For Immediate Release: November 20, 2019
Contact: [email protected]
At Domestic Policy Conference, President Bill Clinton and Secretary Hillary Rodham Clinton Announce Commitments to Advance Economic Growth in Communities Across the U.S.
Wednesday’s conference at the Clinton Presidential Center, “Economic Inclusion and Growth: The Way Forward,” brought together leaders and bipartisan representatives from state and local municipalities, nonprofits, and the philanthropic and private sectors.
Participants discussed the evolution and successes of Community Development Financial Institutions (CDFIs), proven approaches for urban and rural economic revitalization, support for entrepreneurs and small businesses, and how best to advance economic growth in underserved communities
Photos here. Credit: Nelson Chenault, Clinton Foundation
Little Rock, AR – Today, President Bill Clinton and former Secretary Hillary Rodham Clinton hosted “Economic Inclusion and Growth: The Way Forward,” a conference on domestic economic policy, at the Clinton Presidential Center in Little Rock. The conference was held in conjunction with the 25th anniversary of the creation of the Community Development Financial Institutions (CDFI) Fund, among other important economic milestones from the Clinton administration, including the development of Rural Empowerment Zones, establishment of the New Market Tax Credit, and more.
At today’s conference, business and civic organizations announced nine commitments designed to unlock economic opportunity in distressed and underserved areas, and promote entrepreneurship and small business growth. These include a commitment by the Association for Enterprise Opportunity to help small business owners who don’t qualify for traditional bank loans access approximately $250 million in capital; a commitment by Inclusiv to invest $45 million directly into credit unions that serve low-income communities and communities of color across the American South; and a commitment by Pacific Community Ventures to provide 1,500 small businesses with free, expert business advice. In addition, the five CDFI trade organizations have issued two joint calls to action to support CDFIs, advocating for an increase in the federal CDFI fund and the creation of federal tax incentives to promote private investment in CDFIs.
“We're here today because we can't stand the growing inequality in our country, and we all want to act to unlock opportunity for communities that too often get left behind,” said President Clinton. “We know that when you grow the economy from the bottom up and the middle out, you can decrease inequality and increase opportunity. For 25 years CDFIs have been an essential part of growing the economy in the most distressed communities, and they must be a part of our effort to reverse recent trends and address economic inequality.”
“When you think about what has always been at the core of America’s stability — it’s diversity. It’s because individuals, communities, cities, states, and the federal government were looking toward the future,” said Secretary Clinton. “CDFIs embody this philosophy, lifting individuals, businesses, and communities through cooperation and bringing everybody to the table.”
Summary of Commitments:
- The Association for Enterprise Opportunity (AEO) has committed to expand its myWay to Credit program, which helps low-wealth small businesses that don’t qualify for traditional bank loans access credit through CDFIs. AEO aims to expand this program to help business owners access approximately $250 million in capital over the next two years.
- Inclusiv has committed to the formation of a $45 million Southern Equity Fund that will invest capital in credit unions serving low-income communities and communities of color in 17 southern states. The Inclusiv Southern Equity Fund will promote economic mobility among low-wealth and underserved communities, preserve and build diversity in community owned and controlled financial services, and increase the impact of scalable institutions throughout the American South.
- The Community Development Venture Capital Alliance, a CDFI that promotes availability of startup and growth risk capital, has committed to invest $100 million in the Puerto Rican economy, to promote economic growth and increase access to good jobs.
- The National Community Investment Fund (NCIF) has committed to capitalizing its Credit Strategies Fund, a way for investors to lend into a diversified, low risk pool of assets. This will increase the amount of capital available through anchor CDFIs and Minority Banks, making impact capital more available in distressed communities across the country.
- Pacific Community Ventures (PCV), a CDFI based in California, has launched BusinessAdvising.org, which aims to provide small business owners with pro bono, expert business advisors on any topic, from financial management to marketing. PCV has committed to scaling theBusinessAdvising.org platform nationally, serving over 1,500 small business owners across the country next year.
- The Financial Health Network has published the U.S. Financial Health Pulse, which has found that only 29 percent of Americans are financially healthy, and that disparities based on income, age, gender, and race continue to persist. The Financial Health Network has committed to publishing these findings and issuing recommendations for financial services providers, policymakers, and regulators to help improve the financial health of American households.
- The Los Angeles Cleantech Incubator (LACI) works to provide expertise and access to capital for startups looking to deploy clean technologies. LACI has committed to providing guaranteed funding to startups that are deploying clean technology programs in disadvantaged communities, and creating a platform for them to share best practices and learn from emerging technologies.
