Capital Region CATALYZE

Fresh Take ft. Ellis Carr

June 09, 2021 Greater Washington Partnership Season 1 Episode 6
Capital Region CATALYZE
Fresh Take ft. Ellis Carr
Show Notes Transcript

This interview features Ellis Carr, President & CEO of Capital Impact Partners. JB and Ellis discuss inclusive growth, CDFIs, and economic empowerment in underserved communities.

Hosted by JB Holston. Produced by  Jenna Klym, Francesca Ioffreda, Ian Lutz, Nina Sharma, and  Justin Matheson-Turner.

Learn from leaders doing the work across the Capital Region and beyond. These conversations will showcase innovation, as well as history and culture across our region, to bridge the gap between how we got here and where we are going.

About our guest:

Ellis Carr has more than 20 years of experience in the financial services and mortgage industries. Mr. Carr served as Capital Impact’s Chief Financial Officer and Treasurer from July, 2012 until his appointment as President and Chief Executive Officer in May, 2016.

Prior to joining Capital Impact, he held various positions in the investments, capital markets, strategy and corporate finance areas within Freddie Mac and in fixed income fund management both domestically and abroad at Deutsche Bank.

Mr. Carr is a trustee of the NHP Foundation; the Treasurer and Board member of Martha’s Table; a Board member of Housing Partnership Network (HPN); and a Board member of the Opportunity Finance Network (OFN). In 2015, he was recognized as one of the “Top 40 under 40” business executives by the Washington Business Journal. Mr. Carr graduated from Towson University with an undergraduate degree in accounting, and from Georgetown University with a master’s degree in real estate with a concentration in finance.

Ellis Carr  0:00  
Slowly over time as I got older, I realized that I didn't want to have kind of something that was deeply a part of me around getting back to be a side projects and what I did in my personal personal life and I really wanted to begin to have those things to come together as one.

Nina Sharma  0:23  
Welcome to fresh take a candid interview series featuring thought leaders and innovators from across the capital region. These one on one conversations, highlight the incredible work happening in our communities, and showcase both where we are and where we are going as a region.

JB Holston  0:43  
Welcome, everyone, thanks for joining us for today's fresh take. My guest today is Ellis Carr. Hello, Ellis. 

Ellis Carr  0:51  
Hey JB. Good to be with you today. 

JB Holston  0:53  
Thanks. It's great to talk to you again. And great to have you on, folks just a little bit about fresh steaks and partnership, the partnership is a group that was formed to advance regional interests in the region from Baltimore through Richmond, we focus on a lot of a few different topics, in particular, expanding, broadening and deepening the digital talent and skills pipeline is one, transportation and mobility is another. And what we're calling inclusive growth is a third, we have a view that inclusion is the new innovation and the region that is that becomes the most inclusive and equitable, will be the fastest growing region in the country, because it will do the best for the people here and also be the most attractive region in the world. So that's a little bit about us. In that context, I'm really happy to have the chance to talk with Ellis about his work about the region about CDFIs, etc. Let me start by giving you a little bit of background about Ellis Ellis has more than 20 years of experience in the financial services and mortgage industries. He started when he was 12. He served as Capital Partners, president and chief executive officer, and he served in that capacity since 2016. He started with a group in 2012 as CFO and treasurer. Prior to that, I'll switch across the investments capital market strategy and corporate finance areas within Freddie Mac and in fixed income fund management both domestically and abroad at Deutsche Bank. Ellis is an Aspen Institute financial your fellow serves on Morgan Stanley's Community Development Advisory Board is the board chair for Martha's Table and board treasurer for HP and the Housing Partnership network in 2080. In he was recognized on Washington Business Journal's list of top minority business leaders as well as being named among their top 40 under 40. Business executives in I won't I won't mention the year there, Ellis! He's also been directly helpful with us on our inclusive growth committee in helping us understand what a strategy around inclusive growth for the region should mean, and where are the gaps that the partnership generally can help accelerate filling. So Ellis, thank you for for that. And welcome.

Ellis Carr  3:11  
Thanks, JB.

