A Community Development Financial Institution (CDFI) is a financial institution whose primary mission is to help communities that are traditionally left out of banking and investing options. They differ from each other in practices and requirements, but tend to focus on innovative lending options (including less stringent lending practices), educational outreach, and lending for small businesses. CDFIs can be regulated or unregulated, and can take several forms, including:
- Banks—For-profit corporations providing capital to rebuild economically distressed communities through targeted lending and investments.
- Credit Unions—Member-owned non-profit cooperatives promoting savings, affordable loans, and other financial services.
- Loan Funds—Typically non-profit organizations providing financing and technical assistance to small businesses, microenterprises, affordable housing developers, and community service organizations. TBL Fund is a Loan Fund.
- Venture Capital Funds—Organizations providing equity and debt-with-equity services to businesses in distressed communities.
Triple Bottom Line Foundation (TBL Fund) is a Denver-based CDFI that serves clients all over the U.S.; its focus is providing technical assistance and financial products to support clean energy projects in multifamily affordable housing (MFAH) and Indigenous communities. To create financing packages that will support the best projects for each client, TBL Fund bundles available financing sources such as Community Reinvestment Act investments, program- and mission-related investments, Fannie Mae and Freddie Mac green lending incentives, utility rebates, and government loan and grant funds.
There are currently 1,491 certified CDFIs in all 50 states, the District of Columbia, Guam, and Puerto Rico. They are certified by the federal CDFI Fund, and they can apply for financial awards that can be used to:
- finance affordable housing activities, as well as related economic development activities and community service facilities,
- respond to disproportionate economic impacts of the COVID-19 pandemic in low- or moderate-income communities,
- help provide alternatives to high-cost small dollar loans…
… and much more.
It is also worth a reminder that, the Inflation Reduction Act (IRA) provided the Environmental Protection Agency (EPA) approximately $27B for a new Greenhouse Gas Reduction Fund (GGRF) to leverage public investment with private capital to finance clean energy projects. Per the most recent guidance, GGRF dollars will be separately administered under three competitive grant programs that TBL Fund is keeping an eye on. We will also be publishing a more in-depth update later in the Summer of 2023.