Is your organization registered as 501(c)(3) status with the IRS?
YesWhere our solution team is headquartered or located:
Washington D.C., DC, USAWhich dimension of the Challenge does your solution most closely address?
What is the name of your solution?
Business Accelerator Academy
Provide a one-line summary of your solution.
Leading a business accelerator program supporting low-income, women, and BIPOC entrepreneurs to grow and finance their small businesses through a hands-on eLearning cohort.
What is your solution?
The CDF will run 9-week long eLearning cohorts for scaling businesses, serving the neglected need for such courses for small businesses in low- to moderate-income and BIPOC communities. CDF expects to enroll eight cohorts of ten participants in these virtual courses to drive an increased pipeline for small business loans through our CDFI in the projected years. Our aim for our program is for entrepreneurs to walk away with questions answered, ideas incubated, and equipped with the new tools and resources to take their business to the next level. Entrepreneurs also have the opportunity to meet and stay connected with fellow course participants to cultivate relationships with like-minded business owners. Our long-term goal as a CDFI is to partner CDF with CDFIs nationally to implement our technical assistance model on a broader scale. Additionally, our nonprofit is a certified CDFI and those entrepreneurs will be able to apply for a small business loan through our lending program.
What specific problem are you solving?
According to the U.S. Census, there are 3.25MM Black-, 4.22MM Latino-, 12MM women- and a total of 9.7MM racial minority-owned businesses. Limited access to finance limits the growth of minority-owned businesses, with the average value of Black-owned businesses in 2017 (Prosperity Now Scorecard) at $1,056,295, just 42% of the value of white-owned businesses, and Latino-owned businesses valued at $1,312,031, just 52% of the average $2,536,690 value of white-owned businesses. Latino business owners face challenges in accessing affordable sources of business financing from banks and formal financial institutions, despite having high rates of entrepreneurship. This is due to challenges related to language barriers, credit scores, cash-based business records, immigration status, social capital deficits, and other issues. The Stanford Latino Entrepreneurship Initiative reported that 86% of Latino business owners felt immediate negative impacts from COVID in 2020, a higher rate than other ethnic groups and that Latino business owners had less cash on hand when requesting PPP loans, yet were still only half as likely as white business owners to receive PPP loans. This was partly due to the lack of access to information and limited reach of major banks and financial institutions within the Latino communities.
In addition to the database of 4,000 Black- and Latino-owned small businesses that the CDF has compiled as a result of outreach and lending partnerships since 2020, the CDF will build an additional pipeline of loan requests from borrowers that do not qualify for affordable financing from banks or other sources through this accelerator program.
Explain how the problem you are addressing, the solution you have designed, and the population you are serving align with the Challenge.
Small businesses in distressed communities are typically owned by BIPOC communities. Our accelerator program supports and fosters BIPOC-owned small business growth and scale through technical assistance, financial education, and relationship building. We are also positioned to assist those businesses with access to capital through our low interest lending program, primarily financing BIPOC and low- to moderate-income communities. This is in alignment with the Challenge because as a nonprofit, our programmatic work provides resources to entrepreneurs in underfunded communities that help provide those small businesses with the opportunity to scale and succeed and in turn will create job and economic opportunities that revitalize neighborhoods.
Who does your solution serve, including demographics, and how does the solution impact their lives?
Our target population for our business accelerator program are entrepreneurs across the U.S. who are low-income, BIPOC, and women. They are currently experiencing a lack of access to financing opportunities with traditional banks and lending institutions, compared to their white and male counterparts. In large part, this is due to a dearth of financial resources and education available in their communities. Our team is equipped to meet their needs with our business accelerator program that is built with the right cultural competencies, expertise, and support to lead these entrepreneurs to better position themselves to financing opportunities to launch, grow, and scale their businesses.
Women entrepreneurs own about 30% of small businesses but receive about 5% of capital lent to small businesses. Women entrepreneurs represent almost half of those funded by CDF. 87% of our small business borrowers are Black or Latino. Over 30 business categories are represented in our lending portfolio, with the top five being consulting, construction/electrical, food and restaurants, transportation, and personal care services.