- Community Development Bankers Association (CDBA) and Partners for the Common Good has committed to launching the Small Business Impact at Scale Initiative, which aims to build the capacity of the CDFI banking sector to measure, assess, and communicate the impact of their small business lending with a focus on promoting equity and inclusion for low-income and minority communities. As the first training focused on large scale CDFIs, the Initiative will advance best practices in impact measurement and management and demonstrate the impact of more than $4 billion in business loans originated by CDFI banks.
Full List of Commitments:
Commitment by Association for Enterprise Opportunity (AEO): Reinventing Yes to Capital for Low Wealth Entrepreneurs
Low-wealth entrepreneurs face significant challenges in access to capital. Every day there are 8,000 declined requests for business credit, representing a $52 billion credit gap for businesses seeking loans under $250,000. The Association for Enterprise Opportunity launched myWay to Credit to address that challenge, creating a referral marketplace for small business owners who don’t qualify for traditional bank loans, to connect with alternate sources of capital and credit.
This project won the Treasury Department’s first Innovation Challenge. With this commitment, myWay to Credit aims to connect over 40 percent of the declines it processes from traditional banks to CDFIs and other paths to capital services. In doing so, myWay to Credit can help these business owners access approximately $250 million in capital to achieve their business aspirations over the next two years.
Commitment by Inclusiv: Providing Capital to Credit Unions Across the South
Inclusiv has announced the formation of a $45 million Southern Equity Fund that will invest capital in credit unions serving low-income communities and communities of color in 17 southern states, including Alabama, Arkansas, Delaware, Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, Missouri, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia and West Virginia.
Through this commitment, the Inclusiv Southern Equity Fund will promote economic mobility among low-wealth and underserved communities, preserve and build diversity in community owned and controlled financial services, and increase the impact of scalable institutions throughout the American South. The Fund will make investments of up to $5 million in secondary capital loans to high-impact community development credit unions.
Commitment by Community Development Venture Capital Alliance (CDVCA): Investing $100 million for Economic Growth in Puerto Rico.
Even before the devastating 2017 hurricane season, Puerto Rico suffered from a decade-long recession, with a median income half of the lowest U.S. state. The Community Development Venture Capital Alliance, a CDFI that promotes availability of startup and growth risk capital, has committed to invest $100 million in the Puerto Rican economy, to promote economic growth and increase access to good jobs. This funding will be directed to Puerto Rican business and investment fund managers.
Commitment by National Community Investment Fund (NCIF): Increasing Investment in CDFIs and Minority Banks Across the U.S.
The National Community Investment Fund (NCIF) helps foster investment in CDFIs to help make more capital available to distressed areas across the country. NCIF is the largest investor in the mission-oriented banking industry, with investments in 12 percent of all certified CDFI Banks and over $200 million of assets under management. NCIF has committed to capitalizing its Credit Strategies Fund, a way for investors to lend into a diversified, low risk pool of assets.
This will increase the amount of capital available through anchor CDFIs and Minority Banks, making impact capital more available in distressed communities across the country.
Commitment by Pacific Community Ventures: Making Business Advising More Accessible
Small business owners have to wear a lot of hats: CEO, marketing, product development, supply chain, and sales. So many of these unique challenges can hinder growth of small businesses. Pacific Community Ventures (PCV), a CDFI based in California, has launchedBusinessAdvising.org which aims to provide small business owners with free, expert business advisors on any topic, from financial management to marketing. Entrepreneurs that work with PCV's BusinessAdvising.orghave a median 16 percent year-over-year revenue growth (vs 6.1 percent for comparable small businesses) and 13 percent annual job growth, surpassing the national rate of below 2 percent.
PCV has committed to scaling the BusinessAdvising.orgplatform nationally, serving over 1,500 small business owners across the country next year.
Commitment by Financial Health Network: Advancing Financial Health Strategies
The Financial Health Network announced the findings from the second annual U.S. Financial Health Pulse, which is designed to explore how the financial health of people in America is changing over time. The U.S. Financial Health Pulse found that only 29 percent of Americans are financially healthy, despite a booming economy, and that financial health disparities based on income, age, gender, and race continue to persist. Through publication of research such as the Pulse, the Financial Health Network commits to raising a call to action for financial services providers, policymakers, and regulators.
For instance, financial health providers can help promote the well-being of American households by helping people build emergency savings and reduce debt. Additionally, policymakers and regulators can advance programs and initiatives that support Americans’ ability to manage their day-to-day finances and prepare for the future. The U.S. Financial Health Pulse is made possible through a founding partnership with Flourish, a venture of The Omidyar Group. Additional support is provided by MetLife Foundation, a founding sponsor of PCV’s financial health work, and AARP.
Commitment by Los Angeles Cleantech Incubator (LACI): Accelerating Action on Climate Change
The Los Angeles Cleantech Incubator (LACI) provides support to startups to grow and deploy their clean technologies, while helping public and private sector partners access a pipeline of innovative climate solutions. LACI has committed to creating a first-of-its-kind $3 million debt fund to provide access to working capital for cleantech startups, along with a $2 million pilot fund that provides guaranteed funding for startups to deploy their solutions in disadvantaged communities.
