Member Spotlight Stories
Interview with BlueHub
BlueHub Capital is a national CDFI with of mission of building healthy communities where low-income people live and work. Our lending practice recognizes that concentrated poverty in communities of color is the by-product of historic and systemic racism and of policies and practices that limit investment in Black, Hispanic, immigrant and other communities of color.
For over 35 years, we have targeted lending that builds opportunity in communities that are both economically and racially segregated. -BlueHub’s charter school investments are a core part of that work. We invest in public charter schools that effectively serve students in communities of color where other public schools are underperforming. For BlueHub, “effective” means nurturing children’s social-emotional health as well as academic success; creating a welcoming, supportive environment for all students; engaging parents and caregivers in their children’s education; and celebrating students’ history and culture.
BlueHub was one of the founding members of the collaborative. We were excited to join it because of its explicit focus on racial equity. Although much of our charter lending was focused on supporting low-income students of color, we wanted to enhance that focus and to do the work with more intentionality and credibility. We thought that a good way for BlueHub to do that would be to learn with and from peers at sister CDFIs and from educational organizations led by and serving people of color (such as VOW, Discriminology, and WeAre).
(It’s been excellent; couldn’t limit it to just 1!) 1- Intentionality in this practice is essential and so are disaggregated data. Ask specific questions about racial equity for every single deal you do, and obtain data about discipline and scores, not just for all students, but for specific racial and economic sub-groups of students. 2 – Get comfortable in an authentic learning space. Ask questions about practices associated with racial equity and listen with ears wide open. 3-Respect and welcome teachings from educators. Educators striving to enhance their curricula, hiring, culture, etc. so that they better support students and families of color are usually excited to share their work. This often is a place where lenders are learning from borrowers.
Interview with LIIF
Quality education is essential to equitable access to well-being, including wealth-building opportunities. It is a critical factor in enhancing a person’s opportunity for economic mobility and asset growth, and puts every child in a position to excel. LIIF has invested more than $700 million in high-performing schools to create and enhance 101,000 spaces for students and generate over $2.9 billion in increased earning potential for youth.
LIIF helps schools operate stable, sustainable learning environments by providing educational organizations and school developers with flexible and affordable financing options. LIIF provides high-performing charter schools with loans for new developments and rehabilitation of existing facilities. LIIF also provides financing through New Markets Tax Credit transactions and long-term permanent financing.
For decades, LIIF has worked predominantly in communities of color, yet we grapple with the fact that despite this, people of color continue to be most acutely impacted by deep, persistent inequities. To address these inequities, LIIF has adopted a new mission and vision of communities of opportunity, equity and well-being for everyone in the United States. We have centered racial equity within our 2020-2024 Strategic Plan and have committed to driving $5 billion in investments over the next decade to advance racial equity. The formation and learnings of the CDFI Racial Equity Collaborative on Education under Self-Help’s leadership has been an important part of understanding how to operationalize racial equity in our lending.
In March 2021, LIIF introduced a new 12-month pilot to incorporate an evaluation of schools’ institutional commitments to racial equity in our internal underwriting guidelines, using our Racial Equity Assessment Tool for Education (REATE). LIIF’s REATE is informed by the research-based assessment tool known as the Racial Equity Matrix developed by the CDFI Collaborative and developed by Village of Wisdom, Discriminology. We are using this pilot to help us learn more about how schools create equitable learning environments, identify opportunities to enhance a broader array of LIIF’s lending to advance racial equity and to embed a racial equity lens in our everyday lending activities. In addition, we hope to serve as a connecter among schools in our portfolio and others engaged with CDFI Collaborative members to support knowledge exchange on equity best practices in the field.
Interview with LISC
LISC has been lending to charter schools since 1997. Over the years we have funded the creation of 106,400 high quality school seats for children in communities across the United States. Our goal is to ensure access to affordable capital for non-profit charter schools operating in communities that have been historically under-resourced, so that precious public resources can be reserved for use in the classroom.
LISC joined the Collaborative to explore best practices in evaluating whether a school was incorporating racial equity into their school model. As a team, we wanted to learn from experts in the field and we wanted to be aligned with and create an industry consensus with our CDFI partners. We have found this learning to be foundational to our mission. At LISC CSF, we believe that all children deserve access to a successful public school in their community. Historically, there has not been equitable access to high-quality public schools because of structural racism and racist policies. We cannot approach our work without naming the harm done by racist policies and without actively and deliberately supporting schools that are working toward dismantling racism and redirecting power and resources to Black, Latinx, AAPI and Indigenous communities.
We have learned to ask open-ended, high level questions. If we ask a school leader to explain which aspects of restorative justice they have incorporated into their school model, we may get a textbook answer regardless of what is occurring in the school. If we ask broader questions such as “How do you build positive culture at your school?” we will often hear in-depth and authentic answers, revealing what the school or school leader truly cares about. It also positions us, as lenders, to become learners. We are not experts in restorative justice, for example. When we ask open-ended questions, we learn why and how our school leaders are dismantling racism in their schools and what they have found to be best-practices.
