Avenues to Affordability | Issue 3 | 2016

VOLUME 23

THE IMPACTING STORIES OF

ISSUE 3 - 2016

MARKETING IMPACTING LIVES CDFI STORIES

" %*45*/$5*7&-: %*''&3&/5 $0/4536$5*0/ $0.1"/:

NJDIJHBO IJTUPSJD QSFTFSWBUJPO OFUXPSL

BTI TUSFFU SFEFWFMPQNFOU

NBSTIBMM TUSFFU BSNPSZ

UIF DFOUFS GPS OFX FOUFSQSJTF PQQPSUVOJUZ

DPOTUSVDUJPO NBOBHFNFOU ] EFWFMPQNFOU TFSWJDFT DMBSL TU ] MBOTJOH NJDIJHBO ] Q ] JOGP!LJODBJEIFOSZ DPN

LJODBJEIFOSZ DPN

FEATURES YOU MUST ASK YOURSELF, WHY? ........................................... 8

A DATA DRIVEN APPROACH TO IMPACT INVESTMENT MARKETING......................................................... 10

CDFI BRAND UNITY ......................................................................12

SELF-SUFFICIENCY AND MEASURED GROWTH EQUALS DEEP IMPACT ON COMMUNITIES ...........................14

5

B-CORPORATION: A UNIQUE AND ATTRACTIVE STRUCTURE ..........................................................16

DEPARTMENTS

21

CEO’s MESSAGE.............................................................................. 5

by Mark McDaniel

CINNAIRE NEWS ............................................................................18

UPCOMING EVENTS ................................................................... 20

ADVERTISER INDEX .................................................................... 22

12

CEO’s MESSAGE

GOVERNING BOARD Wendell Johns, Chair Retired, Fannie Mae James W. Stretz, Vice-Chair George K. Baum & Company Michael J. Taylor, Secretary/Treasurer PNC Bank Catherine A. Cawthon Fifth Third CDC Derrick K. Collins Chicago State University Christine R. Hobbs Retired, Freddie Mac Multifamily Brett Macleod JP Morgan Chase William C. Perkins Retired, WPHD Carl Riedy State Street Global Advisors Sheldon Schreiberg Pepper Hamilton LLP Donald F. Tucker Don Tucker Consulting Paul J. Weaver Retired, FHLBI

CORPORATE OFFICERS Mark S. McDaniel, President & CEO Christopher C. Cox, CFO James L. Logue III, COO Kevin Crawley, Executive Vice President Jennifer A. Everhart, Executive Vice President Rick Laber, Executive Vice President Marge Novak, Executive Vice President Jim Peffley, Executive Vice President

LOCATIONS Lansing Headquarters 1118 S. Washington Avenue Lansing, MI 48910 Phone 517.482.8555 Detroit Office 2111 Woodward Avenue, Suite 600 Detroit, MI 48201 Phone 313.841.3751 Illinois Office 225 West Washington, Suite 1350 C Chicago, IL 60606 Phone 708.781.9603 Indianapolis Office 320 N. Meridian, Suite 516 Indianapolis, IN 46204 Phone 317.423.8880 Wisconsin Office 2 E. Mifflin Street, Suite 403 Madison, WI 53703 Phone 608.234.5291 Delaware Office 100 W. 10th Street, Suite 302 Wilmington, DE 19801

BY MARK McDANIEL PRESIDENT & CEO CINNAIRE

There was an individual who I will call “Harold” who lived in the classic suburb west of Detroit. He was an engineer at one of the Big Three architectural firms.

Harold had a wife and children. It was a stable life until mental illness took over Harold’s person and spun his life out of control. It wasn’t long before he left his home and family.

As is the case with many with mental illness, they self medicate with drugs and alcohol. Their lives spin out of control and trips to ER and jail are common.

Many times, people refuse mental health services and medications because in their world there is nothing wrong with them. There’s not a strong support network, thus they become a burden to the healthcare and criminal justice system.

Harold hit bottom and lived in a homeless state for a number of years typically residing under overpasses of major freeways. There were times he reached out to service agencies for help or they reached out to him. He would engage, but ultimately disappear to his world on the street. What would happen to Harold?

About this time the emergence of the permanent supportive housing model was showing great success in New York City and Chicago. This model had a much higher percentage of ending homelessness then transitional or shelter care. A very savvy and experienced mental health agency believed in the possibilities of the model and decided to develop a community based on it.

They took a blighted, abandoned historic apartment building and proposed rehabbing it for the purpose of permanent supportive housing. Nobody would consider investing in the vision. So, the group brought the idea to Cinnaire and we said, “lets get this done”. With great difficulty, but by the shear determination of the agency and Cinnaire we were able to develop and finance a 20 unit apartment community for individuals served by the agency. They reached out to Harold who decided to give it a try. He was one of the first residents. He finally had a safe, decent place to live. The staff got his benefits aligned and he received steady counseling services.

As he became stronger, he got involved in the resident council. Being an engineer, he found an interest in the maintenance of the building, which he volunteered to help maintain. With counseling and medications, Harold gained more confidence and realized he had value in the world. He was so good that the management company hired him for a maintenance position. Harold grew 5

CEO’s MESSAGE

stronger. Ultimately, he was reunited with his family and has a strong supportive relationship with his children again. I love this story. It has brought tears to my eyes many times. But, why do I tell it?

Marketing your organization properly is a skill that any organization needs to focus on. It is the forum you are able to attract those you need support from and also to serve your customers better. All organizations need to give priority to marketing and communications. In the CDFI world, marketing and communications is critical to the ability

to attract financial resources, develop programming and be sustainable. This goes beyond what most of us think of as marketing, which is almost always number based or a transactional level.

How much money has been invested?

