How to put racial equity at the heart of community development

Many organizations are quick to claim that they value diversity and inclusion in the wake of the serious social justice incidents of 2020. In fact, according to consulting firm McKinsey & Co., US businesses are spending in the past. less $ 8 billion per year for diversity training. However, most efforts stop far from becoming an anti-racist organization. Executives of the San Francisco-based company Low income investment funds (LIIF) announced in September that they intended to do just that. This commitment was launched with a $ 5 billion, four-year plan to advance racial equity.

LIIF started in 1984 as a community development organization to meet the housing needs of low income people. They are now a national non-profit community development financial institution that has invested nearly $ 3 billion in communities. Eliisa Frazier, Director of Racial Equity and Impact Lending at LIIF, and Director of Strategy and Senior Vice President Lucy Arellano Baglieri explained how they were adapting LIIF’s vision to serve in the fight against racism.

What prompted the initial focus on anti-racism?

Lucy Arellano Baglieri (LAB): A deep inequity persists for people of color, especially blacks and Latinos. We have a different history in the country, but similar current conditions in terms of strength and results, especially during the pandemic. We thought, what do we really need to focus on, given our strengths, to have a deeper impact? We landed on creating opportunities for equity and well-being in the community, with a focus on affordable housing, child care and education. Since we are a big financier, we look at the system in which capital flows and how we can influence it to be more equitable.

Part of your vision is to change the way we think about “high potential areas”. Can you share what you mean by this?

LAB: In the areas of information or community development, we hear about “high potential areas” and opportunities for low income families to travel to these areas. Even though we still think this is an important strategy, what if all the communities were high potential areas, right? Then everyone has a choice of where they want to live, and communities that have unique strengths, histories and cultures remain intact, but we can fill the void with something that might be missing. We can preserve existing communities and their essence, but ensure their access.

This piece is really personal to me. Before coming here, I worked in the Mission district of San Francisco, a very vibrant Latino community. We have seen families having these opportunities to move to “high opportunity areas” and refusing to do so, as it would force them to uproot their lives and their cultural bond. The compromise was not worth it for them. We need to provide opportunities for choice. For my part, I am an immigrant from Mexico and have navigated similar systems and inequalities.

So you listen to what people in the communities want and really need.

LABO: Exactly. There is a difference between choice and real choice. If you have two terrible options to choose from, that’s not really a choice, is it? I don’t want to move my family to a community where we feel like strangers, frankly.

Naturally. So how do you start to institutionalize anti-racism as an organization?

LAB: It was first and foremost a (political) codification, and it turned into responsibility. So it was important to diversify perspectives — from our community of leaders, from our board of directors. We have a committee that is racially diverse and with different identities, coming from different departments, roles and levels of responsibility.

Additionally, a large portion of our staff are passionate and engaged in a way that only comes through diverse lived experience. … When LIIF doubled in this direction a few years ago, the organization worked with Race forward and Carrefour Antiracisme Organization and Training for basic training. We are revisiting the framework of racial equity, shared language. The term “white supremacy” is often used, but can mean different things to people. So we focused on making sure we stay together on this point.

Then there’s the fact that not all progress is smooth, is it? When we talk about race, privilege, and who has historically benefited and been excluded, it can be a real trigger for people. We all show up because we are committed to advancing equality in community development. Sometimes people feel like it’s going too fast; sometimes people feel like it’s not fast enough. So this is a unique situation where we also walk individual journeys and that requires a multi-faceted approach.

How do you translate this commitment through your partnerships?

LAB: We understand our role as intermediary. We don’t necessarily directly reach communities like a developer or service provider would. We are an organization that has offices in different markets, so we continually deepen with networks or organizations in communities, but also led by and representative of those communities.

If there is not enough representation, we can be an intermediary using our platform. With what national network, perhaps affinity, can we humbly seek to forge a partnership rather than attempting to fit into these spaces?

Your impact assessment framework is at the heart of this vision. Can you share how it works ??

Eliisa Frazier: The Impact Framework will allow lenders to assess the potential impact of lending opportunities with a focus on racial equity. This is a tool that lenders can use as part of their business development – finding borrowers, researching loan opportunities. This impact framework will guide decisions that impact on racial equity at the forefront. We are also working on reassessing our risk assessment.

How do you hold yourself accountable?

LAB: We have engaged our board of directors to codify this, both by recruiting a diverse lived experience and by partnering with us on accountability. We also have an external commitment to mobilize $ 5 billion over the next decade to advance racial equity, and we will report on our progress. Even when we risk missing the target, we still want to be transparent and rotate if that happens.

This story is part of our series, CDFI Futures, which explores the community development finance industry through the prism of equity, public policy and inclusive community development. The series is generously supported by Partners for the Common Good. Sign up for PCG’s CapNexus newsletter on

Hadassah Patterson has been writing for news organizations for more than a decade, contributing to local online news for seven years and with 15 years of trade writing experience. It currently covers politics, business, social justice, culture, food and welfare.

Norma P. Rex

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