Canners sort bottles and cans for NFF client Sure We Can

Canners sort bottles and cans for NFF client Sure We Can, a nonprofit recycling center in Brooklyn, NY, serving the local community through recycling, composting, gardening and the arts.

From Energy to Equity, NFF Recommits to Climate Justice

OFN member Nonprofit Finance Fund returns to its roots in energy efficiency financing with the purpose of investing in climate justice. 

Read time: 8 minutes

At the 2023 OFN Annual Conference, OFN President Harold Pettigrew issued a call to action for mission lenders: All mission lenders should adopt climate lending by 2028. OFN is talking to our members at different stages of their climate lending journeys to share resources, information, and ideas industry-wide. Nonprofit Finance Fund (NFF) is one.   

Like most CDFIs, NFF goes where its constituents need it most. Founded in 1980, the New York-headquartered CDFI spent its early years investing in energy efficiency upgrades to help nonprofit clients reduce expenses.  

Over the years, NFF’s services evolved to encompass a broader range of nonprofit financing and consulting. With a renewed commitment to environmental justice and a new strategic plan, NFF is returning to its roots.   

NFF Chief of Staff and Interim Vice President of Development Jessica LaBarbera discusses the CDFI’s re-commitment to climate investment at the intersection of racial equity, environmental justice, and community health. 

NFF’s origins are in green lending. Tell us about how NFF evolved over the years to provide the services you do today. 

NFF’s mission is clear. Through capital, consulting, and advocacy, we invest in mission-driven organizations’ collective success and power to adapt, thrive, and drive positive change in their communities. 

Throughout our 44-year history, we have provided capital to nonprofits driving community-led and -responsive work in lower income communities. These nonprofits are helping people build assets and address challenges stemming from inequitable access to finance, education, healthcare, and other critical assets. 

NFF’s work started with energy conservation: We began as the Energy Conservation Fund.  

From our founding, we had an organizational ethos of recognizing and nimbly responding to the needs of nonprofits. In our early years, we saw many nonprofits wanting to make facility improvements that would reduce expenses and lead to more energy-efficient buildings, but they needed help accessing capital for upgrades. So NFF made loans and provided technical assistance to help its clients manage high energy costs and support their greater financial and environmental sustainability.  

Over the years, our services evolved to meet a broad array of needs. We expanded our financing to provide nonprofits with capital for everything from facility loans to bridge loans and working capital. And our consulting practice emerged to support nonprofit leaders on strategic financial issues, from planning for growth and change to managing through economic uncertainty.  

As our services expanded to meet changing demand, the intentional focus on energy conservation waned. We were still financing LEED-certified projects and others with environmental elements, but energy efficiency was no longer the central factor.  

NFF is returning to its roots, putting climate justice front and center. Where did the commitment come from and how is it shifting your work?

We are now refocusing on climate issues with passion and commitment and a new emphasis: environmental justice. 

As a CDFI committed to racial equity and community-led efforts to build wealth and well-being, our vision for equitable prosperity is one where all communities have the resources and agency they need to flourish. Communities can’t grow without access to fair capital, nor can they thrive when climate change threatens lives and livelihoods. 

Environmental inequities are well established: Low-income communities and communities of color are disproportionately harmed by pollution burdens and attendant climate vulnerabilities.  

Studies show that Black and Latino communities are exposed to higher levels of air pollution, lead, and other contaminants and are more likely to live near toxic waste sites, landfills, and other industrial plants, compared to white counterparts. An estimated 70% of contaminated waste sites are in low-income neighborhoods, and people of color make up nearly half the population in areas closest to hazardous chemical facilities.

NFF realized that to build a more just and vibrant society, we must work at the intersection of racial equity, environmental justice, and community health and well-being. We need to support efforts that center community voices in the design and implementation of responses to environmental racism. 

NFF client Sure We Can's model of environmental sustainability is contributing to climate justice in urban communities

This intersection is expressly woven into NFF’s new strategic plan. Can you share some examples of where you’re focused?