How many loans closed? How many units have been built? How many people served? Reporting on time, no foreclosures, always meeting or exceeding rates of return to investors, and the list of tranactional goals met are always the focus.

But what goes on behind the numbers is much more significant. What is the impact on the people you are servicing? A few CDFIs are highly skilled at telling the stories that put a face on the real impacts of the work we do. Funders want to know for every dollar they allocate, what is the impact on people’s lives, the systems that are used by the people in need and the longterm changes that will be made in society.

This edition will address how a few CDFI’s have built successful marketing and communications platforms to attract funders and make significant impacts in serving communities in need. We, at Cinnaire, are putting many of these techniques and strategies in place as part of our growth plan. We have had a very

6

strong marketing and communications program over the years, but we were focused on all the accomplishments we have had in transactions. Money raised, units built, numbers of people helped, and doing it all without losses to investors and lenders. We have become much more focused on telling our successes through stories of the impacts on people and communities we do work in.

Over the next several months, you will begin to learn our stories through our marketing efforts. We’re working on building a new website that offers basic information our partners need, and tells stories of the many people and communities we serve. Not only are we going to be telling you impactful stories, but also how internally, we are much different from many other similar organizations. We will begin to tell the internal story of Cinnaire and how it is affecting our team and outside communities.

Let’s look back at the impact on Harold. First and most importantly, we were part of a team that saved his life. Harold is no longer a burden and cost to the healthcare system. How? Emergency rooms as a primary care clinic are not being used, EMT services are reduced, the correctional system is no longer spending money, there is one less drug user engaged in supporting the dealers, people are no longer impacted by an alcoholic creating public disturbances. He is employed and a family can have their dad back which will have many unknown benefits to his children’s future. When you multiply Harold by thousands, the positive financial and social impacts Cinnaire has achieved becomes very attractive to communities and funders.

I hope you find this edition thought provoking and helpful as you look at ways to tell your story in a more effective manner. We all need to be storytellers because there are so many more Harolds in the world that need us.

CINNAIRE

.

{Build confidently.} Get the expert support you need to see your housing and community development project through to completion.

Audits, reviews, & compilations Transaction structuring Market feasibility Financial projections Tax credit incentivized financing Tax planning & compliance Strategic & business planning Protecting your bottom line while you build from the ground up.

A higher return on experience.

Contact: Rob Edwards, partner robert.edwards@plantemoran.com 517.336.7460

plantemoran.com

Karl L. Gotting Kenneth W. Beall Michael G. Oliva Michael H. Rhodes Jeffrey L . Green Kevin J. Roragen Richard W. Pennings Ted S. Rozeboom Tracey L . Lackman Michael G. Stefanko

OVER 45 YEARS OF EXPERIENCE IN AFFORDABLE HOUSING

Warren H. Krueger, III

Representing developers and syndicators before the

Elizabeth Husa Briggs

Michigan State Housing Development Authority, and numerous

Dominic R. Rios

other state financing agencies, U.S. Department of Housing and Urban Development, USDA Rural Housing and municipalities,

124 W. Allegan, Suite 700 Lansing, Michigan 48933 Phone 517.482.2400 www.loomislaw.com

and with private lenders, including projects receiving LIHTC, historic and new markets tax credits.

COMMUNITY LOAN FUND

The New Hampshire Community Loan Fund (Community Loan Fund) understands the challenges facing CDFIs in creating a solid understanding of what they do and who they do it for, and they have overcome these challenges.

Eight years ago, the Community Loan Fund had 10 distinct funding programs with different logos, different messages, and very little commonality to foster recognition for the total scope of valuable work the Community Loan Fun was delivering to communities.

While there is value in having separate service centers and different audiences for different programs, for CDFIs to be successful in building support for their complete scope of work, they must find value in creating a unified brand image. This is what Steve Varnum, the Community Loan Fund’s Director of Marketing and Communications, realized when he was hired to find the right balance between common and unique looks and messaging for all programs under the umbrella organization. He started in the right place: conducting research.

The research conducted indicated there were many different names by which the organization was referenced and inconsistencies in describing the total scope of work performed. The Community Loan Fund began a nearly three year process to redesign the website, create 8

new logos, and craft sharper messaging for each program and the organization as a whole.

While each program retained separate logos, there were elements in the logos from a color, general look, and font perspective which would help them be recognized as common to the organization.

In this rebranding process, a better understanding was fostered about the importance of the word “community” to the New Hampshire constituents serviced by the Community Loan Fund. Throughout New England, many communities still hold town hall meetings, barn raisings, and special days recognizing their history.

Sometimes the Community Loan Fund was just being referenced as the Loan Fund. This simple omission took out what was at the heart of the organization’s work: communities served.

The rebranding elevated the recognition of the Community Loan Fund and led to an increased understanding and support of their work. Another piece which came into play was a focus on telling stories to capture attention and support. In a recent conversation with Steve Varnum, he shared a reference to Simon Sinek’s book, Start with Why. The Community Loan Fund questioned why they were conducting the work of each program to arrive at a clear mission statement and focus on storytelling regarding their impacts in communities and on CINNAIRE

the lives of people through their funding and technical/community service. Storytelling aids CDFIs in addressing the challenge of being different from charitable non-profits. CDFIs have a harder message to deliver with the investment aspect of what they do when compared to organizations asking for donations to a cause.

The Community Loan Fund accepts donations and investments, so it needed a way to focus messaging to clarify the options available to potential supporters. Steve and his team chose storytelling to create clarity.

By focusing on the stories of the people and communities impacted by the funds and programs first, it becomes less challenging to deliver the message of how people can invest or donate to support the programs. The Community Loan Fund makes a clear distinction on a total organization level and at the individual program level, on how donations or investments will be used and the lives and communities they will impact. Offering a fixed rate investment also contributes to the simplification of messaging on the financial aspects of this CDFI. Messaging is not enough though. Targeting is needed to make sure the right stories and details are being delivered to the right investors, donors, and beneficiaries of each program, no easy feat at the Community Loan Fund with 10 different programs.

