Opportunity Finance Network

Conference Registration Total

711. That how many people registered for our Conference this year. Most ever. Great group, too.

If you were there and have not yet filled out a Conference evaluation, we want your feedback.

The Martin Luther King, Jr., Memorial

Be Part of It. In Washington, DC, today, there is a groundbreaking for a permanent memorial to Dr. Martin Luther King, Jr. We have the honor of a direct connection to the effort to build the memorial through Arthur Fleming, Opportunity Finance Network's Executive Vice President for Financing, who is the Board of the foundation that is making the memorial happen.

Opportunity Finance Network has contributed to the foundation and I encourage you to do the same. Just click here for more information and the opportunity to contribute.

The Bernanke Factor

Credibility. Affirmation. Chairman Bernanke's keynote speech was important on many levels for the industry and for Opportunity Finance Network. As I look back over what he said, what still jumps out most at me were his concluding comments:

"These efforts demonstrate the ability of CDFIs to adapt their business strategies to evolving markets, as indeed they have done throughout their thirty-year history. I expect that the local knowledge and specialized financial expertise that CDFIs provide will continue to add significant economic value and complement market forces in the support of community economic development. Thus, CDFIs are likely to contribute to our share goal of expanding economic opportunity for many years to come."

I hope to hear and read everyone using that quote for years to come.

Election Impact on CDFI Fund Advocacy

We'll Make it Through. When your strategy is bi-partisan, as ours is, every election means you win some and you lose some.

Five Republican Senators who lost their seats in the midterm elections were supporters of our call for $80 million for the CDFI Fund: Allen (VA), Santorum (PA), Burns (MT), Chafee (RI), and Talent (MO). Only one of the five--Chafee--was among the 10 new Republican backers we gained in 2006.

In addition, we lost to retirement our sole Independent (Jeffords of VT), but we expect to pick up Senator-elect Sanders.

Senate Chairs. With the assumption that the Virginia results stand, the new chairs of key Senate Committees and Subcommittees are likely to be:

• Appropriations: Senator Kent Conrad (ND)
• Our Appropriations Subcommittee: Senator Patty Murray (WA)
• Agriculture: Senator Tom Harkins (IA)
• Banking: Senator Chris Dodd (CT)
• Environment and Public Works: Senator Barbara Boxer (CA)
• Finance: Senator Max Baucus (MT)
• Health, Education, Labor and Pensions: Senator Ted Kennedy (MA)
• Small Business: Senator John Kerry (MA)
• Indian Affairs: Senator Byron Dorgan (ND)

House Chairs

• Appropriations: Rep. David Obey (WI)
• Our Appropriations Subcommittee: Rep. John Olver (MA)
• Agriculture: Rep. Collin Peterson (MN)
• Education and the Workforce: Rep. George Miller (CA)
• Financial Services: Rep. Barney Frank (MA)
• Small Business: Rep. Nydia Velazquez (NY)
• Ways and Means: Rep. Charlie Rangel (NY)

Please keep a watch for more detailed information from Sandra Kerr, our Policy Director. And please note that some of the Committees might change in scope and jurisdiction, as well as name.

First Native CDFI Awards

Congratulations! On Tuesday, October 31, Oweesta and Opportunity Finance Network awarded the first-ever Native CDFI Awards to:

• Citizen Potawatomi Community Development Corporation in Shawnee, OK, received the "Circle of Honor" Award for Outstanding Leadership, and
• Susan Hammond, founding director of Four Directions Development Corporation of Orono, ME, received the "Visionary Leader" Award for Outstanding Achievement.

Oweesta Executive Director Elsie Meeks said at the ceremony that, "For many Native people and tribes, the idea of private assets and ownership is often viewed as diametrically opposed to their cultural ways and traditions. Therefore, we wanted to honor the efforts of those who are committed to making Native CDFIs a force for change in their communities."

It is an honor to be part of the rapidly expanding Native CDFI movement.

Congratulations to the awardees.