JB Holston  3:13  
Let's start a little bit by talking about you and your journey. I just read some of the bios, but maybe talk a little bit about how you came to capital impact partners, because it's a little bit if he was kind of a subcategory of work in financial services a little different than Deutsche Bank, let me put it that way,

Ellis Carr  3:29  
It is. I really appreciate having the opportunity to be here with you, JB and look forward to the conversation. Maybe I'll just start by by saying that I my journey was heavily influenced by my parents, who were both DC public school teachers here for over for nearly 30 years each. And, you know, over the course of their their work, life as teachers, you know, they made the choice explicitly to work in some of the most underserved areas in DC. And they made that decision, because they understood that oftentimes opportunity was limited. Because of where you lived, and, and others instances opportunities were limited to folks because of their own circumstance. So they spent a lot of their time and their careers coaching, encouraging and supporting students, because they believe that everyone had deserve access to quality education, and most of all, that everyone deserved to feel like their community cared about them and was invested in their success. So that really had a big impression on me as a kid, seeing how the students responded to my parents. And it really helped to reiterate or underscore in me that I was part of a much larger community that I needed to have concern over as well. And so really, I think, initially, I would say that because of that, I grew up thinking I was going to be an educator, and my parents told me not to do that. To get another job. And so after a lot of trial and error, I decided to leave it on really kind of pursuing and kind of a degree in finance and accounting, going into to undergrad. And my mother was a math teacher. And so probably, my decision was also influenced by the fact that all the all the work that she had me doing on spring break and all the breaks to keep me busy, made me realize I was pretty good at with numbers and, as well. So um, so that was really kind of how I kind of came to this work kind of in made my way into Deutsche Bank and Freddie Mac, as you've mentioned before, before coming to Capitol impact, I think it's interesting to note that, you know, in my early part of my career, probably for the first decade or so, I kind of kept Church and State praise separately, meaning work was about work, and, you know, making in delivering resources for myself and my family and making a living. While I always had a connection to community, whether that was through my church, or through social organizations, I was always kind of giving back in different ways, as the and I think slowly over time, as I got older, I realized that that didn't want to have kind of something that was deeply a part of me around getting back to be a side project, and what I did my personal personal life, and I really wanted to begin to have those things to come together as one. And so interestingly enough, it was my work through through the through the community that actually brought the opportunity with capital impact before me. So I'm really happy to have joined in 2012, and, as you mentioned, was elevated to President and CEO in 2016 and have not looked back 

JB Holston  6:59  
Thanks very much. I think that talk about the community connection is interesting. As we talk about what CDFIs are and what they do. We come to that in just a second. But your long term denizen of the region, is a broad question, and I didn't let you know, I was gonna ask it. So here you go. But how's the region changed? Good and bad? Since you were since you were a kid here?

Ellis Carr  7:22  
Yeah, I mean, I think it's interesting, I'll give you a couple of anecdotes. My wife is also from the region as well. And she chose to go away to boat to school, both for undergrad and graduate school. And one of the reasons that she left was because she felt like this wasn't a real city. And the city was really more public sector focused. And she didn't think that there was a lot of opportunity. Naturally, she moved back, as a lot of my friends and family did, because DC underwent a rapid area of a period of growth in the private sector, and the emergence of kind of biomedical, biotech, or organizations and a number of other medical organizations. So I think, really, the or this region has really grown in terms of the kind of Ed's admits perspective. Since you know, since I was much, much younger, I think the other part, I'd say, JB is right, demographically, the region has changed quite dramatically. When I was growing up, DC was affectionately known as the chocolate this Chocolate City. And some might argue that that's changed, quite frankly, quite a lot. And it's probably no longer known as that. And so not only has racial demographics change, but so income demographics has changed as well. We know that this is a extremely kind of rich in resources, region, both in terms of people and institutions. And I would say one of the things that we where we find ourselves today around the focus around inclusive growth, is the fact that growth has not been equivalent across kind of the demographic landscape. And that's not necessarily solely focused on this region. We're seeing this kind of on a national scale and actually on a global scale. So a lot of really good things have happened. And I think there's a conscious effort now to really think about how how that growth and opportunity can be made available to more people.

JB Holston  9:43  
That's great. Thank you. Thank you for that. Ellison stuck a little bit about CDFIs. Could you what are they, you know, for an audience that may not understand the financial system, maybe talk a little bit about, you know, what they are the role that they play, and, and then we'll go from there. Got a couple of follow ups on that too.

