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How a Kresge grant helped leverage millions in investments to the CDFI sector in Hawaii

Social Investment Practice

In 2017, Kresge’s Human Services Program and Social Investment Practice made a $500,000 loan to the Council for Native Hawaiian Advancement (CNHA), an umbrella membership organization for Hawaiians and organizations owned, led by or serving Hawaiians. CNHA also operated a small Community Development Financial Institution (CDFI), where Kresge directed its support.

While getting to know CNHA, we spoke with and researched local CDFIs, funders, banks, healthcare organizations and government entities, all members of Hawaii’s community development finance system. The more I learned, the more I was struck by the little investment in CDFIs in Hawaii. It seemed to me that the CDFIs could, at the very least, capture more regular awards from the CDFI Fund. This Federal Treasury department awards grants, loans and tax credits to CDFIs totaling hundreds of millions of dollars annually.

To begin this conversation, we convened six local CDFI loan funds, three that explicitly serve Native Hawaiians and three that serve all residents. We discussed the opportunity to increase the amount and frequency of CDFI Fund awards and how the application process could serve as an organizing principle for a loan fund capacity-building program. We sketched out a three-year program that would cost about $1 million. With the help of some local funders, I set out to raise the funding while the CDFIs continued to meet to develop the program.

Amazing things happened. Local funders were extremely receptive. Including a $200,000 grant from Kresge, we raised about $900,000. And the CDFIs began communicating and partnering more than they had previously, which boosted a critical narrative shift: they began to talk about the CDFIs in Hawaii as a community development finance system.

I had three hopes for the program. Because CDFI Fund applications are onerous, I wanted to ensure the CDFIs had systems in place that could “spit out” application data. That itself would be a capa city-building experience. I believed that by engaging the CDFIs as a group, greater cooperation and a coherent, more effective local community development fin ance ecosystem would emerge. And participation from local funders could help those grantmakers achieve their own goals of using non-grant forms of capital, as strong CDFIs are easier to lend to. We hypothesized that if the CDFIs each applied annually (hopefully with increasing quality) to the fund over three years, that effort would facilitate at least $5 million in CDFI Fund awards to those applicants.


So far, the results have been remarkable. The total assets of the six organizations have doubled. The group pulled down $4.9 million in the first two years, a year ahead of target. Four of the six CDFIs have received loans from new investors. And funders, local investors and government agencies are more aware of their local community development finance sector.

This program has been valuable, and I hope funders and the CDFIs see the annual applications as a prudent investment. The real kudos are due to the CDFIs and program administrator Hawai‘i Community Foundation, along with the consultants, philanthropists, foundation staff and other local advocates for the sector, many of whom are quoted in this report. My admiration and gratitude go out to each of them.

To anyone looking to support CDFIs in your local area, I hope you can find inspiration and models in the stories of these six CDFIs, which are collected in a new report, Tapping In. To funders and investors interested in Hawaii, there is plenty to learn from this case study, namely more about the opportunity to invest and lend in Hawaii’s community development finance sector.

And to the CDFI participants and partners, mahalo friends — look what you have accomplished!

Download the Case Study: Tapping In: A Case Study on CDFI Sector Collaboration and Growth in Hawaii