Be Careful What You Say

Rove's Critical Mistake. There are many reasons the Republicans stumbled so badly in yesterday's election. I believe the Republicans started to unravel just a few days after the 2004 elections, when Karl Rove told reporters that he planned to stay at the White House and did not plan to get involved in future presidential campaigns. That offhand comment weakened his hand at disciplining the Republican troops, since no Republicans had cause to fear him as much. Rove recognized the problem and, just days, later tried to recover, but the damage was done. The Republicans started to fray.

Pelosi's Comment. In politics, you don't make promises you can not keep. On NPR this morning, I heard Speaker-to-be Nancy Pelosi say that under her leadership the House of Representatives in the 110th Congress would be the most ethical, most principled, and most honorable House ever. It sounds good, but even the NPR newscaster noted that it was "an awful big promise to keep." As soon as something unethical, unprincipled, and/or dishonorable happens--and it will--Pelosi's comment will come back at her.

Politics is a tough business.

Overwhelming

Against the Odds. The Democratic House gains are particularly remarkable because of the structural obstacles the Republicans had built while in power--notably extreme gerrymandering, incumbency, the power of the White House (which seems to have backfired), and fundraising. When you hear commentators such as George Will say that the Democratic gains are average for the sixth year of a presidency, remember that the playing field this year tilted Republican. Apparently, the national mood tilted sharply Democratic.

Nancy Pelosi, Speaker of the House

History. One of the things we will always remember about this election is Nancy Pelosi's rise to the highest elected office any woman has attained in the history of the United States. It's been a long time coming.

It's Starting to Look Overwhelming

Watching from PA-08. This election is turning out just the way the polls suggested it would. Fascinating. Somehow, no matter what we sometimes want to believe, the law of large numbers seems to hold, election cycle after election cycle.

I am in Pennsylvania's 8th District, where incumbent Michael Fitzpatrick (R) is trailing challenger Patrick Murphy (D) by less than 1,000 votes. This district (I grew up here) has long leaned moderate Republican, and still does, though it has gradually become more Democratic. Fitzpatrick ran a much better campaign, but Murphy (an Iraqi war veteran) fought hard.

When this race showed up as "competitive" about a month ago, I started to believe that the election was going to trend Democratic. Democratic challengers have already pulled off a bunch of upsets in Pennsylvania and elsewhere, so Murphy just might hold on.

We'll see, but probably not until tomorrow morning.

Election Watching

Early Results. What's interesting early on is that the results seem to be tracking the prevailing poll results.

2006 Compensation Survey

New & Expanded. Thursday morning, Opportunity Finance Network released our 2006 CDFI Compensation Survey at our Conference. With more than 80 CDFIs participating, more jobs included, and more data points, this survey is a big step forward from the pilot survey we released in 2005 in Los Angeles.

For a copy of the survey, please e-mail Marie Wright at mwright@opportunityfinance.net or check our web site next week.

Chairman Bernnanke's Speech

Watch it! Chairman Bernanke's speech on November 1st at the Opportunity Finance Conference was an important statement about the role that CDFIs and opportunity finance play in addressing market failures. Though many in our industry have long believed this, most observers outside our industry have not.

 

The speech is titled, "Community Development Financial Institutions: Promoting Economic Growth and Opportunity." The title says it well.

We had asked the Chairman to offer his perspective on the role that our industry plays. I think he answered clearly, forcefully, and emphatically that, from a macroeconmic perspective, our work is critical.

To watch the speech, click here. To read it, click here.

The Power of Opportunity

My Speech. To read or watch my Conference speech, click here.

My goal in my speech was to convey the exciting innovations that are coming together to form a opportunity finance system. Please let me know what you think by posting a comment (below).

For Conference News...

WWW.OpportunityFinance.net. As our Conference enters its final day, I look forward to reflecting on the event. For news, videos of Fed Chairman Bernanke's speech yesterday and my comments on Tuesday, please visit our new web site.

Compensation Survey Results

2006 Survey Complete. More than 80 CDFIs participated in our 2006 industry compensation survey, almost three times as many as 2005. In addition to a larger data set, this year's survey covers more jobs.

Thanks to everyone who participated!

 

At the Conference, you can obtain a copy at our booth. After the conference, you can get a copy at our online store.

