Redefining Investment in Black Communities: The Role of the African American Equity Scorecard in Advancing Black Liberation
ORLANDO, FL – The African American Alliance of CDFI CEOs (The Alliance) and Community Vision today announced the launch of the African American Equity Impact Scorecard at the Opportunity Finance Network (OFN) Small Business Finance Forum. Designed to guide lenders and impact investors, the Scorecard delivers actionable insights for substantial investments in Black communities and towards the realization of racial equity.
The Scorecard serves as a critical lens for mission-driven lenders and investors, facilitating them to assess the effectiveness of their loans and grants in furthering Black liberation. It brings clarity to how their financial commitments aid Black leadership and power-building, Black-centric equity and Black economic development and job creation.
“The Scorecard presents a profound opportunity to change the narrative, offering a clear and quantifiable metric to ensure capital is serving its intended purpose – to close the racial wealth gap. It is our hope, and indeed our call to action, that all financial institutions and foundations consider the Scorecard as a pivotal part of their decision-making and grant award processes and, in doing so, commit to real, meaningful change,” said Lenwood V. Long, Sr., President & CEO at The Alliance.
The Scorecard was designed to combat the growing racial wealth divide by amplifying access to capital for Black-led initiatives. It employs a rigorous assessment system, quantifying a potential project’s influence across 32 attributes. These are grouped into five pivotal impact areas: Leadership & Power Building, Economic Development & Job Creation, Equity, Community-Centered Approaches, and Catalytic Impact. By tracking and reporting scores across the industry, the Scorecard fosters a culture of transparency and commitment, encouraging an honest evaluation of areas that need improvement. These include policy changes, resource allocation and the development of enduring relationships with Black communities.
“Until now, mission-driven lenders and investors have lacked a coordinated way to track and report on how capital is being deployed into Black-led and Black-centered projects,” said Catherine Howard, President of Community Vision. “The Black racial wealth divide will continue to widen until we are each willing and able to measure and understand our current pipelines and portfolios and shift our practices accordingly. We encourage financial institutions to incorporate the Scorecard into their decision-making processes.”
Following an 18-month pilot with 16 early adopters across the US, the Scorecard demonstrated its most significant effectiveness when used during the vetting stage of a project. It ensures high-scoring projects apply and receive approval.
Scorecard user Bulbul Gupta, President and CEO of Pacific Community Ventures, praised the Scorecard, adding: “Saying one is having an impact is easy. Modifying your processes to be more intentionally inclusive, as well as not unintentionally punitive and then using those processes to provide mission-aligned capital takes real commitment and harder internal work. This is why the Scorecard is so important. It provides organizations with a clear, transparent definition of what an impactful loan is and a score to validate or substantiate the impact. It allows all underwriting to be measured using the same benchmarks and then allows the impact of the portfolio to be clearly presented. We are proud to be part of this pioneering Scorecard to support measurable transparency in racial wealth building efforts.”
For more information about African American Equity Impact Scorecard or to schedule a demo visit https://aaacdfi.org/impact-equity-scorecard/.
About The African American Alliance of CDFI CEOs
The African American Alliance of CDFI CEOs (The Alliance) is a coalition of more than 75 CEOs of Black-led Community Development Financial Institutions (CDFIs), comprising loan funds, credit unions, venture capital firms, and non-profit developers. Since 2018, The Alliance’s network collectively services all 50 states and the District of Columbia. As a result, members are uniquely positioned to address issues related to housing and access to capital for African American populations and communities. http://www.aaacdfi.org.
About Community Vision, Capital & Consulting
Community Vision is a Community Development Financial Institution (CDFI) dedicated to advancing community ownership of community assets. We do this through real estate guidance and financial management advising, innovative programs, grant making and flexible financing. Our goal is to help build a restorative economy that centers success for Black, Indigenous, and people of color led nonprofits, small businesses and initiatives. www.CommunityVisionCA.org
Alisha Brown / African American Alliance of CDFI CEOs / [email protected] / 901-849-0820
Jason Riggs / Community Vision / [email protected] / 415-871-7351