The has announced grants totaling $5 million to five community development financial institutions (CDFIs) through the NEXT Fund for Innovation.
A pilot program that builds on the momentum developed over ten years by the Wells Fargo NEXT Awards for Opportunity Finance initiative, the fund was developed with support from Wells Fargo and Prudential Financial to help underwrite business models, products, platforms, and processes with the ability to drive transformational change and scale in the CDFI industry.
Recipients of the grants include (Brunswick, Maine), which was awarded $1.5 million in support of a new solar energy financing subsidiary, and the (Philadelphia, Pennsylvania), which will receive $500,000 for a newly formed subsidiary that will invest in pay-for-success transactions in the areas of housing, education, social services, and health care. The fund also awarded $1 million each to (Washington, D.C.) to expand its charter school real estate development practice; the (Minneapolis, Minnesota) to develop a "patient" equity-like capital product for early-stage minority-owned business in the city; and (Concord, New Hampshire) in support of its ongoing work to convert manufactured housing from investor to resident ownership.
"Over the course of ten years the NEXT Awards propelled CDFIs ready for scale to achieve their vision," said OFN treasurer and executive vice president of strategic initiatives Beth Lipson. "With the NEXT Fund, we recognize and reward emerging CDFI business models, platforms, or processes with great potential — bringing flexible capital, including equity and subordinated debt, into play at a critical stage."