Why do CDFIs establish Advisory Boards?
In 2017, FUND Community Institute conducted research on CDFI Advisory Boards to gain insight on the extent to which CDFIs integrate Advisory Boards as a component of their business models. CDFI Advisory Boards are a rich resource that are often underutilized. Future blogs will share information on innovative practices that are being employed that could help other CDFIs.
This third data installment presents information on why CDFIs form Advisory Boards:
- Almost 70% of CDFIs in the survey with Advisory Boards indicated they established their CDFI to meet CDFI Accountability requirements.
- CDFIs formed their Advisory Boards on average 8.8 years after organizational formation.
The two main reasons for formation of the CDFI Advisory Boards are:
- To bring local / market input into the CDFI
- “New organization needing guidance from our community”
- “Greater community representation and input”
- “Advice and knowledge of local markets and ability to bring in new business to the bank”
- “To determine target market needs”
- To bring specific expertise to the organization
- “Expertise in lending.. to supplement the boards expertise”
- “Our CDFI launched a Women’s Business Center and felt we needed that perspective”
- “Provide resource and subject matter expertise on non financial aspects”
- “This augments our governing board’s capacities”
About the Research
An online survey was emailed to CDFIs in July 2017 and 216 CDFIs responded; of which 42% indicated they had Advisory Boards. Of survey respondents with Advisory Boards, 83% represented CDFI loan funds, 11% CDFI banks, 3% CDFI credit unions, and 3% CDFI venture capital funds.
FUND Community Institute (FUND CI)
FUND CI was founded in 2017 as part of the family of FUND Consulting organizations. In an effort to support the CDFI Industry, one of the main activities of the organization is to conduct and disseminate research on CDFIs and related topics. For more information, please contact firstname.lastname@example.org.