Memphis Organization Lifts Voices of Community

Daniel Davis: I'm Daniel Davis with the Community Development Department of the Federal Reserve Bank of St. Louis, and I'm speaking with Eric Robertson, President and CEO of Community Lift and River City Capital in Memphis, Tennessee. Eric, the goal of our conversation today is to dive into how your organization has gone through a process of coming up with the money to fund community development initiatives where you work. Can you tell me a little bit about your organization and how did it get its start?

Eric Robertson: Yes, well, first of all, thank you, Daniel, and thank you to the Federal Reserve for having me here today to talk about our work. I'm with an organization called Community Lift in Memphis, Tennessee. It was started by two of Memphis's largest foundations-- the Community Foundation of Greater Memphis and The Assisi Foundation, along with the City of Memphis as well as the Community Development Industry.

About two years prior to our founding which was in November of 2010, those organizations that I named began a city-wide planning process that produced a plan called a Greater Memphis Neighborhoods, a Blueprint for Revitalization.

And in that plan was the recommendation to create something that they said Memphis was missing, and that was a local economic and community development intermediary that could work with institutions such as government or the philanthropic community and/or the faith based community, and also kind of work at a ground level with constituents, whether they were the business owners or property owners or residents. Being that middleman of sorts, channeling resources and building the capacity of people on the ground.

It was also decided too that those organizations help in attracting national funds to the city. Oftentimes when you have national resources, they don't have the capabilities of weighing through 1,000 or 2,000 nonprofits. So they often look for these intermediaries that have the trust and credibility of the government, of the philanthropic community.

And so that's kind of how we got our start. Through that planning process, I was hired to actually create the organization, write the business plan, recruit the board, so on and so forth. And we really hit the ground running in July of 2011.

Daniel Davis: So we know that community buy-in can be an essential component for the success of any organization, and especially in securing financing to move forward. Can you talk a little bit about any steps that your organization took to make sure the community was a part of what was going on from the very start?

Eric Robertson: Absolutely. So that is one of the core principles of our approach to community development, which was discussed in that plan that I mentioned. One of the recommendations was, how do you begin to have community involvement in a real way, in a different way than we may have been doing prior to the creation of Community Lift? And the very nature of the organization being an intermediary, it requires a number of partnerships. As I said earlier that we have partnerships at the institutional level and at the neighborhood level.

One of the things we immediately went to do as an organization was went directly to the community and built relationships with key leaders in the neighborhood and said, here is our plan, here is what we want to do, and here's what we want to do as it relates to community development, and here's what we want to do as it relates to economic development.

And we said we have places for people to serve on our board, we have places for people to serve on our advisory committee. But most importantly, we want to help bring those groups together to form in our communities what we have either called councils, neighborhood councils or neighborhood coalitions that we work with directly. And in most cases, they actually lead us. We want to make sure that we're lifting up the voice of the community. So that's critical to our work.

Daniel Davis: What role did leadership play in helping your organization secure financing? Was there a community champion who helped to advance your goals?

Eric Robertson: Yes. So we have a very interesting model in terms of how we were able to come up with the money. Lift is the umbrella organization. We have an affiliate or a subsidiary organization called River City Capital Investment Corporation. That is our emerging CDFI.

One of the other recommendations from that Greater Memphis Neighborhood plan was that you conduct economic development at the neighborhood level. That what they saw is they kind of scan the landscape in Memphis, that one of the things we were missing, we had the effort by the city to bring in the big companies, but what we were missing was how are we really supporting neighborhood-based businesses and how are we lifting those companies up?

And so it was decided that an economic development strategy should be a core component of the work of the intermediary organization. So to that end, we create the emerging CDFI in River City Capital. And so as you can imagine, we were the first kind of home-grown CDFI in the city. There was another CDFI, but it was doing second mortgages. So we were talking about lending to businesses.

And so when we went out into the marketplace to talk to banks and other people about investing in our emerging CDFI, what we found was many had not heard of a CDFI, hadn't heard of the instruments or the ways in which you could invest into a CDFI either by equity equivalent investment or through some other means.