Yes! Our commitment to environmental justice is explicitly prioritized in our new strategic plan. We are ramping up our focus in this area, building on the work we’ve done to date.  

As we move to recenter environmental justice in our work, we’re engaging existing clients and network partners to understand the goals of community nonprofits in implementing green or environmental justice projects. What we learn is helping us refine our financing and consulting services.  

With our financing, we’re pursuing three approaches: 

  • Modifying our current financing products and approaches to support greening and environmental justice efforts. This includes considering how existing products can be leveraged in new ways, such as equipment loans to upgrade a fleet of electric vehicles or facility financing to install energy-efficient windows or transitions to an electric heat pump.  
  • Exploring how we can develop new products to incentivize greening investments that exceed the minimum local environmental regulations. This might include lowering interest rates for new builds, incorporating above-standard climate-resilient strategies, or offering companion grants for projects delivering significant environmental and community benefits. 
  • Connecting with government agencies and intermediaries to explore where we can bridge investments through tax credits or reimbursement-based contracts in ways that make upfront investments more feasible for organizations. 

We also aim to collect data more intentionally to learn how projects contribute to real and tangible impacts, especially for communities of color — such as through lower energy bills or fewer hospital visits for children with asthma.  

OFN likes to say CDFIs are “Capital Plus.” Has your focus on climate justice changed any of your “plus” services, like consulting or technical assistance?

On the consulting front, we help environmental groups and community nonprofits plan for green investments and pursue strategies that support local climate justice projects.  

For instance, we’re working to refine NFF’s System Replacement Plan to include a focus on environmental sustainability. The plan helps nonprofits with facilities prepare for long-term maintenance and upkeep of major facility systems and includes consideration for energy and financial impacts of green investments. 

We’re also building relationships with environmental justice groups like Green Latinos, Anthropocene Alliance, and Asian Pacific Environmental Network that invest in the capacity of community-led efforts to drive climate justice locally. We seek to understand the barriers community-led environmental efforts face in accessing unprecedented federal funding and how CDFIs like NFF can partner to provide responsive technical assistance, in areas like planning for and managing federal grants and responsive capital solutions. 

How do you work with community leaders and groups to help shape your products and services around climate justice?

A tenet of our strategic plan — and one of our core values — is community engagement and responsiveness. We’re living this value through community listening sessions and capital needs assessments that inform how our investments in new products, services, and processes can respond to unmet community priorities.  

We will follow the lead of communities most impacted by lack of access to clean water, air, energy, and other environmental challenges. And our investments will go where communities need and want them most.  

Through partnership building, we’re more intentionally focusing on how we can address the economic and health impacts of communities most vulnerable to climate change. For instance, we’re working to close a loan to a community solar project in upstate New York that will provide electricity bill discounts to low-income residents. 

At the 2023 OFN Annual Conference, President and CEO Harold Pettigrew called for all CDFIs to engage in green lending by 2028. NFF is well on the way. What’s on your horizon?

NFF is answering Harold’s call. We know collective action in the next ten years is crucial to saving our shared planet. Our work for the future is focused on a few areas.  

We will continue learning from our communities to respond to their needs.  

We anticipate using what we’re learning to advocate for federal environmental funding that enables nonprofits to use government capital for community facilities investments and environmental projects that build community wealth.    

And we’re hiring an environmental justice program director to help shape and grow our work around environmental justice and green lending. 

We know many CDFIs are deeply engaged in climate justice work, and we are grateful for their leadership. We also know that many are newly exploring how to engage in green lending. We seek to learn together, recognizing that this is an “all-hands-on-deck” moment and success depends on collaboration. 

NFF is leaning into our commitment to environmental investment, exploring new avenues, and looking to partner and fill gaps for community nonprofits, particularly where environmental causes intersect with racial justice.

We invite you to join us. 

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