Treasury Secretary John Snow are fighting a war of words over who can claim to be heir to Hamilton's legacy. Because the fight turns on an how you interpret Hamilton's view of the balance of government and private industry, you can be sure that the argument will not go away.
Underneath the disagreement, however, is news that Rubin is leading an effort housed at the Brookings Institution to promote "an economic strategy to advance opportunity, prosperity, and growth."
The Hamilton Project, as it is known, has a lot in common with a policy effort we have launched with CFED called "Into the Economic Mainstream." In May we will be releasing a summary of a bipartisan meeting we held in March that included a wide range of voices. At our 2006 Opportunity Finance Conference this Fall in Washington, DC, we will present an "Opportunity Agenda for Inclusive Prosperity." The Opportunity Finance Network's Policy Committee is working on that agenda for Board discussion.
If you want to get more involved in our policy discussion, we would love to hear from you. Please contact Cheryl Neas on our policy staff to learn more.
The Meaning of "Opportunity." When we changed our name last year to Opportunity Finance Network, I made a case for the power of the word "opportunity" in my speech at our conference last Fall in Los Angeles. In my view, "opportunity" underlies "community development" both historically and philosophically, as I tried to reason in LA. Since the conference, though, I am constantly on the search for more visceral and succinct ways of communicating the power of "opportunity," and I heard a great one last week from Nancy Andrews, President & CEO of the Low Income Investment Fund. "Isn't our work all about improving people's life chances?" she asked in a meeting. That worked for me.
Rolling Out CARS(TM). The CDFI Assessment and Ratings System is entering the final stage of its ramp-up phase with promising results and good prospects. With 17 CDFIs rated, 22 more CDFIs in the pipeline, and 18 investors subscribing to the ratings, CARS(TM) is poised to influence how CDFIs raise capital. A comprehensive, third-party analysis of CDFIs, CARS(TM) ratings are rigorous and comprehensive analyses of Impact Performance and Finance Strength and Performance that investors can use to streamline their investment decisions.
To learn more about the CARS(TM) methodology, visit our web site. If you are interested in getting rated or subscribing to CARS(TM), contact Kathy Stearns, our Executive Vice President for CARS(TM) at kstearns@opportunityfinance.net.
Getting to Know Us. We are rolling out the new brand that the Opportunity Finance Network membership approved last Fall. With our new logo and colors, we have completed the "internal" work (letterhead, business cards, etc.) and are starting now on "external" products. By now you have seen the new portal to our web site but you can look forward to an entirely new approach in coming months that focuses on News, Results, and Innovation.
We are committed to proving the value of the brand in 2006. Not only will we help Members use the brand in both small ways (including "A Member of the Opportunity Finance Network" on your web site or printed materials) and big ways (re-phrasing your marketing materials to incorporate some of what we learned last year in our market research), we want to help some Members who opposed the change last year learn to use the new brand to their advantage.
If you want to discuss why and how to align with the Opportunity Finance Brand, contact Lina Page, our Senior Vice President for Strategic Communications, at lpage@opportunityfinance.net.
Traction. This year we expect to implement several of the innovative products and strategies we have been working toward since we adopted our new strategic plan in 2003. Both the anti-predatory lending mortgage product and the manufactured home park preservation fund are in advanced stages of development. We are aiming to launch them both this year. To learn more, visit our web site.
The Opportunity Finance Network Board set four priorities for our work in 2006 as we move toward the strategic goals we committed to in our strategic plan. Our 2006 priorities are:
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