How Can We Help Protect CDFI Funding?
Over the last 30 years, federal community development spending has plummeted by almost 75 percent, measured as a share of the U.S. Gross Domestic Product (GDP). Fortunately, there are some programs with strong track records that have remained to provide necessary financing in capital-starved communities and to low-income people. The U.S. Treasury Department’s Community Development Financial Institutions Fund (CDFI) Programs, which was established in 1994, is one of these tools many communities have come to depend on for access to capital—especially rural and farming towns in the Midwest. Despite CDFI Fund Programs’ record of success and strong bipartisan support from Congress, this tool has come under threat, with the 2018 President’s budget calling for the elimination of funding.
In July 2017, 40 rural development leaders from five states came together to discuss rural economic and community development financing and the impact it has made for low-income communities and people. The gathering was initiated by Dakota Resources and Dakotas America and took place prior to RuralX17, a convergence of rural thinkers and doers. The meeting was attended by U.S. Treasury staff, including CDFI Fund Director Annie Donovan and Clint Hastings, CDFI Program and Native Initiatives Manager, who provided perspective on rural funding at the federal level.
“Having the director of the CDFI Fund here was a big deal,” explains Lin Van Hofwegen, Managing Director at Dakotas America. “Annie Donovan’s visit to South Dakota shows her commitment to rural communities and the partnerships that make federal programs work well.”
It was an insightful morning, with Ms. Donovan informing a strategic discussion on the CDFI Fund’s priorities for reaching rural areas. Later, attendees participated in round table conversations and a large group collaborative thinking session that provided important take-aways they could use to continue to learn from each other.
Representatives from U.S. Senator Mike Rounds and USDA Rural Development also contributed to the conversation.
Attendees from Center for Rural Affairs, GROW South Dakota, the REED Fund, statewide cooperatives, several development foundations, financial institutions, rural economic development corporations and hosts from Dakota Resources and Dakotas America all ended the conference with renewed energy and purpose. The meeting helped create five solution-based practices to represent the rural communities and people they serve well and protect funding needed to do that, including:
- Elevating rural advocacy
- Identifying and sharing steps community leaders can take on a local, state and federal level
- Beingclear and specific on the “ask” to members of Congress
- Understanding the potential and working together
- as an organized rural voice
- Acknowledging value of partnerships and collaborations
“The overriding theme of advocacy and collaboration on a local, state and federal level was pretty clear—we have to share our stories, raise awareness on the continued need for these important federal resources, particularly in rural communities, and to do that, we need to increase collaboration” says Van Hofwegen. “Proposals are on the table for funding cuts to rural CDFIs and other important loan programs. We know the good they do for rural America and how important CDFI and USDA funding is for our region. Our rural economic development leaders are coming together as one collaborative voice to make sure their message is heard.”
The desire to continue these important conversations rolled into RuralX, where the topic of “rural finance policy agenda setting” was proposed by Brian Depew, Center for Rural Affairs, during the OpenX sessions. Fifteen participants took part in this topic and action items were suggested to help protect CDFI funding and protest USDA rural development funding decreases.
“It was good to hear and discuss with other organizations in South Dakota what they are doing and how we can promote rural at the national level,” said Lori Finnesand, Director of GROW South Dakota. “We have two organizations under our umbrella that are CDFI–certified, so it was important for us to be there.”
If you would like to get involved as an advocate for CDFI and rural development financing, contact Brian Depew at firstname.lastname@example.org or Lin Van Hofwegen at email@example.com.