IFF: You recently gave testimony to Congress on how to address barriers to accessing capital. Among other things, you recommended support for the CDFI Fund and various small business programs. What can you tell us about your experience before the Joint Economic Committee? Based on what the committee members said and asked, what do you think the future holds for the CDFI community?
Lisa Mensah: It was a very revealing hearing. To begin with, I love the fact that they asked me to testify at a hearing called “the innovation economy” because I think it means the leaders of Congress see the work of CDFIs as part of the innovation economy. That is really great. It means that, in a way, we’ve broken through. We’re no longer just a little field with quirky good ideas of how to stimulate the economy; we’re a field that’s got something real to contribute to how we grow this economy.
Several members asked questions about how we can make more change. Congressman John Delaney of Maryland asked what we can come back with 10 years from now. Congresswoman Barbara Comstock from Virginia asked how we can promote more women in business. Other members asked how we can get more venture capital to flow where it should go. So they were asking very future-oriented questions. This made me feel like we have a particular role here. We, the CDFIs, we’re not status quo people. We’re always trying to push and change. What Congress revealed was they’re hungry for the kind of change-agents we are. They are hungry for what brings more capital and what will change the ability to grow businesses. I think that’s a wonderful opening for CDFIs to argue our particular contributions.
IFF: Rural investment seems to hold a special place in your heart. Is that true? If so, why?
Mensah: Well, I have a big heart; there’s lots of room. But – when the Ford Foundation offered me the chance to start working with the rural poverty and resources program in 1989, it meant that I was going from banking to working on rural communities in the poorest areas. And then it was so powerful to serve as President Obama’s Under Secretary for Rural Development. That’s almost 30 years of professional connection in a profound way – in visiting rural communities, in helping to think about rural issues, in connecting deeply with rural Americans.
My professional life has taken me into rural America and really connected me with the needs and opportunities there. But the heart connection comes from being raised in Oregon. My first job was as a strawberry picker on several farms.
One of the things I love about rural America is that it takes time to see it. You can’t fly over it and get it. There’s not one hub. I’ve learned a lot riding down dirt roads in cars and trucks.
One of those cars belonged to Elsie Meeks, the founder of the Lakota Funds. We drove and drove and drove and drove through South Dakota to see so much of both the beauty and the challenge of her state. It was my early introduction to reservation-based economic development – its challenges and its potential.
Another person who taught me a whole lot, who is now deceased, is Ernest Johnson. Ernest worked for the Federation for Southern Cooperatives. He was an African American civil rights leader who single-handedly helped build credit unions throughout the Black belt. I spent days in Ernest’s car, driving throughout several states, visiting the very informal offices of small credit unions in the rural south, and really hearing the history of struggle for what it’s taken for people to build financial institutions that work for their needs.
So at both the personal level and the professional level, I just feel that there’s so much rural America does for the whole country – it feeds us, and it’s a beautiful part of our country, and it’s worth fighting for.
IFF: Your bio points out that you are the daughter of an immigrant from Ghana and a former Iowa farm girl. How do you think your parents shaped your perspective, leading you to a career in community finance?
Mensah: My parents were from very different places, but what they shared with each other and with me was an absolute commitment to leave the world a better place. They were convinced that your life had to be about a purpose. For me, there were no limits to that purpose. I was supposed to take my particular bi-cultural, bi-racial experience and drive for more understanding within this country and between countries. They brought me into the world with a sense of mission. They told me that I was special and that I had to do something with that.
They were both from humble families. My dad is the first in his family to get an education. And so both of them were quite aware of the struggle of people. I think they pushed me to do something that mattered, and that led me to really grapple with where I could make the most change, and that’s ultimately what led me to where I am today.
There’s a proverb from Ghana that my dad always shared: “Money scattered in a dark place brings light.” I’ve always been attracted bringing that kind of light.
IFF: What role do you think CDFI lenders have in the Opportunity Zone space?
Mensah: I think of CDFIs as the original opportunity investors and as the best of the opportunity investors. We have a 30-year track record of investing in opportunity. We have a triple-bottom line way of thinking. We drive dollars to where they don’t go naturally just because the market says it isn’t the highest return. We’re not just going to invest in a hotel because it pays back; we’re going to invest in a hotel because of where it is and the jobs it’s going to create and the renewal that it will catalyze in an area.
This is a law that’s trying to unlock some of the $6 trillion of unrealized capital gains. If even a fraction of that could be reinvested, and if we can force it to flow to the right places, it could be pretty amazing.
Now that the zones have been designated, the questions that awaits us are what do these funds look like? And what are they going to invest in? And what are the individual transactions going to look like? It’s one thing to designate a geography; it’s another to find the transactions that deliver the biggest impact on the ground. Our job is to try to steer and partner and push and pull and drag and amplify and lead in ways that make sure that some of this unlocked capital reaches the harder spots. That’s what we’ll be good at. It’s my hope that during this early rollout, CDFIs will help the funds and transactions become as developmental as possible – will help ensure the investments are creating deep opportunities.
IFF: The OFN Conference is coming up in Chicago on October 8-11. What are you most looking forward to?
Mensah: This year’s conference is focused around the idea of change-agents – it’s really about the people. We have a smattering of everybody – the newest leaders in the field to old warriors like me who’ve been at this for a while. We’ll have a chance to hear from the whole field – from investors to front-line practitioners to new innovators to partners from the public sector to partners from the private sectors. It’ll be a very big tent in the very center of the country (we had 1,400 people in D.C. last fall, and we’re expecting Chicago to beat that level). This is a not-to-miss in-person time to connect – a moment to get off the screens and listen and re-connect and hug and really be inspired.