Beta Resources Available for Download
RESILIENCE ASSESSMENT TOOL FOR CDFI LENDING PROGRAMS
AND
TOOL PILOT PHASE IMPLEMENTATION GUIDE
Links:
Resilience Assessment Tool for CDFI Lending Programs (Word version*)
Resilience Assessment Tool for CDFI Lending Programs (Excel version*)
Tool Pilot Test Phase Implementation Guide*
Note: These are BETA versions that have undergone limited testing. We encourage you to reach out with any questions, to report errors, and to provide feedback. Contact: Tina Poole Johnson, Deputy Director and Senior Fellow, Center for Impact Finance, tina.johnson@unh.edu.
Acknowledgements:
In 2019, building on the work of 100 Resilient Cities, with support from Bank of America, Rockefeller Philanthropy Advisors, and The Rockefeller Foundation and led by Opportunity Finance Network (OFN) and Precovery Labs, the Resilient Community Development Finance Initiative set out to help impact investors, Community Development Financial Institutions (CDFIs), and related partners identify, evaluate, and finance projects that have high resilience potential to improve the systemic resilience of vulnerable communities in the United States. This first phase developed and tested beta versions of a Resilience Assessment Tool for CDFI Lending Programs and Implementation Guide.
The Center for Impact Finance and its partners are currently designing a phase 2 project that will leverage the successful Phase 1 Initiative. Check back soon to see what is in store for Phase 2 and to learn how you can get involved.
Special recognition is due to the handful of organizations who were intensively engaged in the development and piloting of these resources. Without your creativity and commitment, there would be no tool or guide:
• Black Business Investment Fund (BBIF)
• Coastal Enterprises, Inc. (CEI)
• Enterprise Community Partners-Capital Division
• Genesis Community Loan Fund
• NDN Fund
• Self-Help
Countless additional individuals contributed valuable input to the Initiative and the creation of these tools — thank you!
Resilient Community Development Finance Initiative, Phase 2
– Coming Soon
The Resilient Community Development Finance Initiative is a nascent but bold effort to bring Community Development Financial Institutions (CDFIs) and their investors and partners into the task at hand − to build a ground up, deal-by-deal, institution-by-institution foundation for resilience in all communities, for all people. CDFIs and their investors/partners are uniquely positioned to influence real estate development, business expansion, climate solutions, and every other project seeking financing. CDFIs can “normalize resilience” by integrating the assessment of resilience into development services and underwriting and promoting a new type of value engineering — one that seeks to increase the impact of every loan by identifying opportunities to build a return on resilience value. Because decisions are being made and funds are primed to flow, often leveraged by government and private entities, CDFI-financed capital moments are the perfect time to assess and build resilience.
The first phase of the Resilient Community Development Finance Initiative developed and tested beta versions of a Resilience Assessment Tool for CDFI Lending Programs and an Implementation Guide. In addition, Phase 1 sharpened our understanding of the many threats to the communities that CDFIs support and to the CDFIs themselves, yielded insights into how to assess and build resilience through lending processes, and pointed a way forward for the CDFI industry and its supporters and funders.
The Center for Impact Finance and its partners are currently designing a phase 2 project that will leverage the successful Phase 1 Initiative. Building on the solid foundation of Phase 1, the Phase 2 Initiative will invest in research, impact measurement, and data management; develop resources to raise awareness and build capacity around equitable resilience; and optimize the existing beta resources to increase utility and accessibility. Check back soon to see what is in store for Phase 2 and to learn how you can get involved.
Equitable Resilience Is Possible, For and Through Community Development Finance
The global pandemic, combined with the climate crisis, the increasing spotlight on racial injustice, and the widening wealth gap, has confirmed that we are far from realizing the vision of the Resilient Community Development Finance Initiative of creating “...a world in which communities are socially, economically, and environmentally safe and healthy with the capacity to survive, adapt, and thrive no matter what kinds of chronic stresses and acute shocks they experience, and where all people − especially communities of color, Native Nations, and those who are under-resourced − are able to reach their full potential, supported by equal access to responsible capital.”
Individuals, organizations, and communities suffer economic, environmental, and social harms from acute shocks − the sudden events that strike at the fabric of a community or system − and chronic stresses − the slow-moving impacts that weaken the fabric of community facilities, housing, or systems on a day-to-day or cyclical basis. The under-resourced, underestimated, and systemically marginalized communities that CDFIs serve are often the hardest hit and the least resourced or equipped to recover. The damage from the policies of redlining and disinvestment is visible in devastated local economies and infrastructure and the acute affordable housing shortage. Many individuals are experiencing physical and mental trauma from this enduring global pandemic. Homes and farms are damaged by changing weather patterns and severe weather events. Workers and businesses suffer from on-going shifts to a low-carbon economy. CDFIs’ collateral, revenue streams, and ability to deliver on mission are threatened. The shocks and stresses are increasing and continue to collide, often leaving our communities in a constant state of recovery.