Marketing and Communications acts as a service center to each of the programs. A great example of targeting is for the loan program supporting acquisition of manufactured homes in resident-owned communities, ROC-NH™. It was determined the best target for this program was real estate agents struggling to find loans to close deals on manufactured homes. Direct mail has assisted in reaching this target. Manufactured home buyers have also been precisely targeted through Google ads. They focus on who might have a headache needing to be solved, and then they find the most effective manner in which to deliver messaging about the AVENUES TO AFFORDABILITY

Community Loan Fund programmatic solution. Marketing and Communications also works the residents of this program in actively using a closed Facebook group to communicate about best practices and fun activities across communities.

Some lessons to carry away from the Community Loan Fund can be summarized as follows: • Find a common language to communicate the total value of what your CDFI brings to the communities served.

Words such as community have meaning.

• Move beyond basic program content and tell stories to illustrate why you do what you do for communities. Starting with the why of what you do and emotional content is more compelling.

• Find a cohesive look through colors, photos, and everything visual which represents your organizational mission and values.

Even if you have unique programs, common threads bolster the greater good.

The Community Loan Fund, through an investment of time and intelligence on these marketing and communication efforts is easing the challenges associated with being one amongst a sea of opportunities for community support. Don’t get lost in that sea. Find your message, your look, and your stories.

THE COMMUNITY LOAN FUND’S MISSION IS TO SERVE AS A CATALYST, LEVERAGING FINANCIAL, HUMAN, AND CIVIC RESOURCES TO ENABLE TRADITIONALLY UNDERSERVED PEOPLE TO PARTICIPATE MORE FULLY IN NEW HAMPSHIRE’S ECONOMY. THEY DO THIS BY: PROVIDING LOANS, CAPITAL AND TECHNICAL ASSISTANCE; COMPLEMENTING AND EXTENDING THE REACH OF CONVENTIONAL LENDERS AND PUBLIC INSTITUTIONS; AND, BRINGING PEOPLE AND INSTITUTIONS TOGETHER TO SOLVE PROBLEMS. FOR MORE INFORMATION, GO TO WWW.COMMUNITYLOANFUND.ORG. 9

REINVESTMENT FUND

A DATA DRIVEN APPROACH TO IMPACT INVESTMENT MARKETING Reinvestment Fund is helping communities with targeted investments in areas such as quality early childhood education. The organization takes an unique approach in targeting investment opportunities by bringing data and financing expertise together under one roof, then focusing marketing and communications efforts on how these two elements pair perfectly in the world of impact investing.

As an example of this focus, Reinvestment Fund launched a data analysis of the availability of quality early childhood education and access gaps in Philadelphia. This was

followed by a capital initiative targeting financing toward solving the issue, with a goal of expanding current facilities or opening new facilities in underserved areas. This finely focused, data-driven approach helps take the complexity of what CDFIs need to do in targeting, building and messaging investment opportunities and breaks it down to a more basic level through numbers regarding the extent of the issue and potential/actual results. Reinvestment Fund has also found value in making this data readily available and interactive.

Reinvestment Fund’s website hosts

a map where interested parties can directly research where help may be needed in communities, such as access to education. By making this data available, issues more easily come to light and investors can see the potential impact of funds and technical assistance when appropriately targeted through a smart, trusted organization such as Reinvestment Fund.

This data also creates a marketing and communications cache. Media outlets, potential investors, and beneficiaries were all intrigued when Reinvestment Fund launched their data tools and focus. While detailed analytics might cause some people to zone out, everyone can understand issues such as lack of access to early childhood education. The data just supports that the issue exists and can be impacted with funds and assistance.

The program in Philadelphia was launched in 2014, and now has $15M to expand further in Philadelphia and potentially replicate in other areas. Investors appreciate the more detailed information they receive from a datadriven approach, and the lending and data teams at Reinvestment Fund work together to keep this focus sharp and spread the word about it at conferences.

"U .BOFS $PTUFSJTBO XF VOEFSTUBOE UIF DPNQMFYJUZ PG UIF BGGPSEBCMF IPVTJOH JOEVTUSZ BOE XF IBWF UIF FYQFSJFODF BOE SFTPVSDFT OFDFTTBSZ UP QSPWJEF QFSTPOBMJ[FE TVQQPSU JO NVMUJQMF BSFBT PG ZPVS CVTJOFTT

& (SBOE 3JWFS "WF 4UF -BOTJOH .* XXX NBOFSDQB DPN XXX NBOFSTPMVUJPOT DPN 10

'PS NPSF JOGPSNBUJPO PO IPX XF DBO BTTJTU ZPV QMFBTF DPOUBDU ,FJUI 1GFJGMF $1" 1IPOF

&NBJM LQGFJGMF@NBOFSDQB DPN

Reinvestment Fund, as another point of interest, is unique in offering a promissory note program where investors can invest as little as $1,000 to be part of a loan fund. With data readily available regarding the issue and potential impact, paired with simplicity of an investment with fixed rates and terms, social and financial returns become easier to message, a juggernaut of CDFI understanding. In the case of the Philadelphia program for educational CINNAIRE

access, fund returns and concrete numbers regarding increased educational seats are available.

Reinvestment Fund, with an eye on expanding their data-driven approach to service more communities, rebranded recently and launched a new website. The goal was an enhanced visual identity and a clear explanation and presentation of the organization’s approach to success on their website, which has already won an award. The website also presents an excellent mechanism for presenting the stories related to how data and funding deliver the highest impact when used together, the core of what Reinvestment Fund does.

