Monthly Archives

July 2024

Love0
By CNote, Impact Investing, Impact Metrics, Migration V1

CNote’s Q2 2024 Public Impact Report

CNote is excited to share our Q2 2024 public Impact Report! Check it out here.

This quarter, we delve into the achievements and stories from our community financial institutions, showcasing their dedication to driving positive change. Here’s a sneak peek of what you’ll find:

  • Spotlights on our mission-driven partners: Meet Michele Davidson of FTS Lighting Services, a trailblazer in sustainability and innovation, and learn about OurPlace Residential Services, founded by Somali-born nurses to support marginalized communities.
  • Updates from the Wisdom Fund: Discover how the fund is enhancing access to capital for women of color entrepreneurs, and welcome AltCap as a new member focused on inclusive economic growth.
  • Trends and insights: Explore the latest from CDFIs on climate action, including the Clean Communities Investment Accelerator (CCIA), a key initiative supporting green finance projects in disadvantaged communities. Additionally, gain insights from CU Impact 2024, where CNote’s Marketing Manager, Matthew Stratford, shared strategies for effective impact storytelling.
  • Corporate client experiences with Climate Cash®: Find out how companies are leveraging our Climate Cash solution to align with their sustainability goals and promote social justice.

Love0
By CNote, Impact Investing, Migration V1

Quick Tips for Credit Union Membership Growth

New York University Federal Credit Union has been a CNote Impact Cash Partner since 2023. Check out this Impact Story on how they’ve utilized partnerships, innovative products and services, and financial education to grow their membership.

Membership growth is hard to maintain for some credit unions.

The NCUA’s Q1 2024 Quarterly Credit Union Data Summary revealed that credit unions of nearly every size were struggling with membership growth (except those with assets above $1B).

  • Federally insured credit unions with assets of at least $500M but less than $1B in assets saw a $7.4% decline in membership.
  • Federally insured credit unions with at least $50 million but less than $100 million in assets saw a 5.4% decline in membership.
  • Federally insured credit unions with assets of at least $10 million but less than $50 million saw a 5.3% decline in membership.

This decline has also had an impact on deposits.

A report from Fitch in January of 2023 explained that they would expect to see bank deposits “shrink meaningfully through 2024, as “depositors seek higher-yielding alternatives for non-operating cash”, and “the Fed continues to shrink its balance sheet through quantitative tightening.” Fitch expected U.S. banking industry deposits to decline a further $1.4 trillion in 2024.

According to another report from TruStage, in March of 2023, the average member had $13,818 in total savings deposits, a $286 year-over-year drop, and the largest in credit union history.

While there is no silver-bullet solution, New York University (NYU) Federal Credit Union offers a prescient view and compelling blueprint for how to position your credit union to grow amid financial challenges.

When Mira Ness, CEO of NYU FCU, joined the credit union in 2006, it had approximately 2,000 members and roughly $7M in assets. Today, NYU FCU has about 10,000 members and more than $70M in assets.

Mira Ness, CEO of New York University Federal Credit Union 

Invest in Products and Services That Address Member’s Challenges

Over the years, NYU Federal Credit Union has expanded what it’s able to offer its members. That includes online banking, Zelle, and Apple Pay, as well as student loan consolidation, quick cash loans, and credit-builder loans. “We are able to provide the loans that our members need,” Mira said. “We’re constantly trying to listen to our members about what they want.”

For example, one of the first additions that Mira made at NYU Federal Credit Union when she joined 17 years ago was a mortgage program. Within six months of joining, she added five mortgage loans to the credit union’s portfolio, which allowed the credit union to begin making money on interest “right away.” Since then, NYU Federal Credit Union has continued to expand its mortgage program to include mortgage preparedness loans, first-time homebuyers’ loans, and down-payment assistance loans, which has become the credit union’s most popular offering.

Invest in Partnerships

When Mira took up her position, she began investing in partnerships. NYU Federal Credit Union partners with Citibank to give its members access to the bank’s sprawling network of ATMs. They also partner with Neighborhood Housing Services of NYC to host financial education seminars about available housing grants for low-income members. The credit union even partners with Citi Bike NYC to provide its members with a considerable discount to access thousands of bikes across New York City, Jersey City, and Hoboken. However, one of NYU Federal Credit Union’s most innovative partner relationships is with United Nations Federal Credit Union, a large, international credit union that has a presence in New York City.