Equitable resilience is possible, for and through community development finance. Resilient community development includes both resilience − the capacity of individuals, communities, institutions, businesses, and systems to survive, adapt, and grow no matter what kinds of chronic stresses and acute shocks they experience − and community development, the capacity to provide social, economic, and environmental “dividends” to communities beyond the basic functions of a given project. Community resilience describes, in the broadest of terms, the defined community of the lender and/or borrower and the holistic resilience of that community, based on the core definitions above.
CDFIs are positioned and equipped to deliver resilience to their target communities. Many CDFIs are already financing projects and businesses and providing services that build resilience. Financing solar and storage in an affordable multifamily building builds resilience, especially in areas where the electrical grid is unreliable. Financing the minimal extra costs to raise the foundation on a single-family home above what is required by code adds resilience in areas with increased flooding. There are many more examples. CDFIs can join their public and private sector institutions to plan with a “precovery” mindset, one that focuses on the future and the needed preparation for building long-term equitable resilience.
History of the Resilient Community Development Finance Initiative
What began as a simple concept note to bring resilience to the world of CDFIs and their related funding and finance partners in the spring of 2018 blossomed into a robust awareness-building, educational and tool development project, now known as the Resilient Community Development Finance Initiative. In 2019, building on the work of 100 Resilient Cities, with support from Bank of America, Rockefeller Philanthropy Advisors, and The Rockefeller Foundation and led by Opportunity Finance Network (OFN) and Precovery Labs, the Resilient Community Development Finance Initiative set out to help impact investors, CDFIs, and related partners identify, evaluate, and finance projects that have high resilience potential to improve the systemic resilience of vulnerable communities in the United States.
Through an inclusive, iterative process to ensure buy-in from CDFIs, their funders and investors, and community stakeholders, the Initiative developed and tested Resilient Community Development Finance Principles, a beta Resilience Assessment Tool for CDFI Lending Programs, and a beta Implementation Guide.
The CDFI Cohort that drove the Initiative defined their purpose with the following vision, mission, and objective. Further, the Cohort detailed core beliefs to guide their work. These principles have been widely shared and embraced.
Vision of the Resilient Community Development Finance Initiative: We envision a world in which communities are socially, economically, and environmentally safe and healthy with the capacity to survive, adapt, and grow no matter what kinds of chronic stresses and acute shocks they experience and where all people − especially communities of color, Native Nations, and those who are under-resourced − are able to reach their full potential, supported by equal access to responsible capital.
Mission of the Resilient Community Development Finance Initiative: Build the capacity of low-income, low-wealth, and other underserved people and communities to survive, adapt, and grow no matter what kinds of chronic stresses and acute shocks they experience by ensuring access to affordable, responsible financial products and services that embrace resilience planning and implementation.
Objective of the Resilient Community Development Finance Initiative: Achieve widespread adoption of resilience finance by the CDFI industry, impact investors, foundations, and other supporting stakeholders, including the integration of resilience principles, the resilience assessment tool, and/or other materials into planning, business development services, lending, and organizational practices and policies, while recognizing our role in service to the wellbeing of the earth and global citizenry.
Core Beliefs of the Resilient Community Development Finance Initiative:
- Investing in resilience will improve quality of life. Investing in resilience will reduce and help prevent the impact of shocks and stresses on a community’s people, physical environment, and economy; accelerate recovery; and improve the quality of life for a community’s residents.
- Responsible resilience requires consideration of lifespan. Responsible resilient investing requires that the lifespan of the project, program, or service be considered and addressed at every capital moment.
- Shared resilience requires a focus on equity/anti-racism, climate change, and globalization. Resilience cannot be achieved through the broader community development sector without a focus on the intersection of equity/anti-racism, climate change, and globalization that adversely and disproportionally affects communities and people that are already burdened and marginalized.
- Community resilience is most effectively delivered through integrated, holistic efforts. Addressing resilience challenges in an integrated and holistic way will help communities realize multiple benefits across sectors and stakeholders.
- Everyone is entitled to participate equally in social, economic, and political life. Every facet of our work should be directed toward and reflect an unwavering commitment to fair and equal access to, opportunity in, and responsibility for social, economic, and political life.
- Our customers deserve excellence. The people and the communities that CDFIs serve have a right to expect excellence, and we have a responsibility to provide it. A commitment to excellence is a statement of respect for our customers, investors, funders, staff, Board, and members, as well as those stakeholders in the community that this work touches.
- Input from a wide ranging and diverse group of stakeholders must shape our work. The work products/tools we create together shall be designed with input from a wide ranging and diverse group of representatives and stakeholders and piloted, market tested, and refined before rollout.
- Our work is for the good of all; therefore, all work products shall be freely available. The work products/tools we create together shall be “open source,” available for use and adoption by all in the broader sector.
For more information, contact Tina Poole Johnson, Deputy Director and Senior Fellow, Center for Impact Finance, tina.johnson@unh.edu.