Startups looking to deploy clean technologies—from renewable energy to zero emissions mobility solutions—face challenges in accessing capital from traditional lenders and investors as well as doing business with cities and government agencies who want innovative solutions to reduce GHGs and air pollution. The Los Angeles Cleantech Incubator (LACI) supports startups to grow their enterprise (e.g., access to investors, workforce development, etc.) and deploy clean technologies while helping cities, government agencies, utilities, and corporate partners access a pipeline of innovative climate and sustainability solutions.
LACI has committed to creating a first-of-its-kind $3 million debt fund to provide affordable access to working capital for cleantech startups, and a $2 million pilot fund that provides guaranteed funding for startups to deploy clean technology solutions in disadvantaged communities that suffer from underinvestment and disproportionate air pollution.
The debt fund has been seeded by Wells Fargo Foundation and supported by US Department of Energy, and the pilot fund is supported by state government, utility, and private sector partners. The debt fund and pilots will be complemented by a platform to share best practices among startups, cities, agencies and other partners, as well as learn from emerging technologies.
Commitment by CDBA and Partners for the Common Good:
Small Business Impact at Scale Initiative
Catalyzed by a grant from the W.K. Kellogg Foundation, a partnership between the Community Development Bankers Association (CDBA) and Partners for the Common Good are launching the Small Business Impact at Scale Initiative, which aims to build the capacity of the CDFI banking sector to measure, assess, and communicate the impact of their small business lendingwith a focus on promoting equity and inclusion for low-income and minority communities. As the first training focused on large scale CDFIs, the Initiative will advance best practices in impact measurement and management, and demonstrate the impact of more $4 billion in business loans originated by CDFI banks.
Commitment by Opportunity Finance Network (OFN), Community Development Bankers Association (CDBA), Association for Enterprise Opportunity (AEO), Community Development Venture Capital Alliance (CDVCA), and First Nations Oweesta Corporation: Calls to Action to Support CDFIs and Investment Across America
Enacted in 1994, the CDFI Fund has proven to be one of the most innovative and successful Federal market-based initiatives for promoting access to capital, promoting financial inclusion, and combating the root causes of poverty in disinvested communities. Since inception, the CDFI Fund’s original programs have invested nearly $3 billion into CDFIs, serving the most distressed urban, rural and Native American communities nationwide. This investment, in turn, sparked the growth of the nascent sector from 196 in 1997 to more than 1,100 nationwide today. Annual funding for the CDFI Fund began with a modest $50 million in 1995, and today has increased by five-fold to $250 million. Yet, the need for CDFIs is greater than ever, as income inequality increases and the top 1 percent of families in the U.S. makes more than 25 times what families in the bottom 99 percent do.
The five CDFI trade organizations have committed to two joint calls to action to support CDFIs across the U.S.:
- A joint commitment for an advocacy campaign to increase annual federal appropriations for the Community Development Financial Institutions Fund to $1 billion within five years.
- A joint commitment to advocate for the creation of federal tax incentives to promote private investment into all CDFIs, enacting a tax incentive that will leverage $1 billion in new impact investments per year.
Featured participants included:
President Bill Clinton, founder and board chair, Clinton Foundation; Hillary Rodham Clinton, former U.S. Secretary of State; Darrin Williams, CEO, Southern Bancorp; Stephanie S. Streett, Executive Director, Clinton Foundation; Mayor Frank Scott, Jr., City of Little Rock, Arkansas; Donna Gambrell, President and CEO, Appalachian Community Capital, and Former Director, U.S. Department of the Treasury’s CDFI Fund; Jodie Harris, Director, U.S. Department of the Treasury’s CDFI Fund; Lisa Mensah, CEO, Opportunity Finance Network;Cliff Rosenthal, Visiting Scholar, Center for the Study of Brooklyn at Brooklyn College; Jennifer Tescher, President and CEO, Financial Health Network; Connie Evans, President and CEO, Association for Enterprise Opportunity (AEO); Brian Argrett, President and CEO, City First Bank of D.C.; Secretary Henry Cisneros, Chairman and Co-CIO, American Triple I Partners; Mayor Michael Hancock, Denver, Colorado; Joe Neri, CEO, IFF; Erin Robert, Head of Impact Finance, JPMorgan Chase; Sherece West-Scantlebury, President and CEO, Winthrop Rockefeller Foundation; Mayor Stephen Benjamin, City of Columbia, South Carolina, and Immediate Past President, U.S. Conference of Mayors (USCM); Kerwin Tesdell, President, Community Development Venture Capital Alliance (CDVCA); Secretary Mike Espy, Chairman, Hope Enterprise Corporation; Stacy