THREE-YEAR STRATEGIC FRAMEWORK 1 THREE-YEAR STRATEGIC FRAMEWORK INTRODUCTION Community Reinvestment Fund, USA s (CRF) Strategic Plan for fiscal years 2017-2019 provides a three-year, comprehensive, realistic plan for carrying out our mission by collaborating with others to address the challenges and needs of those we serve. During our six-month planning process, we conducted market and industry research and gathered input from a broad group of stakeholders including all levels of CRF staff, partner organizations and the community. The board provided strategic leadership and guidance throughout the process. Based on this information, we refined our core values to drive action internally and externally, refined our mission to more accurately portray our role as collaborators and connectors, and laid the groundwork for a three-year set of actionable goals. All of this work guided the creation of a detailed FY 17 plan, which is supported by community, product and service, department and individual staff development plans.
THREE-YEAR STRATEGIC FRAMEWORK OUR MISSION To empower people to improve their lives and strengthen their communities through innovative financial solutions. 2027 VISION Lead the industry in deploying innovative financial solutions that level the economic playing field for everyone. As measured by: Impacting one million people and deploying $1 billion in capital annually. OUR CORE VALUES THE BELIEFS THAT GUIDE OUR WORK TRANSFORM THROUGH INNOVATION CREATE EQUITABLE ECONOMIC OPPORTUNITIES EXCEL IN ALL WE DO LEAD THROUGH COLLABORATION ACT WITH INTEGRITY TRANSFORM THROUGH INNOVATION We believe in taking risks, being open to the unexpected and demonstrating unwavering commitment to solving problems that affect the communities we serve. We develop and deliver creative solutions that transform lives, communities, our work and our industry. LEAD THROUGH COLLABORATION ACT WITH INTEGRITY We believe that true leaders work with, and through, others to create impact. We are passionate about learning and strive to be courageous, yet humble, thought leaders. We believe in holding each other to the highest moral and ethical standards, not compromising truth. We will authentically treat everyone with respect and embrace diversity in our organization and the communities we serve. EXCEL IN ALL WE DO CREATE EQUITABLE ECONOMIC OPPORTUNITIES We believe that we should be uncompromising in our pursuit of excellence. We have high standards and will accept nothing less than striving to be the best we can be. We believe it is our responsibility to fight to ensure that all communities have access to a level economic playing field. We are committed to providing opportunities and delivering measurable, transformative impact. 2
THREE-YEAR STRATEGIC FRAMEWORK 3 OUR THEORY OF CHANGE CHALLENGE OUTCOMES PROBLEM STATEMENT SHORT-TERM Economically challenged communities lack access to appropriate capital and resources COMMUNITY NEEDS Increase number of quality jobs created. Increase number of businesses. Expand access to consumer goods and services. Increase the number of businesses owned by people of color, women and veterans. Increase capacity and capability of community lending partners. Healthy communities require jobs, housing, health-care, and education LONG-TERM CRF SOLUTIONS Fill gaps in access to capital Build capacity and capabilities of others Reduce long-term unemployment among underserved populations. Spur additional investment and transform economically challenged communities into vibrant places to live and work. Create opportunity for those left out of the mainstream. BIG impact If we successfully deploy capital, then communities will be stronger and people will have greater economic opportunities.
