The Brief: Community lenders mobilize to save CDFI Fund from elimination

Greetings Agents of Impact! 

Meet up with ImpactAlpha in person at these upcoming events: 

​​✅ Impact Capital Managers. Agents of Impact are in Washington, DC, this week for ICM’s awards gala and day on the Hill. ImpactAlpha’s Zuleyma Bebell and Dennis Price will host breakfast, Friday, March 21, to take a market pulse and introduce ImpactAlpha LP/GP, our new weekly spotlight on industry trends. Grab a spot!

​​✅ Re:Construction North Carolina – A playbook for shared prosperity. GOOD TRBL’s Napoleon Wallace and ImpactAlpha’s David Bank will welcome Agents of Impact to the Ackerman Center for Excellence in Sustainability at the University of North Carolina, Friday, April 4. Join Self-Help’s Martin Eakes, ncIMPACT Initiative’s Anita Brown-Graham, Partners in Equity’s Wilson Lester, Symphonic Capital’s Shruti Shah, and dozens of other leaders building North Carolina’s impact ecosystem and advancing models for shared prosperity. The free, daylong event will include a special screening of “Equity & ownership: Napoleon Wallace and the Reconstruction of Black wealth.” RSVP today.

​​✅ Save the dates. ImpactAlpha’s spring Re:Construction tour will continue with screenings of “Equity & ownership” at the Aspen Institute in Washington, DC, Tuesday, April 8, and at the Boston International Film Festival, Saturday, April 12. Watch this space.

In today’s Brief:

• Community lenders mobilize to preserve Treasury Department’s CDFI Fund
• KKR integrates employee ownership into a union shop
• Agriculture exit in Zambia 

Featured: Community Investing

Threat to CDFI Fund gives community lenders a chance to flex bipartisan support. A whirlwind weekend of mobilization in response to President Donald Trump’s order to shut down a Treasury Department fund for low-income community lenders has produced a three-part strategy to defend the CDFI Fund’s seed capital for small businesses, affordable housing and economic development. First, community development financial institutions, or CDFIs, and their supporters are citing the “statutory” basis and legislative authority for the fund, which as recently as last week was replenished with $324 million as part of the continuing budget resolution passed by the Republican-controlled Congress. Second, advocates are showcasing bipartisan support for CDFIs, which effectively serve as the nation’s local banking system in both urban and rural areas. Democratic Senator Mark Warner of Virginia and Republican Senator Mike Crapo of Idaho, who lead the Senate’s 28-member Community Development Finance Caucus, extolled CDFIs’ record of leveraging public funding to attract eight times the amount of private capital. “We are proud to reaffirm our bipartisan commitment to support the CDFI Fund’s mission,” the two senators said in a statement. And third, advocates are leaning into CDFIs broad alignment with the Trump campaign’s promises of economic mobility, and even the policy agenda of the first Trump administration. “We can’t have America First without putting our communities first,” Harold Pettigrew, head of Opportunity Finance Network, an association of CDFIs, said in a statement.

• America First. Pettigrew recalled the response of local lenders in the first days of the 2020 Covid shutdown, “when the Trump Administration called upon CDFIs to help preserve jobs, keep businesses open and stabilize communities.” Some of the nation’s 1,342 CDFIs played a key role in distributing Trump-era Paycheck Protection Program loans in areas underserved by traditional banks. At his Senate confirmation hearings in January, Treasury Secretary Scott Bessent said, “The addition of these CDFIs into these underserved communities is very important.” Trump’s executive order gave the CDFI Fund and a half-dozen other programs seven days to comply and specified that “non-statutory components and functions of the… governmental entities shall be eliminated to the maximum extent.”
  
• Concerted attack. The attack on the CDFI fund is part of a larger assault on lenders serving low-income communities. As part of the Environment Protection Agency’s efforts to claw back some $20 billion in Greenhouse Gas Reduction Fund awards, the FBI has launched criminal investigations against several CDFIs that are part of the coalitions awarded funding through a public process during the Biden administration. Last month, Denise Cheung, the head of the criminal division in the US attorney’s Washington, DC office, resigned after being asked to initiate a criminal investigation for which she said there was no basis. Among the CDFIs that have been targeted are Community Preservation Corp. and Self-Help, which are partners with Calvert Impact in Climate United.
  
• Flood the zone. The weekend executive order, which seemed to take even some Trump administration officials by surprise, also called for killing the United States Agency for Global Media, the parent company of Voice of America, and the Commerce Department’s Minority Business Development Agency, which dates back to the Nixon administration. The speed with which CDFI supporters mobilized gave rise to guarded optimism that that threat might provide an opportunity for CDFIs to flex their nationwide presence and considerable support to survive intact, if not strengthened. “The entire movement is rallying to flood the zone on this,” John Holdsclaw IV, a board member of both the CDFI Coalition and Opportunity Finance Network, tells ImpactAlpha. “We want to temper any fears that impact investors have on this.” Annie Donovan and Donna Gambrell, former directors of the CDFI Fund, say, “This is not the time to be silent. Show your support for the CDFI Fund. Let your voice be heard among our bipartisan congressional supporters.”
  