Reinvestment Fund is a best in class example of starting with data and working toward impact investment success. This focus also enhances their ability to collect case studies, including compelling pictures of actual results, and deliver these through the website and any marketing channels for visibility of what their organization does and what their brand means.

This is a win-win in messaging to both investors and the world at large and presents a compelling answer to the questions of what a CDFI is and how it impacts communities.

REINVESTMENT FUND IS A CATALYST FOR CHANGE IN LOW-INCOME COMMUNITIES. WE INTEGRATE DATA, POLICY AND STRATEGIC INVESTMENTS TO IMPROVE THE QUALITY OF LIFE IN LOW-INCOME NEIGHBORHOODS. USING ANALYTICAL AND FINANCIAL TOOLS, WE BRING HIGH-QUALITY GROCERY STORES, AFFORDABLE HOUSING, SCHOOLS AND HEALTH CENTERS TO THE COMMUNITIES THAT NEED BETTER ACCESS—CREATING ANCHORS THAT ATTRACT INVESTMENT OVER THE LONG TERM AND HELP FAMILIES LEAD HEALTHIER, MORE PRODUCTIVE LIVES. FOR MORE INFORMATION GO TO WWW.REINVESTMENT.COM.

We Do More Than Just Answer Your Questions...

WE CREATE THE SOLUTIONS! “My properties have shown incredible improvement since you started working with them. I can’t believe how much better the sites are doing today. I don’t know what took me so long to get you involved!”

Lora D. Gilbert, Vice President of Asset Management, Larc Properties, Inc.

Operations • Marketing • Leasing Training Specialists • Compliance Call today to reduce expenses and increase your occupancy.

800.865.0948 | WWW.OCCUPANCYSOLUTIONS.COM

8609 3115 990 BASIS HAP LIHTC HUD 2/15 We speak your language.

11

www.doz.net | 866.848.5700 @dozcpa

AVENUES TO AFFORDABILITY

/company/doz

11

ACCION

CDFI BRAND UNITY STRENGTH IN COLLABORATION CDFIs are complex and hard to market.

Their different areas of focus; plethora of funding vehicles, programs, and services; and, unique market position are a lot to explain let alone wrap neatly in a brand. Accion is figuring it out though, despite some additional challenges in branding and marketing an independent network cohesively.

Accion is a global nonprofit with 64 microfinance institutions in 32 countries on 4 continents. There are four independent organizations under the Accion brand in the U.S., and until about five years ago, they were operating and marketing independently.

Understanding the potential power of a unified brand and pooled marketing resources, they began a process of collaboration to extend the reach of the brand beyond regional entities.

According to Accion leadership, their brand is viewed as a living concept, and best practices in marketing are best exchanged across the brand to make the whole stronger. The time was right for their independent organizations to figure out the areas in which resources could be pooled for maximum effectiveness. A customer-facing website was the first target.

Accion, using four different names in the U.S., determined if they went to market as one brand, they could find and speak to more small business lending customers. The website provided a natural vehicle with which to start.

If you go to Accion’s U.S. web presence today, it is clear the small business customer is the brand’s organizational focus. From making a loan application to getting educated about 12

improving business operations and loan potential, Accion U.S. has found a unified focus to leverage on behalf of their independent locations. The end result is a larger funnel of better educated loan customers for each location and the organization as whole.

In addition to marketing efficiency through the website, Accion is working on improving operational efficiency.

The process for lead nurturing and online commerce, through the online application, is streamlined and focuses on providing customers with the right information at the right time. They found reducing application data fields up front is a best practice and was more conducive to a positive experience for the customer by taking burdens off of the borrower in early stages of the process. This aids in continuous conversation and relationship building and a better common resource for the brand.

The website is the right mix of a business tool and a marketing tool, and the site creates a platform for attracting new customers through its business education content. With the website

acting as a core component of a strategy built for the digital marketing age, Accion is focusing on a data-driven approach to strategic decision-making.

They have discovered it can be harder to segment audiences in the digital age and have focused on the best practice of making the brand and the website speak to multiple users at once, including investors and donors.

Accion, using data, made the determination there is very little distinction between their customers, investors, and donors. Businesses who receive their help today can be the donors and investors of tomorrow, so they make sure this progression is communicated, and the audience understands the entire opportunity.

Data has also shown that web traffic no longer flow through a home page gate, but rather, with search engine mechanics, flow to more direct information pages. It is best to put information on a page in a manner allowing people to get the right information on the first search. The goal is to guide an audiCINNAIRE

ence to where you want them to be.

In addition to rich information on running a business and easier access to an application, Accion is also leveraging client success stories across the brand. Small business owners can see themselves in the success stories of other businesses served, in part, by Accion, and potential investors can see the impact they can make.

This focus on brand unity and a single portal has been both challenging and worthwhile to Accion. When asked for the best practices garnered from their experience, they summarized as follows: • Try and focus on using data to drive branding and marketing decisions, and remove the emotion from decision-making. Leverage experience board advisors in this process as well. The data available through digital marketing can lead to sound decisions.

• Pooling resources and integrating strategies and plans across a network of locations or programs allows for efficiencies in branding and operating for the whole.

• Branding is not just a discrete effort conducted every so often. Brands and marketing require constant stewardship and focus to shift with the quickly changing tactics and data available. With stewardship, a brand becomes an asset to the business just like other tools.

When using data and best practices to create brand unity and a pool of marketing resources for a CDFI as a whole, all of the pieces under the complex umbrella become better as a result. Accion plans to prove that if you find the right places to build a unified message, brand, and targeting in your business, there can be greater success for all.

