On June 15, the U.S. Department of the Treasury announced that 863 certified community development financial institutions (CDFI) will receive funds from the $1.25 billion CDFI Rapid Response Fund. The fund, created through the Consolidated Appropriations Act 2021, is designed to aid economic recovery efforts from the COVID-19 pandemic.
Lewis & Clark Development Group (LCD Group) is among the CDFIs receiving funding. CommunityWorks North Dakota, which is part of LCD Group and a CDFI, has been awarded $1.8 million to assist in the organization’s work at boosting North Dakota’s economic recovery.
Coordinating the Response to the Pandemic’s Economic Fallout
LCD Group is classified as one of 245 organizations serving rural populations. Since the beginning of the pandemic, LCD Group has been coordinating an economic response at regional and statewide levels. LCD Group, through the Lewis & Clark Regional Development Council (RDC), has been providing recovery services and financing for a ten-county region in south central North Dakota. Through both CommunityWorks North Dakota and various programs such as the North Dakota Opportunity Fund, among others, LCD Group has been assisting businesses across the state.
“We have always been positioned to bring businesses, lenders, economic development groups, and local leaders together to address local economic and community development issues. The pandemic really highlighted how important these capabilities are,” says Ekstrom.
“Lewis and Clark Development Group has been able to respond quickly and strategically in offering critical assistance to small businesses and communities.”
Using the Funds to Address Affordable Housing
CDFI Rapid Response funds may be used to support activities such as financial products, financial services, development services, certain operational activities, and build capital and loan-loss reserves. For LCD Group, the $1.8 million infusion will be applied to the state’s growing affordability housing challenge.
“The pandemic made North Dakota’s affordable housing challenge even worse. We are going to use these critical funds to expand our single-family and multi-family lending programs. Many communities, especially rural towns, are seeing their multi-family properties at risk of losing their affordability. We are going to also use some of the dollars to acquire these properties to the benefit of residents and the peace of mind of community leaders,” says Ekstrom.
Leveraging Dollars to the Benefit of North Dakota Communities
In making the announcement, U.S. Treasury Secretary Janet Yellen stated that CDFIs lift up the entire economy, stating: “We know that for every dollar injected into a CDFI, it catalyzes eight more dollars in private-sector investment, meaning that today’s announcement might lead to an additional $10 billion in investment.”
Ekstrom seconds Yellen’s point. “Historically, when Lewis and Clark Development Group has received similar funding we have leveraged those funds at a much higher rate than the national average. Our historic leverage for every dollar received has ranged between 80 to 90 dollars per one dollar of grant funds. We leverage these funds with other state, federal, and local dollars as well as private capital. It’s very much a sound investment.”
About the CDFI Fund: Since its creation in 1994, the CDFI Fund has awarded more than $3.9 billion to CDFIs, community development organizations, and financial institutions through the Bank Enterprise Award Program, the Capital Magnet Fund, the Community Development Financial Institutions Program, the Financial education and Counseling Pilot Program, and the Native American CDFI Assistance Program. In addition, the CDFI Fund has allocated $61 billion in tax credit allocation authority to Community Development Entities through the New Markets Tax Credit Program, and closed guaranteed bonds for over $1.7 billion through the CDFI Bond Guarantee Program. More information about the CDFI Fund and its programs may be found at www.cdfifund.gov.
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