We've got a national representation here from the Federal Reserve System. This is an opportunity to promote community economic development. We want to continue the conversation. There has been such vibrant discussion and we want to hear from you. Feel free to ask us questions and to move this agenda forward.
We had two lists that we created.
We wanted to talk about pre-screening for home ownership; figuring out how you can create a pipeline of groups so you can have a more seamless production.
We talked about underwriting developers. We talked about geographic expansion. There were national groups interested in partnering with regional groups. We talked about how to figure out collaborations across geographies.
Then there was a discussion about creating efficiency in the marketplace. We talked about creating something like a CDFI clearinghouse. Was there a way to streamline the process of getting what you need from CDFIs? We mentioned a listserv as a way to start.
Everyone brought resources. Some had more equity or grant funding - more flexible capital that could be blended with different kinds of debt. There was a bank that had a back office they could bring to other CDFIs.
Then we broke into two small groups. One talking about improving operational efficiencies and the other talked about a clearinghouse idea.
Megan - our group was heavy in credit unions and New Yorkers. We talked about a CDFI clearinghouse as a form of collaboration and we talked about operational efficiencies as well.
Specifically to the clearinghouse, how do you get to this collaborative model? Would we need a third party to run it? What did come up was the idea of understanding the local group dynamics and politics which can stop collaboration. The question that then came up was, 'aren't we just creating another organization that needs funding and staffing?'
We wanted concrete solutions. Whether you had sample documents or resources or things like, what would a standardization look like? What would it look like so that everyone can benefit? Lines of credit, loan servicing, etc. are a few topics the clearinghouse could handle.
Loan gaurantee or credit enhancement pools were things we talked about (to lend out more of what we have). Maybe we could get a grant to start some small collaboration? Maybe we need to approach a funder or group of funders to fund a collabration?
Standardization: we talked about standardizing something like PR and Marketing - groups going in together to work with those groups for some number of hours. Creating recognition and getting the message out. Standardizing the PR and marketing to get the message out and save some money.
We talked about collaborating across different geographic areas. For some things like accountants and attorneys they could sort things out at a regional level. You can state that on the web site or the clearinghouse.
The three areas of content we discussed were: collaboration opportunities (discussing ways to collaborate); standardization and access to resources (best practices; how-to quick guides).
We did a deal in the other small group.
Amy - a lot of what we discussed in the larger group we also talked about in the small group. So many of the CDFIs have a niche business ( they might have micro loans and small business - but there aren't a lot of groups that can integrate all the various services). We think we could connect someone interested in real estate for child care and other things that could also be used on that land.
It is difficult to do various types of lending. This person had been to some banks. If you are in a community development part of a bank they are limited to what they can do. Specialized lending is difficult. CDFIs can collaborate more and have a clearinghouse. We talked about micro lending and they identified the need for housing lending and we talked about the need for market research and understanding what is going on there before you jump into that business.
We tried to follow the assignment. We talked about what people are looking for. Many of the housing groups want to be like Tom Bledsoe. Replicating some or all of what the Housing Partnership is doing. Here's a list of things that were mentioned:
- Insurance was mentioned.
- Finding new ways to grow and possibly through shared services and collaboration.
- There were also some smaller things that came up like cost sharing, data management.
- There were some people already in collaborations and they wanted to know about how to grow those collaborations.
- Finding an anker organization to partner with was something else we talked about.
Some people were looking for partners with complimentary skills. Facilitating larger organizations to help smaller ones - not just in terms of charity. Money came up - could we get new resources? Someone mentioned complimentary skills. Collaboration outside of the CD area - collaboration with small business, corporations, etc.
We then talked about what people bring or how they can jump start a collaboration. A major infusion of dollars to jumpstart funding something like a local housing cooperative was mentioned. We also talked about things like business management infrastructure and someone in our group had a model that works so we talked about that. To really collaborate we need a vehicle of some type.
How do you find time to push a collaborative effort? We had different types of intermediaries. A lot of what we saw yesterday was member owned or member driven.
And we talked about some kind of self-directed collaboration - becoming more like the member driven or member owned entity over time.
We figured we need to have partnerships around a particular problem or issue. Partnerships between housing groups and other groups that compliment their group was something we talked about.
Collaborating around something high impact that doesn't make you change but is also not something you can do on your own.
So here's our wish list. What would you need to take that first step?
- More opportunities to talk to people that have done it before.
- More organized information sharing - a clearinghouse of some kind. Information sharing vehicles to learn more about collaborative efforts.
- Putting some collaborative proposals together. Community development finance and capital raising was one thing this could be applied to.
We had a diverse group of people. We had practitioners, CDFIs, a start up and a couple of others. There was a lot of discussion about working well together. A lot of discussion of where you get to in the value chain.
We have a group of people we work with in a certain way but we don't know who else is out there. There was a desire to move further and to have a clearer understanding. How do we know we are having an impact? We really do need more basic market research.
We wanted dollars that could then be fed into product development and hopefully a higher impact because the right products are being crafted for people that need them.
The idea was shared infrastructure - getting past having the loans on their own loan servicing. Look at the market research and getting more granular about the need in this area. We also talked about getting the customer more in the picture.
Get credit bureau reporting going and having a better opportunity to report better to the credit bureas.
There were eight folks with different backgrounds - health care, early childhood education, growth philanthropy, domestic violence; and some geographic diversity as well.
We talked about opportunities and strategies rather then forming specific alliances. Folks brought a lot of experience to the conversation. What people needed boiled down to money.
We decided to talk about how collaboration can help with money (both efficiency and access); how do you avoid competing for dollars? We talked about how collaboratives can get us to new places? Can collaboration help to manage or sustain growth? Is this a long term strategy?
How can collaborations help with capital and resources? Efficiency is purchasing power. Partners with management capacity and expertise are important. Maybe access money that wouldn't be given to the smaller organization? We also talked about sharing fund raising research - who knows where the money is?
One way of doing this is building web pages to share information between the partnerships. Bringing in new services and hence bringing in new resources.
What do you look for in a partner? Relationships, trust, local knowledge and access to resources. The partners need to have trust and relationships to be successful.
How do you avoid competing for money? It's not just that you apply for the same grant. If you create a new organization and one organizaiton does healthcare and the other does childcare - if you apply twice you are competing that way.
The idea of working together well is something you need to foster internally first. Developing a checklist for groups that are thinking about collaboration. Are you ready? What to look for?
How can collaboratives get you to new places? Building a relationship of trust among clients. If a new partner is bringing in new services you have to build that trust. Creating an additional entity that is owned by each equally creates a new entity and new opportunities and the older organizations can keep what they did successfully. Getting diverse groups into the collaborative. Maybe you don't know anyone in these other areas? Community foundations, universities, etc. might be important as a third party - a neutral party. Who you choose is important. Maybe it should be someone that is a more neutral party?
Can collaboration help to manage and sustain growth? Cross referrals can offer a steady stream of clients. If ther are multiple providers for a particular service that you know about you can steer people into another one if needed. Making sure there is money for infrastructure for supporting expansion is important.
Setting a time table for growth - managing growth so you can keep up with it. And we need to have a business model for the revenue side. Doing joint fund raising to go for larger contracts ala Seedco is something we talked about. Ideally a collaboration is the best of both worlds. What makes these programs good is that they are small and they know their community - and you don't want to lose that. Collaboration has efficiencies of scale and access to larger grants. You know it works when you can do both - keep the local connections and gain access to larger grants.
We want to advocate for public policy changes that can make real difference in the community.