• Keep reading, “Threat to CDFI Fund gives community lenders a chance to flex bipartisan support,” by David Bank and Amy Cortese on ImpactAlpha.

Dealflow: Ownership Economy

Exit payouts for Kito Crosby employees and union members after KKR’s $2.7 billion sale to Columbus McKinnon. The 4,000 global employees of Kito Crosby, a Texas-based manufacturer and distributor of chains, hooks and other industrial lifting products, will receive checks of up to 12 months of income following the company’s all-cash sale to its Charlotte-based competitor, Columbus McKinnon. Employees who have been at Kito Crosby for at least three years will receive six months worth of income payments, according to KKR’s Pete Stavros. Longer-tenured ones will earn as much as 12 months of income. Some of Kito Crosby’s employees are unionized under the International Brotherhood of Teamsters. “Too often I hear people say that [employee] ownership and unions don’t mix and this is one of many examples proving that isn’t the case,” said Stavros, who sees the country’s unionized workforce as an opportunity to expand employee ownership. “Almost half our workforce in the US is union.”

• Worker share. KKR acquired Kito Crosby (previously The Crosby Group) and its affiliates from Melrose Industries in 2013 in a billion-dollar transaction. The private equity giant launched an employee ownership program at the company in 2021. KKR expanded the program in 2023, when Crosby merged with Japanese lifting business Kito Corp. to form Kito Crosby. “Through good times and challenging ones, our 4,000 team members in over 20 countries come to work everyday to make lifting and securement safer for millions of workers around the world,” Kito Crosby’s Robert Desel wrote on LinkedIn. “This week they learned the value they will receive for their share of what they built together.”

• Value creation. During its 12 years of ownership, KKR says it helped Kito Crosby more than double its profits, introduce new products and expand to new countries. Kito Crosby last year generated $1.1 billion in revenue. The employee ownership exit “demonstrates that even with a more modest financial return, workers can do well too,” said Stavros (see, “As private equity firms start to share the wealth, low-income workers get just a little bit”). Stavros cited previous KKR ownership exits like CHI Overhead Doors’ $3 billion sale in 2022, in which 800 workers received cash payouts averaging $175,000, a small portion of KKR’s 10x return. KKR’s $2.7 billion sale of Kito Crosby to Columbus McKinnon marks a 170% profit gain for KKR and its investors.
  
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Dealflow overflow. Investment news crossing our desks:

• Impact investor AgDevCo exited Zambia’s Saise Farming Enterprises, which grows seed potatoes and other crops on irrigated land, in a sale to Zambian potato processor and distributor Buya Bamba. (AgDevCo)
  
• Zolve, a New York neobank that provides financial services to skilled migrants moving to the US, raked in $251 million in debt and equity from Community Investment Management, Creaegis, HSBC and other backers. (TechCrunch)

• Climate Investment Fund and South Africa’s Nedbank invested 575 million South African rand ($32 million) in Pele Green Energy Group to scale the firm’s renewable energy projects. (African Private Equity News)

• Avaana Capital, a women-led climate tech fund in India, led a $5 million financing round for AmpereHour Energy, which develops modular battery storage systems. (YourStory)

Agents of Impact: Follow the Talent

Don’t miss these upcoming ImpactAlpha partner events:

• April 1-2: Phenix Capital’s Impact Summit Europe (Amsterdam). Asset owners can register for free. Fund managers and corporates can apply to attend.
  
• June 23-25: ReFED Food Waste Solutions Summit (Seattle). Take 10% off with code ImpactAlpha10. 

Impact investing veteran Lisa Green Hall passed away Saturday. Hall, most recently impact chair at Apollo Global Management, was “a giant in the impact investing industry,” Texas Tribune’s Sonal Shah, a colleague of Hall’s at Georgetown University’s Beeck Center for Social Impact and Innovation, told ImpactAlpha… Jonathan Rose Companies shared news of the death of partner Nathan Taft, who has been with the New York-based real estate firm since 2004 and helped launch its first social impact fund in 2005… Thistle Community Housing welcomes Ryan Hanauer as senior manager of acquisitions and financial sustainability.

Village Capital is looking for a chief executive officer in Washington, DC… I&P is recruiting an impact director… Climate Imperative Foundation has an opening for a chief financial officer… The NYC Department of Environmental Protection seeks a performance and program management director… Habitat for Humanity seeks a chief financial officer in New York… The United Nations Federal Credit Union is hiring a senior manager of global sustainability and climate in New York… Terner Labs is on the hunt for a chief operating officer in Oakland, Calif. 

Shareholder Commons will preview this year’s proxy season including its “Portfolios on the ballot” and “Guardrail” shareholder proposals, Wednesday, March 18… ICCR is hosting a webinar to preview its members’ 2025 shareholder proposals, Tuesday, March 21… ImpactPHL will host a webinar on the intersection of place-based and gender-lens investing, featuring Heading for Change’s Sana Kapadia, Nimrit Kang of NorthStar Asset Management, and Artha Impact’s Audrey Selian, Wednesday, March 26.

👉 View (or post) impact investing jobs on ImpactAlpha’s Career Hub.

Thank you for your impact!

– March 17, 2025