Yvonne Sparks, assistant vice president of community development at the St. Louis Fed, welcomes attendees to the St. Louis Investment Connection event.

The Investment Connection (IC) program, started by the Kansas City Fed, is a strategy used to bring community and economic development organizations, financial institutions and other funders together to build impactful relationships and find innovative ways to meet community needs within low- to moderate-income (LMI) communities. The process for hosting a live IC event begins with selecting a location for the event, determining whether the event will be topic-specific or broad, releasing a request for proposals (RFP), reviewing and selecting proposals that are eligible under the Community Reinvestment Act (CRA), and leading an event that gives community development organizations an opportunity to present their proposals to financial institutions and other funders. Though funding is a critical part of the event, community development organizations are also provided opportunities to connect with community organizations with similar missions and highlight the needs facing LMI communities.

The Federal Reserve Bank of St. Louis launched its inaugural IC live event in 2017 in Memphis, Tenn. Since the inaugural event, the St. Louis Fed has hosted five additional live IC events in Springfield, Mo.; Memphis; Little Rock, Ark.; St. Louis; and Louisville, Ky.

Results

Seventy-five organizations have responded to the RFPs. Of those, 40 presented proposals to over 230 bankers and other funders. Projects addressed an array of community development needs (see table below). The majority of the projects focused on neighborhood revitalization and stabilization. Others addressed small-business, economic and workforce development, community facilities, and affordable housing. Organizations have made 169 documented connections. To date, banks, community development financial institutions (CDFIs) and foundations have committed $1,142,500 in grants (25 percent), loans (14 percent) and investments (61 percent) for IC projects. In some instances, organizations received additional financial and programmatic support from banks beyond the scope of requests proposed at the IC.

“My experience with Investment Connection involved my initially listening from afar and taking things in during the presentations and the first few speed round meetings at the breakout session. However, once I met with a few groups that had a mission that aligned with ours [affordable housing], I became actively engaged in discussions and made several connections with folks with whom I wanted to follow up after the event. This led to my having an initial discussion with Tabernacle CDC [Community Development Corporation]. After hearing about what they had already done and how they’d financed their projects, I shared how Gateway CDFI could help them expand and accelerate their plans. Within a couple of months, we closed on a loan that would provide Tabernacle CDC with the funds to redevelop five multifamily rental properties in the Jeff-Vander-Lou neighborhood in north St. Louis, and I can see there’s potential for us to support more of their projects in the future.” — Jaycee Green, Gateway CDFI, St. Louis

Lessons Learned

The St. Louis Fed conducted a year-end survey in 2018 to collect feedback from community development organizations, bankers and other funders who participated in the IC program. Here are some results:

• A majority of the participants said IC events enhanced their understanding of the CRA and its role in community development.
• Ninety percent of participants were extremely satisfied, very satisfied or satisfied with the quality and execution of the application and review process, events and opportunities provided for making meaningful connections.
• Organizations, bankers and funders said IC events created a platform for them to network with one another and provided opportunities to partner.
• Bankers and funders expressed interest in seeing more organizations pitch for loans and investments other than grants.
• Organizations highlighted the need for technical assistance in preparing for IC proposals and presentations.

Investment Connection, 2019

The St. Louis Fed has directed its focus toward more-robust outreach and training to better prepare organizations, bankers and other funders for the 2019 IC program, and its goals and expected outcomes. The outreach efforts will include community scans/asset mapping, on-the-ground partnership building, and conversations to understand community development needs, strengths and opportunities. These outreach efforts help form training and IC processes and structures.

The St. Louis Fed will host IC events in St. Louis and all three of its branch cities in 2019. Below are live IC event dates:

• Memphis, Tenn.: May 21, 2019
• Little Rock, Ark.: July 24, 2019
• Columbia, Mo.: September 24, 2019
• St. Louis: Oct. 17, 2019
• Louisville, Ky.: Nov. 14, 2019

Teresa Cheeks Wilson and Neelu Panth are community development advisors focusing on the Community Reinvestment Act (CRA) at the Federal Reserve Bank of St. Louis.