Opportunity Next: Transforming the Future of the CDFI Industry

Harold Pettigrew, President & CEO, Opportunity Finance Network

June 17, 2025 – 

Read time: 8 minutes

This month marks my two-year anniversary since joining you as the President and Chief Executive Officer of Opportunity Finance Network (OFN). In that time, we have experienced historic tailwinds and relentless headwinds—from economic opportunities and disruptions to political support and volatility, to accelerated climate solutions and now systemic disregard of the threats of climate change. Yet, amid these challenges, the mission of Community Development Financial Institutions (CDFIs) has become not only more urgent, but more visible—and more viable—as a solution to market failures with the deployment of capital to communities that need it most.

As I reflect on the last 24 months, one truth is resounding, loud and clear: our future will be defined by our willingness to innovate—and our ability to do so on our own terms. The decisions we make today will shape the future of the community development finance industry, and our position to move boldly into the center of American economic life.

That’s why OFN is launching the CDFI Innovation Initiative – a sustained investment to institutionalize innovation, reimagine the structuring of community development finance, and develop new tools to deepen impact across the country.

Innovation is Our Inheritance—and Our Future Strategic Imperative

Innovation is often misunderstood. It’s not just about technology or disruption. At OFN, we define innovation simply: trying new approaches to solve persistent and perennial challenges for our members and the communities they serve. That may look like deploying catalytic capital in new ways, building digital infrastructure to streamline operations, or reimagining products to meet evolving community needs.

CDFIs have long been innovators—whether structuring equity-like investments, creating impact-first loan products, or standing up new delivery models. OFN has long been a catalyst in this history—from launching Aeris, to co-developing the first EQ2 product, to pioneering the NEXT Awards, and forging our partnership with Google.

But as an industry, we’ve rarely had the structures, resources, or mindset to institutionalize innovation as a core function of leadership.

At OFN, we are changing that.

A New Era for OFN—and the Industry

We’ve entered what I describe as the Third Wave of Community Development Finance. The first wave established the foundations of our place in capital markets. The second built our visibility and viability as a national force for community impact. This third wave requires that we not only protect the gains we’ve made over the decades but position ourselves to lead in a fast-evolving financial landscape.

That’s why OFN is launching the CDFI Innovation Initiative, as an intentional, bold, multi-year commitment to elevate the field of community finance to support bold experimentation, new tools, and actionable models to solve the field’s most persistent challenges—capital sources, data fragmentation, technology gaps, and limited operational capacity. At its core, our work remains centered on putting members first. Everything we do—from advocacy and data initiatives to product innovation and storytelling—is designed to help our members increase their impact, reduce their operating burdens, and grow sustainably.

The Risks of Standing Still

For more than 40 years, OFN and our members have been a trusted investment partner to the public, private, and philanthropic sectors – that’s foundations and corporations, banks, and government agencies – helping partners invest in communities to catalyze change and create economic opportunities for all. We have deployed historic flows of capital, and seen unprecedented visibility, policy recognition, and increased public trust. More institutions than ever before want to partner with us. More communities depend on us.

But let’s be clear: the status quo is not safe.

We must be prepared for the opportunities and the threats that lie ahead, or risk being left behind or replaced without intentional change. We face real threats: federal divestment, political volatility, talent and technology gaps, and new entrants who may adopt the language of the CDFIs but lack the values or track record of our movement.

If we do not modernize, communities are at risk with the loss of trusted partners, and stewards of public and philanthropic capital. If we do not invest in innovation, our models may become too slow, too expensive, and too small to meet the moment.

We have an opportunity—but it’s also a warning. We must innovate not just to stay relevant, but to own the future.

The Path Ahead: Building Durable Solutions

To lead in the third wave of community development finance, CDFIs must focus not only on doing more—but doing differently. That means building durable and enduring solutions across four essential fronts:

1. Capital Solutions That Enable Growth and Build Resilience

CDFIs need access to more blended sources of patient and affordable capital to continue financing impactful projects in communities. New capital solutions, and a broader investor base, will empower CDFIs to grow more sustainably by diversifying funding sources and making financing more responsive to mission. By changing how capital is structured and accessed, CDFIs will be better positioned to serve more communities with greater financial stability and impact.

2. Financing Products That Expand Reach and Close Gaps

Communities’ needs are vast, and CDFIs have long sought to expand product offerings to create greater financial inclusion and economic opportunity. Next-generation financing products will need to address persistent gaps in access to capital, especially in low-income and underserved communities. With products designed to unlock entrepreneurship, job creation, and community wealth-building, CDFIs will build more prosperous communities.

3. Technology and Operational Innovation That Drives Scale and Efficiency

CDFIs are small businesses, which means they must do a lot with limited resources. Innovative technology and operational models—deployed in community-aligned ways—are critical to enable CDFIs to modernize service delivery, improve efficiency, and expand their reach. With advancements in the innovation economy, CDFIs have the opportunity to leverage innovative shared service models, ethical AI, automation, and advanced data tools to streamline operations and operate with greater sophistication while maintaining their mission-driven focus.

4. Data, Systems, and Analytics That Inform and Accelerate Impact

CDFIs create substantial impact, and access to accurate, timely, and comprehensive data is needed to drive smarter solutions; increase performance; better tracking of social, financial, and impact outcomes; capture compelling narratives; and influence policy with facts. Advanced data and analytics systems will move CDFIs from reactive to strategic by providing the insights needed to guide investment and scale impact. This data-driven approach will enhance accountability, unlock new capital sources, and ensure that innovation leads to measurable change.

Innovation at Work: A Platform for Scalable Solutions

Through 2030, OFN will make industry investments to pilot projects and scale innovations through a structure designed across three core activities:

• The Innovation Council – A collaborative forum of experts, CDFI leaders, funders, and thinkers who will shape the direction of innovation across the industry.
• The Innovation Center – A national hub that supports an “action tank” to seed innovation and accelerate promising solutions.
• The Innovation Fund – A blended capital pool designed to capitalize high-potential ideas from concept to scale, ensuring innovations deepen the impact of the industry and reach the communities that need them most.

Together, these components form a powerful platform that fuels creativity, reduces risk, and ensures real-world application of breakthrough ideas for community development finance.

Looking Ahead to 2030

This isn’t just about today’s needs. It’s about designing a future where the industry looks different—more inclusive, more agile, and more effective than ever before.

If community development finance looks the same in 2030 as it does today, we will have collectively failed as an industry. This is not change for the sake of change—it is an evolution of OFN’s leadership into a more dynamic, responsive platform for the field.

This is our moment. A moment that requires bold transformation—not just to grow, but to remain relevant and resilient.

We have work to do and we are ready for it. The communities we serve deserve nothing less.

A Call to CDFIs and Investors: The Future Is Ours to Shape

To our members: your work has always been about meeting the moment. You have built the modern CDFI movement from the ground up. Now, we must build the next chapter, The Third Wave, together.

To our capital partners and investors: your capital is most powerful when it is paired with vision, proximity, and trust. CDFIs bring all three. The value we offer is not just impact—it’s insight, execution, and long-term presence in communities that matter.

The opportunity before us is extraordinary. The future of community development finance will be shaped by those who are bold enough to imagine it—and those who are prepared to build it. OFN is ready. Our members are ready. Join us in this work.

The only way to predict the future is to create it. Let’s not just adapt to the future. Let’s define it—together.

Learn more about OFN’s CDFI Innovation Initiative.

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Tags: CDFI Leadership, Community Development, Impact Investing, OFN