Changing the Players for Broadband Success

What role can CDFIs play in expanding access to broadband? At the #RuralTalks Broadband and Infrastructure Summit in May in Washington, we explored the ways in which CDFIs are stepping up for big impact.

When Congress passed a law to support CDFIs over 25 years ago, Community Development Financial Institutions (CDFIs) were still a relatively nascent movement. They represented an approach to community building and anti-poverty efforts revolving around the idea that communities without access to conventional financing should be able to organize and develop their own financial resources in order to make an impact close to home. Not everyone had faith in the idea..

Fast forward to today and there are more than 1,200 certified CDFIs nationwide and the CDFI industry manages more than $222 billion in funding. As financial engines in the fight for economic, social, and racial justice, CDFIs have left an indelible mark across the nation, creating jobs, affordable housing, improving financial health, and creating opportunities in places that mainstream finance dollars typically don’t reach. 

At LISC, we’re proud to be a CDFI and partner with other CDFIs and rural nonprofit community-based organizations to improve the lives of residents across the United States. When it comes to enhancing broadband access, we’ve worked first-hand with CDFIs who are stepping up to fund crucial broadband infrastructure projects in order to bring high-speed internet access to more people in more places. We explored this topic at length during our recent LISC Rural Talks Summit in Washington, DC.

LISC’s former COO Annie Donovan spoke with Emily Rose, senior vice president with U.S. Bancorp Community Development Corporation (USBCDC), the community investment and tax credit division of U.S. Bank, about the role the CDFIs can play in aiding the efforts to spread connectivity.

Rose has been spearheading an ambitious program between USBCDC and broadband provider GCI Alaska to bring high-speed internet access to First Nation communities in the remote Aleutian Islands of Alaska. Over the last decade, USBCDC invested more than $60 million in New Market Tax Credit equity in the Alaskan project, and the bank has also supported various projects working to expand broadband access in rural Appalachian communities in Ohio. According to Rose, these programs aren’t simply offering “nice-to-have” connectivity — rather, their impact in bringing accessible telehealth and online mental health services makes them “literally life-saving” projects, she says.    

The overall message Rose conveyed is that CDFIs are uniquely positioned to be change agents and can play a pivotal role in funding and supporting projects to help widen broadband access. “Being close to the ground, CDFIs better understand the collaboration and know-how to build the right relationships and engage the private sector” in ways that benefit their local communities, she explained.

From her experiences at the intersection of traditional finance and CDFI lending, Rose spoke substantively about how New Markets Tax Credits (NMTCs) can be a game changer for broadband expansion. CDFIs know how to utilize NMTCs in order to support business growth and spur job creation and economic development in underserved communities, she explained. These federal tax credits provide an incentive for investment and are an important funding vehicle in the broadband space.

“The impacts [of NMTCs] are real…and measurable to the communities that are trying to get broadband access,” Rose noted.

When working on broadband projects, Rose said, it’s important for CDFIs to also think about job creation. “Connectivity in these communities can open opportunities to good-paying jobs with fewer barriers to entry,” she explained. “We don’t only want to create jobs where you need a high education... If you create a technical job where somebody can do an apprenticeship, job training, and make $60,000 a year, that’s a great outcome.”

Also important to the outcome of these projects, Rose added, is the ability to report on impact — through data and stories.

“If I say we’re going to spend $300 million to bring internet to 40,000 people, is that going to connect internally? Is the return that we’re going to get worth it?”

Telling the story of how those investments are “worth it” is a process, Rose explained — one that is aided by events like our LISC Rural Talks Summit, which help to “raise the visibility of the experts in the field so that people can share knowledge and success,” she said. “It doesn't matter who was in your in your deal or who your capital source was, we can all help each other by sharing the knowledge that we have gained through our experiences.”

Looking to be part of the process of expanding connectivity? Speak with LISC to learn how CDFIs can play an important role in the deployment and adoption of high-speed broadband in unserved and underserved communities. https://www.lisc.org/rural/