The Community Capital Response to the Crisis

​The coronavirus crisis has hit our communities suddenly and intensely. And by forcing people to retreat to their homes indefinitely, it has put up significant barriers to both economic activity and collaboration. Yet despite the barriers, and despite the enormity of the challenge that the coronavirus presents to community economics in the weeks and months and years ahead, community capitalists are stepping up and doing their part to support each other and their communities in amazing ways.

No one is immune from the feelings of isolation and fear that are sweeping the country. Yet folks are working through those feelings and building bridges to each other and to that place in the future, on the other side of this crisis, where we can look back on this scary time with gratitude for all the community capital leaders who rallied to insure that communities endured and thrived.
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Here are a few ways that community capital champions are responding to the crisis:

I. Community Investment Fund (CIF) Acceleration
To foster the level of local investment and type of community collaboration that’ll no doubt be required in the recovery years ahead, NC3 has mobilized a Community Investment Fund Acceleration Task Force. To learn more about CIFs, please take a look at our recent publication, Community Investment Funds: A How-To Guide for Building Local Wealth, Equity, and Justice. To stay informed about the CIF Acceleration Initiative as it develops, keep an eye out for future announcements and check in on our website now and then.
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II. CIF and Community Loan Fund Emergency Response
​The Pioneer Valley Grows Investment Fund has established an Emergency Farm Fund to help regional farms that have suffered income loss because of farmers’ market, restaurant, and college closures or other disruptions due to COVID-19. And they’re not alone. CIFs and Community Loan Funds around the country are supporting critical community enterprises in creative and inspirational ways. (As it turns out, in a time of crisis like this, communities that have pooled resources and developed collaborative partnerships work well together.)
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III. Crowdfunders are connecting small business owners and Main Street investors with 21st century tools to make this response a more grassroots, democratic, and inclusive response to an economic crisis than we’ve ever seen before.

Mainvest has launched two initiatives: one, called Still Open, to support restaurants offering takeout, and another, called Main Street Initiative, to support businesses with 0% interest emergency loans and opportunities to raise community capital through revenue share notes. Wefunder has also launched two initiatives: a coronavirus crisis loan product to help businesses raise flexible, patient capital from fans and a Fight the Virus Challenge to back startups geared toward addressing the problems ahead. Honeycomb Credit has reduced fees, deferred payments, and streamlined the due diligence process with its Small Business Relief Loan program. Fundopolis has also reduced fees and deferred payments in a special offer in response to the crisis; and Localstake has waived upfront fees, expedited the due diligence process, and reduced placement fees for a special revenue share product as well. 

Crowdfunding Consultants are also offering special deals. Aware that time and money are especially tight at the moment, Crowdfund Better is offering a quick assessment tool to expedite the process of determining if crowdfunding is the right path for small business owners.
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IV. Community Banks and Credit Unions are leading with their missions, putting the well-being of their communities first and bending over backwards to provide critical funding.

Vermont State Employees Credit Union (VSECU) is offering 2-year 0% loans of up to $2,000 for both members and non-members. And that’s just one example. Though the number of community banks and credit unions has declined substantially in recent decades, there are still thousands of community banks and credit unions around the country, and from the sounds of it, they’re allocating capital generously and effectively – and brilliantly carrying out their missions of supporting shared and durable prosperity.
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V. Regulatory reformers and policy makers are breaking down barriers to community investment and creating better opportunities for locally owned businesses to survive and thrive.

The Council of Development Finance Agencies is sharing its expertise to guide smart recovery efforts. The SEC Office of the Advocate for Small Business Capital Formation is hosting Virtual Coffee Breaks to facilitate conversations about ways to support small businesses with the coronavirus-related challenges they’re facing. With partners, NC3 is working to introduce legislation and reforms that would incentivize local investment. Main Street Alliance is mobilizing aligned advocates nationwide to ensure that federal stimulus dollars support Main Streets across America.
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VI. Journalists and academic teams are sharing critical information.
The Center for the Advancement of Social Entrepreneurship at Duke has built a comprehensive searchable database of grants, loans, etc.

Impact Alpha is providing inspiring and informative coverage of innovative responses to the crisis.
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VII. Innovative finance professionals are developing creative strategies and tools for a recovery that unlocks a more inclusive, democratic, and equitable capital market in the decades ahead.

In addition to the immediate responses from the community capital community to address immediate and near term capital needs, innovators are developing new strategies and tools for the long term, and we look forward to highlighting how those evolve in future newsletters.