In 2006, CDFI Virginia Community Capital (VCC) was founded with $15 million in seed money from the state of Virginia to fund economic growth in underserved areas. In the years since, VCC has turned that investment into a $1.8 billion dollar impact in the state. This past fall, they’ve brought in Opportunity Finance Network alum Amir Kirkwood to lead their next chapter of growth.
Kirkwood is only a few months into his new role as CEO, but he already has big goals around expanding access to credit as well as advisory and investment management services to small businesses, particularly among underserved communities per the original mission of VCC. He also intends to build on one of the things VCC does best: bringing together a wide swath of agencies — the state, cities, economic development agencies, universities and other CDFIs — to fund community growth in Virginia.
He spoke to us about how CDFIs can foster that multi-level investor collaboration, as well as new efforts to expand access to capital for BIPOC- and women-led businesses across the state.
VCC recently launched the Economic Equity Fund (EEF). What will be happening with that in the coming months?
The Economic Equity Fund was a targeted effort to expand capital access to BIPOC and women-led businesses in the Richmond area. We believed the benefits of this program could be expanded to benefit similar communities across the Commonwealth. Using our capacity as a lender and facilitator of technical assistance, we’re utilizing our bank and loan fund to increase EEF lending in Hampton Roads, Southwest Virginia and Northern Virginia.
Do you see more efforts like this in the works?
Yes. It will require bringing more investors to VCC who share a common focus on flexible and longer-term capital to provide both financing and advisory support to the businesses and entrepreneurs we most seek to help.
In early 2020, VCC subsidary LOCUS Impact Investing was tapped as the manager of a newly formed $33.1 million national guarantee pool to encourage community development called the Community Investment Guarantee Pool. How do you anticipate that pool continuing to evolve?
To me, the commitment by our philanthropic investors to seed this financial product should attract not only additional philanthropies to invest, but also institutional investors, corporations and high-net-worth investors able to take on contingent liabilities.
When you look at the success rate of community development intermediaries to generate not only a return of capital, but a return on capital with impact, an investment in CIGP seems a natural fit. As more investors recognize the opportunity to diversify beyond PRIs (program-related investments) and loans to provide credit enhancement, CIGP will grow and likely inspire new guarantee providers.
How critical is collaboration with community stakeholders and city government?
Collaboration is essential to generating true impact. Financing alone never has been and will never be the sole need of a community. Our work will continue to engage local government and community partners, both through collaboration on deal structuring and as customers. We will also continue to be advocates for community and place-based investment with the state and federal government.
We also hope that partners to VCC and other CDFIs recognize the importance of engagement that is inclusive of the community we all seek to serve. No one seeks to design funds or programs that are “thrust on” to communities, but financing should reflect the objectives of local stakeholders. As a CDFI, it is important that we play a role to help bridge the interest of investors and government with the local desires of communities.
What advice do you have for communities working to create economic growth for under-funded sectors?
It is important that communities seeking these outcomes recognize the possibilities and limitations of investors. Investors, while well-meaning, may not always make available capital that is practical with supporting the appropriate community-level objectives. Being clear is important.
Inclusion also — this is not a zero-sum game. Local strategies should include government, community organizations, local businesses and investors.
Why is your work important to you?
I have dedicated a significant portion of my career to the belief that financing can be a tool to generate both economic and social equity. I am convinced that capital is not fundamentally extractive and can increase equity, especially for communities that have been previously disinvested for reasons ranging from economic distress to transitions in the economy, historic racial discrimination and underinvestment in the social determinants of health.
This story is part of our series, CDFI Futures, which explores the community development finance industry through the lenses of equity, public policy and inclusive community development. The series is generously supported by Partners for the Common Good. Sign up for PCG’s CapNexus newsletter at capnexus.org.
Hadassah Patterson has written for news outlets for more than a decade, contributing for seven years to local online news and with 15 years of experience in commercial copywriting. She currently covers politics, business, social justice, culture, food and wellness.