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The City of Bloomington is developing and piloting a new model for bringing national financing to local community development. Bloomington is encouraging and incentivizing community development financial institutions (CDFIs) to work here by becoming a “CDFI Friendly City.”

CDFIs are financial intermediaries that provide capital and services to underserved populations - low-income, low-wealth and other disadvantaged groups and areas. For more than 30 years, CDFIs have produced substantial community impact through jobs, affordable housing, and sustainable community facilities, as well as solid financial returns. More than 1,000 CDFIs operate in the U.S., providing billions of dollars of financing annually. But smaller markets, including cities such as Bloomington, often face challenges attracting CDFI financing.

As being developed and piloted in Bloomington, a CDFI Friendly City is a new strategy for smaller markets that would benefit from CDFI financing but are less able to support a stand-alone CDFI. A CDFI Friendly City will include:

  • A designated local authority and expertise to ensure effective community control;
  • Local capital investment earmarked to attract and leverage financing from CDFIs and private and public state, regional, and national partners;
  • An independent, private, mission-centered organization to lead the work; and
  • A sustainable business model, with goals and accountability.
     

Several local projects have already been identified as potential recipients of outside CDFI financing, including a number of affordable housing projects currently in the planning process at the City, and facilities such as child care centers and community-oriented businesses. Several CDFIs have expressed interest in expanding their portfolios in the city.

Led by a local CDFI working group, the deployment of this CDFI Friendly City approach included a market assessment of potential investment opportunities in and around Bloomington, outreach to national CDFI leaders and investors, and a first-of-its-kind Bloomington symposium last November with representatives of local, regional, and national CDFIs, banks, and foundations, as well as the U.S. Treasury’s CDFI Fund.

The CDFI working group made up of representatives from the city, local business, the Bloomington Urban Enterprise Association and the Community Foundation of Bloomington and Monroe County has been working with a longtime CDFI industry leader to shape the project.

Tina Peterson, president and CEO of the Community Foundation. Pinsky served for more than 20 years as President & CEO of Opportunity Finance Network, the CDFI industry’s leading national trade association, and was Chairman of the CDFI Coalition, a national industry group.

In the coming months, Bloomington leaders and community advocates working with Five/Four Advisors will develop a business plan for Bloomington’s local approach to secure funding commitments for operational support and investment, and establish a local entity to guide the effort in our community.

The Community Foundation is serving as a temporary fiscal sponsor for the local effort until a permanent home is identified. Seed funding for planning, research, and stakeholder engagement has come from the Community Foundation, the BUEA, and PNC Bank.