INVESTING IN COMMUNITY
Check out some of the bright lights of our 2023 investments
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The Big Case for Small Business Support
SMALL BUSINESSES SIT AT THE HEART OF LISC'S MISSION: they drive the U.S. economy, accounting for two-thirds of jobs created over the last 25 years and 44 percent of gross domestic product. They’re also an integral part of healthy, dynamic communities and a platform for building family wealth and well-being. Our work focuses on ensuring that systemically disadvantaged entrepreneurs—including people of color, residents of disinvested areas, immigrants, and women—have the tools they need to build flourishing businesses that help their families, communities, and nation prosper.
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Providing access to capital is one of the ways LISC helps level the playing field. Last year, through grants and affordable financing, LISC widened opportunity for hundreds of small enterprises, the overwhelming majority owned and operated by people of color and women who have faced challenges accessing credit. Take our partnership with comedian and entrepreneur Kevin Hart and tequila maker Juan Domingo Beckmann on The Coramino Fund, through which we’ve awarded more than $1 million in grants to 100 Black and Latino entrepreneurs.
In 2023, LISC small business lending continued to build capacity for small enterprises with a focus on entrepreneurs of color and other business owners that serve socially and economically disadvantaged communities. The Entrepreneurs of Color Fund, now active in 10 markets across the country, deployed $185 million in lending to nearly 3,000 small businesses. We do this work through 34 partner CDFIs who are as committed as we are to decreasing the racial wealth gap through capital access.
We also work with small businesses owned by people who have faced challenges building capacity to compete for supplier contracts in the healthcare industry, with help from capital made available through the Abbott-LISC Initiative to Support Diverse Businesses in Health. Most suppliers we work with report turning down contracts due to lack of available working capital to purchase inventory or hire staff, which can lead to hundreds of thousands of dollars of lost contracts annually. We provide working capital loans to bridge financing gaps so entrepreneurs can confidently compete for larger contracts.
I always knew that I wanted to be my own business owner.”
In an initiative sponsored by JPMorgan Chase & Co., LISC also offered no-cost, unsecured financing to small businesses owned by socially and economically disadvantaged entrepreneurs who have struggled to build capacity. This program, too, aims to strengthen their ability to compete for corporate procurement contracts.
LISC’s Black Economic Development Fund, meanwhile, has provided nearly $212 million in critical bridge financing to Black-led financial institutions and businesses, and other organizations doing business in predominantly Black communities.
In addition to capital, business owners need technical assistance and professional services. With this in mind, LISC supports a nationwide network of more than 170 business development organizations (BDOs) that last year offered entrepreneurs free coaching and advice on challenges from adopting new technology to securing affordable commercial space to developing resiliency against place-specific climate threats. These trusted on-the-ground partners understand the needs of local business owners and provide culturally competent services in their preferred language, whether they’re looking to launch a food enterprise in a home kitchen or get financing to take a legacy business to the next level.
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Towards a Green and Resilient Future
THE YEAR 2023 SET A NEW RECORD for U.S. weather and climate disasters with 28 billion-dollar events that upended lives and inflicted losses in communities all over the country. LISC’s philosophy on this problem is simple: Climate change affects everyone. Solutions must be equally inclusive.
LAST YEAR LISC INVESTED INTENSIVELY to ensure the low-wealth and rural communities and communities of color we work with play an integral part in the transition to a greener, more resilient economy. These vulnerable communities often suffer the brunt of climate impacts like flooding and deadly heat, while lacking the resources required to both reduce greenhouse gas emissions and harden assets against extreme weather.
LISC supports green initiatives that are rooted in these communities, meeting residents’ everyday needs and centering their priorities. Moving forward, this work will be exponentially intensified with the support of a $2 billion grant from the EPA’s Greenhouse Gas Reduction Fund, awarded in April 2024 to LISC and our partners in the Power Forward Communities coalition.