OUR THREE-YEAR STRATEGIC IMPACT PLAN THREE-YEAR STRATEGIC FRAMEWORK 4 FILLING GAPS IN ACCESS TO CAPITAL BUILDING THE CAPACITY AND CAPABILITIES OF OTHERS MISSION, VISION, VALUES CAPITAL SOLUTIONS LENDING SERVICES FUNDING STRUCTURES Our mission, vision and values informed the development of our threeyear plan. Every goal, strategy and tactic is measured against how it aligns with those three guideposts. They work together in strategic alignment to create stronger communities and greater economic opportunity. Fill gaps in access to capital by deploying innovative lending products directly to borrowers, and through community lending partners. Build the capacity and capability of our community lending partners by providing cutting-edge lender services. Offerings - Direct & Indirect Offerings Offerings Small business loans Small business advisory services Community facilities loans Multi-family affordable housing loans Bond issuance under CDFI Bond Guarantee Program Single-family home mortgage program Small business loan marketplace Loan servicing Small business loan origination software Loan fund management Process consulting Grow the capacity of the industry by creating innovative funding structures that allow CRF and our partners to access the capital markets. Securitization Single-family Home Mortgage Fund 3 year goals BIG impact Impact 150,000 lives 1200 new businesses Capital Deployment: $625 million annually Increase net assets to $21.9 million as a way to help increase community partner capacity
THREE-YEAR STRATEGIC FRAMEWORK 5 FOCUSED PRIORITIES CAPITAL SOLUTIONS Fill gaps in access to capital CRF SBA 7(A) SMALL BUSINESS LOAN Deploy capital in areas, and to populations, not served by traditional SBA lenders. CRF PATIENT CAPITAL SMALL BUSINESS LOAN Deploy patient form of capital may include a period of monthly, interest-only payments and revenue royalty repayment. CRF FLEX SMALL BUSINESS LOANS Deploy a flexible form of capital offering faster decisions, longer payback times and responsible terms. MULTI-FAMILY AFFORDABLE HOUSING Deploy capital directly to borrowers through the HFA Risk Share Program targeting a lending gap for smaller properties. SINGLE-FAMILY AFFORDABLE HOUSING Launch three home mortgage programs, including Detroit, to solve the problem of low property values that have led to a gap between the appraised value of a house and the loan amount needed to buy and renovate it. LINE OF CREDIT/MERCHANT ADVANCE Address the unmet market needs for responsible line-of-credit and merchant cash advance products for small businesses. LENDER SERVICES Build industry capacity and capability CONNECT2CAPITAL SMALL BUSINESS LENDING MARKETPLACE Complete development, implement and grow a marketplace that matches small business loan requests with responsible mission-driven small business lenders and business advisory providers. LOAN SERVICING PLATFORM Integration of a new, more robust and efficient loan servicing platform that will allow for expansion of third party servicing contracts. SPARK SMALL BUSINESS LOAN ORIGINATION SOFTWARE Continue development and deployment of the Spark platform to increase efficiency of mission-based lenders. FUNDING STRUCTURES Grow capacity of CRF and our partners CRF BALANCE SHEET Restructure CRF balance sheet as a way to help increase the capacity of our community partners. CONNECT2CAPITAL (C2C) FUND Create a structure that will allow CRF, and lending partners participating in the C2C marketplace, to access the capital markets for funding. SECURITIZE CRF SBA 7(A) LOANS Securitize the unguaranteed portions of SBA 7(a) loans that are currently held on our balance sheet. SECURITIZE LOAN PURCHASE Create a structure to securitize loans of other mission-based organizations to provide liquidity to our community lending partners. SECURITIZE COMMUNITY ADVANTAGE (CA) 7(A) LOANS Create a structure to securitize CA loans to provide liquidity to our community lending partners.
THREE-YEAR STRATEGIC FRAMEWORK 6 PROJECTIONS PROJECTED THREE-YEAR GROWTH IN SMALL BUSINESS LENDING Dollars in thousands ACTIVITIES 2017 2018 2019 Support & Revenue Loan Income $4,007 $4,596 $5,365 Fee Income $8,433 $9,135 $10,465 Grants and Contributions $4,500 $4,500 $4,500 Total Revenue $16,940 $18,230 $20,330 Program & Operating Expense $15,433 $15,896 $16,691 $43M FY16 $55M FY17 $65M FY18 $80M FY19 Change in Net Assets $1,507 $2,335 $3,639 PROJECTED THREE-YEAR GROWTH IN SELF-SUFFICIENCY FINANCIAL POSITION 2017 2018 2019 Assets $94,920 $104,516 $116,465 Liabilities $78,854 $86,115 $94,525 Net Assets $16,066 $18,401 $21,940 78% 85% 88% 94% FY16 FY17 FY18 FY19 Liabilities & Net Assets $94,920 $104,516 $116,465