Opportunity Fund is a different kind of financial institution – a Community Development Financial Institution (CDFI). Over 20 years ago, the US Treasury Department created this designation for loan funds (like Opportunity Fund), credit unions, and others who are committed to using financial tools to help low-income communities. The CDFI Fund is responsible for not only designating whether organizations can call themselves CDFIs, but also for providing financial support for their work. Over the past two decades, the CDFI Fund has helped make tremendous impacts in communities in nearly every corner of the country. In FY2016 alone, CDFIs invested over $3.6 billion in low-income communities, financing 11,000 small businesses as well as over 33,000 affordable housing units. Especially during the recession, the CDFI Fund was a critical source of capital for mission-based lenders – ensuring we could continue to make loans and serve businesses that desperately needed capital to keep their doors open and America’s economy churning (while creating jobs!). During the Great Recession, Opportunity Fund increased our lending and helped fund businesses like the Bay Area Medical Academy, which now boasts over $2 Million in annual revenue and provides jobs for dozens of employees. Since the economic recovery, Opportunity Fund has backed beloved food trucks like Ricky’s Fish Tacos and helped businesses like Zycle Fix expand to meet growing demand.
One or the most impressive things about the CDFI Fund is how a relatively small outlay of federal dollars can translate into powerful impacts for local communities. In Opportunity Fund’s case, we have been able to take a combined total grant amount of $12.3 million (since 1994) and invest over $200 million in California small businesses. That is a leverage ratio of over $16 lent for every federal dollar we have received. And the impact goes much further – our research shows that each dollar we lend out generates nearly $2 in regional economic activity. So all in all – every federal $1 invested in the CDFI Fund generates over $30 in economic activity for our cities, states and nation. These are millions of dollars circulating in underserved inner cities, rural regions and tribal lands – bringing hope and opportunity for business owners, their families and their employees.
For all these reasons, the CDFI Fund has had broad bipartisan support for more than two decades. Right now, for the first time it its history, the CDFI Fund is in danger of being defunded. While we believe the results of the CDFI Fund speak for themselves, Opportunity Fund is working to amplify that message to policymakers in Washington DC. We encourage all members of Congress to maintain funding for the CDFI Fund.
Help keep funding for small businesses in your community – contact your member of Congress today and tell them to prioritize funding for the CDFI Fund. If you are an organization, please also sign onto this letter – the deadline is Monday, March 20th.