Catalyzing Culture and Community through CDFIs

Catalyzing Culture and Community through CDFIs

Judilee Reed, Director, Thriving Cultures Program, The Surdna Foundation.
Judilee Reed directs the foundation’s arts-centered work which includes support for arts training programs for teens; artists-centered community development projects; and artists and their contributions to local economies and broader social change.

Artists and art enterprises, like this saddle maker in Dupree, South Dakota on the Cheyenne River Indian Reservation, will benefit from an initiative to support local lenders to integrate arts and culture into revitalization efforts. Photo by HipHick Studios.

Around the country, the widespread adoption of Creative Placemaking¹ has produced a rich landscape of growing practices that integrate arts and culture in revitalization strategies through community and economic development activities. As communities around the country deploy artists and arts organizations in ambitious projects seeking to expand social and economic opportunities, it’s becoming clearer how arts and culture are connected to the more widely understood elements of a healthy community: a strong local business sector, affordable housing, accessible public transportation, public safety, public spaces, and more. In just a few short years, ArtPlace America, the National Endowment for the Arts, Our Town Program, and private foundations like the Kresge Foundation have each brought to light inspiring projects taking place around the country that help build our understanding of these connections.

The cross-sector nature of this work suggests the existing infrastructure in the community development field, like community development finance institutions (CDFIs), could play an important role in helping artists, arts and culture organizations, and non-arts organizations build their capacity to sustain creative production long after dedicated funding for specific projects has passed. For many CDFIs, the role they play in providing both financing and technical assistance to support neighborhood-based projects and the growth of small business in low income communities implies they may also have the potential to pivot their services to engage artists and projects that support the development of arts and culture.

In an effort to build on a baseline of information about the ways CDFIs either actively support or aspire to support arts and culture in their economic and community development activities, the Surdna Foundation, in partnership with the Kresge Foundation, created a one-time grant opportunity called Catalyzing Culture and Community through CDFIs (C4). The open request for proposals (RFP) launched in September 2014, and sought two project types—arts- and artist-centered interventions and neighborhood revitalization projects—both focused on deploying alternative capital in disinvested communities to augment efforts that systematically integrate arts, culture, and creative activities.²

From an impressive pool of 41 applications we have selected seven to fund. The CDFIs are active in diverse locations: West Philadelphia, Baltimore, Nashville, Toledo, Santa Fe, Albuquerque, and the Cheyenne River Lakota Reservation. Each award is unique in scope, but the joint investment from Surdna and Kresge will further the work of the CDFIs as they provide lending and direct support for arts and cultural events as well as programming, capital projects, business training, and market development for artist-run creative enterprises.

The CDFIs will, for example, provide training to help Native artists acquire and refine business and marketing skills; offer a loan program and technical assistance to help culinary artists locate businesses in a revitalizing commercial corridor; provide home and workplace loans to keep low- and moderate-income artists in the greater Nashville area; and help develop and finance affordable housing for artists, businesses, and arts and culture anchors in Baltimore neighborhoods.

And while many of the proposals identified Creative Placemaking as the focus of their programs, it was notable how many proposals were supporting this activity at its root—the artists, culture-bearers, and creative entrepreneurs who bring the content to place-based endeavors. Many applicants to the C4 described programs that would provide training to artists and creative entrepreneurs to sharpen their business strategies, connect their work to markets, and provide financing to jumpstart or grow their businesses. The C4 applicant pool identified more than $38 million in confirmed support, indicating both commitment to execute proposed work and considerable leverage for a grant that would not exceed a modest $200,000 over 12 or 24 months.

Given our individual and collective work in the field of arts and culture, we at the Surdna Foundation are optimistic about the role of CDFIs in supporting artists and cultural organizations. Our experience shows CDFIs face significant barriers to issuing debt in support of arts and culture due to irregular or unpredictable revenue, high proportion of foundation support in the income mix (income that cannot be used as collateral against a loan), and balance sheets describing a weak financial picture in spite of value and impact of an individual’s or organization’s work. And from the arts and culture perspective, a lack of understanding of the unique flows and characteristics of creative practice and its viability within a marketplace may create translation barriers for traditional economic and community development service providers seeking to work with artists and within arts and culture.

With these constraints in mind, we are thrilled to continue learning about the work of the CDFIs in order to understand how we can better employ existing financial systems in support of artists and arts and culture. Through C4, we hope the project examples will do two things: 1) spark support of these types of projects and programs by other CDFIs, and 2) increase the number and variety of arts-centered activities in social investment programs.

Focusing on specific places and techniques, the C4 program will enhance the practice and sustainability of artists and creative enterprises, including their contributions to Creative Placemaking, by bringing capacity-building support and financial know-how to the field.