Ellis Carr  10:00  
So CDFIs, or community development, financial institutions are private sector mission driven financial intermediaries, whose primary purpose is to expand economic opportunity for low income people and communities. Prior to coming to capital. In fact, I didn't know what a CDFI was. It's the acronym that's, I think, becoming more and more known today, particularly in this in these times in the last year. But they're a vital part of the financial ecosystem. And so CDFIs can be structured as banks or credit unions, or loan funds, which capital impact is, or venture capital providers. And typically, you will see them really embedded in communities, which are in and focused on supporting businesses, investing in in schools or local health care centers, or community centers, all in efforts to correct provide and create opportunity for their residents. When you think about how we're CDFIs are in kind of the financial landscape, they really play a role in communities that oftentimes, kind of mainstream banks and financial institutions can't play. And don't play because because they, I would say the one of the key benefits for CDFIs is that because they're embedded in communities, they understand or we understand the real delineation between real and perceived risk, right, because the a lot of the work that we do, and underserved or underestimated communities are really transformational and a large degree because there is a dearth, or there's, frankly, a non existence of financial products and support for those communities. And so we have the ability to kind of understand and manage risk appropriately, and work with other financial institutions to leverage their capital to provide resources to communities that haven't traditionally had capital invested in them. And so we kind of think of ourselves as kind of a a boutique or a boutique type financial organizations that provide tailored solutions for the communities in which we serve. Maybe a couple of the things I just mentioned JV around our role. In the kind of financial ecosystem, I think, we played three probably distinct roles. One is really around kind of what we call market makers, and I kind of just spoke to that, creating new products and services. And when there is a, there is an existence of any two, I think we play our role as a market catalysts. And as CDFIs. We form public private partnerships, which basically leverage, in this case, maybe federal dollars, and for every dollar that we are able to raise, we are able to leverage that with $10, of private sector dollars. So we're able to create those products initially based on the feedback from the community, and then begin to develop public private partnerships to bring those to scale. And I think the last play plays that we play it really well on the FICO financial ecosystem, is what we call another community quarterback. And that's really an organization who really understands the strategy before the goals and objectives of a community and can basically basically play a coordination role, both to provide the resources and the capital to really help that committee achieve its desired outcomes.

JB Holston  13:41  
Yeah, it's great. If you can maybe talk about a client or to like tell us who should people imagine when they think of the people that you're providing that you're lending to a couple of stories on that front would be helpful.

Ellis Carr  13:58  
I'll give maybe a couple broad categories that maybe speak to one or two. So in in this region, Katelyn packs has played a role in a few different areas. We've primarily focused on a few different sectors, education, health care, food and housing. And so from a housing perspective, we will work with a affordable housing developer that is providing quality and affordable housing to residents that may earn 30 to 50 or 80% of the area median income, but in a in a place that's safe and affordable, but also proximate to their jobs. We will also have had and will continue to provide access to capital for say a Community Health Care Center and a Community Health Care Center in this case will provide health care services and access to health care for those individuals who may be lower income or uninsured in In the District, an example of that would be like a unity healthcare. And finally, you know, we we have supported a number of nonprofits who provide really critical safety, kind of safety net services to their communities. And as you mentioned, I'm on the board of Martha's Table here in the city that really has survived kind of food and education supports for a number of residents, and both Ward a primarily in Ward eight. And capital impact was able to provide financing for their expansion toward a the comments where they're able to actually provide a focus place based resources for the residents. And in that neighborhood.

JB Holston  15:49  
To some degree, you're arbitraging the risk between the financial institutions, we mentioned the federal government as well, that can provide some of the capital and the use of that capital. And my sense is that in order to do that, you just need to know who you're lending to. And I think you alluded to this really well and work closely with them, which is, which is very different from the normal big financial institution model that we think about that, is that is that right?

Ellis Carr  16:14  
Yeah. And that's exactly right. I mean, what I mentioned, kind of tailored or bespoke, kind of approach, you know, some have said that we're very artisanal and then nature, because we have to go in and understand the needs of the community, and then began to develop financial products to address their needs. And so the work that we may be doing in Detroit, where we do work, a lot of work may be very different than DC. But the work that we're doing in DC may be very different than the work we're doing in Oakland, etc. Because we try to take the unique needs and resources within each environment, and then just bring those those resources together and support the community.

JB Holston  16:54  
Yeah, but low loss, those sorts of things. You know, I'm sure you track those. And can you talk a little bit about, I think the perception again, for folks who don't know is that well, that just must be a highly risky category that you know, folks are, so they're gonna have a lot bigger proportion of write offs or anything like that. And yet, I don't think that's necessarily the case. How do you folks think about that?

