The MassMutual Foundation is partnering with a national network of community development financial institutions to increase investment for innovations in underserved communities.
Over the next five years, the MassMutual Foundation, part of the Springfield-based life insurance company, will contribute $25 million to the Opportunity Finance Network, a national network of 450 community development financial institutions.
The new investment will contribute to OFN’s launch of the CDFI Innovation Initiative, an initiative to build CDFIs capacity and efficiency to meet the increasing demand for their services in underserved communities.
CDFIs are nonprofit lenders that expand economic opportunities in low-income communities. The community institutions help by supporting pathways to homeownership and leveraging assets to provide the necessary capital to launch small businesses.
Dennis Duqette, president and CEO of the MassMutual Foundation, said that when searching for the proper investment to contribute to community learning and economic growth, CDFIs consistently appeared as a positive force in financially underserved communities.
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“CDFIs, typically, are tremendously effective. They take the money they loan out, it's paid back, and then reinvest it in the community. So we love their localness,” Duquette said.
In this instance, OFN is supporting the growth of the CDFI industry by creating new infrastructure to contribute to community-based innovation, one of the three pillars behind the innovation initiative.
The three pillars supporting the innovation initiative are the creation of an innovation advisory council, the development of an innovation center and the launch of an innovation fund to seed and scale these solutions across diverse communities.
According to Duquette, the innovation initiative's main crux is its ability to build capacity and scale innovation. OFN is creating a space to institutionalize knowledge and best practices nationwide through the innovation center.
As it gathers knowledge about CDFI best practices, OFN acts as a clearinghouse for best practices to help CDFIs meet the increasing demand for investment in community-based innovations.
“I think being able to spawn a healthy economic environment through lending in the community where previously it hasn't existed is the first take in the ground regarding how we look at success,” Duqette said.
