There is a 30-year track record of investing in Creative Places and Creative Businesses as part of comprehensive community development. Conversations with Community Development Finance Institutions (CDFIs) across the U.S. reveal extensive experience and portfolio exposure to Creative Places and small Creative Businesses.
Today many CDFIs — including the two largest national groups, Local Initiative Support Corporation (LISC) and Enterprise Community Partners — have dedicated teams focused on creative placemaking within their overall strategies.
Small business lending is a core part of community development strategies, with 32% of non-credit union CDFI loans going to businesses and microenterprises.1 LISC and Enterprise are moving away from a concentrated focus on affordable housing, and beginning to investigate how they can help create quality jobs in low income communities. There are already examples of CDFIs like Coastal Enterprises Inc. and Colorado Enterprise Fund supporting small businesses in their local Creative Economy to build community wealth and grow new jobs.
The existing CDFI system can be used to connect impact investment with Creative Places and Creative Businesses for a fast start and scale up of the Creativity Lens. According to the US SIF Foundation Biennial Report of U.S. Sustainable, Responsible, and Impact Investing Trends, community investing is already one of impact investing’s fastest growing sectors. Assets nearly doubled between 2014 and 2016 to $121.6 billion across community development banks, community development credit unions, community development loan funds, and community development venture capital funds.2
Upstart Co-Lab’s recent pilot with the Calvert Foundation demonstrates that the existing CDFIs can be used to link impact investors to the Creative Economy, channeling this growing commitment of impact investors to community development. In November 2016, Calvert Foundation closed a $2.5 million investment in Artspace, the nation’s leading nonprofit developer of arts facilities, creating live-work housing, artist studies, arts centers, and commercial space for Creative Businesses. This investment was catalyzed by impact investor Lorrie Meyercord’s $1 million investment in Calvert Foundation’s Community Investment Note, with an additional $200,000 sub-debt investment. By mid-2017, five individuals and one foundation had invested an additional $500,000 in the Community Investment Note allocated to Artspace and affordable artist housing.