Ellis Carr  17:14  
Yes, that's a great question. I mean, I think, first and foremost, I think we, we are a nonprofit, which means that we're not profit maximizing. But we have to be profitable. And the reason that that's an important distinction is that the difference between profit maximizing and profitable, really allows for the communities to build capacity. And for the businesses, nonprofits and organizations that we lend and invest in, to really begin to develop and create more jobs and support their community more specifically. But we be we are a financial institution, which means we have to kind of look at and evaluate credit and credit worthiness just as any other financial institution would. But we also look at and evaluate kind of the social impacts. Right? So it's the the who and the what is that as it's being happening, this happening? So that could be everything from who is leading, who is who's leading the organization that we're lending to? Do they have community support? Are they creating jobs? And what are the communities benefits of the projects, our initiative that we're supporting? So we still approach the our work with the similar rigor of a traditional financial services organization. But again, because we're community based, our success is really driven by in quantify by how the community benefits from our work. So I think, to your point, JB, I think we still have loan losses as capital impact is, is s&p rated. And we we issue debt in the public markets to both individuals and institutions. So we have to have the the rigor required to be in those markets. But I think having the real understanding of the community really helps us to understand and really cut through the perception around risk, because as you as you can imagine, when something is unknown, it is, is definitely perceived to be more risky. And I think, to your point, our loan performance has been extremely stellar, as most CDFIs have been

JB Holston  19:32  
That's great. Thanks for that. Let's talk about the impact of COVID both on your organization, but also more generally, on the populations that you're serving through the organization.

Ellis Carr  19:42  
Yeah, I mean, as everyone knows, COVID Hat 2020 was a really tough year for a lot of both people and businesses. And in particular, you. We've all read about all the first responders and how they have put themselves put their lives on the line in support of others in hospitals and medical institutions, what, what also it has been covered, but probably to a lesser degree, or all the folks who are also are working both hourly jobs and roles and which require them to put themselves in harm's way. And because they don't have the ability to kind of work from home as maybe your I too. And so in those in those, there's a high correlation of folks who are working in those roles, who are also lower income individuals. And so we've seen and and the communities in which we serve a really distinct and pronounced impact both on the individual people, but also the businesses that are operating in those areas. And so one of the focuses that we have had for some time is really around kind of ensuring that there that there's that our communities have equitable access to products and services, but also that we have the ability to begin to address kind of the so the wealth gap that we're seeing in this country, particularly the racial wealth gap. And so as we're looking at the number of businesses that are not expected to survive COVID, there's a significant portion of them that are minority lead. And so that's something that is really important to us to figure out how we can be supportive, really during this time period. So to answer your question has been pretty debilitating for a lot of communities. And our goal has barely been around, how can we help support the immediate recovery, but then also really helped them to get back to resilience and stabilize community? Yeah,

JB Holston  21:52  
so sort of the path to inclusive growth is through inclusive recovery. One of the things that's happened recently, and I've spoken a bit about is the new legislation to add funding for CDFIs. And MD is it's it's, you know, roughly 12 billion in total. And to your point about sort of leverage ability of that kind of capital, in theory, that could mean, let's call it another 100 billion of lendable capital, that that might end up being available into the system through CDFIs and NDIS. By virtue of that, that legislation, which passed at the end of the last calendar year, but it's not it's he from our conversation is pretty clear. It's not just a matter of, you know, therefore, capital impact and others line up and say, give me 8 billion, it's, it's more is going to have to happen to really put this capital to work in a functional way. Can you talk to us a little bit about about that? What are the prospects use? It is this is this 12 billion interesting, what do we have to do to really take advantage of it appropriately?

Ellis Carr  22:52  
Sure. So the $12 billion, that was a part of the recent stimulus package that was approved in January, is, is is pretty incredible. For CDFIs. And transformational. Prior to this legislation, there was about us that funding was was just under about 250 million. Wow, looking at a pretty sizable, you know, increase in funding, which is, which is music to our ears, and from a CDFI perspective. And just to talk a little bit about why that's relevant, because organizations like capital impact, and others CDFIs because there's, there's not there's no existence of a secondary market in our, in our space, traditionally, our loans and our investments, our portfolio on our balance sheet. And so that constrains our ability to continue to lend and invest further and communities. So having the ability to have significant availability of dollars to scale up and provide skills solutions, particularly at this time is pretty incredible. And we're really excited about it. That's it, you know, I think that there are challenges for us, as an industry to be able to take that to be to utilize those dollars and resources effectively. Because we need to continue to find willing partners to partner with us at a time that is particularly troubling from a from an economic perspective. And so, you know, I think we we understand that while these resources are available to us, and we'll be at competing actively with our other CDFIs across the country, to get those resources channeled into this region in particular. We will also need to ensure that we have in our working under a common strategy and partnership with other private institutions who really care about inclusive growth in this in this in this region?

