In a Q+A with ImpactAlpha, Michael T. Pugh delves into the ways community development finance must operate in the wake of new affirmative action legislation, and what the big-ticket items on LISC’s 2024 investment list are, including small business support and green jobs and homes.
The excerpt below was originally published:
LISC’s Michael Pugh on navigating legal challenges to community development finance (Q&A)
By Roodgally Senatus, ImpactAlpha
ImpactAlpha, January 24 — After 100 days at the Local Initiatives Support Corporation, Michael Pugh is getting down to business. At the top of his agenda: increasing the supply of affordable housing in underserved communities, financing undercapitalized businesses and ensuring LISC’s investments foster inclusion and climate resilience.
As the largest community development financial institution in the country, “We remain connected to a strong balance of public and private sector partners to help galvanize resources to take on these challenges,” Pugh told ImpactAlpha.
The 52-year-old CEO brings 30 years of banking experience to LISC. Before joining LISC, Pugh headed Carver Bancorp, the holding company for the Carver Federal Savings Bank, the largest African American and Caribbean American-managed banks in the US, with roughly $700 million in assets. A group of community leaders launched the federally-chartered savings bank in Harlem in 1948 to provide access to mainstream financial services for African-Americans and Caribbean-Americans neighborhoods that were historically excluded.
Pugh calls his tenure at Carver “the highlight of my career.” He led efforts to expand the institutions’ assets and investors, and launched digital financial products and services geared towards underbanked households and small businesses, particularly those that are owned by minorities and women.
With LISC, Pugh leads an organization that has invested nearly $30 billion in its 45-year of operations to support the creation of affordable housing, education, jobs and health services, and other community-based solutions for low-income and underserved neighborhoods in all 50 US states, as well as the District of Columbia and Puerto Rico.
Among LISC’s many forward-looking initiatives is Project 10X, which has raised close to $900 million since 2020 to address racial gaps in health, wealth and opportunity in the US over a decade (see, “LISC looks to 10x investment in closing racial wealth gaps”).
The initiative, which has a $1 billion target, includes the Black Economic Development Fund, a $250 million fund that invests in banks, businesses and anchor institutions supporting economic growth in Black communities. LISC’s $100 million Entrepreneurs of Color Loan Fund buys loans off the books of community lenders to free up their capital for more lending to minority entrepreneurs.
LISC is one of the many CDFIs competing for the mandate to manage a portion of the $14 billion National Clean Investment Fund, part of the national “green bank” created under the Inflation Reduction Act. The nonprofit last year formed a new entity called Power Forward Communities, alongside partners Rewiring America, Enterprise Community Partners, United Way and Habitat for Humanity, to manage the fund.