Congratulations, Dr. Yunus

Nobel Peace Prize Announcement. The entire development finance industry worldwide can be proud that Dr. Mohamed Yunus and Grameen Bank won the Noble Peace Prize yesterday. Dr. Yunus, well-known for turning a single idea into a transformational movement, has long been a leader in our field.

In 1990, Dr. Yunus delivered the keynote speech at our Conference in Washington, DC. I saw him last in 2001 in Geneva, Switzerland, at a global meeting of social entrepreneurs.

Like so many others, I was pleased to hear about his selection. It is a great thing for microenterprise and for development finance here and around the world.

New Policy Agenda for Opportunity Finance

Don't Miss the Meeting. At the Annual Membership Meeting at the Conference, we will introduce a new policy agenda for opportunity finance. Developed by our Policy Committee at a retreat over the summer, based on several years of work, and approved by the Board in September, the agenda sets a bold course for the industry, consistent with our strategic plan.

The Agenda will be the center of attention at a panel presentation during the Membership Meeting. We will lay out our policy vision and invite you to get involved. The discussion will focus on a "Call to Action"--what you can do over the next 12 months to make our vision real.

Conference Registration

Get Your Early Registration Discount. When I left the office yesterday afternoon, more than 440 people had registered for the upcoming Conference. That is way ahead of prior years. The discount early registration deadline is upon us, so register now.

We Shall Be Free

Now It's Legit. Not long ago I spotlighted a liberation song written and sung by Garth Brooks, the country singer who is not most people's idea of a substance-filled artist. I love the song. A new cover of the song might just give it the credibility it needs. Sam Moore--the "Sam" in the 1960's R&B duo "Sam & Dave"--has release a new album that features the song. In fact, the album--"Overnight Sensation"--is a great genre-crossing mix of R&B, gospel, rock, and crossing featuring Moore singing with (among others) Bruce Springsteen, Jon Bon Jovi, Sting and Sheila E. (on a cover of Lynyrd Skynyrd's "None of Us Are Free), and others. It's my new favorite album.

Thanks to NCCED

Closing Doors. Yesterday the National Congress for Community Economic Development (NCCED) ceased operations. Founded in 1970, NCCED was the trade association for community development corporations. While many CDCs continue serving their markets, the industry has a whole continues to transform.

Congratulations!

The 2006 Awards Results are In. Congratulations to all the CDFIs that won awards in the Native, TA, and Core funding rounds of the CDFI Fund's 2006 awards.

Our preliminary staff tabulations is that Opportunity Finance Network Members won 62% of the awards and 73% of the dollars, but we are double-checking the numbers. This is significantly higher than the historical averages, which hover around 45%-50% of the total dollars.

CDFI Fund Awards

The Results Are In. Yesterday the CDFI Fund announced more than $4 million in awards for Native CDFIs. Today it will announce more than $20 million in Core Funding. The Opportunity Finance Network staff will prepare a comprehensive analysis of the awards.

It's Been a Long Time Coming...

Since 1984. I bought my first home computer--a "FatMac" ("Fat" because it held a then-unheard of 512k of RAM and a 20MB hard drive)--in 1984 after convincing my wife that it would make it easier for her to complete graduate school papers. I owned a series of Apple computers through 1995, until I went to work at Opportunity Finance Network, which ran a Windows-based system.

Today Chris Ferguson, our IT expert, loaded Windows 2000 onto my Apple MacBook Pro, linking the two worlds (PC & Mac). I have been looking forward to this day (really!) for more than 20 years. Two worlds that seemed destined to remain separate are now linked.

Who would have believed it?

New Honor for Eric Weaver

Leadership Award. The James Irvine Foundation has honored Eric Weaver, Executive Director of Lenders for Community Development, with its first-ever James Irvine Foundation Leadership Award.

The Winner Is...

Debra Houghtaling. ...who identified the songwriter (see Debra's comment to "Have You Heard This Song?" below). Debra runs the Grow Iowa Foundation in Greenfield, Iowa.

California Regional Meeting

Great Discussion. More than 60 people from about a dozen organizations (mainly California but also Colorado) joined us for the Regional Membership Meeting on Tuesday in San Francisco. With the help of a Planning Committee from the membership, we organized a flexible agenda that encouraged networking--so flexible, in fact, that several times I had to stop informal networking so that we could get on with the planned networking.