JB Holston  25:07  
What do those private institutions need to do ls? Is it that, you know, the traditional big financial institutions with big balance sheets need to double up? You know, sort of say, great, you know, you take 12, we'll give your 36. Talk a little bit more about that.

Ellis Carr  25:21  
Yeah. And and I'll take a step back. And then and then answer your question, JB, you know, capital impact, as I mentioned, has really been focused on kind of broader community facilities and housing, as I mentioned, in last August, we realized that more needed to be done. And we we announced an alliance with CDC Small Business Finance, which is one of the largest mission based small business lenders in the country. We did that for a few reasons. But the first one and most and most chiefly is that we've really strongly believed in a vision for holistic community and economic development at scale, centered around people and communities. And we realized that we needed to change and pivot the way around the work that we were doing, because ownership was going to need to be key in any economic recovery. And so CDC, small business, finance and capital impact are working together. And initially, in three specific regions across the country, this is one of them, to really help drive Community Economic Development at scale. And as we've been talking about the work that we're going to do it together, we recognize that even our own approach and way that we need to provide credit and and capacity to communities has got to change, because there is a growing part of the population across the country, and particularly in this region that has been left out of traditional mainstream finance. And so to reach them, we can't use the traditional tools that we have, then we'd have to augment them. That's similar to my my, my comments earlier, to be able to reach those segments of the market. And so because we are changing and evolving around how we are providing services to our communities, communities and institutions right, need to do the same. And yes, it's about capital. But it's also about understanding and leveraging of their resources, their people resources, to really help provide us capacity as CDFIs. So that we can provide, you know, the best thinking around how to reach these markets that had not been reached these committees that have not been reached, so that we can move forward as a as a as a nation, quite frankly, in the region, to create more opportunity for more people.

JB Holston  27:51  
One of the we came out with a study this week that our friends at EY helped us pull together about corporations intentions, post pandemic. And it's pretty clear that those organizations that can intend to be a lot more hybrid in the future than they've been in for a region like this, that could be good news, because to the degree that it means that you can live anywhere and work anywhere, there are a lot of living in this region can be great in many ways. But it also has real prospective implications for the ability to recover, particularly in the in the urban areas. And, and if you think about the businesses that are going to be most affected by that, there are those that have been the most affected by the pandemic, in many ways. You know, it's the sort of small businesses that are really dependent on having a thriving downtown. If you assume those changes, how would that affect your strategy? How would that affect your work in Detroit? Or DC or Oakland or other areas?

Ellis Carr  28:58  
Yeah, I think that's a that's a great question, JB, I think for me, one of the things that that we are really focused on is, is in partnership with with your you and your team, and and with those who are part of the greater Washington partnership is really, it's important for us to understand where where the opportunities will exist going forward, and working. And having a better understanding of that, and does it in developing a strategy around how to ensure that small businesses, which is a strong driver of the economic engine in this region, continue to continue to prosper requires us to really have a really strong perspective around where we're headed. And so one of the things that I'm excited about is that we are working to develop a strategy in partnership with you all and I think if we have an understanding for what success looks like for us, where where the next set of jobs are will be created to your point, if they're virtual or not, then we can really help ensure that the workforce has adequate training, folks are trained effectively for those jobs that will meet in the next five and 10 years. And that we can begin to provide guidance and support that we do today for small businesses so that they can pivot and take advantage of those opportunities. So I think for us, it's you know, it's always it's not just about financing, it's also getting people prepared and cat prepared to take on capital, but also prepared to take on the market around them as well.

