We are characteristically small business lenders and have been for more than 23 years.

Our mission is to move resources into low-income communities. We have experienced growth in assets (from $50,000 in 1989 to $160 million in 2009) and have funded more than 2,400 projects that have resulted in significant impact and dramatic increase in demand.

Due to this demand, Finance Fund has begun the careful exploration to purchase a national bank charter. The bank would be an affiliate of Finance Fund and will maintain the mission of Finance Fund, which is to invest in distressed communities. Its purpose will not be to compete with other local, regional and statewide banks. Simply, the purchase of a bank will enable us to maintain our altruistic mission and collaboration with a bank’s profit mission.

On Feb. 18, 2010, the inaugural meeting of the BISC (Bank Initiative Steering Committee) was held.  This group of experienced, mission-focused individuals debated at length, the pros and cons of types of banks, timing and potential obstacles to this endeavor.  It was unanimously decided that a professional consultant would be sought-out to guide the BISC through the process of potential bank identification, and acquisition.  To that end, an official RFP has been issued.  The RFP, which can be found here, details the scope of work and minimum requirements desired of prospective candidates.

This begins yet another exciting chapter for Finance Fund.  As this exploration unfolds, look for further details of our progress.

Jennifer Deuber (Director of Communication) and Valerie Heiby (Director of Development) were with me on the trip and in spite (or because) of their best efforts I was re-elected to the Coalition’s board of directors. In addition the board, through some slip-up in procedure, ended up electing me as Treasurer of the board. Though I ran a covertly non-existent campaign that backfired, I am honored to accept this role.

It is an exciting time for CDFIs. They are being identified and recognized as a part of the nation’s financial services industry that has long been a stable and credible provider of community lending. That recognition is resulting in additional resources and confidence as a player in economic recovery of the country. We heard at the Institute that the Obama administration believes that CDFIs have a key role in recovery and ongoing community stability. It is our hope that Congress will come to the same conclusion.

Finance Fund is honored to be part of this group as a trusted state leader and visionary in the realm of early childhood care centers and schools and financial assistance. In addition to myself, the group includes professionals from Miami Valley Child Development Centers, Inc., Ohio Department of Job & Family Services, Federal Reserve Bank, Ohio Office of Budget & Management, the Ohio Department of Education and others.

The workgroup will provide insights and recommendations to Gov. Strickland by the end of this April – in time for consideration in the development of the next biennial budget.

After 23 years serving Ohio’s under-privileged and low-income neighborhoods and communities, we’ve set ourselves apart as a trusted financial intermediary that is considered a state leader and visionary. Since 1987, Finance Fund has invested more than $96 million in housing, economic development, childcare and Head Start projects throughout Ohio, leveraging more than $759.9 million. This investment was accomplished through more than 2,457 awards to community-based organizations throughout the state as part of Finance Fund’s core programs. Partnerships have enabled low-income people access to more than 15,312 units of affordable housing, 8,991 full-time jobs, and 3,033 early care and education spaces (classrooms) for 69,377 children benefiting the lives of more than 116,000 Ohioans.

Recently, we helped fund two child care centers by providing grants and loans for re-construction and overhaul.

Noble Learning Center – Caldwell, Ohio
Availability, cost, safety, quality, and accessibility all added to the frustration of finding the right place – the comforting place to care for Noble County children. Finance Fund provided a grant for planning and for facilities improvement for Noble County’s newest (and only) child care center. The overhaul supported 20 construction jobs and the resulting child care center services 135 children and employs 15. Read more here.

MVCDC Kings Highway Head Start – Kings Highway
The Miami Valley Childhood Development Centers (MVCDC), encompassing Clark, Madison and Montgomery Counties, was in great need to purchase, update and improve their Kings Highway Head Start facility. Finance Fund stepped in with $1.05 million in New Markets Tax Credits funding toward the renovation, and an additional $429,000 federal grant. Today, more than 225 children are enrolled at the MVCDC Kings Highway Head Start, with a capacity of 240 students. Read more here.

Check back here for my updates on Early Childhood Financing Workgroup meetings. I look forward to sharing our progress.

After 18 years in the private sector, and particularly in banking, what was the motivation for switching to the non-profit side of the world?

Switching from the private to the non-profit sector wasn’t the largest consideration. It was more about taking what I already knew about finance and commercial development, and coupling it with my passions. When I was at the Huntington National Bank we had an internal initiative called Huntington Hometown Partnership. It was the bank’s plan to meet a $250MM commitment in residential loans, community development, and small business lending, as a part of Mayor Michael Coleman’s 21st Century City Initiative. I was the point person in the small business lending area. Part of our goal was to make our lending more prudent in low-to-moderate income areas. We realized that when lending in re-developed or economically depressed areas, customers don’t necessarily fit in the established underwriting “box.” We worked to adjust guidelines and find partners like Finance Fund.