Although NYU Federal Credit Union’s assets have grown considerably since Mira joined in 2006, the credit union is still too small to carry a high number of mortgages on its balance sheet, despite the demand from its membership. Therefore, to meet its members’ needs, the credit union forged a partnership with the United Nations Federal Credit Union. NYU Federal Credit Union sells its mortgages to United Nations Federal Credit Union but holds onto 10% of each loan. In return, United Nations Federal Credit Union gets to improve its balance sheet, while NYU Federal Credit Union gets to serve more members. Last year, the arrangement resulted in NYU Federal Credit Union earning approximately $400,000 in fees, which Mira says was a “huge boost” to the credit union’s bottom line.

Another partnership that’s proving to be beneficial for NYU Federal Credit Union is with CNote. In 2023, NYU Federal Credit Union became a CNote Impact Cash® Partner. CNote clients deposit  Impact Cash dollars in mission-driven NCUA-insured partners like NYU Federal Credit Union, generating returns on institutional investors’ cash allocations while supporting financially underserved communities across the country. “Because we need cash flow, and we have to have liquidity for our transactional mortgages,” Mira said, “CNote has been very helpful for us.”

Invest in Financial Education

Given the popularity of its mortgage programs, NYU Federal Credit Union offers numerous financial education and information seminars. Although much of the credit union’s business flows out of these seminars, Mira says that that’s not her and her team’s goal. “Our goal is education and to help people,” she said. “We want people to get the best possible deal, and if someone else is going to be able to give it to them, we tell them to go for it. Educating people and gaining trust is the most important thing.”

This information should not be relied upon as research, investment, legal or financial advice. CNote is not a legal, financial, accounting or tax advisor. This material is strictly for illustrative, educational, and informational purposes and is subject to change. Investing involves risks, including possible loss of principal.

CNote® and Impact Cash® are registered trademarks of CNote Group, Inc. © 2024 CNote Group, Inc. All rights reserved.

Love0
By CNote, Migration V1

CNote’s Flagship Fund – A Path to Community Impact

Impact investing doesn’t have to be difficult or time-consuming. With CNote, you can quickly become an impact investor on the CNote platform and support under-resourced communities with vital capital for small business growth, affordable housing development, climate adaptation, and more; all while earning 4.00% APY*.

 

The Role of CDFIs

Community Development Financial Institution (CDFI) Loan Funds have been dedicated to this work for decades. Through their efforts, billions of dollars have been leveraged for investment in communities left out of the economic mainstream.

Their primary mission is focused on supporting economic growth in the communities they serve. CDFIs fund small, often BIPOC-owned businesses, affordable housing, volunteer organizations, and services essential to revitalizing low-income neighborhoods. They are critical in ensuring all Americans can share in the prosperity and innovation of our country.

Certified by the U.S. Treasury Department, CDFIs can be found in every state and the District of Columbia, serving both rural and urban communities.

Real-World Impact: ACE and Brown Toy Box

Terri-Nichelle Bradley, founder of Brown Toy Box

What does that impact look like on the ground?

Access to Capital for Entrepreneurs (ACE), a CDFI Loan Fund based in Georgia, has been serving its local community since 1997. Grace Fricks founded ACE with an initial grant of $50,000 to support small business owners across the state. Over the past 22 years, ACE has provided loans and business advisory services to more than 2,000 small business owners across 68 counties in Georgia.

One of those entrepreneurs is Terri-Nichelle Bradley, founder of Brown Toy Box, an educational play-kit company designed to get BIPOC kids excited about STEAM careers. In 2021, Target announced they wanted Brown Toy Box in every one of their stores—40,000 kits in total.

Terri-Nichelle reached out to her network to fundraise but found traditional banks were not yet an option. “We didn’t have enough revenue to qualify for a bank loan,” she said. “One of my mentors who leads a bank told me ‘We won’t look at you for another couple of years.’”

Fortunately, Terri-Nichelle had previously been co-located in an incubator with (ACE).

Terri-Nichelle reached out to ACE, and the CDFI provided the necessary financing to execute the Target deal. ACE funded the first $500,000, which allowed Brown Toy Box to secure the inventory needed to enter 1,757 Target stores. In addition to lending, ACE’s founder and CEO, Grace Fricks, advocated for Terri-Nichelle, bringing other partners to the table to provide additional funding for Brown Toy Box’s inventory rollout across the country.

“The reason that we are where we are right now is because we were able to get the capital,” Terri-Nichelle said. “That happened because some really strong women in the investment and finance sectors really showed up for me.