JB Holston  30:36  
Yeah, yeah, it's an interesting time, because I think everyone understands the acuteness of the issue in front of us. And yet, as you mentioned, everyone's also dealing with the sort of train wreck behind them. And it's difficult, you know, our higher ed partners, understand the need to help scale up to more now than ever. And yet, you know, that industry as an industry last year, was, you know, as set upon as any, as any industry. So, strategy is going to be critical to your point, Ellis understanding priorities. In that context, if you think about the CDFI MDI, the sort of the landscape of institutions like yours in this region, you know, you sort of think Baltimore to to Richmond, do we? How should people think about that? Are there a lot of them relatively speaking here? Are they relatively mature? Are we overserved? underserved? How do you think about that?

Ellis Carr  31:30  
I think that this region is incredibly credibly well served with the CDFIs, and MDs in this region. There are about 1000 CDFIs, across the country operating in every state. And I would say that there are four CDF or the largest CDFIs in the nation operating in in this in this region. And you have three also, India is to operate between rich gun and Baltimore. And so I think that we are incredibly well served from a even from a neighborhood level CDFI all the way to CDFIs, like capital and backed and others that operate nationally, but are headquartered here, and really kind of care about this work. So the great part about that is that we already could collaborate and work well together today. And given the given the intentional focus that we'll need to provide in this region, I think there's a good foundation for what is to come around how we can plug in and support that broader strategy as it's developed.

JB Holston  32:42  
Great. We had a question about opportunity zones, is Brad. I won't give it more context and then say, how do you think about those in the context of your work?

Ellis Carr  32:51  
Yeah, I mean, I think there are. Capital Impact is not leveraged or utilized opportunity zones today. There are a few CDFIs actually, who operate in this area who who have opportunity's own funds for investors to invest in. I think for us, we've thought about it as a potential capital source for us to advance the work. And, yeah, but we have not done a lot of work with.

JB Holston  33:23  
Great. I wanted to talk before you some get quickly get to just a little more about Capital Impact Partners. How big is your organization? Ellis? How many folks do you have? How do you talk about in terms of its financial size? What are the sort of metrics that you can share about that?

Ellis Carr  33:37  
Sure. So capital impact. We're a national nonprofit, community development financial institution, headquartered right here in Arlington, Virginia, but we have offices in New York, Detroit, Austin, and Oakland. So we have just over 100 people working across the country, probably about a little less than half operating here. And in this region. And our we have about a billion dollars in assets under management. And, you know, some of the metrics that we we look at is our kind of our loan portfolio size, which is just just under 400 million. And, you know, loan performance in terms of credit quality is under 50 basis points. In terms of credit, delinquency, instant credit losses, actually, last year, delinquency and credit losses were under 10 basis points. And so, and that's been it's been consistently about that over over the last several years. So we've, again, seen a lot of really strong performance and we work very closely with our borrowers. And but I investees to make sure that that that they're supported and as a result, we have good portfolio quality as a result.

JB Holston  34:55  
Yeah, the billion dollar under you know, 100 management in the 400 million how do those numbers compared to CDFIs. Around the country is in the top, are you in the top segment?

Ellis Carr  35:07  
 Yeah, I would say capital index is probably the top five of, of the 1000, CDFIs. In terms of, of asset size, we've grown pretty dramatically over the last we've run over 50% Over the last four years. And, and that was intentional, we want to double down a few areas, DC was one of those areas. And I think with the alliance with CDC, Small Business Finance, we have a number of things planned for this year, which we expect, we expect that number to grow substantially.

JB Holston  35:38  
My expense for CDFIs is a lot of them don't grow, a lot of them kind of get stuck. They have certain partners to provide capital, and they just stay where they are. What's allowed you to grow, particularly the last four years haven't necessarily been the easiest.

Ellis Carr  35:51  
Yeah, so I think I think your your initial communist is well placed. And I think it goes back to the the access to capital for CDFIs themselves, and the fact that there's no secondary market. So oftentimes, liquidity is probably the in capital, access to capital and specifically equity capital, is the is what prevents CDFIs from growing. And I think just going back to your earlier question, having the ability to have a significant amount of capital available to CDFIs, particularly the ones that have not been able to grow up provides them an opportunity to grow and invest probably in resources, such as technology, to really be able to get to a different level of scale. In for Kathlyn, packed in terms of our growth, you know, we we have benefit from public private partnerships, where we've created funds that have invested in healthcare or education, or other community type facilities, where we have used utilize other people's money and generated fees off of that. And that has allowed us to kind of grow our balance sheet in terms of net income, that thing could be leveraged over time. And so our gross was really around thinking strategically around growing through partnership and generation of fees. While we were able to leverage our great credit, quality, and invest in ourselves and grow our portfolio.

