This past January, the New York Fed hosted its first Investment Connection pitch program in Puerto Rico. Community development financial institutions, investors, and philanthropists gathered in San Juan to hear funding proposals from 30 economic and community development organizations from both rural and urban regions of Puerto Rico.
The Investment Connection program, first started by the Kansas City Fed, aims to link financial institutions and other capital providers with nonprofit and community development organizations whose needs may qualify for credit under the Community Reinvestment Act (CRA). All banks are eligible to participate in the Investment Connection program, including those supervised by regulatory agencies other than the Fed (such as the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency).
Ahead of this keystone pitch event, the New York Fed announced the 30 proposals eligible for CRA consideration and therefore eligible to participate in the Second District’s first iteration of Investment Connection in Puerto Rico.Over two days, representatives of these organizations pitched their proposals, which covered topics such as affordable housing, health, education, renewable energy, and more.
New York Fed President John Williams welcomed guests via pre-recorded video and reaffirmed the New York Fed’s commitment to Puerto Rico’s people, growth, and prosperity. Speaking to funding providers and participants, he said “our goal in hosting Investment Connection program is to serve as a catalyst for you to come together to tackle some of the most complex challenges confronting the Island,” while noting that the “recent devastating events reinforce the need for community investments.”
On the first day of the program, the capital providers in attendance — including bank representatives, impact investors and philanthropists — listened to funding proposals on affordable housing, capacity building, health, and renewable energy.
On the second day, the investors heard pitches related to small business, education, and workforce development.
“The Investment Connection program provides the opportunity for institutions across the country to make tangible investments in Puerto Rico — investments that make both an immediate and long-lasting impact,” said attendee José R. González, president and CEO of the Federal Home Loan Bank of New York. “Investment Connection offers tremendous value both to investors and the Commonwealth.”
Prior to the pitch program in January, the New York Fed’s Community Development Finance (CoDeFi) team led an outreach campaign to more than 8,000 organizations in Puerto Rico and developed capacity-building workshops for those interested in participating in the program. These preliminary outreach efforts, conducted following the initial announcement of the Investment Connection program in July 2019, were critical to ensuring that organizations were prepared to participate ahead of submitting their proposals for the review process.
During the proposal submission window in October 2019, the New York Fed received more than double the expected amount of proposal submissions, confirming the enthusiasm of organizations in Puerto Rico who are seeking new forms of capital to support their missions and the populations they serve.
Proposals were then selected based on criteria related to CRA eligibility, organizational capacity, and potential impact.
“Given the level of need for increased support all across Puerto Rico, our priority when implementing this program was to ensure that the process was inclusive and accessible,” said Chelsea Cruz, associate director of CoDeFi. “The proposals submitted were from organizations both big and small, working in urban and rural areas and on a variety of critical issues. It is our privilege to be able to raise the profiles of these organizations and their missions.”
The Investment Connection team has already seen results from this inaugural event. So far, the team has recorded more than 80 connections between participants and capital providers. One organization even organized a site visit with an interested investor the day after the event.
Almost of all the attendees representing potential investors indicated that after hearing all the pitches, they are likely to recommend their institution invest in at least one proposed project. Additionally, multiple investors, community development practitioners, participating organizations, and other stakeholders recommended the program be repeated and expanded to other regions.
In the coming months, the Investment Connection team will continue to facilitate connections between participants and capital providers. Recently, the New York State Department of Financial Services announced that financial institutions under its purview may receive CRA consideration for participation in Investment Connection, and the Investment Connection team plans to work with any firms that may be interested in learning more about investment opportunities in Puerto Rico.
Later this year, the team will release an impact report highlighting the achievements of the program and its contributions to recovery and development efforts in Puerto Rico.
Read more about the organizations and watch their proposal pitches via video on the Investment Connection Proposal site.