And so we had to really begin an education campaign. And without the champions of-- honestly, the Federal Reserve Bank, our local branch representation there as well as the FDIC, hosting gatherings. Memphis's also strong city, strong community city with SC too, and so there was another gathering, and they held those repeatedly to help us try to break through and explain to people what this CDFI was and what it was trying to do.

And then as we went to do that, we still found we were running into some trouble, that while we were educating some of the community officers with the banks, we were not necessarily reaching senior management. And so we had a meeting with our mayor who, as the city, was a part of our creation. We often update him on the work that we're doing.

And to this point, the mayor and the city had not made any financial investment in the organization. And I'll never forget this meeting, Daniel, he said OK, this is great. You guys are doing great work. But one thing I know is a romance without finance becomes a nuisance. So what can I do to help you without giving you money?

And we said, well, mayor we know this is tough times for the city. What we need from you is mayoral leadership. We think that you can convene the local bank presidents to a meeting and get them to show up versus us doing that. And he said, OK, I'll do it. We can have it here on the seventh floor. We have the spectacular view of the Mississippi River and the bridge and I'll get up and talk about the work you're doing and what it means for our city.

He did that. We had about 23 of the local bank presidents show up. And after that meeting, we were able to secure financing from about five of the banks who were in attendance. But that was a way where he really exemplified and exercised his leadership to help us kind of cross over that barrier.

Daniel Davis: So what role has collaboration had in launching and advancing the work of your organization?

Eric Robertson: Well obviously, our funding structure is that we are made up of a multi bank partnership. So we have five banks who participate. They've invested in our loans. So our loan committee is made up of representation from some of those banks as well as from community businesses, and as well as the philanthropic community, because this has also been an education for our philanthropic community around PRRIs.

What's the place of philanthropy in economic development? Traditionally in Memphis, philanthropy had been solely focused on direct services to individuals. Now we are saying, how do we help businesses to grow to provide access to a quality of life for our families and neighborhoods? And so we had to bring all people into this effort to get us to where we are today. And it was a collective effort.

Daniel Davis: I want to talk for a moment about data. Was data used in determining the strategy of your organization and the work you do? And then also, has it been used to help obtain funding for the work?

Eric Robertson: Absolutely. Data is critical. That was-- Daniel, you're just hitting on all of the key points of the plan, the Greater Memphis Neighborhoods plan. So one of the recommendations was that you use evidence-based decision making, that you use data to drive your investments.

Within the plan, it create this tool called the Strategic Framework for Prioritizing Investments, and it's a 16-point data set-- 10 data points around need, six around assets and opportunities. The theory being that you want to strategically select some neighborhoods that would give you the best chance for success.

And so we use this tool in that just on the asset and opportunity side, we had to collect how many businesses are in the neighborhood, what the size, the number of employees, so on and so forth to use that to drive our decision making on selecting the neighborhoods.

And then as we began the work of the CDFI in terms of lending, we also collected a huge amount of data in terms of trying to understand the market data, what types of businesses were in the community. Again, we were looking at the size and so on and so forth, and thinking about how we can create some packages that would fit the community that we serve.

Daniel Davis: In community development finance, things seldom work out as we plan. Can you talk about the challenges and obstacles that you've faced and how you've worked to overcome those?

Eric Robertson: Yeah. Well, I gave you the very short version of the story of raising that money which ultimately we have a pool of about $600,000 that we were able to raise. $100,000 or so from philanthropy, and then about half a million from the local banking community.

But that process was really an 18-month process. From the beginning of the Fed Reserve and FDIC holding these sessions to the mayor having that meeting, and then there was probably another eight months after that meeting that the mayor hosted, really walking people through what it means to make these investments, what that looks like, and how they can feel comfortable in doing that.

There was a lot of points along the way where we could have easily given up. But we were persistent. We went into this-- when I say we, our board of directors and our partners, went into this with one mantra, which was failure is not an option. So with that, we knew we could not stop short until we reached our goal of seeding the fund and getting it launched.

Daniel Davis: Eric, I think you've painted a very broad picture of how Community Lift and River City Capital have gone through the process of coming up with the money. Thank you so much for joining me today.

Eric Robertson: Thank you for having me.