The Growing Need for Capital

According to a 2023 survey of 453 CDFIs by Fed Communities, there is heightened demand for CDFI products and services and an urgent need for more capital to support their impactful lending efforts.

  • “Three out of four CDFIs saw an increase in demand over the past year, and a similar percentage expect demand to continue increasing into next year.”
  • “Loan funds frequently cited the increasing cost of lending capital as a challenge, as well as restrictive and insufficient operational funding.”
  • “45% of CDFIs reported that lending capital was a significant factor preventing them from fully meeting demand.”

How You Can Help with CNote

  • CNote is a women-led impact platform using technology to streamline diversified community investments. Every dollar invested through CNote’s platform funds mission-driven financial institutions that provide responsible and responsive financial products adapted to the needs of under-resourced communities.
  • Through CNote’s Flagship Fund offering, we aim to provide any investor with a competitive and scalable way to align their cash with purpose.  CNote’s Flagship Fund invests solely in a portfolio of federally certified CDFI loan funds that have decades of experience providing critical lending and financial services to underserved communities across America.

Tangible Impact through CNote

Through the Flagship Fund, you can channel capital to these CDFI loan funds to create tangible impacts in the communities that need it most. In Q3 of 2023 CDFI loan funds used capital from CNote investors to support the following lending activity:

  • 80% of loans originated to Black, Indigenous, and People of Color (BIPOC) borrowers
  • 73% of loans originated to low to moderate income (LMI) communities
  • 77% of loans originated to women-led businesses

Why Use the Flagship Fund?

  • Social Impact: Money in the Flagship Fund supports a wide range of community development projects, driving positive social and economic outcomes in underserved areas.
  • Transparency and Reporting: CNote provides detailed reporting on the performance and impact of the Flagship Fund, ensuring that users are well-informed about where their money is going and the difference it is making.
  • Simplicity: Flagship Fund has no minimums.

Key Features of the Flagship Fund:

  • 4.00% APY*- Earn while doing good
  • Impact: Your funds support a wide range of CDFIs and community development projects.
  • No Barriers to Entry: No account minimum
  • Strategic Advantage: Enjoy the security of locked rates for the full 30-month term, combined with the convenience of quarterly liquidity options.
  • Diversified CDFI Investment: Carefully vetted and placed among community development organizations

 

Impact investing can be straightforward and immensely rewarding. By investing through platforms like CNote, you can make a significant difference in under-resourced communities, fostering economic growth and creating opportunities for those who need it most. Become an impact investor today and join the movement towards a more equitable and prosperous future for all.

 

CNote Group, Inc. (“CNote”) is not a bank, a credit union, or any other type of financial institution. CNote is not a registered investment advisor with the Securities and Exchange Commission (SEC) nor a broker-dealer authorized by the Financial Industry Regulatory Authority (FINRA). CNote is not a legal, financial, accounting or tax advisor. CNote offers securities consisting of various promissory notes (“Notes”) to eligible accredited investors pursuant to Regulation D under the Securities Act of 1933, as amended (“The Act”) and to eligible unaccredited investors pursuant to Regulation A of The Act. Neither the SEC nor any state securities regulator has passed upon or endorsed the merits of any investment in CNote’s offerings. Investments in our Notes are not bank deposits and are not insured by the Federal Deposit Insurance Corporation (FDIC), the National Credit Union Administration (NCUA), or any other governmental agency. Information provided herein is for educational purposes only and is not tailored for any individual investor or client. It should not be relied upon as financial or investment advice. This document does not constitute an offer to sell, or a solicitation to buy. Returns are not guaranteed. Past performance is not indicative of future results, and future returns may vary. All investing has risks. Before making an investment, the recipient is advised to consult with its financial, legal and/or tax advisor(s) to determine whether an investment such as this is suitable for it. Interest rates are for illustrative purposes, and are subject to change.

*Returns are not guaranteed. The Flagship Fund issues Adjustable Rate Promissory Notes that are non-recourse obligations of CNote and involve the risk of loss, including principal. You should carefully review all offering documents including our most current Flagship Fund offering materials, the Subscription Agreement and the Note terms prior to investing. This offering is for accredited investors only. Past performance is not indicative of future results, and future returns may vary. All investing has risks. Before making an investment, the recipient is advised to consult with its financial, legal and/or tax advisor(s) to determine whether an investment such as this is suitable for it. Interest rates are for illustrative purposes, and are subject to change.