Noting just a few highlights from an active year, in 2023 LISC:
▸ Advanced construction and retrofitting of affordable housing for energy efficiency, resiliency, and cost savings. For instance, LISC issued loans for green building projects in Philadelphia, rural California, and Hartford, CT. LISC Boston helped affordable housing providers overcome technical and financial hurdles to install rooftop solar photovoltaic panels at affordable housing sites across Massachusetts.
▸ Helped establish green community infrastructure. LISC New York, for example, launched a multi-pronged program introducing clean, convenient, affordable multi-modal travel to the East Side of Buffalo, a transit and food desert.
▸ Supported disaster response and recovery in communities where we work and promoted community resiliency to climate hazards. Partnering with the U.S. Department of Housing and Urban Development, LISC created a comprehensive toolkit for local planners on how to incorporate resiliency considerations in their local building codes and demonstrating how this strategy can protect vulnerable neighborhoods from the worst impacts of climate change.
▸ Connected disadvantaged workers to opportunities in the green economy, for instance, living-wage weatherization jobs in Boston and, in Arizona, construction-related work emerging from a major effort to upgrade building energy codes across the state.
Powering Forward with Green
Together with our partners in Power Forward Communities, LISC has been awarded a $2 billion National Clean Investment Fund grant to help decarbonize affordable homes and make our communities healthier and more resilient in the face of climate change. These funds will enable us to ramp up our ongoing critical green housing, job training, and facilities investments and work to ensure that no one is left behind in a transition to the green economy.
RIGHT: The Tempe Micro Estates, an energy-efficient, planned housing community. As part of a deed-restricted community land trust, they’ll be affordable—and environmentally sustainable—for generations to come.
PHOTO CREDIT: David Crummey
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Nurturing Leaders for Now and Tomorrow
SINCE OUR FOUNDING IN 1979, LISC has been supporting individuals—community members, housing developers, CDC employees, students—in developing essential skills to become effective leaders. We focus on nurturing leaders who reflect the demographics and lift up the concerns of the communities they serve. Although this work is hands-on and progresses gradually, its goals are vital for creating the society we all want to live in. We’re witnessing remarkable results from these efforts.
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Take our Historically Black Colleges and Universities (HBCU) internship program, funded by the Citi Foundation. Since the program’s inception in late 2022, LISC has invested $800,000 to place 74 HBCU students from 33 separate educational institutions in paid, part-time internships at community development financial institutions (CDFIs) around the country. These talented young people are growing their careers even as they help build a healthy, diverse CDFI sector. They deserve equitable access to the stipend-supported internships that allow students to pursue academic success and meaningful work at the same time.
Our AmeriCorps program is another shining, and longstanding, example of this leadership development. Last year alone LISC placed nearly 100 AmeriCorps members to serve in 73 local organizations across the country where they spearhead valuable projects, engage community residents, and gain skills and experience they can put to work in community-serving careers. Through an initiative launched in 2021 called the Economic Mobility Corps (EMC), a partnership between the CDFI Fund and the federal AmeriCorps program, LISC has also been placing service members at CDFIs. With support from the Citi Foundation, LISC AmeriCorps EMC members provide financial counseling to community members in areas underserved by traditional financial services providers, boosting CDFIs’ capacity to support household financial health in a holistic way.
Since our AmeriCorps program began, we have placed hundreds of members in more than 30 states and Puerto Rico, across 100+ communities in urban and rural areas.
For decades, LISC has also been investing in training and technical assistance for emerging affordable housing developers and others dedicated to creating affordable homes and other key community assets in historically underinvested places. LISC Puget Sound’s Housing Equity Accelerator (HEA) is a prime example. Supported by the Amazon Housing Equity Fund, the HEA aims to increase the supply of desperately needed affordable housing in Puget Sound by supporting the growth of emerging developers with intensive training, networking opportunities, and access to grants and loans to help bring their projects off the ground. The HEA’s inaugural (2022–23) cohort of 13 developers had 25 projects in the pipeline representing $580 million in total development. A second cohort of 20 developers began in March 2024.
