Question: Are there funding sources that the Board of Directors and senior management of minority owned institutions should be aware of?
Answer: Yes there are. For example, two Treasury Department programs include the Minority Bank Deposit Program and the Community Development Financial Institutions Fund also known as CDFI Fund.
The Minority Bank Deposit Program was developed by the Treasury to help preserve and strengthen minority business enterprises. Eligible participants include commercial banks and savings and loans that are minority owned or minority controlled. The program encourages federal agencies, state and local governments and the private sector to use MBDP participants as depositaries and financial agents. An eligible financial institution must apply and be certified by the Treasury to participate in the Minority Bank Deposit Program.
Question: Could you provide some background on the Community Development Financial Institutions or CDFI fund?
Answer: Certainly. The CDFI Fund is a Treasury program that awards money and tax credits to community based organizations that work in low income urban and rural communities across the country. The CDFI Fund’s mission is to expand the capacity of financial institutions to provide credit, capital, and financial services to underserved populations and communities. The CDFI Fund does not make loans directly to individuals nor does it finance specific projects. Instead, the Fund provides financing to CDFI’s that work in low-income communities.
For more information you can log on to the CDFI Fund website at www.cdfifund.gov.
Question: Would you please explain the concept of social investing and diversity investing.
Answer: Yes. Social investing involves firms that specialize in community development and socially responsible investing steer clients toward minority institutions that have sound financial performance while serving economically distressed neighborhoods.
Diversity investing is the result of corporate investors who make equity investments and place deposits in minority owned financial institutions.