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News February 9, 2021

Strategies to Drive Community Development Capital to Small and Midsized Cities

Topic General

New Report from Urban Institute and Reinvestment Fund offers cross-cutting lessons to improve community investment systems

Philadelphia, February 2, 2021 — Urban Institute today released Making Community Development Capital Work in Small and Midsize Cities, a report in partnership with Reinvestment Fund, that explores the challenges many small and midsize cities face in attracting and sustaining community investment capital, as well as the opportunities that their size provides.

Small and midsize cities in the aggregate are falling behind their larger peers in attracting and receiving community development investments. Diminished access to capital for investments that bolster positive, local social determinants of health in small and midsize cities coincides with the economic and social trends that affect these localities. For example, since 1980, cities smaller than the 250 largest ones have seen their share of the national income shrink from 18.3 percent to 14.6 percent.

Brett Theodos, Senior Fellow at Urban Institute, facilitator of the Health Capital Roundtable, and lead author of the report said, “We found that community development investors face real challenges to enter, operate, and remain in small and midsize cities. This is because the local community development ecosystems have fewer supporting actors and there is a dearth of federal incentives to help.”

Despite these challenges, small and midsize cities also present distinct opportunities including a strong entrepreneurial spirit and growth potential as well as an outsized impact for smaller price tags. The report presents five real-world models for sustainably and successfully expanding investment in small and midsize cities.

“Considering the mix of challenges and opportunities, we found that CDFIs, other mission investors and community partners have created compelling models for sustainably expanding investment in small and midsize cities,” said Don Hinkle-Brown, President and CEO of Reinvestment Fund. “From mergers to anchor institution partnerships to creating ‘CDFI friendly’ policies, these models illustrate how collaboration of investors, cities, and their partners can build health and wealth.”

The report draws primarily from experiences shared by community development investment practitioners at the Health Capital Roundtables, a series of convenings hosted by Reinvestment Fund and supported by the Robert Wood Johnson Foundation as part of the Invest Health initiative. The roundtables explored systems challenges while financing projects that aim to improve social determinants of health in small and midsize cities.

“One thing we’ve learned as community development investment actors is that the capacity and community development infrastructure of smaller places is the bottom line, and resources (both financial and non-financial) are important factors when it comes to building community economic development capacity,” said Pat Smith, President and CEO of the Funders Network, a non-profit organization that seeks to leverage philanthropy’s unique potential to help create communities and regions that are sustainable, prosperous and just for all people.

Attendees from over 40 organizations represented traditional financial institutions, like banks and credit unions, mission driven financial institutions, such as community development financial institutions and foundations, and healthcare organizations seeking to shift their investment portfolio to the built environment. The roundtable was intended to foster new conversations and opportunities to think differently about capital flows in small to mid-sized cities.

Reinvestment Fund developed the Health Capital Roundtables as a part of the second “Field Building” phase of the national Invest Health work which engaged 50 small to midsized cities since 2016. For 10 of those cities, targeted support was directed to help advance a pipeline of equity-promoting community development projects and improve the systems that influence health and well-being. The Urban Institute co-facilitated the Health Capital Roundtables with Reinvestment Fund.

To read the full report, visit the Urban Institute, visit




About Reinvestment Fund
Reinvestment Fund is a mission-driven financial institution committed to making communities work for all people. We bring financial and analytical tools to partnerships that work to ensure that people in communities across the country have the opportunities they strive for: affordable places to live, access to nutritious food and health care, schools where their children can succeed, and strong, local businesses that support jobs. We use data to understand markets and how transactions can have the most powerful impact, which has consistently earned us the top Aeris rating of AAA for financial strength and four stars for impact management. Our asset and risk management systems have also earned us an A+ rating from S&P. Since our inception in 1985, Reinvestment Fund has provided over $2.4 billion in financing to strengthen neighborhoods, scale social enterprises, and build resilient communities. Learn more at

About the Urban Institute
The Urban Institute is the trusted source for unbiased, authoritative insights that inform consequential choices about the well-being of people and places in the United States. A nonprofit research organization, Urban believes decisions shaped by facts, rather than ideology, have the power to improve public policy and practice, strengthen communities, and transform people’s lives for the better. Experts diagnose current challenges and look ahead to identify opportunities for change. Urban Institute uses research findings to help stakeholders craft relevant solutions and strategies that address today’s concerns and avert tomorrow’s roadblocks and share insights in real time with influencers eager to make smarter decisions. For more than 50 years, Urban has collaborated with philanthropists, social services providers, community advocates, businesses, and federal, state, and local leaders to discover, advise, and solve. Learn more at

 About the Robert Wood Johnson Foundation
For more than 45 years the Robert Wood Johnson Foundation has worked to improve health and health care. We are working alongside others to build a national Culture of Health that provides everyone in America a fair and just opportunity for health and well-being. For more information, visit www.rwjf.orgFollow the Foundation on Twitter at or on Facebook at

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