We discussed a wide range of topics and zeroed in, for our afternoon discussions, on capitalization & pricing challenges as well as impact. We did not settle much, however. We had expected to concentrate on policy, but the topic slipped down the list of priorities.

Thanks to everyone who participated and helped plan the event. We agreed to hold a California meeting again next year.

We are scheduled to have an Opportunity Finance Network Membership Regional Meeting in New Jersey in September. To learn more--or to discuss the possibility of holding a Regional Membership Meeting in your area--contact Blake Myers at bmyers@opportunityfinance.net.

What Does It Mean?

Readership Up. Readership of this blog roughly doubled since I posted the picture of Bono (below). I'm not sure what to make of that; maybe I have started the People-ization of our field. Are we a celebrity-craving professional community?

Special Election Results

CA-50. Yesterday's victory for Republic Brian Bilbray in California's 50th congressional district proved almost nothing, say the pundits. What should be a solid Republican seat in a Republican-dominated district remained a Republican seat--notwithstanding the conviction of former congressman Duke Cunningham on serious corruption charges. What might have been a groundswell of opposition to Republicans did not surface in this district in this election. In other words, while the election might have established that the Republicans have less than expected to fear in the mid-term elections this Fall or that the Democrats have a better shot than anticipated to reclaim either or both houses of Congress, it did neither.

NMTC Announcement in Philadelphia

An Unlikely Scene. I attended the U.S. Treasury Department's New Market Tax Credit announcement ceremony in Philadelphia today. It was one of nine NMTC announcement ceremonies the Treasury is conducting for this round of allocations. Either this is an election year with an unusually high policy emphasis on domestic policy or New Markets Tax Credits have grown very popular.

The site for the Philadelphia announcement--which featured The Reinvestment Fund (based in Philly), Northside CDC (Pittsburgh), PNC Bank, Sovereign Bank, and a CDE run by the state housing authority--was The Enterprise Center, a small business incubator in West Philly.

The setting had an extra twist, as The Enterprise Center occupies what once was the studio from which Dick Clark broadcast American Bandstand. Try to imagine sitting in the American Bandstand studio listening to brief presentations by Treasury Secretary Snow, Senator Rick Santorum (R-PA), CDFI Fund Director Art Garcia, and TRF's Jeremy Nowak about a tax credit strategy for addressing poverty. It was evidence that life is never obvious.

The ceremony was well done and the presenters and awardees all spoke eloquently about the important role NMTC plays. Jeremy spoke eloquently about how NMTC has become a "common ground" policy that draws support from both Republicans and Democrats. Senator Santorum, who for several years has been our industry's leading Republican advocate in Congress, spoke emphatically about the good he has seen come out of New Markets.

Life never is obvious.

NMTC Allocations are Out

Diminishing Returns? Congratulations to the 13 Opportunity Finance Network CDFIs that received $674 million in New Market Tax Credit allocations just announced. (That's just 16% of total allocations in this round.) All told, CDFIs received $953 million (23%).

The Opportunity Finance Network staff is preparing a complete analysis that I will post as soon as it is done.

NMTC Awards on Thursday

Mission? On Thursday, the Treasury Department will announce the next round of allocation awards for the New Markets Tax Credit. As with past rounds, Opportunity Finance Network will monitor closely whether the awards fairly include mission-focused organizations.

Today (Tuesday) and tomorrow Treasury is calling congressional representatives to notify them of awards in their states and districts. Treasury plans to hold a series of announcements at multiple--as yet unspecified--locations across the nation.

Let me know if you have heard about results or announcement plans at mpinsky@opportunityfinance.net or by posting a comment on this site.