Leeds, Vice Chancellor for Economic Development, University of Arkansas; Luz Urrutia, CEO, Opportunity Fund; Grace Chionuma, Executive Director, Public Finance Banking, Morgan Stanley; Annie Donovan, COO, Local Initiatives Support Corporation (LISC); Saurabh Narain, President and CEO, National Community Investment Fund (NCIF) ; Annie Donovan, COO, Local Initiatives Support Corporation (LISC); Peter Filipovic, Vice President and Treasurer, Starbucks; Dan Letendre, Managing Director of ESG Capital Deployment, Bank of America; Cynthia Muller, Director of Mission Investment, W.K. Kellogg Foundation; Megan Glover, Co-Founder and CEO, 120WaterAudit; Fagan Harris, President and CEO, Baltimore Corps, and Venture Partner, Blueprint-Local;Anna Mason, Partner, Rise of the Rest Seed Fund;Bulbul Gupta, President and CEO, Pacific Community Ventures; Mayor Libby Schaaf, City of Oakland, California; Gene Sperling, Former Director, National Economic Council; Gene Ludwig, Founder and CEO, Promontory Financial Group, an IBM Company; Cathie Mahon, President and CEO, Inclusiv; Matt Petersen, President and CEO, Los Angeles Cleantech Incubator; and Mayor Levar Stoney, City of Richmond, Virginia; Jeannine Jacokes, Chief Executive and Senior Policy Advisor, Community Development Bankers Association (CDBA); Chrystel Cornelius, Executive Director, First Nations Oweesta Corporation.
This conference was made possible by the generous support of our partners: Ford Foundation, The Honorable Eugene and Dr. Carol Ludwig, Quorum, Southern Bancorp, Inc., Inclusiv, Winthrop Rockefeller Foundation, Road Runner, Little Rock Regional Chamber of Commerce, National Community Investment Fund, Opportunity Finance Network, Community Development Bankers Association, IFF, Association for Enterprise Opportunity, Financial Health Network, Oweesta, Beek Center, Calvert, Wayne Silby, Sunrise Bank, and Community Development Venture Capital Association.
About Clinton Administration priorities to unlock economic opportunity and inclusion:
- Community Development Financial Institutions (CDFI) Fund: The Clinton Administration promoted the formation of more than 400 Community Development Financial Institutions (CDFIs) through the creation of the CDFI Fund. Through the passage of the Riegle Community Development Banking and Financial Institutions Act of 1994, the CDFI Fund was created within the U.S. Treasury Department to provide federal support for CDFIs serving low-income communities.
Since 1996, the CDFI Fund awardees have provided more than $29 billion in loans and investments across the country, including $6.1 billion in small towns and rural communities, $757 million in Native communities, and $726 million to women-owned businesses.
- Rural Empowerment Zones (EZs): To spur economic growth in areas with poverty rates about 20 percent, the Clinton Administration established the first three rural and six urban EZs in parts of Philadelphia-Camden, Baltimore, Chicago, Detroit, New York, Atlanta, and the rural regions of Texas’ Rio Grande Valley, the Mississippi Delta, and Appalachian Kentucky. Between 1997 and 2008, EZ and Enterprise Community (EC) tax credit dollars claimed by employers within both rural and urban EZs/ECs grew from just over $10 million to nearly $180 million.
- New Market Tax Credit:President Clinton initiated a focus on ‘New Markets,’ which sought to integrate the efforts of several government agencies and private sector actors to ramp up investment and business development in underserved and marginalized economic areas in the United States.
In an announcement of the New Markets Tour in 1999, President Clinton said, “Our greatest untapped markets are not overseas; they are right here at home.” Areas were prioritized based on high proportions of low-income people and included Appalachian Kentucky, the Mississippi Delta, Pine Ridge Reservation in South Dakota, East St. Louis, South Phoenix, and the Watts area of Los Angeles.
About the Clinton Foundation
Building on a lifetime of public service, President Clinton established the Clinton Foundation on the simple belief that everyone deserves a chance to succeed, everyone has a responsibility to act, and we all do better when we work together. For nearly two decades, those values have energized the work of the Foundation in overcoming complex challenges and improving the lives of people across the United States and around the world.
As an operating foundation, we work on issues directly or with strategic partners from the business, government, and nonprofit sectors to create economic opportunity, improve public health, and inspire civic engagement and service. Our programs are designed to make a real difference today while serving as proven models for tomorrow. The goal of every effort is to use available resources to get better results faster – at the lowest possible cost.
We firmly believe that when diverse groups of people bring resources together in the spirit of true cooperation, transformative ideas will emerge to drive life-changing action.
Learn more at https://www.clintonfoundation.org, on Facebook at Facebook.com/ClintonFoundation, and on Twitter @ClintonFdn.