Essays on People, Place & Purpose

Investing in What Works for America's Communities

What Problem Are We Trying to Solve?

by Mark A. Pinsky

I would suggest four key attributes of the CDFI brand:

  1. We build and operate organizations and approaches that are profitable but not profit-maximizing. Although there are many important things that are not profitable (public goods), these are not what CDFIs can provide—government and philanthropy must take the lead role.
  2. We operate as private-sector enterprises and not as byproducts or extensions of government programs or foundations; we retain the ability to make independent choices and to put mission before self-interest.
  3. We measure success by both financial results and impact— quality jobs, quality affordable housing, quality facilities and services—that produce opportunities for low-income, low-wealth, and other disadvantaged individuals, communities, and investors. We must sustain ourselves and our beneficiaries now and in the future.
  4. We hold ourselves accountable to our customers and our funders, our beneficiaries and our investors, and our communities and our nation. Our success or failure is collective, as each of our institutions alone lacks the resources and scale to provide relevant solutions proportional to the challenges our nation faces.

Put another way: Our solutions must be authentic, sound, sustainable, and scalable.

These attributes may be enough to build a movement brand that both maintains discipline internally and inspires confidence to a larger audience. When the rubber meets the road, brand is not just what you want to believe about yourself. It is what you do and how you do it. If your actions, services, products, and decisions are not true in an obvious way to your idea about your organization, your brand is inauthentic and worth very little. When you fall back on an inauthentic brand in a tough moment, it does not support the weight of your good intentions.


Will our work be relevant to the problems of tomorrow—the challenges that low-income, low-wealth, and other disadvantaged people and communities will face?

I spoke recently at a graduate school to an audience of students passionate about community development. One young woman spoke of her frustration as an intern in the federal government, witnessing the passion for cutting discretionary government spending and the lack of passion for community development. When, she asked, can we turn the debate on its head to focus on the good things that community development does?

I stumbled to reassure her by explaining the progress I believe CDFIs are making: the increasing number of federal agencies reaching out to CDFIs, steady funding for 2012 for the U.S. Treasury’s CDFI Fund, the potential of the Small Business Administration’s Community Advantage program, and more. But I could not leave my answer there. I wanted to be honest about my hope that she and her peers will lead us beyond community development. “As long as we are talking about ‘community development,’” I told her, “we are going to lose.”


  1. The emerging meme among impact investing leaders is that impact investing will supplant and replace community development finance. Impact investing has the potential to play an important role, but that role will have little to do with benefitting low-income, low-wealth, and other disadvantaged people and places. Mission-related investing followed a similar arc over the past decade or so; it is important but its value to the target markets that CDFIs serve is structurally limited.
  2. For more information see

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Investing in What Works for America’s Communities is a joint project of the Federal Reserve Bank of San Francisco and the Low Income Investment Fund.

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Funding for this project was generously provided to the Low Income Investment Fund by the Citi Foundation.