Evolving Capital for an Evolving Field: Why CDFIs Are the Next Frontier for Impact Investing
The community development finance field is moving into a pivotal new chapter. Over the past decade, Community Development Financial Institutions (CDFIs) have grown dramatically in scale and sophistication. Once largely small, niche lenders operating on razor-thin margins, many CDFIs today manage nine-figure balance sheets, deploy capital with disciplined underwriting, and report impact outcomes with increasing rigor.
But even as they professionalize, CDFIs face a structural challenge: ongoing uncertainty in federal funding. Volatile appropriations cycles, political shifts, and recent government shutdowns mean that relying heavily on federal programs, including the CDFI Fund, historically central to the industry’s growth, is increasingly risky.
This moment has accelerated a major trend: CDFIs are intentionally diversifying their capital sources to build more resilient, scalable, and mission-aligned institutions.
About CNote
CNote is a key supporting partner of Forward Community Investments.
Founded in 2016 by financial executives Catherine Berman and Yuliya Tarasava, CNote unlocks the overlooked $5T community finance market for investors who understand that you can achieve strong performance alongside positive community development. After seeing CDFIs’ strong fundamentals and real outcomes, such as affordable housing, supporting first-time entrepreneurs, and building community facilities, the CNote founders built the firm to connect capital to the community finance / community banking ecosystem without added risk. Today, CNote applies institutional-grade discipline, modern technology and rigorous risk management to channel capital into community finance at scale.