Persistent Poverty and the Prevalence of CDFIs

In new research supported by the Robert Wood Johnson Foundation, Opportunity Finance Network shows the traditional measure of persistent poverty by county severely undercounts the number of Americans living in entrenched poverty and is less geographically inclusive of rural and urban communities alike.

Persistent Poverty and the Prevalence of CDFIs posits that measuring persistent poverty at a census tract level offers a more equitable and accurate methodology and has profound implications for many CDFIs.

A county measure suggests that nearly half of CDFIs have no lending activity in these areas. A census tract measure shows that the vast majority of CDFIs lend in persistent poverty areas and that nearly 40 percent of all CDFI lending is in these areas, a testament to the CDFI industry’s targeting of highly vulnerable rural and urban communities.

The paper’s findings include:

  • A census tract measurement counts 37 million Americans in rural and urban areas, of which 17 million are not counted in a county-focused measure
  • When measured at the census tract level, persistent poverty in the U.S. nearly doubles
  • The number of rural counties with persistent poverty increases from 310 to 751 and the number of urban counties increases from 45 to 643
  • A census tract measurement also increases persistent poverty populations across rural and urban geographies
  • Persistent Poverty and the Prevalence of CDFIs includes a foreword by Partners for Rural Transformation, as well as recommendations for CDFIs, policymakers, funders, and investors seeking to address persistent poverty.

Download the paper for a detailed comparison of persistent poverty when measured by census tract and county, CDFI lending by each metric, resources for CDFIs to measure by both, and borrower stories.