Leading LIIF’s Next Chapter: A Conversation with Erika Poethig

Hosted by Mindy Binderman, Chief External Affairs Officer

As Erika Poethig assumes her new role as LIIF's Board chair, I sat down with her to learn more about her journey to LIIF and how she believes LIIF is uniquely positioned to lead. Erika is currently the Executive Vice President for Strategy and Planning, Civic Committee of the Commercial Club of Chicago.

Mindy Binderman (MB): We are excited to welcome you as LIIF's new board Chair. I'll start by asking: what brought you to LIIF and how your leadership journey has evolved?

Erika Poethig (EP): I'm going to step back to the early days in my career, back in the 1990s, when I worked for the City of Chicago Department of Housing. At the time, our most valuable partners in executing our work were the CDFIs that we partnered with in Chicago. We put public resources in funds led by Community Investment Corporation and Neighborhood Housing Services as a layer of capital. And it was through that partnership that I really came to understand what a terrific vehicle CDFIs are for bringing different capital sources together, including public sector capital sources.

Through that experience I became an enthusiast for the roles that CDFIs can play in knitting different sources of capital. And it's why I'm so bullish on not just the kind of capital we receive today from state and local governments in the form of contracts, but on expanding the kinds of partnerships we have at the state and local level, maybe tapping state and local funds as guarantees or loan loss reserves or other ways in which that kind of capital can really help us scale.

MB: That leads to my next question: what are you most excited about taking on, both challenges and opportunities, and where do you see the future of LIIF going during your tenure?

EP: Clearly on the challenge front, there are a lot of headwinds for CDFIs at this moment with the Administration changing its policies and constraining resources for CDFIs. And while that puts a lot of fiscal pressures on the CDFI industry, it requires us to be sharper and make the case for the role that CDFIs play in communities. And the tailwinds, I think, are the opportunities to look to a variety of different partners. Our main partners have been the lending institutions that have a regulatory requirement and they've been hugely important. But with the headwinds, it forces a conversation about not only our capital sources, but also what they mean in terms of how we define ourselves as an organization.

During my first "chapter" on the Board, we were leading the field as one of the first CDFIs, if not the first, to execute a bond as a source of capital. We were finding new sources of capital for the lending, and it was a very exciting moment.

I think the tailwinds are the opportunities to think about our partners and our capital providers, where those sources of capital are coming from, how we tell our story and make the case to a new set of capital providers.

MB: That's a great perspective, kind of like what's facing the CDFI industry writ large. What do you think are the unique strengths that LIIF brings to the field? And how might we position ourselves?

EP: First and foremost, LIIF has a multidisciplinary, multi-sectoral point of view about what communities need to thrive, and we are very intentionally a national organization. And it's so rare but it allows us to see the experience that Americans are having across different communities in the U.S. Our perspective is very distinctive and hugely important to the real lending that happens on the ground, but also in our discussions with policy makers or other CDFIs.

Looking forward, LIIF should continue to play a leading role in any kind of new tool development or other kinds of capital strategies. For example, we know that approximately 50% of U.S. births are occurring in the southeast, which leads you to ask how well children in those communities are doing and what is influencing their outcomes. Said differently, these communities are playing an out-sized role in the long-term economic mobility of the U.S. population.

What did LIIF do? We increased our presence in the southeastern part of the U.S., bringing much-needed childcare to those communities. We've also continued to push the envelope in terms of the kinds of lending we do-i.e. lending to more emerging developers in markets where we've been building out our presence.

MB: As we close out our discussion, is there something you want to share about how you hope to lead?

EP: I hope to tell the LIIF story by sharing how we build our national strategy from distilling lessons learned from our work on the ground into tools and lending that influence outcomes in many different communities across the U.S. I want to bring both my heart and head to this work because it's a critical time to be disciplined but also to lead with empathy. It is an extremely challenging time for CDFI's, and for that reason I think it's critically important it is to be a compliment to the executive leadership by drawing out and leveraging the expertise and wisdom of the Board's own leadership.