CDF’s efforts to increase its micro- and small business lending activities over the last two years occurred in the uniquely demanding context of the COVID-19 pandemic, which hit LMI, Black, and Latino communities the hardest. Since 2020, NCRC CDF has focused on helping small business owners and “gig economy” workers keep their businesses and dreams afloat. Over the last two years, CDF deployed $1.12MM in small business loans, with a median loan size of $19,000. A full 100% of loans were to Latino-, Black-, immigrant-, or woman-owned businesses.
Is the solution already being implemented in at least one of the Truist Foundation’s target geographies: North Carolina, South Carolina, Virginia, Maryland, West Virginia, Kentucky, Tennessee, Georgia, Florida, Alabama, Indiana, Texas, New Jersey, Ohio, Pennsylvania, Washington, D.C., Delaware?
Yes
If your solution is already being implemented, list which of the above US state(s) you currently operate and include those states not listed
We operate nationwide.
Is your organization’s mission to help launch small businesses and/or to sustain small businesses?
Our mission is to help launch and sustain small businesses through our business accelerator, micro- and small-business loan opportunties.
NCRC Community Development Fund (CDF) is a subsidiary of the National Community Reinvestment Coalition (NCRC), a U.S. Treasury-certified CDFI and 501(c)(3). Our mission is to help bridge the racial wealth divide by supporting entrepreneurship in America's underserved communities. CDF provides access to capital and business support services to Black, Latino, and low- to moderate-income entrepreneurs nationwide. We work to reduce poverty, lower unemployment across these communities.
What is your theory of change?
Black, Latino, women, and immigrant entrepreneurs lack access to affordable capital and culturally nuanced technical assistance opportunities. According to the University of California, Santa Cruz, during the start of COVID-19 from February to April 2020, 41% of Black- and 32% of Latino-owned businesses shut down compared to 17% of White-owned businesses. This is partly due to difficulties in securing affordable capital and partly because programs are not structured to support the specific needs of the Black and Latino communities.
The CDF seeks to fill this need by implementing a business accelerator that is both culturally nuanced and provides the skills and network necessary to secure affordable capital. The design of our program leverages cultural competencies from lived experience and consulting expertise in small business and financial services to create a business a culturally component accelerator that addresses the multifaceted barriers faced by Black, Latino, women and immigrant entrepreneurs through a system and structure that is culturally familiar. The accelerator addresses the social capital deficit faced by Black, Latino, women and immigrant entrepreneurs by providing mentorship and building an intentional network.
The impact of our solution is demonstrated through the trust that has been established with our previous clients. Many of our accelerator clients are from previous lending programs the CDF has implemented. Or they are referrals from our previous clients. This is tangible evidence that our programs have been successful in supporting these small businesses, and that our program taps into a need that is not otherwise present in the market.
Our solution's stage of development:
Pilot: a product, service, or business model that is in the process of being built and tested with a small number of beneficiaries or working to gain traction.Film your elevator pitch.
What is your organization’s stage of development?
Growth: A registered 501(c)(3) with an established product, service, or business model in one or several communities, which is poised for further growth. Organizations should have a proven track record with an annual operating budget.How many small businesses does your solution currently serve? How many will it serve in one year? In five years?
Currently serving 20 entrepreneurs through our business accelerator academies and 48 entrepreneurs through our small business lending program, will serve 160 individuals through our academy this year and aim to increase our loan pipeline through those individuals. Our goal is to scale our program to serve 1,000-5,000 individuals in the next five years.
How do you define the community you serve, and who are its stakeholders?
We serve low- to-moderate income communities, BIPOC entrepreneurs, and women-owned businesses. Our solution is executed by our staff and our staff and board are the key decision makers who also influence organizational strategy. We are a subsidiary of the National Community Reinvestment Coalition (NCRC). NCRC was formed in 1990 by national, regional and local organizations to increase the flow of private capital into traditionally underserved communities. NCRC has grown into an association of more than 700 community-based organizations in 42 states that promote access to basic banking services, affordable housing, entrepreneurship, job creation and vibrant communities for America’s working families.
How do you work with the community and your stakeholders to create community-based and place-based solutions?
NCRC CDF is a subsidiary of the National Community Reinvestment Coalition (NCRC). NCRC and its grassroots member organizations create opportunities for people to build wealth. We work with community leaders, policymakers, and financial institutions to champion fairness in banking, housing, and business.