Interview with NFF
NFF is a nonprofit lender, consultant, and advocate for putting money to work in better ways for social good. We believe the best way to do this is by improving the flow of money to community-centered organizations led by and serving people of color. We’re part of a growing movement to shift funding and financing practices to better support these organizations that have long persevered through racist, systemic underfunding.
NFF believes that charter schools play a key role in providing families and communities with meaningful school choice and access to high-quality public education, and we have been financing charter school facilities projects, including predevelopment, acquisition, construction, leasehold improvements, and refinances, for nearly 20 years.
NFF’s aim for every aspect of our work is to advance equity. To make our strategic commitment to racial equity concrete and accountable, we launched “Plan 50%+.” In 2021, we will invest at least half our total lending in organizations led by people of color. Joining the Collaborative has allowed us to delve deeper into institutional barriers in education and how money flows to schools, including within our own lending practice.
Thus far, NFF has focused most heavily on the student discipline aspect of the matrix. Prior to joining the Collaborative, this wasn’t an area of great focus during our lending process. We now understand the complexity and nuances of this topic and the importance of having these conversations with schools, particularly in the context of racial equity.
Interview with Reinvestment Fund
Over the last two decades, Reinvestment Fund has provided over $500 million in financing to 110 charter schools. The majority of schools were new or early-stage operators at the time of our first financing, and about 40% have received multiple rounds of debt. We often phase our financing, particularly for new operators, in efforts to support schools with affordable loans in all stages of development. Our charter school underwriting has always gone beyond the financial story that audits and projections tell and includes a multifaceted review of the program. We observe classes in session and engage in discussion with school staff to assess the experience of the leadership team, student engagement and demand, and how the program is performing compared to its peers. You can learn more about the charter school projects we have supported here.
Reinvestment Fund joined the Collaborative to explore how we can improve our underwriting practices by consistently applying a racial equity lens to our education lending. The vast majority of the schools we finance serve students of color. Too often, however, students of color, particularly Black and Latinx students, continue to face inequity inside schools we may even support, which could result in lower expectations, harsh disciplinary approaches, negative school environments, and racial microaggressions that disconnect rather than connect them to school. The work with the Collaborative has been invaluable in providing a framework to think, talk, and inquire about racial equity in schools. The Collaborative has provided a learning community for Reinvestment Fund to grapple with the juxtaposition that a quality school is one that is preparing students for both navigating and dismantling the system in which it operates.
The value the Collaborative has brought to Reinvestment Fund’s charter school lending has gone beyond the tangible tools, such as a revised loan application and conversation guide, that have been developed to assess a school’s racial equity commitments. Engaging with the Collaborative has created space for reflection on the system in which schools operate and the implicit biases that we bring to this work. We recognize that the tools that we continue to adapt for our underwriting have little impact without lenders also having access to resources and time to develop their own racial equity analysis. With this in mind, instead of simply sharing underwriting tools informed by the Collaborative’s work with Reinvestment Fund’s broader lending team, we chose to first conduct a series of webinars that included the screening and discussion of the documentary PushOut. Pushout examines the criminalization of Black girls in schools and the educational, judicial, and societal disparities facing black girls. The documentary and the ensuing dialogue was powerful as the topic of Black girls and their experience in education naturally led to broader conversations about race, bias, inequitable systems and policies. The webinar provided a strong foundation for reflection and helping staff understand the importance of applying a racial equity lens to education lending and beyond. Reinvestment Fund has now begun to use the learnings from the Collaborative and the webinar series to adapt our underwriting in other areas of the organization.
Interview with Self-Help
Self-Help has supported public charter schools since 1997 and provided $438 million in financing on more than 196 loans. Through these relationships, our borrowers have created or maintained more than 57,000 student spaces.
We support high quality charter schools that provide access to strong educational options in communities with majority low-income earners. We seek out partners who create rigorous, culturally affirming, and equitable learning environments, particularly for students of color, English language learners, students with learning differences, and those in low-income households and rural communities. We keep equity at the forefront in our lending to ensure students not only have access to high-quality education, but also to appropriate social and emotional support.
Our team was excited to come together with colleagues from other CDFIs to think deeply about racial equity and how we can support the growing movement in the education space to create equitable and inclusive schools where all students and families are given the resources they need to succeed. Participation in this learning community has expanded our notion of what a “quality school” looks like. We now go much further than academic data when assessing performance and mission-alignment to really investigate culture and the investments schools make in creating the best environments possible for all kids.
One big lesson is that equity needs change based on context. In using a tool like the Racial Equity Matrix, it can be easy to focus on the equity factors in the tool. While it’s helpful to always consider factors such as family and community engagement, discipline practices, and culturally responsive pedagogy, the pandemic showed that we need to consider how equity looks in a specific moment. For instance, in typical times when school is happening in person, we assess discipline practices by looking at suspension data by race and gender. During remote learning, equitable discipline might look like not penalizing students if they have to be off- camera because of something going on at home. If we’d continued asking only about suspensions, we would have missed great work that schools were doing to support students in a trauma-informed way.