Guiding Principles for Scale

Board Approved Principles. Yesterday the Opportunity Finance Network Board approved overarching principles to guide our work developing CDFI-centered financing strategies that are capable of significantly increasing the number of people our Network benefits. Here they are:

"Consistent with Opportunity Finance Network's Core Purpose of aligning capital with social, economic, and political justice and our Mission of leading the opportunity finance system to scale, three Principles guide all Opportunity Finance Network scale initiatives:

• First, they must play leadership roles in building and ensuring the performance of new networks of CDFIs, capital markets, developers, and philanthropic partners. The requirements and infrastructure of the networks must continually push the boundaries, reach, and positive impact of the ways in which the partners conduct their business.
• Second, they must incent and reward aggressive yet incremental engagement of the capital markets through risk-share strategies and demonstrated portfolio performance.
• Third, they must provide capital and systems solutions that are readily accessible to and useful for Opportunity Finance Network Members in their efforts to address the critical problems of poor people and communities."

Behind those lofty ideas are two initial products that we expect to introduce in coming months--the responsible subprime mortgage platform to combat predatory lending and the manufactured housing park conversion fund to preserve affordable housing choices for very low income people.

If you are interested in learning more, please contact Laura Sparks on our Financing Team at lsparks@opportunityfinance.net.

Working with the New Brand

It's Easy. First State Community Loan Fund in Delaware is the latest Member CDFI to put the new Opportunity Finance Network brand to use. Lina Page, our Senior Vice President of Strategic Communications, has been working with a growing number of Members to find a comfortable fit with the new brand. This summer, she will begin offering a series of on-line discussions to share what we are learning about the brand and how Members are working with it. We hope to have some Members explain how they are using it. If you would like to be part of that discussion, please contact Lina at lpage@opportunityfinance.net.

NMTC Announcements?

June 1. The word is that the CDFI Fund will announce allocation decisions for the current New Markets Tax Credit round on June 1st.

Please let me know if you know anything more. Thanks.

Board Meeting Update

Guiding Principles.  The Opportunity Finance Board met in Philadelphia today--the first one-day meeting in several years. Because it involved a presentation by our auditors, the meeting packed in a lot of substance. The highlight was the Board's approval of a set of Guiding Principles for our work to support high-volume, mission rich financing strategies as well as corresponding Guiding Principles for our "platform" for responsible subprime mortgages and for our Manufactured Housing Park Conversion Fund. (When I am back in the office tomorrow, I will report in more detail.) The Board also approved a plan to organize Member discussions of policy issues that influence our work but that are not our top advocacy priorities--for example, immigration policy. Our purpose is to learn what Members are thinking about the issues; we do not expect to take formal policy positions unless there is an overwhelming consensus.

Look for a more complete report...

Honors 4 L4CD

SBA Honors Eric Weaver. The Small Business Administration will honor Eric Weaver, Executive Director of Lenders for Community Development, next Tuesday, May 23rd, in San Jose, CA. SBA is honoring Eric as the "SBA Financial Services Advocate of the Year."

I visited with Eric and several senior L4CD staff last week at their offices in San Jose. The organization is doing well and extending some of its services from up the peninsula to San Francisco in partnership with peer organizations.

New Strategies

Low Income Investment Fund. I met yesterday with Nancy Andrews and her staff at the Low Income Investment Fund. Based in San Francisco and with offices in Los Angeles and New York, LIIF is a pioneer among CDFIs in using off-balance sheet financing to leverage its balance sheet to increase the volume of its financing. In essence, LIIF uses its expertise in finding and structuring high-impact deals to bring other sources of capital into communities. Last year, approximately half of LIIF's $100 million in lending was off-balance sheet. Other CDFIs are increasing their off-balance sheet lending, as well, but LIIF has been developing this strategy since at least 1990. What is different now is that LIIF has started designing its systems--notably its loan servicing systems--to meet the demands of a financing strategy that depends increasingly on fee-based revenue from off-balance sheet transactions. Nancy emphasized that it has taken them several years to figure out some of the complexities. That's the "bad" news. The good news is that she is open to having her staff teach others in the Opportunity Finance Network so that they can learn from LIIF's experiences. One of the defining characteristics of our Members is their willingness to share what they know so that others can succeed.

Unprecedented Support for the CDFI Fund

60! Six or so years ago, almost everyone in the CDFI industry thought that the CDFI Fund was doomed. Not only is support for the Fund still growing, however, the growing support is bipartisan.