AT ACCION, THEY BELIEVE IN A FINANCIALLY INCLUSIVE WORLD—ONE IN WHICH EVERY INDIVIDUAL CAN SEIZE THE OPPORTUNITY TO ACCESS A FULL RANGE OF HIGH-QUALITY, AFFORDABLE FINANCIAL SERVICES. THROUGH ACCESS, EACH PERSON WE SERVE CAN CAPITALIZE ON HIS OR HER OWN CAPABILITY AND DRIVE TO ACHIEVE REAL ECONOMIC GAINS— AND BUILD BRIGHTER FUTURES FOR THEMSELVES AND THEIR FAMILIES. FOR MORE INFORMATION, GO TO WWW.ACCION.COM. AVENUES TO AFFORDABILITY

OVER 20 YEARS EXPERIENCE IN ALL PHASES OF AFFORDABLE HOUSING • Audits • Cost Certifications Mt. Pleasant & Midland Michigan

• LP Tax Returns • Mortgage Certifications

Phone 989.772.4673 | Fax 989.772.6371 | Email jbourland@blystonebailey.com

TTY: 711

Family Owned & Operated Since 1957

MANAGEMENT

AFFORDABLE HOUSING SPECIALISTS Your project is important to us!

That’s why we’re on time and within budget... every time!

CONSTRUCTION

4530 MERCHANT ROAD FORT WAYNE, IN 46818 260 497 9000

KELLERDEV.COM DEVELOPMENT 13

COMMUNITY FIRST FUND

SELF-SUFFICIENCY AND MEASURED GROWTH EQUALS DEEP IMPACT ON COMMUNITIES

T

he Community First Fund (CFF) has been able to penetrate the Pennsylvania markets it serves with deep investment creating large-scale positive change. Serving some of the poorest small cities in the state, it was important for the organization to create a sustainable framework for investment. This is where a focus on self-sufficiency comes into play.

The CFF makes disciplined use of some best practices in developing self-sufficiency and strength, resulting in organizational and community impact success. CFF starts by keeping their cost of funds at steady levels, and they avoid overpaying for debt or accepting high rates.

They have also been successful in establishing additional revenue through a NMTC program starting in 2013. Their placement and asset management fees support the organization in being able to reach their communities at the level desired. Although this revenue is not a given, it has provided CFF with the ability to invest in larger projects in their communities while still maintaining current self-sufficiency targets.

CFF also relies on local philanthropy to support their investments. Their communities in South Central and Eastern Pennsylvania experienced less of an economic spike followed by less impact from the downturn. This translates to stability for their organization and programs, as well.

Stability is not always a given, and CFF understands this, so they go beyond looking at debt costs and establishing stable revenue sources to use metrics to project a stable growth and investment path.

Metrics are a monthly focus at CFF, with a solid review of self-sufficiency, earnings, cost of capital, and operational efficiency metrics. A target minimum for self-sufficiency is established and tracked. CFF uses the metrics to determine the optimal level of reach into communities as well as the appropriate size of their organization.

For example, they do not open offices unless the metrics point to a need matched with the ability financially to support the location in a successful manner.

14

In 2016, CFF was able to add a full-time team member and a new location to service the Lehigh Valley region made up of three counties. They carefully assessed the market need against their lending capacity, while looking at maintaining key metrics like self-sufficiency, before the final decision was made. It is not about being able to rapidly expand to service more communities for CFF, it is first about servicing the communities already under their care well and to the greatest impact.

CFF will undertake strategic planning in Spring of 2017. Again, their focus will remain on going deep. They will look at items such as product line diversification and how they manage their current lending capacity. An impactful result of this type of planning is a grocery store project in an impoverished community which will open in 2017.

CFF utilized their NMTC program to bring healthy food to a community through an investment in a grocery store. The community did not have a grocery store, and it was determined this anchor development was the right project to ignite further community growth. This type of large scale redevelopment investment from their program will be matched with smaller CFF investments in projects complimenting the anchor development. The end result will be vibrancy at a faster pace where once sat blight.

A development mentality focused on conservative growth and self-sufficiency does not have to limit impact made on communities. In fact, CFF has proven that smarter, deeper investments for greater impact and growth, when measured and supported by the proper capacity, lead to organizational success. Sustained, larger scale impact investment is a great goal for CDFIs, and with metrics and smart planning and program development like CFF has employed, it is well within reach.

COMMUNITY FIRST FUND CREATES SUSTAINABLE PROSPERITY FOR LOW WEALTH COMMUNITIES AND INDIVIDUALS, ESPECIALLY PERSONS OF COLOR AND WOMEN, BY ALIGNING CAPITAL, KNOWLEDGE AND ADVOCACY TO ADVANCE BUSINESS OWNERSHIP, HOUSING AND COMMUNITY DEVELOPMENT IN THE COMMUNITIES THEY SERVE. FOR MORE INFORMATION, GO TO WWW.COMMFIRSTFUND.ORG. CINNAIRE

NEW CONSTRUCTION RENOVATIONS HISTORIC REHAB MULTI-FAMILY COMMERCIAL MIXED USE

CLEARINGHOUSE

B-CORPORATION A Unique and Attractive Structure

Clearinghouse CDFI (Clearinghouse) uses a unique structure as a for-profit B Corporation (B Corp) to challenge profit maximization concepts prevalent in the industry and create value for communities.

As a result of a successful 12 months, Clearinghouse has raised a significant amount of equity from new and existing investors. Their CEO attributes this success to their B Corp status which has certainly helped to communicate their appeal. For example, Grandpoint Bank and Mutual of Omaha Bank both recently invested $500,000 in equity after recognition that the organization’s B Corp status was the right balance between a solid investment and giving back to the community. Even if companies did not solely invest because of this structure, it helps deliver a clear and consistent message about who Clearinghouse is and what they offer.

