Community Development Financial Institutions in the Southeast: Surveying the Social Investment Landscape
Non-Lending Programs and Services
Key Findings
In addition to their lending activity, respondent CDFIs perform a range of social impact functions, including financial counseling and advocacy. Demand for these functions is high, but as many CDFIs are already limited-capacity operations, they struggle to fund and measure additional programs and services.
- 88.4 percent of 121 respondent CDFIs provide products and/or services in addition to their lending activity.
- Of these additional services, financial counseling was the most prevalent; 63.6 percent of 121 respondent CDFIs provide financial counseling.
- Of the CDFIs that provide additional programs and services, 85.4 percent measure the impact of these programs in some way.
- The most popular method of impact measurement is collecting measures of program productivity, including number of clients and size of audience.
Impact Investing and Angel Investors
In recent years, investment in ventures that produce joint social and financial returns — traditionally the domain of CDFIs — has developed into a more widely pursued investment strategy known as “impact investing.” Among those private investors interested in impact investing are angel investors — high-wealth individuals who provide capital to ventures and often play an advisory role. This increased interest among both private investors and angel investors has led to the creation of impact investment groups and angel investor circles that may work with CDFIs to pursue socially impactful investment opportunities.
To better understand the effect that this broader pursuit of impact investing has on CDFIs, the 2015 Survey of CDFIs in the Southeast asked several questions about CDFI interaction and collaboration with angel investors and social impact investment groups.
Of the 30 respondent CDFIs that have been approached by angel investors and/or social impact investment groups, 16 reported substantive outcomes from these interactions. These outcomes included capital for CDFI operations, program-related investment and the creation of a designated fund to serve borrowers in the 80 to 120 percent Area Median Income (AMI).
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