Amir Kirkwood’s Monthly Update – August 2022
Want to know what’s on our CEO’s mind this month? Find out below!
Partners and Friends,
I am excited about the launch of our new VCCSE newsletter. Each month, our staff will have the opportunity to share our work with our customers, investors, and the communities we serve. The newsletter will offer a moment for us to share more about our lending and advisory work through VCC Bank, VCC loan fund, and LOCUS. We will update you on key events our organization sponsors and the impact of our work as we seek to provide unique financing and advisory support.
VCCSE and its subsidiary organizations continue to grow at a steady pace reflective of market opportunities while maintaining a pulse on our impact objectives and a sound risk culture. We currently have an outstanding loan portfolio of $238 million, and we are on pace to have positive net income this year without compromising on credit quality. To date, we have no performing loans currently greater than 30 days past due, and our classified loans remain less than 5% of the total portfolio assets.
Our LOCUS business continues to expand mandates with community foundations and impact investors across its platforms, from strategy work, to fund management, and through our Community Investment Guarantee Pool (CIGP). We recently renewed our contract with the Commonwealth to facilitate the final $160 million of the Rebuild! VA small business grant program. With this recent extension, VCCSE – through LOCUS – will have facilitated over $530 million in grant funds to Virginia’s small businesses.
VCCSE has kicked off a strategic planning process designed to help shape our vision and mission and produce our operating plan for the next three years. This plan will help us fully integrate the lending offered through VCC Bank and our loan fund with the advisory work provided by LOCUS. VCCSE serves unique customers through its businesses, but our mission is singularly focused on supporting economically vibrant communities. The strategic plan will help align our operations so that our resources – capital, technology, and people – seamlessly meet the needs of our clients. The strategic plan will also help to ensure we embed our principles of inclusivity throughout all levels of our organization and in our work with our customers and partners.
To facilitate the strategic planning process, we have engaged Wellspring Consulting. Wellspring is a strategic consulting firm with a focus on the social sector. We believe Wellspring’s experience and insights will provide VCCSE the perspective to help us develop an enduring plan that fully incorporates our organizational ambitions while presenting a clear sense of the resourcing necessary to execute the plan. To date, Wellspring has scheduled or completed interviews with 20 members of our team and eight members of our board of directors. Wellspring has also begun to interview outside experts on our work, and eventually, they will engage customers and partners. We expect the plan to be substantially complete by the 1st quarter of 2023.
DEI Strategic Plan
Over the past 18 months, VCCSE facilitated a staff-led process for developing our DEI Strategic Plan, which has been endorsed by our board of directors. In this plan, our organization has committed to five strategic goals which will be pursued by and embedded in the work of all employees and for the benefit of our customers, partners, and investors. Each of the five goals has an executive sponsor and a cross departmental team that will ensure that the goals reflect the values of the organization. Our DEI Values Statement is as follows:
Diversity, equity, and inclusion are foundational to and embedded in every facet of our work with the communities we serve:
- We foster a workplace of trust, excellence, respect, accountability, and authentic belonging where diverse identities, different perspectives, and shared success are celebrated.
- We commit to a community-centered approach that puts people first in pursuit of financial inclusion and prosperity for all.
- We partner with systemically under-resourced communities as they build wealth through investments in key sectors.
- We amplify the voices of diverse stakeholders to address forces that hinder sustainable economic development and equitable access to financial and advisory services.
- We connect communities to partners, capital, and tools to facilitate financial inclusion and equitable access to resources.
News from the Field
Since the pandemic began, policymakers have focused on the importance of CDFIs as critical partners to address the crises facing American communities. VCCSE has been an active leader and facilitator of transformative financing and community support. In the height of the pandemic, we made $46 million in Paycheck Protection Program loans to existing and new small business and nonprofit borrowers. We have effectively leveraged and deployed $36 million of preferred equity provided by the U.S. Treasury under the Emergency Capital Investment Program. Locally, we have facilitated over $370 million in grants to small businesses as a part of the Rebuild! VA program. In the post-recovery period, VCCSE will maintain that commitment to public-private partnership with the state and federal government.
Future opportunities are presented in the recently enacted Inflation Reduction Act (IRA), an expansive law that seeks to address economic disparities and simultaneously support public-private efforts to address climate change, especially disproportionate impact on low-income, rural, and distressed communities. For CDFIs and impact focused organizations like VCCSE, the IRA provides for the creation of a $27 billion Greenhouse Gas Reduction Fund, with $15 billion specifically allocated for low-to-moderate-income and disadvantaged communities. Through a combined team of VCC and LOCUS staff, we will work with CDFI industry leaders and peer organizations to identify how VCCSE can apply for funding that aligns with our lending and advisory strategies.
Senator Mark Warner, who was instrumental to the launch of Virginia Community Capital as Governor of Virginia, recently announced another key effort to support the work VCCSE and our peer CDFIs. Senator Warner and Senator Mike Crapo (R-Idaho) will co-chair the newly formed bipartisan Senate Community Development Finance Caucus (CDFC). As stated on Senator Warner’s website, the CDFC will be the platform where policymakers can coordinate and expand on public- and private-sector efforts in support of the missions of CDFIs and Minority Depository Institutions (MDIs). VCCSE has provided comments in support of the formation of the CDFC, and our staff have led conversations with Senator Warner’s office to continue building on our strong relationship.
Finally, I am excited that VCC will send a substantial team to participate in the 2022 Opportunity Finance Network Conference. Hosted in New York City the week of October 17th, this conference will be the premier event for CDFIs, investors, and policymakers to gather and focus on ways to invest for change in the communities we serve. I am happy to announce that VCCSE staff will participate on two panels. The first will focus on efforts by CDFIs to generate investments that support climate risk mitigation with a focus on community resiliency. Through the Community Investment Guarantee Investment Pool (CIGP), VCCSE will participate in a second panel at the conference. This session will focus on how financial guarantees can be used to advance racial equity in finance. I am humbled by the opportunity for VCCSE to be represented at this important industry conference.
Be sure to look out for next month’s newsletter to stay informed about how we can do more…together!
President & CEO
VCC Social Enterprises