On Tuesday, October 22 — day two of OFN’s Annual Conference — OFN awarded the 2019 Ned Gramlich Lifetime Achievement Award for Responsible Finance to Michael Swack, a highly influential CDFI practitioner and researcher. The Gramlich Award is the CDFI industry’s highest individual honor.
“Michael has made a lifetime of contributions to the CDFI industry and continues to offer unique expertise that moves us forward today,” said Lisa Mensah, OFN President and CEO. “His research brings a discipline to the CDFI field that has helped CDFIs improve operations, fundraising, and capitalization, as well as products and services. Over the whole of his career, he’s been a critical influence on practitioners and students of community development. We honor his trailblazing accomplishments and his lasting legacy with this award.”
We spoke with Michael a few days before the award and asked him to reflect on his career, CDFIs, and his unique position in the field.
How did you come to work in community development?
I was always interested in issues related to social justice and equality. I grew up in Northeast Ohio, and my mother was a bit of an activist. That was unusual in our neighborhood.
I went to school at the University of Wisconsin and became involved in cooperatives. The idea of people owning and controlling economic resources through cooperative ownership seemed very appealing. While in school, I worked at a cooperative organization that purchases housing and converted it to cooperative ownership. It was always a problem to raise money for the purchase. So, I got interested in financial questions as an undergraduate in college.
I once got my organization (and myself) in trouble by creating a “bond” to raise money to purchase a property. I didn’t know anything about securities laws – I just created bond document from a book I found in the library. Our attorney didn’t catch wind of this until I had already “sold” a few bonds. He told me that the State of Wisconsin had laws to protect its citizens from people like me!! I thought it might be useful to actually learn something about finance after that.
What most excites you about the growth of the CDFI industry/movement over the past 35 or so years?
It’s exciting that the field has grown and gained so much more sophistication about financing and financial markets and the important role that finance can play in promoting better outcomes for people and communities. We understand the finance is just part of a solution in creating more equitable outcomes for communities and individuals – but it is an important part.
Your work focuses on scaling the industry – what are some roadblocks to scaling?
One of the questions I have — and it often makes people nervous — is whether we really need more than 1,000 CDFIs. Very few CDFIs are operationally self-sustaining with a plan for becoming so. Would we be better off maintaining and growing CDFI coverage with fewer larger CDFIs — CDFIs with strong balance sheets, are self-sustaining and able to attract a wide range of investors? Of course, there is nothing wrong with being small, but there is a problem with not having a sustainable business model. And I think this is truly the biggest challenge. One path we may want to pursue is the development of an operating platform, developed and cooperatively owned by CDFIs that would perform a variety of backroom and HR functions. This could potentially improve services and save money — and be particularly helpful to small CDFIs — but could benefit the large ones as well.
From your educator lens, how has interest in community development finance changed over the years?
A lot more people who are interested in social and community change are interested in learning about finance. Thirty years ago, people interested in working in social change shied away from finance – believing it a bit unseemly. Today, people want to understand finance – from how loans are underwritten to how risk is defined to how financial markets work. They want to understand how to make finance work for communities rather than serve as a tool to discriminate against poor communities.
What is it like to be both a researcher and practitioner in the field?
I am particularly grateful for my somewhat funny position: many practitioners think of me as a researcher and my university colleagues consider me a practitioner. What’s really great about this is that I really get to do everything. I’ve worked with many, many CDFIs on issues of strategy, capitalization, and problem-solving. And on the research side, I collect so much information from my people in the field that I can share in different ways. So I feel like I’m, in some ways, an information intermediary. It’s a great position to be in. I learn so much and meet so many really terrific people who are doing great work.
How does it feel to receive the Gramlich Award?
I am very appreciative of the recognition from my peers. I feel very lucky to have spent my working life in this field. I have met many, many smart, committed, thoughtful and decent people.
Enjoy Michael’s acceptance speech!
(OFN2019: Ned Gramlich Awardee Michael swack on Vimeo.)
See more 2019 OFN Conference highlights!