In essence, my biggest switch will be staying mission focused and less profit driven. Although, I will review projects with a business mind set because at the end of the day, it’s of no benefit to Finance Fund and the community at large if we lose money.

What makes you most anxious about taking this new direction in your career?

The stability of non-profit funding sources – and the future comfort level of those sources.

Additionally, after being with an organization for 13 years, you are a bit on cruise control when it comes to knowing the internal systems. Now, I’m starting over again from learning the voicemail system to new products and services. I am in the process of learning how to be focused on our bottom line, while not making decisions that will compromise our mission.

The banking industry has obviously gone through many changes in the last few years. What was the hardest loss you saw during that time? What was the greatest lesson you were granted?

The hardest lesson learned is making sure that you stay in your own back yard (rather than follow customers out of market where you don’t have a presence). There are some times when you want to say yes – that you have to say no. I also learned a great lesson on how to do business: the way you do it in the bad times is how you need to do it in the good times.

Finance Fund has a unique position within the State of Ohio. Given what you’ve learned about it in your few short weeks on the job, what’s your greatest hope for where it will head in the next 10 years?

We are a sideline partner right now. We want to be on the field playing with everyone else. This means being more proactive in the effort to re-invigorate historically economically depressed areas – and being very “loud” about how we can help you. We miss opportunities to impact communities every day by not being on the field. Bankers need to know that we are here and we can help diffuse exposures and give creativity to a project.

Lastly, as someone that will have the distinct opportunity to report to Jim Klein, how will you “herd his cats” of ideas?

Jim reminds me of a lot of small business owners I worked with over the years. I’m going to take his vision, and work hard to actualize it – with him and for him. I’m a thorough researcher – I am likely to pick up an idea that he threw out and check it out. No idea is a solution until we’ve proven it to be or not.

I have a checklist to make sure I know if I should propel a project along the line. What is the project, planning stages; I will communicate to the potential client what I need from them to be able to help them.

I will say no quickly so that I won’t string out any potential project for months and months. And when I say no, it will always be with a path to get to “yes” or clear reasons why it couldn’t be done.

The Competitive Imperative of Learning (Harvard Business Review July-August 2008), by Amy C. Edmondson

Most executives believe that relentless execution – the efficient, timely, consistent production and delivery of goods or services – is the surefire path to customer satisfaction and financial results. Managers who let up on execution even briefly, the assumption goes, do so at their peril.

                In fact, even flawless execution cannot guarantee enduring success in the knowledge economy. The influx of new knowledge in most fields makes it easy to fall behind.  Look at General Motors which was the largest most profitable company in the world in the 1970. GM remained wedded to a well-developed competency in centralized control and high-volume execution. They have steadily lost ground for decades and are now counted in the ranks of high profile bankruptcies.

                Edmondson’s research identifies a different approach to execution, what she calls “Execution-as-learning ”. The approach maintains that a focus on getting things done, and done right, crowds out the experimentation and reflection vital to sustainable success. By continuing to think about execution as efficiency, which she refers to as old fashioned and narrow, companies fall into predictable self sabotaging traps.

1.       Critical information and ideas fail to rise to the top

2.       People don’t have enough time to learn

3.       Unhealthy internal competition arises

4.       Companies think they can do no wrong

In addition the environment must be made safe. Before an execution-as-learning can occur organizations must foster psychological safety. This means ensuring that no one is penalized if they ask for help or admit a mistake. This safety is not done at the expense of accountability and Edmondson presents a safety/accountability matrix which suggests that effective organizations achieve high levels of both.

        The goal of the approach is to find out what works and what doesn’t; employees must absorb new knowledge while executing, often sacrificing short term efficiency to gain insight into and respond to novel problems. The author reveals four steps to make this happen.

1.       Provide process guidelines

2.       Provide tools that enable employees to collaborate in real time

3.       Collect process data

4.       Institutionalize disciplined reflection

The article presents a valid and viable alternative that strikes a median between hierarchy and self guided teams. Fostering an atmosphere in which trust and respect thrive, and flexibility and innovation flourish, pays off in most settings, even the most deadline driven. When people know their ideas are welcome, they will offer innovative ways to lower costs and improve quality, thus laying a more solid foundation for their organization’s success.

You can read the full article here.