Claire: Please subscribe to this podcast, wherever you get your podcasts from. Welcome along to the latest episode of the Curious Capitalist brought to you by the Conscious Business Collaborative, known as the CBC board in Connecticut. On today's episode, I'm going to be speaking with Diane Smith, who is the CEO of Capital for Change based in Wallingford, [00:01:00] Connecticut.

Claire: Capital for Change has been delivering financial capital and impactful change to Connecticut's Underserved communities for more than 50 years. I'm excited to find out more. So Diane, welcome to the Curious Capitalist.

Diane: Thank you very much. I'm happy to be here. It's

Claire: great to have you on board. So come on, Diane, tell me, first of all, a little bit about yourself, how you got to this point in your career, and then we're going to dive into Capital for Change.

Diane: So I would say community development as an industry or as a discipline is sort of something that people generally get into accidentally. So I started with. With working for the state of Connecticut, I worked for the state of Connecticut for over 30 years, and I started in public policy, which included, you know, investment in economic development and housing development, community development, and went on to Work specifically in the financing world of economic development and community development.

Diane: When the previous CEO left, I was encouraged to apply for this position and I did. So that's how I got here.

Claire: Wow. What an amazing journey to date. And I mean, you guys have been doing so much good for, for so, so long, and we're going to dive into some of the huge success stories. I think that it's fair to say you've had a Over the last 50 years.

Diane: Well, actually there hasn't been our, uh, Former board chair has been involved in a various numbers of, uh, philanthropic and investment communities and had introduced us to the conscious capitalists back in about a year ago. And I just started, so I didn't have any idea what that was about. The, our development officer, however, continued to have the conversation about being engaged.

Diane: So this is our sort of our first foray with this organization.

Claire: It's fabulous. You know, I've interviewed so many people over the years. Who have worked in all different areas of business, sometimes startups, entrepreneurs, very established businesses. And quite often they stumble across conscious capitalism as a, as a theory or as a, a framework for doing business for good.

Claire: Over the last 50 years, you've invested over 425 million. of mission driven capital into Connecticut's most vulnerable communities. Like, that's a round of applause for a start. But what could be done at state or federal level to, to maximize the positive impact that you guys are having?

Diane: I would say to recognize the community development finance institutions as an industry all, all together.

Diane: So what this happened, at least at the federal level, is there is in the Treasury Department has established CDFIs as a certified organization, a body of organizations, and have funded it through something called the CDFI Fund. As the, uh, Pandemic happened and the feds really needed to get a lot of money out on the street.

Diane: to small business, to community organizations, to the folks who actually represent the neighborhoods, really just to be able to, to be able to touch those, those people more directly than the federal government or the state government can do on its own. Both of the, You know, those government sectors are really important to the work that we do.

Claire: Absolutely. Something I just thought of is you've been doing this for a very, very long time now as a, as an organization. Tell me about some of the success stories or highlights that you've gone, wow, that's amazing. Ones that you're like really proud of, the ones that you take home and share around the dinner table at Thanksgiving, the ones that you, you know, that you're really chuffed

Diane: about.

Diane: I'm not sure that I share them around the Thanksgiving dinner table. However, it, what's really good about the work we've done. Really more recently in the last, I would say five to 10 years is understanding the value of unrestricted affordable housing in communities, the state government, the federal government have lots of programs where they provide affordable housing.

Diane: They really want to be able to maintain their properties and provide good housing to the neighbors. And what we've been able to do over the last few years is to find capital to help those owners maintain their properties in good condition, as well as providing affordable rents without the, the, uh, the public restrictions.

Diane: So here, you know, we, we call it that naturally, naturally occurring affordable housing, NOAA housing, but over the period of time, you know, That we've been available, we've made these dollars available through a relationship with a state agency. There's been an awful lot of, of work been, been done with these investor owners, and not only has it provided this affordable housing to folks, but it's also reduced the costs for the owners themselves who were getting money from more expensive lenders.

Diane: You

Claire: do so much more than just assisting people with home ownership and home development though, don't you? You work with a lot of businesses as well. Give me the full umbrella of, of capital options that you can offer all walks of life within the community.

Diane: So we are what is described on our website as a full service CDFI.

Diane: They can also benefit from energy efficiency lending from us. We can provide energy efficiency lending to larger property owners who have, you know, you know, 50 unit apartment buildings. We can provide lending to folks who are looking to acquire property, to create affordable housing, to improve affordable housing, to plan for the development of affordable housing.

Diane: Those are called pre development loans. We provide loans to small businesses. So we do that in partnership with the state. And we also provide lending to nonprofits for their businesses themselves. So whether they're looking to purchase a property or to expand their business line in providing services to the community in terms of working capital or to purchase equipment, we can also do that.

Diane: So we can do all of that in the same community and and really be able to We hope to be very impactful in our investment strategies,

Claire: huge, hugely impactful and changing communities and lives. You mentioned the, the environmental and sustainability. Tell me a little bit more about the homeowner loans specifically in terms of solar, geothermal, improved insulation.

Claire: So

Diane: what we've done primarily is to work with homeowners who are looking to improve their energy efficiency. So we live in New England and there is a lot of dependence even now on oil and gas. So we do provide opportunities for those homeowners to repair and improve those systems if they're dedicated to keeping them.

