I am delighted to introduce the 2018-2019 Job Quality Fellows focused on capital deployment strategies for job quality. It’s wonderful to acknowledge talented people who are upholding a fundamental belief held—and proven—by community development financial institutions (CDFIs): capital creates opportunity and drives social, economic, and political justice.
For more than 30 years, CDFIs have made responsible loans and provided financial services in communities underserved by traditional banks. We’re the original impact investors, profit-motivated but not profit-driven, investing for a double bottom line in areas where capital doesn’t flow naturally.
When I started in community development roughly three decades ago, CDFI lenders were making more loans in affordable housing. Today, a large and growing number are focused on lending to small businesses as a path to jobs and income growth. As of 2017, 137 OFN members have closed small business or microenterprise loans totaling $7.04 billion since 1999, the first year for which reliable data are available. This financing has helped create or maintain 598,208 jobs in rural, urban, and Native communities.
CDFIs’ consistently low loan-loss rates demonstrate that our approach is effective and successful in the markets we serve, both for investors and borrowers. And our expertise, impact, creativity, and stick-to-itiveness—during the Great Recession CDFIs doubled down to fill the void left when mainstream finance pulled back—has earned us recognition for being part of the innovation economy.
Clearly, CDFIs aren’t status quo organizations. We’re change agents, pushing beyond norms to do more and better. I’m excited that job quality is part of this mix. With increased frequency, we’re looking not only at the number of jobs created in a community but the quality of these jobs. Do they pay a living wage? Do they offer benefits? Is there room for growth? Do employees feel secure? Do employers have the knowledge and resources to help their employees build wealth?
Job Quality and Social Impact as Mission
With the Job Quality Fellowship, the Aspen Institute, along with Fellowship funders Prudential and the Ford Foundation, actively work to advance job quality. The Fellows chosen this year are from organizations holding job quality and social impact as their mission. The particular group below is using capital deployment as a strategy for realizing this mission. And I’m proud this year’s cohort (as was true last year) includes leaders from OFN member CDFIs.
One is Opportunity Fund’s Eric Weaver. Eric founded the California-based CDFI in 1994 to focus on small business ownership as a path to quality jobs. Opportunity Fund emphasizes equity, with a portfolio of borrowers that is 64% low- or moderate-income, 88% people of color, and 30% female. To help reach more borrowers, the fund recently launched a partnership with LendingClub, an online lender, that gives “second look” to businesses that don’t qualify for the fintech company’s loans. The partnership expands Opportunity Fund’s reach and increases access to affordable capital for small business owners who may not be aware of CDFIs.
And there’s Amanda Blondeau from Northern Initiatives, a Michigan-based CDFI providing both money and know-how to help small businesses improve job quality. Serving a mostly rural footprint, Northern Initiatives has built an online portal that blends one-on-one coaching with self-directed learning. Available 24/7 to Northern Initiative borrowers and as a platform for other CDFIs, the blended-learning approach helps borrowers with a broad array of technical assistance. And Blondeau, who oversees the CDFI’s Business Services Program, is designing new resources to help businesses understand components of job quality and take steps to incorporate them.
Weaver and Blondeau are in brilliant company. What I find wonderful about the spaces in which CDFIs work is that we have so many innovative and passionate allies. Two of them— Tomás Durán, president of Concerned Capital, and Alison Lingane, cofounder of Project Equity—are fellows. Both based in California, Concerned Capital and Project Equity improve job quality by promoting employee ownership. They collaborate with business owners to help transition to an employee ownership model.
Concerned Capital advises business in Los Angeles on ownership conversions and is particularly focused on manufacturing to retain good-paying jobs in the community. Project Equity provides additional support to businesses post-conversion, assisting them in improving governance, culture, and financial stability.
And investors stand with us in the push for quality jobs. Represented in the Fellows group is HCAP Partners, a private equity firm that believes job quality is important to a company’s economic wellbeing. Fellow Bhairvee Shavdia developed the firm’s Gainful Jobs Approach, which measures job quality across a range of factors and uses these measures to develop a roadmap to improve them. Businesses that work with HCAP are required to follow the approach and hit benchmarks as part of the terms of their investments.
Learning and Leading for All
These remarkable individuals and their organizations are helping to draw attention to the value of quality jobs for investors and lenders. By using capital deployment strategies to focus on job quality they are proving it is possible to not only transform the lives and communities of employees but also contribute to a business’s health. I am excited to watch and learn from all of the Fellows, as we work together to realize our shared mission of creating opportunity for all.
Meet the Fellows
Tweet How can capital deployment promote quality jobs? Through organizations like @ConcernCapital, @hcapllc, @niupnorth, @OpportunityFund, and @projectequity, the @AspenInstitute’s #JobQuality Fellows are leading the way.
Tweet CDFIs are the original impact investors, profit-motivated but not profit-driven, investing for a double bottom line in areas where capital doesn’t flow naturally. What does this mean for #jobquality?
Tweet “CDFIs aren’t status quo organizations. We’re change agents, pushing beyond norms to do more and better… We’re looking not only at the number of jobs created in a community but the quality of these jobs.”
About the Author
Lisa Mensah is President and CEO of Opportunity Finance Network (OFN), a leading national association of community development financial institutions.
Mensah joined OFN in March 2017, bringing private and public sector expertise in using financial tools to improve the economic security of the working poor.
Before that, Mensah served as under secretary for rural development at the USDA under the Obama administration. During her tenure, she managed a loan portfolio of $215 billion, directing annual investments of $30 billion in critical infrastructure for rural America.
Before the USDA, Mensah was the founding executive director of the initiative on financial security at The Aspen Institute, where she led a national bipartisan effort with leaders of financial institutions, nonprofit executives, and experts to promote savings, homeownership, and retirement policies and products. And prior to that, she spent 13 years at the Ford Foundation, where she was responsible for the country’s largest philanthropic grant and loan portfolio of investments in rural America.
Mensah is a member of the Advisory Council of the Aspen Institute Economic Opportunities Program.
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