On Clearinghouse’s website, a B Corp is defined succinctly as follows: B Corps are socially and environmentally sustainable companies that have been certified by the nonprofit B Lab as meeting high levels of performance, accountability, and transparency.

16

With the following statistics, it is not hard to see a smart structure and clear value proposition can lead to high impact in communities. Clearinghouse publishes a summary of key statistics on their website as follows:

among the CDFI industry. As a B Corp we have been introduced to a number of like-minded companies that think and act like we do. Having that common goal is a tremendous opportunity to work together.”

• 1M Individuals Served Annually • $1.2B in Total Lending • $473M in NMTC Allocation Deployed • 6,000 Affordable Housing Units Created • 12M Square Feet Developed or Preserved • 13,800 Jobs Created or Retained

Clearinghouse is methodical about measuring and communicating the impact they are making. They produce an annual impact report that goes out to their shareholders and supporters. It highlights everything from jobs created to affordable housing units financed. It is comprehensive and a great tool for focused and continuous reporting.

According to Clearinghouse’s CEO, Douglas J. Bystry, “In many ways being a B Corp makes us unique in and

Clearinghouse with a market leading structure for success and significant measuring and reporting of impact CINNAIRE

makes the right decisions about investments. CEO Douglas J. Bystry says, “We balance prudent investment with community benefit through sound underwriting of loans. Our underwriters evaluate both financial risk as well as community benefit on every loan we consider.”

Prudent investment has supported another unique facet to Clearinghouse’s success, a strong S&P rating. Receiving a strong S&P rating is another way to communicate responsible management and success to the organization’s stakeholders. It underscores Clearinghouse’s stated goal of being prudent managers of capital and demonstrates their commitment to long- term growth and profitability. CDFIs struggle daily between running the business aspects of their organization while staying true to their mission. Clearinghouse is excelling in business and progress towards their mission.

One step ahead.

Within our full-service accounting and advisory firm, Baker Tilly’s nationally recognized affordable housing specialists can help you analyze options, overcome barriers, and uncover resources to make your project successful.

Our strategic solutions go beyond the basics to help public and private development entities, managers, lenders, and investors make the right decisions with candid advice and clear industry insight.

Connect with us: bakertilly.com Don Bernards, CPA, Partner 608 240 2643 | Donald.Bernards@bakertilly.com

Baker Tilly refers to Baker Tilly Virchow Krause, LLP, an independently owned and managed member of Baker Tilly International. © 2015 Baker Tilly Virchow Krause, LLP

In closing Douglas offers, “We have always said to shareholders, community organizations, and the CDFI industry that we believe community development lending, when done properly, can and should be both profitable and impactful.”

Even if it is not realistic for your CDFI to organize under a different structure or pursue an S&P rating, finding a balance between financial stability and growth and community impact, and measuring both consistently, is a good place to begin.

CLEARINGHOUSE CDFI IS PROUD TO BE A CERTIFIED B CORP. OUR COMMITMENT TO “B THE CHANGE” IS NATURAL AS A MISSION-BASED CDFI. AS A B CORP, WE AIM TO TRANSCEND TRADITIONAL NOTIONS OF BUSINESS SUCCESS: MAXIMIZING PROFITS AND MAXIMIZING RETURNS TO PEOPLE AND THE PLANET. FOR MORE INFORMATION, GO TO WWW.CLEARINGHOUSECDFI.COM.

AVENUES TO AFFORDABILITY

17

CINNAIRE NEWS

NEW HIRES

Ruqayyah Polk joined Cinnaire in September as an Underwriting Analyst in our Chicago office.

Latrichia Henry joined Cinnaire in July as a part-time Accounts Payable Clerk in our Lansing office.

CRAIN’S DETROIT BUSINESS COOL PLACE TO WORK Cinnaire recently received the honor of being named #33 out of the 75 Michigan companies to be recognized as a Crain’s Detroit Business Cool Place to Work. This is the third time Cinnaire has been included on this prestigious list of outstanding companies.

Crain’s hired Best Companies Group to gather data on employers and survey employees to produce this ranking.

The voluntary program was open to Michigan businesses, nonprofits and government entities that have at least 15 employees at a Michigan location.

The process is extensive: First, the employer provides detailed information

When it comes to economic development, we’re all in.

It’s time to count on more.

Clark Hill’s Economic Development Team plays a significant role for our clients by being instrumental in major economic development transactions. We have received national recognition for innovative financial structures, the ability to build bridges between business and government, and positive contributions to the communities we serve.

on its benefits and perks; next, employees answer questions about work environment and company leadership in a confidential, 80 question survey.

Cinnaire was selected as a Cool Place for providing all employees an unlimited paid time off policy, a riverfront trail for biking and walking during lunch, jeans and slippers day with proceeds supporting veterans, onsite fitness center, wellness program, AAA memberships, and weekly organic fruit deliveries to the office.

“It is a true honor to receive recognition as a Crain’s Cool Place to work,” said Mark McDaniel, Cinnaire President & CEO. “Our vision is to provide a workplace that allows our staff to grow professionally and personally in a unique and inspiring environment.

What truly makes Cinnaire Cool is the commitment and dedication our staff has consistently shown in our 23-year history. Our employees are the heartbeat of Cinnaire and we remain committed to creating benefits to show our gratitude for the value they bring to our organization.”

CINNAIRE AWARDED $6.5 MILLION IN CDFI FUND GRANTS Cinnaire successfully secured $6.5M in grant awards. This included a $5.5 million grant through the CDFI Fund Capital Magnet Fund (CMF) program.

