Why do CDFIs choose people or place-based strategies?

Blog post originally published 11/12/2021

What is FUND CI thinking about this fall?  People and Place-based strategies.

Over the summer, FUND CI conducted an online survey of CDFIs and found that CDFIs are using the following strategies:

·        23% place based

·        22% people based

·        55% both place and people based

The survey requested information on the reasons that CDFIs employed people and/or place based strategies. The majority of CDFIs indicated that strategy usage was based on alignment with mission and a smaller group reported that it was based on its organizational theory of change. Notably, CDFIs did not base community development strategies on funding or CDFI Certification requirements however they did report significant differences in CDFI target markets, geographic footprints, and designated populations.

 The results show that while a majority of CDFIs employ both place and people based strategies, there are significant numbers of CDFIs that focus on one strategy based on mission. Will the influx of capital into the industry lead to any changes and how will CDFIs respond?