JB Holston  37:22  
That's fascinating. You mentioned technology. And then I want to turn to one last category of questions as we wrap up here. But there's been a huge explosion in online lending over the last x period of time, and I have to believe that some of those that for lack of a better term are targeted by some of those online lenders or folks who historically might have availed themselves of a CDFI or other. And yet, you know, there seems to be nearly usurious interest rates in some of those online, could you talk a little bit about that phenomenon? And you mentioned technology for CDFIs. Everything competing with that is some something I have to think about.

Ellis Carr  38:01  
So I think you're exactly right. There are a lot of organizations or companies who need access quickly to capital, and they know that the rates are unusually high or user, but they need the access. And one of the the areas that I am thankful for, well, for the last year is that CDFIs, the main brand, the brand of CDFIs, has raised because it has raised quite significantly, kind of as a part of the pandemic, and in the civil unrest. And so I think quite frankly, JB a lot of people just don't know about the industry exists. And, and I think that the adult, the fact that we do not have as an industry, although they're they're growing, made investments in technology that our kin to, you know, a another FinTech, I think does not put us on equal positioning, doesn't put us on an equal ground. And so I'm I'm confident that because I know that several CDFIs and actually part of a few convenience that I've been to over the last six months, technology has been named as like the top area that needs to be invested in. And so as we think about kind of putting this back to this region, thinking about how we can leverage technology to serve as a conduit to develop pipelines for CDFIs is something that I think needs to be solved for.

JB Holston  39:36  
Yeah, we should get some of the companies in the partnership to fund internships for folks in our educational establishments from underrepresented groups to work on that problem and then work.

Ellis Carr  39:46  
That's right. I love that.

JB Holston  39:51  
Ellis last question. And thank you again for the time today. You mentioned the wealth gap. And that's something that we talk a lot about, you know, if you look at the data You know, arguably the region or some of the MSA is in the region has done a pretty good job to some degree closing the income gap over the last the racial income gap of last 2030 years. But the wealth gap persists. And if anything, it's broadened. What do we what do we need to do to close that? Because I thought I actually just question for you last

Ellis Carr  40:19  
So I think there's two ways that have historically created wealth in this country. One is through homeownership, and the other is to business ownership. And I think that those really are the two areas that I think we can and should focus on, given the strength of this region. And, and, and, and the institutions that are operating within it. I think there's a shoo in, and the federal government, there's a huge opportunity to really kind of create pathways to moving those entrepreneurs that are two to three people up to 25 to 30 people. And I think if we can continue to be very thoughtful about how we go about that, I think we will see the business ownership rise, I think to your other point earlier around how the pandemic is accelerated innovation, and how that is going to change the way that we operating works, gives us an opportunity to really think broadly about the region and allow people who may be within plus or minus five miles from the city center to really actually move a little bit further out where they can actually afford to, to buy a home and generate wealth. And so I think that there are ways that we can help support that, both indirectly and directly for but for all people in the region. 

JB Holston  41:38  
That's great. And one of the things I've been to that's a good, great point anyone else, but your point about the cut about supporting entrepreneurs that maybe two or three people in a group to even call it 10 times that I think as we think about entrepreneurship, it's just so important. Everybody understands that all kinds of have an entrepreneurial element.

Ellis Carr  42:01  
Exactly. That's exactly right. Yeah. I think you said we can't underestimate either, right. The fact of those small businesses are in a in a community, and they're oftentimes they're investing in that community themselves. So it has a ripple effect in terms of how wealth is created, how resources are generated, and community as well.

JB Holston  42:22  
Yeah. Well, my guest today has been Ellis Carr is the CEO of capital impact partners. Very fortunate to have your group headquartered here. ls and wanted to thank you for all the work you folks are doing, but also for the partnership with the partnership as we work on this strategic business critical strategic issue, which is making sure this is the most inclusive growth region in the country. Ellis, thanks for all that you do. And thanks for your time today. Thanks, Davey. Great to be with you. Good to talk to you.

Nina Sharma  42:54  
Thanks for tuning into fresh take this episode was produced by Jenna Klym, Francesca Ioffreda, Ian Lutz, Nina Sharma and Justin Matheson Turner. If you like what you heard, share it with your network. For more information and to access all of our podcasts, events and publications visit Greater Washington