Sandra Kerr, Opportunity Finance Network's person in Washington, DC, reports that 60 Senators--39 Democrats, 20 Republicans, and 1 Independent--have signed a letter circulated by Senators Rick Santorum (R-PA) and Robert Menendez (D-NJ) seeking $80 million for the Fund for fiscal 2007. That would be a $25 million increase over current funding.

60 is not just a nice number. It is a powerful number. 60 is the number of votes that can override a veto. Not that the CDFI Fund is likely to spark a veto by President Bush but, still, it's nice to know.

Senate Majority.

55. That's the number of Senators who are supporting an $80 million appropriation for the CDFI Fund for fiscal 2007, one more than the total who supported a comparable request last year. The support is solidly bipartisan with 34 Democrats, 20 Republicans, and 1 Independent signer. Sandra Kerr, our Washington representative, says we expect some additional signers with a total of 60 possible--though still a reach.

The key to the strong bipartisan Senate support is the work that CDFIs do to reach out to their elected officials to educate them about their work. I can not tell you how many times Sandra or I have sat down with Senate or House staff, mentioned one of our Members, and heard some version of: "Oh, THAT's what you're talking about! Sure, we'll support you."

Honor for First State CLF Leader

Financial Services Champion. Van Hampton, Executive Director of the First State Community Loan Fund will be recognized as the "Financial Services Champion" by the Delaware Economic Development Office in conjunction with the U.S. Small Business Administration. Van will receive his award at the 2006 Delaware Small Business Week Awards Dinner on Wednesday, May 24th, in Dover.

Visiting Southern California

Celebrating "10 Years of Impact." Tomorrow night I am flying to Los Angeles for some meetings and to speak at Clearinghouse CDFI's 10th anniversary celebration and shareholders' meeting. Clearinghouse, which in its first ten years has provided housing, business, and community facilities financing "from LA south," recently made a strategic decision to expand statewide. It is an ambitious strategy from an ambitious organization that has proved itself.

Many of you know Doug Bystry, the CEO at Clearinghouse, and will, I hope, get to know him better. He is a creative, dedicated leader.

In my comments, I am going to discuss the loan commitment Opportunity Finance Network recently made to Clearinghouse CDFI and our reasons for doing it. Based on what we learned about Clearinghouse in our underwriting, we have selected it as one of three CDFIs we will report on this year in a new "Spotlight on Innovation" series. What is most significant about Clearinghouse CDFI is that it is structured as a for-profit loan fund with a unique capitalization structure. I was publicly skeptical of the model a decade ago but I am a big fan now. We want to explain the model and what about it works so well so that others can learn from it.

Senate Sign-On Letter

35. That's the number of Senators that have signed our letter seeking $80 million for the CDFI Fund.

Senate CDFI Fund Letter

33. Senator Lugar (R-IN) is the latest to sign on in support of an $80 million appropriation for the CDFI Fund for fiscal 2007. Is your Senator on the list? Contact Sandra Kerr at skerr@opportunityfinance.net to find out.

Growing Senate Support

31. The bipartisan number of Senators who have signed on to our letter seeking $80 million for the CDFI Fund continues to increase. We now have 31 signers--20 D's, 10 R's, and 1 Independent.

Side by Side

Benchmarking & Peer Comparisons remain the heart and soul of Opportunity Finance Network's Opportunity Finance Institutions Side by Side: Fiscal Year 2004 Data and Peer Analysis (Seventh Edition). Opportunity Finance Network Members received free copies in the mail. To order your copy of this critical resource for practitioners, investors, and funders, visit the Opportunity Finance Network's Online Store.

Saving the CDFI Fund

Senate Support Grows. Each year, bipartisan Senate support has grown for the CDFI Fund. Last year, in a bipartisan effort, the Senate led the effort to restore fiscal 2006 (current year) funding for the Fund--and we won close to $55 million, maintaining level funding from fiscal 2005 at a time when Congress had to cut almost all other programs.

This year's Senate effort is off to a quick start behind the leadership of Senators Rick Santorum (R-PA) and Robert Menendez (D-NJ). At the close of business yesterday, 29 Senators (20 D's, 8 R's, and 1 Independent) had signed. We are confident that we will top last year's total of 54 and that will help us maintain or, perhaps, increase funding for the Fund's core programs.