Too often, promising community development projects stall out when attempting to access the capital and resources needed to launch and get to the finish line. Recognizing the significant opportunity cost this challenge presents, a group of national and local impact investors came together in 2019 to develop an innovative way to advance community impact with an emphasis placed on equity. The Community Investment Guarantee Pool (CIGP) is a platform for guarantors – currently, a team of 14 foundations and other philanthropies – to deploy financial guarantees jointly and efficiently to support projects in affordable housing, climate, and small business.

To date, CIGP has deployed $16.6 million of its $42.1 million guarantee pool across five affordable housing and two small business guarantees. These guarantees are expected to support up to $146 million of underlying financings – well more than CIGP’s target of unlocking 5x additional capital. Moreover, the guarantees are already enabling projects to move forward that will ultimately provide 2,000+ affordable homes and the retention/creation of over 700 small business jobs. There are also early signs of promise with respect to CIGP’s racial equity objectives. For example, all affordable housing lending enabled by CIGP’s guarantees have gone to BIPOC-led or owned developers. And while all guarantees have been to CDFIs so far, the CIGP team is now working with other types of beneficiaries to explore potential guarantee use cases, particularly in the climate change space.

One of CIGP’s small business beneficiaries is MoFi, a CDFI in Montana with a working capital loan product called Thrive. MoFi created Thrive to serve economically excluded small businesses who incurred significant losses during the pandemic – many of which are owned by women and entrepreneurs of color. So far, CIGP’s $500,000 guarantee has enabled MoFi to make 87 loans totaling nearly $5 million through October 2021– ahead of its own projections and about halfway to its overall volume target of $10 million for the program. CIGP partner and MoFi CEO Dave Glaser noted, “The value proposition the guarantee provides is clear; it enables CDFIs to be more of who they need to be.”

A vital element of a movement is the spirit of teamwork. Alone, CIGP’s philanthropic partners certainly have an impact with their regular grantmaking. CDFIs make mission-aligned loans every day. But together, this group of likeminded changemakers is paving the way for greater impact in communities where aspirations have gone unrealized due to historic underestimation. The guarantee pool is an innovative tool that goes beyond the limitations of more traditional financing, and this is only the beginning.

Learn more about CIGP and its progress so far here.