How the Citi Foundation is Helping to Build a Marketplace for U.S. Community Investments

By Kristen Scheyder

If you’re a regular reader of Triple Pundit, chances are good that you’ve heard of “impact," “sustainable” or “mission” investing, which according to their broadest definitions mean investing to generate a social and/or environmental impact, alongside a financial return.

Chances are slimmer, however, that you’ve heard as much about CDFIs (community development financial institutions), which have a 30+ year track record of investing in underserved U.S. markets for social and environmental impact. CDFIs make loans and investments to foster economic equality, environmental sustainability, food access, health care, education, affordable housing and more. As financial intermediaries, CDFIs offer a convenient way for mission-driven investors to target their capital towards particular economic or environmental issues – while prudently managing risk.

The Citi Foundation has supported CDFIs for more than two decades, believing in their power to create economic opportunity for low-income individuals, families and their communities. CDFIs are one way to increase the flow of capital and the supply of financial products and services in the open market to those outside the economic mainstream. Through thought leadership, pro bono involvement and our financial support, we aim to build and expand this important industry to ensure greater access to capital for all.

A crucial component of expanding CDFI capacity is through the increased availability of up-to-date and reliable performance information. That’s why, together with our partner Aeris (formerly known as CARS Inc.), an information service that provides data, analysis, ratings and advisory services to CDFI investors, we worked to build a solution that supports investors’ research and due diligence on CDFIs, while simultaneously creating a useful management tool for CDFIs.

The result? The Aeris Cloud, an online database that for the first time gives investors access to analytic tools on the financial and impact performance of CDFIs. These tools include standardized, GAAP-compliant, real-time data that enables investors to target specific impact areas in which they wish to invest (e.g., environment, energy, healthy food, women), and provides on-the-spot access to quarterly performance data to underwrite and monitor these investments. In addition to the real-time peer and industry trend analyses, the Aeris Cloud gives subscribers access to Aeris Ratings Reports – the only third-party assessment of a CDFI’s financial strength and impact performance.

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The Citi Foundation will continue to work with organizations like Aeris, and other leaders in the CDFI industry, to help meet the financial needs of lower-income communities and promote economic progress. Expanding the marketplace and breadth of U.S. community investing to grow the supply of capital for CDFIs will continue to be an important component of that work.

Kristen Scheyder leads the Citi Foundation's U.S. Financial Capability, Inclusive Finance and Urban Transformation portfolios. She collaborates with national organizations to develop innovative programs that expand Citi's partnerships and initiatives with U.S. municipal and community development organizations, to innovate, attain scale and achieve financial sustainability. Kristen has been a community development practitioner for 20+ years, with experience in the banking, government and nonprofit sectors.