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Sustainable Communities Thought Leadership

CDFIs are Empowering Women through Investment

April Mendez (pink top) at the Ribbon Cutting for the Well Farm at Voris Field in Peoria, Illinois. Photo Credit: Doug Leunig

By Meghan Maguire, Senior Associate, Communications at Reinvestment Fund

Developer and entrepreneur Nadine Ngouabe Dlodlo

When Nadine Ngouabe Dlodlo, a native of Cameroon, heard about the lack of affordable housing in Southwest Baltimore, she wanted to get involved. After a traditional bank turned her business plan down, she decided to go another route. When hearing about her vision to provide affordable housing to healthcare workers and single mothers in the area, as well as to revive a once-bustling commercial strip—Reinvestment Fund didn’t consider her project “risky.” To assist with the acquisition of the property, Reinvestment Fund worked with the female entrepreneur through research and a thorough underwriting process. Today, Dlodlo’s vision is transforming into a reality. 

Women are the largest rising demographic of entrepreneurs in the United States, and with a significant part of that share, Black women like Dlodlo are leading the way to become the new face of entrepreneurship. As of 2019, women-owned businesses represent 42% of all U.S. businesses—50% owned by women of color. In the Southeast, the number of female entrepreneurs is growing. Areas like Metro-Atlanta are home to more than 203K women-led businesses. Despite positive trends that point to women as capable and successful business leaders, women, particularly Black and Latina women, still encounter significant adversity when accessing capital. 

As mission-driven institutions, Community Development Financial Institutions (CDFIs) prioritize long-term community impact, over financial gain—a distinction that allows them to measure who is “loan-worthy” in ways that optimize impact through a flexible underwriting process. With an added commitment to underserved communities, this approach enables CDFIs to provide access to loans for people who are often overlooked by banks—a trend that, for women and people of color, is more indicative of systemic barriers than the potential success of a business venture. For CDFIs, investing in impact-driven women-led businesses goes far past the individual—to investing in whole communities across sectors.

Real Estate Development:

Inspired by her own experience and a commitment to empowering single mothers, Nadine Ngouabe Dlodlo started Women’s Home Preservation LLC and its corresponding nonprofit, Women’s Home Preservation Fund in West Baltimore. The mission-driven development firm focuses on creating housing stock that is accessible to single mothers and widows. The nonprofit organization helps single mothers who are homeowners by providing emergency financial assistance to prevent foreclosure.

With Dlodlo’s perseverance and support from the Reinvestment Fund, the developer was able to take her vision for West Baltimore further. She secured three properties on West Baltimore Street and is on her way to building a bustling commercial strip featuring locally owned restaurants, a retail showroom doubling as a tailoring apprentice program, and rental units with priority given to employees from nearby healthcare facilities and single mothers. In 2021, one of her retail businesses was awarded the competitive BGE Energizing Small Business Grant

Reinvestment Fund’s housing stability research advances the understanding of housing market trends, issues that impact access to affordable housing, and the systemic factors that affect households, neighborhoods, and their cities. Investments that improve the quality of local residential real estate markets and, in turn, strengthen communities, are high mission. When Reinvestment Fund got wind of Dlodlo’s project—she was exactly the type of visionary the CDFI was excited to build a relationship with. 

Presently, Rattanni is working with the developer on financing a second project for a building on the same block. It will include 12 apartment units with a turnkey café concept on the ground floor.

On working with Dlodlo, Reinvestment Fund lender Ryan Rattanni expressed, “Development has historically been a male-dominated profession, which is beginning to change, thankfully. Women can bring a different perspective to development that’s refreshing. Nadine’s approach, for example, is informed by her cultural and familial experiences, which results in family-centered projects with strong community support.” Presently, Rattanni is working with the developer on financing a second project for a building on the same block. It will include 12 apartment units with a turnkey café concept on the ground floor. The concept envisions a gathering and living space that encapsulates the synergy of the diverse neighborhood, home to immigrants representing nearly 52 countries.