Cinnaire received the largest grant awarded. CMF supports financing for the preservation, rehabilitation, development or purchase of affordable housing for low-income communities as well as related economic development and community service facilities such as day care centers, workforce development centers and health care clinics. The $1 million grant from the CDFI Fund’s Financial Assistance (FA) and Technical Assistance (TA) programs was provided to increase its lending and investment activity in lowincome and economically distressed communities.

clarkhill.com

18

CINNAIRE

“It is an honor to have received these two grants. This degree of trust truly validates our organization’s dedication to grow and positively impact more communities,” said Mark McDaniel, president and CEO of Cinnaire. “Our team works tirelessly for the communities we serve and this funding helps us further impact economically distressed areas.”

This capital will primarily be used to provide flexible loans to support highimpact affordable housing initiatives across the Cinnaire footprint. The focus will be to partner with nonprofit developers, preserving currently existing affordable housing and will have special carve-outs to reach rural communities and extremely low-income households (earning 30% area median income or less).

CINNAIRE CLOSES $150M LIHTC FUND Cinnaire recently closed its most recent fund, Cinnaire Fund for Housing Limited Partnership 31, a low income housing tax credit fund that raised $150M of investment to support affordable, multifamily housing throughout the Midwest.

The capital for Cinnaire Fund 31 came from a total of 14 investors, including two new investors. Cinnaire Fund 31 will help finance 1,881 units at 29 properties in Michigan, Indiana, Illinois, Minnesota and Wisconsin.

“In our 23-year history, Cinnaire has raised more than $2.61 Billion in equity investment, creating or renovating over 39,000 units of affordable housing,” said Mark McDaniel, Cinnaire President & CEO. “These investments have allowed Cinnaire to successfully revitalize neighborhoods throughout the Midwest and Mid-Atlantic regions, spurring community and economic development. We wish to thank our investors for their commitment to invest in safe, high-quality, affordable housing.”

AVENUES TO AFFORDABILITY

Building Communities with Proven Expertise

When you take PM Environmental’s insight filled reports to help you make the right decisions for your project and put them together with our full line of premium services and more than 20 years of experience, you’ve got an unbeatable combination under a single, dependable roof.

Risk Well Managed

800.313.2966

ENVIRONMENTAL & ENGINEERING SERVICES

NATIONWIDE

Low-Income Housing Tax Credit (LIHTC) state approvals & HUD experience • Phase I & II Environmental Site Assessments (ESAs) • HUD Environmental Assessments (4128) • Hazardous Materials (Asbestos, Lead-based paint, Radon) Management & Consulting • National Environmental Protection Act (NEPA) Compliance • ASTM E-2018 Property Condition Assessments (PCAs) • Capital Needs Assessments (CNAs) • Fannie Mae, Freddie Mac Physical Needs Assessments (PNAs) • HUD Project Capital Needs Assessments (PCNAs) • HUD RAD Physical Needs Assessments (RPCAs) • HUD Green Physical Needs Assessments (GPNAs) •

www.pmenv.com 19

CINNAIRE NEWS

BBQ for Books

UPCOMING EVENTS CINNAIRE HOLIDAY PARTY December 14, 2016 • 5:30pm Troppo’s Lansing PARTNER RECEPTION During BMCC May 1, 2017 Cinnaire Office UNIVERSITY TO AFFORDABILITY September 20 – 21, 2017 Kellogg Center, East Lansing

CINNAIRE STAFF: IN THE COMMUNITY ZAPP to Dionna Sargent Dionna Sargent, Manager, Business Development, recently volunteered her time to assist the Junior League of Delaware’s task force in passing Erin’s Law, which establishes a school curriculum to teach age-appropriate techniques to help students recognize child sexual abuse and to tell a trusted adult; teaches school personnel about child sexual abuse; and teaches parents and guardians the warning signs of child sexual abuse. New to advocacy work, Dionna nonetheless managed to identify an enthusiastic Senate sponsor, testified before the legislature and worked to build support, which led to the law passing in June – making Delaware the 28th State in the Union to pass Erin’s Law. Please join Cinnaire staff in thanking Dionna for her personal volunteer work!

20

The Madison Reading Project is a literacy based nonprofit providing books and programs to vulnerable children in South Central Wisconsin. The Madison Reading Project works in partnership with many other organizations, nonprofits and elementary and middle schools to get books directly into the hands and hearts of kids in Wisconsin.

Cinnaire Senior Vice President, Chris Laurent, serves on the Board of Directors. Recently, the Madison Reading Project hosted BBQ for Books, a fundraiser to help the organization meet their annual goals. Cinnaire was proud to sponsor this event. Chris Jillings, Cinnaire Asset Manager, was able to attend, network and of course – donated books! In addition to Cinnaire’s sponsorship, staff made financial donations as well as donating books.

“How grateful I feel to have Cinnaire and their employees be part of Madison Reading Project’s event and cause,” said Rowan Childs, Founder & Executive Director. “It just goes to show that everyday people can help others by just a simple act; donating books to kids, attending an event for a coworker, networking, helping on a board, sharing kudos. Madison Reading Project’s success has been driven by volunteers and supporters. It takes a village.”

The BBQ for books fundraiser successfully raised $3,496 for the Madison Reading Project.

Cinnaire Staff Volunteer to Clean Up Lansing Neighborhood

Capital Area Housing Partnership (CAHP) recently purchased homes at 316 Madison and 231 Lathrop in Lansing with plans to fully renovate the homes for qualified first time homebuyers. The Michigan State Housing Development Authority (MSHDA) and the City of Lansing’s Department of Development/Planning provided financing to allow the substantial renovation of these homes.

Volunteers from Cinnaire, MSHDA and the Community Economic Development Association of Michigan (CEDAM) recently volunteered to begin exterior renovations of these properties. The volunteers removed overgrown trees and shrubs on both properties, clearing the way for CAHP and its contractors to complete renovations. These once neglected properties will become beautiful, affordably-priced homes for future owners.