How do you build trust within the community your organization serves and among small business owners?
Our mission is to support economic mobility and bridge our nation’s racial wealth gap — and we can’t do that alone. That’s why part of the Community Development Fund’s business model is working with institutional partners and investors who share our vision. We regularly communicate with our small business clients with opportunities and resources via email and phone banking.
What are your impact goals for the next year and the next five years, and -- importantly -- how will you achieve them?
RACIAL EQUITY FOCUS. Historically, the vast majority of CDF’s clients and beneficiaries have been people of color. CDFIs and other community organizations are well-placed to provide interventions designed to move the needle on income and asset poverty rates in communities of color. CDF will prioritize building DF member capacity as it relates to increasing equitable access to financial products to historically underserved communities, through intermediary lending and development services. Its direct lending will also prioritize Latino and Black borrowers.
CDF will also explore developing loan servicing products or services and/or access to infrastructure technology or services designed to increase member CDFI efficiencies and affordably augment staff capacity.
EXPAND AND DIVERSIFY FUNDRAISING. Building on NCRC CDF’s increased market presence due to new partnerships, expanded and diversified loan portfolio, and public recognition such as its 2022 Fast Company Top 10 Most Innovative Companies selection, NCRC CDF will work to develop new sources of grant funding. Diversified and unrestricted sources of grant funding will be essential in enabling NCRC CDF to continue to innovate and develop new approaches to meet evolving needs in its target market.
Taken together, these strategic goals will support organizational and lending growth of both CDF and NCRC member CDFIs, directly aligning with its mission to work with community partners to build wealth, and reduce poverty and unemployment in LMI communities nationally.
Why are you and your team well-positioned to deliver this solution?
CDF currently has a full-time team of six, all of whom have been hired since 2020: Executive Director Marisa Calderon; Program Managers Natasha Sim and Zaba Rashan, Development Director Grigs Crawford, and Special Assistant Christa Murillo. Operations Director Nayeli Pelayo joined the team in March 2022.
As Executive Director, Marisa provides overall management of CDF’s activities, and leads on the development of new partnerships and funding sources such as those that have driven growth since 2020. Natasha oversees CDF’s program management, compliance, and reporting, and Grigs is responsible for CDF’s communications, including development of its new website and advocacy-related work. Zaba is managing the launch of CDF’s technical assistance program in 2022. CDF’s capacity to continue to expand its lending will be greatly served by the recent addition of an Operations Director. In this newly created role, Nayeli will maintain internal controls, financial systems, and processes as its lending grows, including managing liquidity, compliance with budgets, and timely reporting to funders, investors, members, and regulatory bodies, including the CDFI Fund.
In addition, CDF will hire two additional staff in 2022 which will significantly strengthen capacity in marketing and lending operations. The Program Specialist will support lending outreach, as well as analyzing, monitoring, and recording financial data. The Underwriter / Client Support role will focus on directly supporting NCRC’s lending pipeline and provide support in loan processing, underwriting, and servicing.
Why are you applying to Truist Foundation Inspire Awards?
The requested award will directly support CDF’s ability to build innovation in developing new products and services that leverage its unique network and capabilities and also allow for increased small business lending by providing funds for loan loss reserves and for lending capital available to lend nationally, not restricted to certain states.
In which of the following areas do you most need partners or support?
If you selected Other, please use the space provided here:
N/A
Please explain in more detail here.
We are currently working on strengthening our board involvement and strategy. Additionally we'd love to be able to better leverage outreach, marketing, and communications opportunities to expand our client base, our fundraising and branding efforts. Additionally, we are seeking to improve our lending CRM and automate prequalification efforts.
What organizations (or types of organizations) would you like to partner with, and how would you like to partner with them?
CDF is closely partnered with community organizations focused on Black, Latino, Women, Immigrant and Returning Citizen communities. Through our partnership with NCRC, we also have access to over 600 member organizations, over 100 of which are CDFIs. We look forward to leveraging these partnerships in addition to our extensive borrower network to tailor our programming to the needs of the communities we serve.
Solution Team
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What is the name of your organization?
NCRC Community Development Fund