Investing in Communities
A Profile of Alumnus Ron Kelly from the Fall 2016 Issue of AAP News.
Among the many solutions proposed to address economic disparity and hardship, none may have a more positive impact than community development investment — providing money for initiatives and institutions that can breathe new life into cities, towns, and villages by providing opportunities for the people who need them most. It's a plan of action embraced by Ronald Kelly (M.R.P. '08), who currently serves as director of impact strategy for Capital Impact Partners, a national community development financial institution based in Arlington, Virginia. As someone responsible for evaluating the organization's impacts on its clients, he has seen the difference an infusion of capital can have on populations struggling to keep their heads above water.
"The need for community development finance is truly great. While the United States is largely blessed with economic prosperity, it is not uniform," Kelly says. "Far too many communities get left behind, both urban and rural. Community development finance can step in to make investments that have long-term positive influences — by improving educational opportunities for young people, increasing access to health care and healthy foods, and catalyzing asset-building through small business development or worker ownership."
This is the spirit of the lending work done by Capital Impact, he says. "I am thrilled to be on the team that helps to develop the strategy of the overall organization, and to do what it is that drove me to graduate school to study city and regional planning in the first place, by helping us improve the ways in which we measure and track our collective impact."
A mission-driven lender, Capital Impact has deployed more than $2 billion into low-income communities to help build and expand community health centers, charter schools, healthy food enterprises, mixed-use real estate projects that support affordable housing, and cooperatives, among other ventures. This effort supports Capital Impact's work to help create a nation of communities built on equity, opportunity, and inclusiveness.
Kelly's interest in lending and economic development began on a much smaller scale. He was an undergraduate business student at Rochester Institute of Technology (RIT) who "cared about more than the bottom line for companies," and also had an interest in how businesses can positively impact the communities in which they operate, he says.
As an undergrad he helped start a credit union in his hometown, Jamestown, New York. The goal was to provide small consumer loans to a Puerto Rican population that was being exploited by rent-to-own agencies, and faced both an equity challenge and a language barrier.
"Church leaders in the community saw that the local Puerto Rican population was relying on rent-to-own agencies for many of their purchases, and were being taken advantage of. We wanted to create a way for them to get small loans, which is what credit unions specialize in," Kelly explains.
A credit union was established, open to anyone who lived, worked, or worshiped in Jamestown, and it was housed in a community center run by the Joint Neighborhood Council, a place familiar to the target population. The church leaders pledged deposits as seed money and, after the neighborhood institution was chartered and operated with volunteers for a couple years, a more established local credit union saw the market potential of serving the same customers and acquired it in a merger.
"It was a great success," Kelly says. "We were able to show that the people we served were good customers, and then find a way for them to have better access to financial services than what we could cobble together through our volunteer network."
After graduating from RIT, and buoyed by that positive experience, Kelly joined ShoreBank in Chicago, which was then the first and largest community development bank in the U.S. From there, he attended graduate school at Cornell, to study city and regional planning. "My primary goal was to add to my skill set — particularly to learn how to analyze communities to understand what sort of impacts these types of investments were spurring," he says.
His graduate studies in the city planning program did, indeed, provide the skills he sought, Kelly says. "I definitely had a better sense of what made cities and regions tick; how their economies worked, what progressive policies would better work along with community development finance in tandem, and how to conduct both quantitative and qualitative research to ascertain the impacts of various policy interventions," he says.
Kelly recalls that he took every course that Professor Susan Christopherson offered during his two years at Cornell, "and I would continue to take economic development planning courses with her as long as she could stand me being there. I learned such a great deal from her and was thrilled to have her as my thesis advisor."
He also enrolled in several classes with Professor Pierre Clavel, now emeritus, who served as the second on his committee. "Pierre gave me a better perspective on planning history — learning how past trials and errors can be used to better communities going forward," Kelly says. "And, one of the classes that I think about quite often was a core course taught by [Professor] John Forester that really drove home the point that so much of the work we do as practitioners is in the gray area of policy. If there were black-and-white, cookie-cutter answers for our work then we wouldn't continue to see the problems of poverty, disinvestment, etcetera. One of the best lessons from my time at Cornell was to be comfortable with the gray area."
Kelly finished his master's degree at the height of the Great Recession, which delivered a severe blow to community development financial institutions. He then spent seven years with a nonprofit that focused primarily on work at the federal, state, and regional levels involving economic and workforce development issues.
He went on to lead workforce and economic development strategy for the Department of Housing and Urban Development's Sustainable Communities Initiatives in the Erie, Pennsylvania, and Knoxville, Tennessee, regions and led research projects for the Arizona Commerce Authority, including an assessment of the state's green economy and an evaluation of the economic diversity of the state's aerospace and defense industry.
"It was a wonderful experience to work directly with communities to help them shape their own economic future," says Kelly. "The work often started with an assessment of current conditions. This was important because community leaders can have misperceptions about the strengths and weaknesses of their economy or workforce. Starting from a common understanding of what's happening on the ground is important. And, sometimes we had to do a great deal of research to get to that common understanding. An example of that is the survey I managed that went out to 10,000 businesses to provide the baseline assessment of the green economy for the State of Arizona."
Before joining Capital Impact, Kelly led a team of experts in banking, commercial lending, and economic development policy to analyze the lending programs offered through the U.S. Treasury Department's State Small Business Credit Initiative. This involved some 150 lending programs run by state agencies around the country with small business investment programs totaling more than $1 billion.
There is much satisfaction in doing work that results in broad-based benefits, Kelly says. "It's a really great feeling to be able to come to work every day knowing that my organization positively impacts the lives of so many individuals. And, that we're not just sitting back on our laurels celebrating what we've done — that we're continuing to strive to do more and find new ways to create positive change. It's very motivating," he says.
Still, there are substantial challenges. "We are trying to improve economic conditions in areas that have long been underserved. The factors that led to their current conditions are so multifaceted and often very entrenched," he says. "Those factors include housing, jobs, education — they must be addressed simultaneously, which is difficult, because they are all interrelated. There are no silver bullet solutions."
By Jay Wrolstad