Opportunity Finance Network (OFN) announced that Wells Fargo is committing a $25 million grant to its Finance Justice Fund to help tackle systemic barriers to capital in communities around the country. Managed by Opportunity Finance Network, the Finance Justice Fund aims to address the racial wealth gap and persistent poverty by delivering financing through community development financial institutions (CDFIs) to Black, Latinx, Native, rural, and other communities with less access to traditional financial services.
“Wells Fargo’s historic grant contribution sets a precedent for organizations seeking to make an impact in low-income and underserved communities. CDFIs can offer the highest impact programs when debt capital is coupled with grants that enable them to build their capacity and net assets. This grant means that CDFIs will be able to go deeper into their communities to serve more individuals and neighborhoods,” said Lisa Mensah, president and CEO of OFN.
“Growing small businesses, supporting affordable housing developers, and revitalizing economic corridors enrich communities for the long term,” said Bill Daley, vice chairman of Public Affairs at Wells Fargo. “We’ve long understood the expertise of CDFIs having engaged OFN through our Diverse Community Capital program and now with our Open for Business Fund. The Finance Justice Fund is a natural evolution of our deep collaboration with OFN and appreciation for the role CDFIs play in the economy.”
CDFIs will receive awards from the Finance Justice Fund to expand lending and provide business advisory assistance to small businesses. The Wells Fargo grant helps OFN deploy the Finance Justice Fund debt as it catalyzes its long-term, low-cost, flexible capital and accelerates the work of OFN member CDFIs in communities of color, rural markets, and areas of persistent poverty. OFN envisions that when the Finance Justice Fund achieves its goal of $1 billion in capital, the fund will support financing approximately $420 million for small businesses, $420 million for affordable housing, $70 million for consumer and other financial support, and $90 million for community facilities in those markets.
Wells Fargo has a history of working with CDFIs and OFN. From 2015 to 2021, Wells Fargo provided CDFIs who were expanding their lending to Black, Latinx, and other diverse small businesses with more than $80 million in debt and more than $94 million in grant capital through the Diverse Community Capital program. This initiative built capital, technology, and infrastructure for these CDFIs, strengthening them for the long term and enabling them to mobilize faster to meet the unexpected demand from small businesses during the pandemic. Additionally, the Wells Fargo NEXT Awards for Opportunity Finance awarded the nation’s most promising CDFIs more than $76 million from 2007 to 2016.
This $25 million grant is part of Wells Fargo’s Open for Business Fund, a roughly $420 million small business recovery effort. Through May 31, 2021, the Open for Business Fund is projected to reach roughly 35,000 small businesses, helping them keep nearly 90,000 jobs.