Diane: And we also provide them lending to install something called heat pumps, which are electric driven. We are just starting our work with solar. Um, we're doing that in partnership with the Connecticut Green Bank. And we're getting that just, just started. Um, so those installations will probably begin, you know, during the, during the late spring.

Diane: And there are other, there are other federal funds that are coming through. The greenhouse gas reduction fund where we're expecting to be able to work with, you know, wherever those those dollars flow in making energy efficiency and environmental sustainability more accessible to low and moderate income households, where it's been, you know, a bit of a challenge to to penetrate some of those markets because of the Because of the cost.

Diane: Uh, and solar parks. That would be really, that would be really helpful. That requires a larger community conversation, including the municipality and the state around how those things are cited and how they're financed. But that's just an enormous amount of opportunity that's in front of us in terms of environmental sustainability.

Claire: I'm excited to see what you come up with there. It sounds very exciting with the technology that's, that's being developed as we speak. Now, you've done a huge amount of good for the communities at which you serve, which is commendable. Tell me a little bit about your team. Tell me about the team and what motivates them and puts fire in their belly to come to work every day.

Diane: We're putting together a strategic plan right now, and it's been really fascinating working with my team and having them ask me questions and ask each other questions and challenging our board of directors on, on pushing harder to really be clear on what it is we're trying to accomplish. And that really is true neighborhoods to stability, stability, sorry, neighborhood stability and revitalization.

Claire: It's always such a difficult one, isn't it? And one of the tenets, one of the vital tenets of conscious capitalism is about conscious culture and that leadership, you know, you're all so entrenched in, in your common higher purpose and what you're trying to achieve. It's, it must be, it must be really sort of heartwarming to know that you've got an entire team supporting you and there for all the right reasons and hopefully pushing forward and delivering on what you're, you know, you're hoping to achieve.

Diane: So, it is our challenge to be able to find the mix of funds that allow us to do that. To provide that capital so that the communities we're serving can afford to, to absorb it, to do the work that they're trying to do the work that they're trying to do and accomplish what they're looking to accomplish and be being successful and being able to, to repay it and whether that's in a community, you know, if that's community work through a nonprofit.

Diane: So that's, you know, it's, it's. It really is. It's a, it's very interesting work. It's very satisfying work. And as we double down on our mission and making sure that we are doing what we say we're going to do, having partners in the work who understand it and are willing to stand beside us is also very satisfying.

Diane: I bet.

Claire: I bet. And increasingly, you know, I guess the financial markets and the financial world that we sort of find ourselves in today can be a bit of a challenge, you know, in many ways.

Diane: But what we found, which is really also getting very sad, I feel if I find myself using the word satisfying quite a bit, and maybe it's because coming from government, the work that I'd done in the past, we could, we could use our, the funds we had available in multiple ways.

Diane: You have to, at the very least, make those dollars available at the cost at which you borrow it. What we're also finding these days is that there are some funding partners who are willing to provide us a lending at their cost or below cost because they have some version of internal subsidy or external subsidy that allows us, allows them to give it to us at a lower rate.

Diane: And that You know, finding partners like that. It just, they're game changers for us because it allows us to reach markets. We wouldn't have been able to serve without that lower cost of funds.

Claire: Absolutely. It's just absolute proof that doing business for good is possible, but working together, you know, you're, you're all achieving.

Diane: Well, really it's a phone call. So some of our, some of our work is online. You can apply online.

Diane: For the most part, we still deal sort of face to face. We do webinars to get folks up and up and running, understanding what our work is and how they can, how they can be improving their own work, their own businesses and getting access to capital. And they can just call us and we'll send them a link to a, an application or send them an application.

Diane: Some of our small businesses aren't as computer savvy and tech savvy. So we sort of meet them where they're at. Wherever they're at, we can go to meet them directly at their places of business and help them complete an application. They can come in to us, um, they can fill it out and upload it and send it to us.

Claire: That's great to know. And also something we should highlight, perhaps in this podcast, I will put a contact telephone number and details of how you can get in touch with the guys in the show notes of this podcast.

Claire: If you're listening now, have a great idea, need a bit of financial support and think that you've got the solid business plan you need to make sure all of those details are in the show notes for you. Diane, what do you hope for the next one year to five years? What's the plan? What's the big plan for Diane Smith?

Diane: Where do you put that one dollar when you only have a dollar? And that always needs to lead with mission and, and policy that this is our behavior. You can always count on us to focus. On our mission. So in the next year, the next five years, I want us to be really clear about those objectives to be able to find the financing that helps us to meet those objectives and the partners to help meet those objectives.

Diane: I want communities and borrowers to understand who we are and how we can help and that we're always willing to be at the table to do some collective problem solving around community

Claire: solutions. I commend you. Kudos to you really and your team. You're doing some amazing work and I urge anybody listening to this podcast, do check out the website capitalforchange.

Diane: it. Thank you so much for inviting me. This has been an awful lot of fun.

Claire: Thank you. Well, we'll see. I'm not sure about fun, but um, I hope that we get word out there and, and get more people aware of what you guys are doing so that you can actually help more people. That would be fabulous.

Diane: Well, thank you so much for your time today.

Claire: It's a pleasure. Thank you for being a part of the Curious Capitalist.

Claire: Until next time, Diane, thank you so much. Thank you for taking the time to listen to this episode of the Curious Capitalist. If you'd like to find out more about the cbc, the Conscious Leaders Network, or even join us, visit the website, conscious business collaborative.org. That's Conscious business collaborative.org.