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Affordable Housing at the Forefront
LISC HAS BEEN LEADING AND INNOVATING in affordable housing finance for more than four decades. We designed some of the market’s earliest affordable housing loans for multi-family development in the early ‘80s, helped prove the value of Low-Income Housing Tax Credits (LIHTCs), and developed models of securitization to create liquidity for community development groups and the affordable housing market writ large.
SINCE THOSE EARLY DAYS, we have diversified our community development work and now support a wide array of services, such as family wealth-building and criminal justice intervention. But housing is still at the core of many of our day-to-day efforts. In fact, LISC supported the development and preservation of 18,275 homes in 2023 alone.
More specifically, our National Equity Fund affiliate invested more than $1.85 billion in affordable rental housing last year through a combination of LIHTC equity and housing preservation loans. The LISC national lending team worked with our local staff to pour $232 million in affordable financing into rental and homeownership projects, while LISC Fund Management deployed tens of millions of dollars to support housing progress through innovative investment vehicles 32
like the Charlotte Housing Opportunity Investment Fund, the Detroit Housing for the Future Fund and the Dallas Housing Opportunity Fund.
Our local program teams also utilized high-impact grants to fuel housing gains —including $22.5 million from Wells Fargo's WORTH program that is bridging racial gaps in homeownership, as it supports first-time homebuyers.
Across our programs and affiliates, LISC invested
more than $2 billion
to create safe, affordable homes in 2023.
LEFT: LISC supported longtime partner HACE CDC in Philadelphia to develop the mixed-use housing community Rafael Porrata-Doria Place, in the city's Centro de Oro commercial corridor, a historically Latino cultural and business hub. Photo credit: Daniel Jackson for Embassy: Interactive
ANOTHER OF LISC'S LONG-STANDING STRENGTHS is our ability to scale and replicate successful strategies. Home repair programs, for example, are a centerpiece of our housing preservation work, providing affordable capital to low- and moderate-income households as a wealth-building tool for generations to come.
In 2023, we expanded a highly successful home repair program launched in Detroit in 2015 to Memphis to help households fix their roofs and windows, remove lead paint hazards, and attend to other critical repairs. The financing helps families protect their assets while also helping communities fend off speculators hunting for distressed properties.
“The access to capital through these home repair programs is a powerful preservation tool,” said Damon Thompson, LISC director of housing. “The programs are wealth-builders for families and help to increase property values for communities as well.” The LISC home repair model is being replicated in Cincinnati and Cleveland in 2024.
LISC has also made it a priority to invest in ways that dismantle exploitative practices. Last summer, LISC Strategic Investments closed on a $10 million commitment to the Blackstar Stability Distressed Debt Fund, which is acquiring a portfolio of contracts for deeds—essentially, extractive rent-to-own schemes that promise homeownership but rarely fully deliver. The fund is purchasing these contracts and offering residents affordable mortgage financing, so they can actually build equity.
“This is a tremendous financial opportunity to help move people out of predatory lending contracts,” stressed Michael Skrebutenas, LISC senior vice president for housing.
To protect homeowners, LISC Jacksonville has also been deepening its work on heirs’ properties—in the process, helping integrate lessons learned into other LISC preservation efforts around the country, like the local home repair programs. “We can identify problems and intervene to help—before a family is at risk of losing their home,” noted Kristopher Smith, community development officer with LISC Jacksonville.
ABOVE: On the site of a self-help housing community-in-the-works, led by longtime LISC partner Community Housing Improvement Program (CHIP) in Paradise, CA, a community destroyed by forest fire in 2018. Photo credit: Rebecca Canterbury
Finally, LISC is continuing its history of developing investment tools to target specific market gaps. Most recently, our national housing team has been working on a new loan product to help recapitalize small, at-risk Naturally Occurring Affordable Housing (NOAH) properties, which do not benefit from public funding. LISC will pilot the product in several cities in 2024, with the goal of protecting small landlords and helping keep the rents they offer affordable.