This Academy Was Built Just for CDFIs

A new slate of virtual classes is hoping to help CDFIs address their biggest challenges—from retention to awareness.

(Photo by Sergey Zolkin)

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CDFIs face a number of unique challenges that don’t always affect traditional financial institutions. To help CDFIs navigate these issues, the National CDFI Academy recently debuted a slate of courses to serve as resources for these organizations.

“Our goal is to provide robust best-in-class training that’s specific to the work of micro-lenders and small business lending CDFIs who provide capital to BIPOC and low-income entrepreneurs,” says Carolina Martinez, CEO of CAMEO, California’s statewide microbusiness network, which is hosting the academy.

Announced at last year’s Clinton Global Initiative meeting, the virtual academy kicked off in March and has about 80 attendees signed up.

The “first-of-its-kind” virtual academy has a catalog of 45 courses, including topics like strategic management, technology, and governance structures, she explains.

“I want to send the message to CDFIs that there are resources available to help them really build their capacity in a way that could help them grow and scale and have more impact,” Martinez says. “We also want them to get to know each other, their peers, the other CDFIs—so they feel like they’re working to solve the problems in their communities, but that they’re part of a nationwide network of people working together to provide capital where it’s needed the most.”

We spoke to Martinez about some of the challenges facing CDFIs and how they can work to address them.

One area that the academy is focusing on is recruitment and retention for CDFIs. Why is this such a challenge?

Recruitment and retention is a big challenge for CDFIs because they are financial institutions that need very technical finance skills and expertise. And, they’re often unable to compete with the compensation and benefits that for-profit banks and financial institutions offer.

Our advice for CDFIs always is to invest in human capital to foster a strong culture at the organization that’s inclusive and mission-based, to bring people in, and then focus on onboarding and retention strategies that are aligned with your values to ensure your talented staff stays with you. We’ve heard how significantly important the mission of the organizations is for people to go work with CDFIs. It’s also important to have professional development opportunities that employees need to offer the right services and adapt to the specific characteristics of CDFIs.

Why is emphasizing the mission-driven nature of CDFIs such an important part of recruiting and retaining talent?

We’ve been hearing a lot of new staff coming into the industry say the mission and the values of CDFIs really talk to them, and it speaks volumes to what they want to do with their professional life—to not only grow professionally but have an impact with the work they do. CDFIs offer a perfect mix on that end. Unfortunately, there’s not a lot of marketing or awareness about CDFIs for people that are interested in looking for jobs with impactful results.

We always want to present CDFIs and mission-based lenders as a great option to provide capital, help small businesses, especially in BIPOC and low-income communities, and at the same time, employees can grow professionally and learn very tangible skills.

It’s also important for CDFIs to be constantly presenting the impact that the work they’re doing has. Sometimes staff might not see the big-picture impact that they can offer, and it’s always important to keep bringing that to the table and making sure staff doesn’t get into the workload without really thinking about that impactful end result.

The work is presenting those inspiring stories and that impact to the outside world to get other people interested, inspired, and engaged in being part of this industry.

What other challenges do CDFIs face compared to traditional financial institutions?

I think there’s an awareness gap that exists currently. CDFIs’ marketing budgets are relatively small compared to online lenders or for-profit organizations. It ends up being grassroots—word of mouth from customers to help spread the word or in-person events or social media. It’s really important for CDFIs to find and dedicate funding to do more marketing, especially CDFIs with a smaller staff, where each member wears many hats and doesn’t have time to focus on a marketing strategy.

Another one is related to technology. Many newer and smaller CDFIs are managing their loan portfolios manually, and that limits their growth and ability to scale. Automating processes and training staff on those tools would enable them o do more with the same capital. With additional loan capital, CDFIs can definitely scale up, which will benefit more small businesses.

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This story is part of our series, CDFI Futures, which explores the community development finance industry through the lenses of equity, public policy and inclusive community development. The series is generously supported by Partners for the Common Good. Sign up for PCG’s CapNexus newsletter at capnexus.org.

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Erica Sweeney is a freelance journalist based in Little Rock, AR. She covers health, wellness, business and many other topics. Her work has appeared in The New York Times, The Guardian, Good Housekeeping, HuffPost, Parade, Money, Insider and more.

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Tags: small businesscdfi futures

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