The Entrepreneurs of Color Fund (EOCF) is designed to get much-needed capital directly into the hands of small business owners serving communities of color, and works through over 20 CDFI partners in local markets across the country, with LISC as national manager. Kim Buttemer, a small business finance expert who works with EOCF as an advisor, shares her insight into how CDFIs can support organizations’ growth.
This year, Kim Buttemer, the former COO of CDC Small Business Finance, a leading SBA lending nonprofit, joined the Entrepreneurs of Color Fund supported by JPMorganChase, which LISC manages nationally, as an advisor to CDFIs in the program. In the Q+A that follows, Buttemer describes the value of deep listening to build alignment, what keeps her motivated, and more.
LISC: How do you work with an organization to think through how they can improve their operations and meet the challenges they’re facing?
Kim Buttemer: I start by spending time listening to different team members to help spot what's working, what's not working, and what do we want that we're not getting. From there, with a cross-functional team, I put everybody at the table, and we map out their process.
What happens 100% of the time in that exercise is that colleagues realize they've made assumptions about what other people's roles are that aren't completely accurate. And people leave much better informed about the overall process, much better informed about their role in it, with much more empathy for their colleagues, and as a result, generally, we see accelerated collaboration and group problem-solving after.
The process really helps to start breaking down silos in processes and it creates a much smoother process, not just for the customer but for the service provider too.
Do you have an example of a client you worked with that embodies that process?
I have one client that comes to mind who had a big technical assistance division to help loan prospects. We worked really hard to define who was responsible for what, to make sure that when there was a handoff, it was a clean handoff. And we were able to increase their efficiency. In the six months after implementing the new process they did 150% of what they had done in the prior six months, and by the end of the year, they were at 300% of the prior year's production.
Seventy-five percent of the ideas were from within the organization. We just needed to all sit there and process them together, combine them, and then I could supplement with my experience, and it’s really helped the organization.
It's so rewarding to walk away from these projects and people are so much happier. The level of job satisfaction is another definite impact.
Everybody [gets] on the same page, solidifies, and creates strong teams. A year later, [that client] reached out to let me know they took what we had worked on together and now prioritize that every year when they’re creating their budget--they are also taking time to process mapping as well. The work continues to serve them long after our time together.
What do you hold as a ‘north star’ when you have these conversations with CDFIs?
I'm a real believer that business owners come to our industry-- to mission lending-- because they're hesitant to go to a bank, whether that's because they've had an experience, or because they have general fear. It doesn't really matter. They come to us, and they need help.
When I approach things, it's always with the customer in mind. And if they need money, they don't need money in seven months, they need money in a matter of weeks in order to really sometimes survive, be able to fulfill the contract, to meet payroll, to seize an opportunity. I always start from the perspective of the whole reason that we're all here is to find the right businesses that we can help. We can't help every business, but we have to find the ones that we can help.
One of my old colleagues used to have a sign in her office that I often reflect on. It said, “Owning a business is a privilege.”
A lot of what I've done throughout my career and with the advising that I help other mission-based lenders with is we have to remember that so often it's easy and natural to get so close to a story or a situation or an idea that we lose perspective that business ownership is a privilege, not a right.
But sometimes the best thing we can do is to say “no” or “not now” to businesses that need to hear that, so that we can use that time and resource to help the ones that are “yes” and “now.”
A lot of what I do is working with CDFIs and other nonprofit lenders to find ways to be able to say “no” or “not now” with a true assessment and not leave people stranded. Enabling their organization to have a process that flows smoothly and really focus on helping those that are totally ready, or just right before ready, get to the finish line faster.
What could CDFIs be thinking about more in their work?
Well, here’s one thing about me: I am a huge advocate that every CDFI should be financially self-sustaining because it gives the CDFI power. It gives the CDFI the ability to produce more impact in their region or with their demographic. It also aligns with our goal to prove that underserved communities deserve to be served. If we can do it and be financially sustainable, then that's further evidence that so should banks. Impact and financial sustainability as a nonprofit need to be really important goals.
We absolutely need funders to start new programs. But if we as an industry become beholden to just the money that the funder wants to give us for their pet project, and then we're not true to the core of who we are as a company, [what] we want to do, and how we want to do it.
It's easier to be able to do a good job if you know what your strengths are, know what your focus is, and then secure whatever grant financing you might need to seed, but not live off of.
What is your favorite part about working with small business CDFIs?
When I was in my twenties and I heard about economic development for the very first time, I knew right away what I had to do as a career. I did other types of economic development early on, but when I got into this space, where it's really helping what I believe is the engine of America, small businesses -- the entrepreneurial spirit and the way that communities grow and thrive both through commercial real estate ownership and through families becoming bosses instead of laborers.
That's my favorite part of our industry, is that we create impact both economic impact but also personal impact, for people and their families. That really matters to me.
I care about the underdogs. Nobody needs to be one.