Administered by the Department of Treasury, the Community Development Financial Institutions (CDFI) Fund promotes economic revitalization and community development in low-income communities that lack access to private sector capital. One of the CDFI Fund’s (the Fund) primary activities is to certify financial entities as CDFIs, institutions serving these underserved markets. Certified CDFIs are eligible for CDFI Fund grants and technical assistance. Since the first investments in 1996, the Fund has awarded over $820 million dollars, and as of December 31, 2006, the Fund had certified 773 CDFIs.
The CDFI Fund engaged Concentrance to conduct an assessment of its certification policies. The evaluation focused on a review of the Fund’s polices, procedures and content with particular emphasis on Targeted Populations (specifically, Investment Areas, Low-Income Targeted Populations and Other Targeted Populations). Other areas of focus included the certification criteria for evaluating Financing entities, Target Markets and Nongovernment entities.
In order to evaluate the CDFI Fund’s certification policies and procedures used a three phase approach to gather, assess information and formulate recommendations. We reviewed a broad range of documents relating to the Fund’s policies and procedures, examined the criteria of similar government programs, conducted an extensive review of the literature relating to the Targeted Populations, and held discussions with internal and external CDFI Fund stakeholders. We examined the impact of our findings on the achievement of the CDFI Fund’s mission to formulate our final recommendations.
The assessment of CDFI Fund’s certification criteria led us to several recommendations focusing on eligible institutions, target market requirements, the application process, industry needs, and non-government entity criteria. Based on our research, we were able to reassure the CDFI Fund that it’s polices and criteria, on the whole, support the Fund’s mission effectively, and we identified four areas where modifications in the certification criteria could improve the efficacy and delivery of the CDFI Fund’s programs. Our recommendations were approved by the Fund and have resulted in additional projects with the CDFI Fund.