Community development is no stranger to race relations. Most of the field’s activities focus on “marginalized”, “under-resourced”, “overlooked” communities, aka “low- to moderate-income” (i.e. “LMI”). We have created these social conditions through centuries of institutionalized racism. So, what progress have we made? Are there fewer “marginalized” communities than before? Are “LMI” communities no longer “low- to moderate-income”? As a sector, we need to identify barriers, create interventions, and measure outcomes, with explicit reference to race in our work – moving away from what the Anti-Racist Community Development research identified as a wariness to use “race-explicit language, even within programs specifically designed to address racial disparities.”

I’m the daughter of immigrants from the Philippines. Entrepreneurship was part of the family experience. Upon moving to the States, my lola (my mom’s mom) became a seamstress, and my other lola (my dad’s mom) had a security agency – back in the Philippines. My own mom is a lifelong entrepreneur, with a private pediatric practice that she still operates today. As for myself, I found a professional home in the community development finance industry, specializing in working with entrepreneurs of color, recognizing that small business lending and ancillary supports can be catalytic for families to prosper in our economies.

Over my years in the field, I noted trends that led me to form views on ways we:

Uplift grassroots economic models and ways of doing. Despite the deep institutionalized refusal to engage communities of color, they are still vibrant places. In some Black communities, barber shops are a center of economic and social life. An incentive program I administered was designed to invigorate historically Black communities, but the criteria prioritized business-to-business companies, thereby penalizing retailers like barber shops. Should the Black community have been engaged in the process with an element of agency, criteria could have centered these types of businesses.

Insist on outcomes. For all the programs designed to serve Black and brown entrepreneurs, how many have seen outcomes exclusively benefiting them? The community development field has historically focused on transactions and outputs: loans approved, dollars deployed, and jobs created. What does this mean for a more just economy? The field will benefit from further refining to more meaningful units like racial / ethnic / gender identity of business ownership or organizational leadership or the rate of growth of a beneficiary’s / community’s income. Consideration of these outcomes should be co-equal with our consideration of financial criteria; racial impact underwriting should coexist with financial underwriting.

Interrogate our underwriting criteria with respect to race. If people of color, due to institutionalized racism, have lower credit scores, significantly less assets than their white counterparts, and have less management experience to lead their enterprise, then we are automatically disadvantaging them with our underwriting constructs. What alternative measures can demonstrate the “ability to repay”? Measures like family outcomes and community commitments are strong indicators. A manufacturing company once showed me tax returns with negligible income on the bottom line. Yet the owner displayed photos of their four offspring, each of whom they sent to college. I learned the need to “read between the lines”, deducing that these entrepreneurs of color had paid themselves salaries from the business to be able to financially support their family.

We can also restate our relationship to “risk” by acknowledging our underwriting criteria are designed to protect the financial institutions themselves. Loan-to-value ratios in the community development field should all exceed 100%, considering that we work in communities of color that consistently have lower wealth. We can force philanthropic organizations to collaborate more strongly with financial institutions so that philanthropy provides that risk mitigant, not the intended beneficiary.

As a field, it would be worthwhile to embed “anti-racism” as an expectation and requirement in the work. Anti-racist practices involve specific and transparent actions designed to dismantle discriminatory practices at every intersection of the web of community development. Can we be more explicit and say that our work will focus on interrogating the racial discrimination that continues to exist in community development? Doing so could lead to more racially just outcomes.

Olivia Rebanal is Interim Executive Director and Chief Impact Officer at Ecotrust, an organization that leverages advocacy, business development, storytelling, Indigenous leadership support, and training and education to advance work at the intersection of equity, the economy, and the environment. Olivia previously served as Director of Inclusive Food Systems at Capital Impact Partners, where she developed the organization’s first racial justice strategy and designed and implemented healthy food financing initiatives.