Climate Action:

Greenprint Partners is a woman-owned, mission- and impact-driven planning, engineering and design firm empowering underserved communities through green stormwater infrastructure solutions. Low-income communities are disproportionally affected by outdated water infrastructure and changing weather patterns that lead to increased urban flooding and water pollution. Founders April Mendez and Nicole Chavas recognized this and combined their entrepreneurial and investment backgrounds to create a firm that solves social and environmental problems disproportionately impacting low-income communities.

Reinvestment Fund’s loan supports the installation of stormwater infrastructure, enabling private property owners to tap into the financial and environmental benefits of green infrastructure grant programs that would otherwise be inaccessible. Historically, despite being available in many cities across the US, these programs are highly under-utilized by the communities that need them most. Reinvestment Fund extended a line of credit to support GP projects in a variety of markets, with initial funding for projects in St. Louis, MO, where they have multiple contracted projects already underway. 

Their equity-driven approach to project sourcing has successfully driven millions of dollars of green infrastructure investment into historically under-engaged communities, activating community anchor institutions such as schools, houses of worship, and health care facilities to become advocates and stewards of green infrastructure on their sites.

Early Childhood Education

Damaris Alvardo-Rodriguez is the owner of two high-quality care childcare centers in Philadelphia

Damaris Alvarado-Rodriguez is the owner of Children’s Playhouse Learning Center, a high-quality early childhood education facility operating in Philadelphia community largely comprised of low-income households and people of color. Like many small businesses in the childcare space, it struggled to secure capital from a traditional bank. So, when Reinvestment Fund began offering grants to expand high-quality care in Philadelphia in 2014, Alvarado-Rodriguez jumped at the opportunity. 

Children’s Playhouse has since received continued support from Reinvestment Fund on expansion projects, technical assistance related to organizational planning and budgeting, and project management, and more recently, Covid-19 relief funds. This is part of Reinvestment Fund’s “continuum” approach—a kind of intervention that CDFIs take to create lasting impact in under-resourced communities. The assistance Reinvestment Fund provided has helped the minority and women-led business to empower the community way beyond childcare services—offering furthering educations opportunities to her staff and family feeding programs during the pandemic are just two examples. 

In her own words, the small business owner explained, “I am a Latina woman entrepreneur and with Reinvestment Fund’s support over the years, I have become a stronger businesswoman, an advocate and a leader. My business finances and my personal finances are stronger. Today, I am the owner of two high quality early learning centers in Philadelphia serving a total of 270 children. As a small business, I employ close to 60 people.”

The success of Children’s Playhouse isn’t an outlier. The impact that Damaris Alvarado-Rodriguez continues to achieve in her community is representative of what is possible when financial institutions prioritize people and community impact, over preconceived notions of whom, and what, they consider “risky.”

Closing:

CDFIs are well positioned to help close investment gaps where racial and gender equity is concerned, but many entrepreneurs still don’t know about them. In Atlanta, Reinvestment Fund has been fortunate to partner with a woman-led CDFI, Access to Capital for Entrepreneurs (ACE) that has helped bring capital to underserved small and medium businesses in metro Atlanta and North Georgia for more than two decades. 

“ACE is committed to maintaining focus on and assisting underserved business owners – collaboration with other organizations like Reinvestment Fund allows us all to help more extensively,” says Grace Fricks, ACE President and CEO. “For 2021, we’re thrilled to report that 51% of our funds deployed went to female business owners and we were able to open our second SBA Women’s Business Center in Georgia.”

Reinvestment Fund takes a proactive approach to target impact investments by providing benefits like technical assistance programs, emergency relief benefits, and an open line of communication for continued support and growth projects. Over the past five years, the number of women receiving loans or grants from the Reinvestment Fund more than doubled—representing a total of 113 women and minority-women owned-business and/or nonprofits (though still less than 20% of all investments). 

At the core of many women-led businesses/nonprofits serving low-income communities, exists a mission to uplift and empower people. For CDFIs, investing in mission-driven women entrepreneurs sits at the intersection of facilitating measurable impact and doing good business. The impact women-led businesses have on their communities, despite facing barriers in securing capital, reflects the very missions CDFIs exist to serve—and a testament to why the greatest risk we can take, is not investing in them more. To learn more about Reinvestment Fund’s commitment to equity and our work in Atlanta and the Southeast, visit our website.

 

This is sponsored content.

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