“Cinnaire has been a long-time friend of CAHP and is proud to work with their experienced staff and board members to create affordable housing options and revitalize neighborhoods in Lansing,” said Mark McDaniel, Cinnaire President & CEO. “Our staff have always been committed to spending time outside the office, volunteering with our partners to fulfill our mission of creating vibrant and sustainable communities. The revitalization of these two properties is a great representation of the work that can be done when public and private resources work together to rebuild neighborhoods.”

CINNAIRE

CINNAIRE STAFF EVENT: GROUP AWESOME TRIP TO INDIANAPOLIS Cinnaire staff are assigned to teams which participate in small group outings from time to time throughout the year. The purpose for these employee events is to strengthen relationships among all Cinnaire employees, result-

Group Awesome team members had the opportunity to tour Ganassi Racing during their time in Indianapolis. Other activities included zip-lining, brainstorming lunches and visiting Cinnaire investments. The purpose of the small groups is to strengthen employee relationships among all Cinnaire employees.

ing in a strong and efficient team focused on improving communities and providing best-in-class services.

Group Awesome, one of the Cinnaire teams, recently enjoyed a fun-filled

few days in Indianapolis, IN. Activities included site visits to Cinnaire investments, zip-lining, brainstorming lunches and a behind-the-scenes tour at Ganassi Racing.

Group Awesome team members: James Dow, Brian Feeney, David Helm, Hughlett Kirby, Leigh Middleton, Jim Peffley, Ryan Robinson, Deb Toby and Anthony Winston.

LIKE WHAT YOU’RE READING? SUBSCRIBE! VOLUME

If you would like to receive future issues of Avenues to Affordability, please complete the below form or email your information to Mary@altmgmtsolutions.com.

22 ISSUE 4

| 2015

Full Name

VOLUME 23

Address ISSUE 2 -

2016

City State

INSIGHT REBRANDTO SUCCESSFUL ING STRA TEGIES

Zip

Phone

VOLUME 23

Email

ISSUE 1 201 6

|

Submit forms to: Mary McDaniel, CMP, Alternative Solutions, LLC 1057 Cambria, East Lansing, MI 48823 AVENUES TO AFFORDABILITY

21

ADVERTISER INDEX

MANAGING EDITOR Mary McDaniel, CMP Alternative Solutions, LLC 517.230.5494 mary@altmgmtsolutions.com EDITORIAL Kelly Rogers Pixie Publishing, LLC 517.575.5051 pixiepublishing@gmail.com ADVERTISING Jennifer Calery Alternative Solutions, LLC 517.896.0873 jen@altmgmtsolutions.com GRAPHIC DESIGN Melissa Travis Ink Ideas Graphic Design, LLC 989.272.3101 www.inkideasgraphicdesign.com

Baker Tilly ..................................................................................................................................17 Blystone & Bailey ....................................................................................................................13 Chesapeake Community Advisors, Inc............................................................................. 19 Clark Hill, PLC .......................................................................................................................... 18 Community Economic Development Association of Michigan ....................................11 Dauby O’Connor & Zaleski, LLC ...........................................................................................11 Ginosko Development Company ...................................................................................... 24 Keller Development ................................................................................................................13 Kincaid Henry ............................................................................................................................2 KMG Prestige, Inc. ................................................................................................................. 22 Loomis, Ewert, Parsley, Davis & Gotting, P.C..................................................................... 7 Love Funding ............................................................................................................................17 Maner Costerisan, P.C. .......................................................................................................... 10 Medallion Management, Inc. ................................................................................................13 MHT Housing, Inc. ................................................................................................................. 23 O’Brien Construction Company, Inc. ................................................................................. 15 Occupancy Solutions, LLC .....................................................................................................11 Plante Moran ............................................................................................................................. 7 PM Environmental, Inc. ......................................................................................................... 19 Rohde Construction ................................................................................................................. 4

COVER ILLUSTRATION Matthew McDaniel Student matthewmcdaniel1294@gmail.com Avenues to Affordability magazine is published quarterly by Cinnaire.

This publication is copyrighted. The reproduction of Avenues to Affordability is prohibited by law. For additional copies, comments, concerns or to be added to the mailing list, please contact the Cinnaire office at 517.482.8555 or visit www.cinnaire.com.

INTERESTED IN ADVERTISING? Contact Jennifer Calery at 517.896.0873 or jen@altmgmtsolutions.com for more information. Since January 2015, Cinnaire’s online magazines have garnered 2,078 reads, made 49,168 impressions and were shared 32 times through the website. The Cinnaire website attracts an impressive 1,000 visitors to the homepage and over 6,000 page views on a monthly basis.

DEADLINES Winter Mid-December Spring Mid-March Summer Mid-June Fall Mid-September CINNAIRE

Promises Made, Promises Kept.

Syndicators and lenders will attest to our rock solid reputation.

For more information, contact our administrator at 248.833.0550

Ginosko Development Company “Creating a Brighter Community Today” Ginosko Development Company (GDC) is a real estate development company specializing in the creation and preservation of quality affordable housing. GDC has a successful track record meeting the financing challenges of these developments, from MSHDA and HUD loan programs, tax-exempt bond programs, rental subsidy programs, and Low-Income Housing Tax Credits; to historic tax credits, brownfield credits and other specialized financing programs unique to the affordable housing industry. GDC is also known for its success in meeting the design, planning and environmental challenges of these developments. GDC’s residential communities are recognized for careful and coordinated planning, an experienced development team of top architects, attorneys, contractors and engineers, attention to detail and design quality, and respect for the environment. Visit our website to get to know us better!

www.Ginosko.com 41800 West 11 Mile Road, Suite 209 | Novi MI 48375 office 248.513.4900 | fax 248.513.4904