Moving Money to Mission Through Impact Investing Partnerships with CDFIs

This story was originally published on the Philanthropy Missouri blog as a guest post by Paula Langley, Senior Project Manager, IFF & Gary Newcomer, Director of Operations, Community Builders Network (on behalf of the St. Louis CDFI Coalition)

Members of the St. Louis Coalition at the St. Louis CDFI Forum hosted by the Federal Reserve

The St. Louis CDFI Coalition is a partnership among eight Community Development Financial Institutions (CDFIs) that offer an array of capital, development, and consulting services and share a common mission to empower a comprehensively healthy St. Louis community through support for nonprofits, small businesses, and communities facing disinvestment.

CDFIs, which are designated by the U.S. Department of the Treasury, provide financial services to borrowers where commercial banks and traditional lenders leave gaps. Some specialize in midsize to large loans to community-serving agencies; others provide small, individual loans and other credit and financial services, while others focus on small business and real estate development lending.

The eight CDFIs in the St. Louis Coalition share a common mission of access to safe and affordable financial products and services, and offer mission-driven loans and other resources that are more flexible and accessible than traditional financing.  Loans and resources are deployed across the region into some of St. Louis’ most economically distressed communities, and members frequently re-assess needs and look for innovative ways to fill financial gaps.

The St. Louis CDFI Coalition in Action

The St. Louis CDFI Coalition is a diverse collection of community development organizations ranging from depositories to loan funds and has supported a range of work including the highlighted projects below:

• Justine PETERSEN was profiled by the Wall Street Journal for their work supporting black-owned businesses through the Paycheck Protection Program (PPP).

• St. Louis Community Credit Union created gateways to banking careers.

• Gateway CDFI financed affordable homes in North St. Louis neighborhoods.

• IFF supported the early childhood education (ECE) community through Urban Sprouts Development Center.

• Alltru Credit Union fought for the financial health of the community.

• The International Institute Community Development Corporation provided business development support to refugees that launched a local soap business.

• Rise CDFI is rolling out its minority contractor and small developer loan funds in 2021.

• Alliance Credit Union is a Low-Income Designated CDFI with strong consumer, mortgage, and commercial lending portfolios.

To read more stories about CDFIs, look to the St. Louis CDFI Coalition blog.  Elsewhere in Missouri, there are CDFIs Coalitions such as the Kansas City CDFI Coalition, including statewide CDFIs Gateway, IFF, and Justine PETERSEN.  For a full list of CDFIs, see Opportunity Finance Network’s CDFI Locator. 

Invest in CDFIs

Impact investing in CDFIs is an additional way for investors and funders who are looking to amplify their social impact while also gaining financial returns.  IFF’s CEO, Joe Neri, recently shared the benefit of partnering with CDFIs to achieve a social mission and stated, “those investments can also strengthen the entire community finance ecosystem and, in turn, create greater impact in even more communities”.  Impact investors and CDFIs can partner together to amplify shared missions of social impact that ultimately strengthen the entire community finance ecosystem.

If you or someone you know is interested in learning more about CDFIs, impact investing, and how to invest in your local St. Louis CDFI community, please visit our website to learn more about each CDFI’s mission and how to invest.  For more information on how to support the St. Louis CDFI Coalition, reach out to Gary Newcomer at gary@communitybuildersstl.org.

To view the original blog post, click here.

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Rebecca Mawuenyega of Dellwood Pharmacy was one of those businesses in the St. Louis area struggling to recover from the COVID-19 pandemic. Her business benefitted from PPP lending at Justine PETERSEN after losing more than 40% of her revenue. Her business was able to receive $16,000 through the program at a critical time and is pursuing PPP lending for a second time due to recent increases in local COVID cases.

“Because the COVID numbers are going up, it’s happening again.”

-Rebecca Mawuenyega

The PPP loan made possible through Justine Petersen helped Dellwood Pharmacy to keep her business open and serving the local community.

And her business isn’t the only one benefiting from the program.

“There seems to be a healthy demand” said Galen Gondolfi, Chief Communications Officer at Justine PETERSEN. In the first week, they received about 150 inquiries from small businesses asking about the PPP program.

Rebecca Mawuenyega of Dellwood Pharmacy

Moreover, Justine PETERSEN has been tracking where their PPP lending is going. 75% of the $14.8 million in their PPP lending went to BIPOC-owned small businesses, which were much less likely to access PPP lending during the first round of the federal stimulus program.

Justine Petersen’s mission is to connect institutional resources with the needs of low- to moderate-income individuals and families, helping them to build assets and create enduring change - not just for each individual or family that they assist, but the community as a whole.

Justine PETERSEN is a member of the St. Louis CDFI Coalition, a partnership among eight CDFIs that offer an array of capital, development, and consulting services and share a common mission to empower a comprehensively healthy St. Louis community through support for nonprofits, small businesses, and communities facing disinvestment.

All photos from this story taken by Rebecca Mawuenyega. Read the full story from the Wall Street Journal here.

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“Not only did this program get me ready for the Credit Union professionally, but also gave me a boost of confidence with my personal goals. I was made aware that there’s no limit to my talent, and all I had to do was show up and show out!

Tammerah J.
2018 Gateway to a Banking Career Participant”

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“Not only did this program get me ready for the Credit Union professionally, but also gave me a boost of confidence with my personal goals. I was made aware that there’s no limit to my talent, and all I had to do was show up and show out!” said Tammerah J., participant in the 2018 Gateway to a Banking Career program.

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St. Louis Community Credit Union is a certified community development financial institution (CDFI). Through caring service and education, St. Louis Community Credit Union provides the residents of the St. Louis region with safe, affordable and accessible financial services and products. For more than 75 years and counting, they have been serving residents of St. Louis City and those of Franklin, St. Louis and St. Charles counties in Missouri; as well as St. Clair, Madison, Monroe and Jersey counties in Illinois.

St. Louis Community Credit Union is a Low-Income Designated credit union and is one of the largest Minority Depository Institutions in the United States (per the National Credit Union Administration).

St. Louis Community Credit Union is a member of the St. Louis CDFI Coalition, a partnership among eight CDFIs that offer an array of capital, development, and consulting services and share a common mission to empower a comprehensively healthy St. Louis community through support for nonprofits, small businesses, and communities facing disinvestment.

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Screenshot from NCI’s 2020 Year-End Wrap-Up

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Screenshot from DeSales Community Development’s interactive map