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  • Community Credit Lab

Why Borrowers Don’t Pay CCL’s Costs

Updated: May 2, 2022

Collective group of hands of different people of varying skin shades Photo by Rineshkumar Ghirao on Unsplash

In March, Community Credit Lab reached our 100th Investment. This week, we closed our 3rd commercial loan at the direction of a Lending Partner! These major milestones would not be possible without our Lending Partners, Borrowers, Funders, Donors, & Impact Investors. Each loan is an investment in an individual or a business owner to improve their economic prospects.

These milestones are especially significant because of the fact that we put a constraint on our model from the very beginning: borrowers do not pay CCL’s costs to achieve their goals. Given CCL’s emphasis on eliminating the poverty premium for people who face discrimination in the financial system, we took a strategic decision from day one that borrowers should not pay any part of CCL’s operating costs. While this constraint may seem limiting in the short term, we have already seen that it is fundamentally freeing–this parameter allows us to think, act, respond, and design differently–most importantly, it allows us to center our borrowers and their needs and economic prospects as the ultimate goal of our work.

We took a strategic decision from day one that borrowers should not pay any part of CCL’s operating costs.

In practice, this parameter means that our operating costs are covered by donations (from Patrons and individuals), grants (from foundations, corporates, and credit unions), and service revenues (from our Lending Partners and Conveners). This revenue mix is increasingly diversified thanks to the continued growth and participation of people, corporations, and foundations who seek to think and act differently as we design for an equitable financial system together.

Given that CCL’s model relies on grants and donations, it’s also important to recognize that the financial system has and continues to be subsidized, both philanthropically and by the public sector, per the examples below:

  • Subsidies to “Systemically Important Banks” (a.k.a. Banks that are deemed “too big to fail”) increased during the pandemic;

  • CDFI grants are a primary motivation for banks, credit unions, or loan funds aiming to serve their local community to receive certification as a Community Development Financial Institution—this federal funding expands capacity for community lending in the form of technical assistance grants;

  • Credit Unions, tasked with serving a local or regional community, are federally backed by the NCUA for deposits—encouraging the private sector (i.e. depositors and foundations) to place money in Credit Unions that then can be lent out within the parameters of relevant regulations.

If the traditional systems and institutions continue to be paid or subsidized by taxpayer money, new systems must also be subsidized with philanthropic or public sector capital as well. We cannot say the old system is working when banks are “too big to fail” and simultaneously pressure new models to be “sustainable” from year one.

At CCL, we know philanthropy is essential to community participation and supporting others to thrive—and we continue to be grateful to our philanthropic community for making this work possible. We also believe that there is such a thing as “too small to fail”–when the ideas can be a powerful indicator that new ways are possible. A special thank you to all of you—the CCL Community—for your continued support. All who engage in strengthening the community are equally valued—whether volunteer, staff, donor, investor, advisor, or board member.

Inherent to the journey is the CCL way of being intentional and relational. In a sector whose survival historically relies on a relational front end and a transactional back end, it can be challenging to integrate a relational approach across both engagement, lending and servicing activities—we see these challenges every day as we adjust the language and processes we use to support our borrowers effectively. That said, historical barriers and challenges are precisely why we all show up in this space, why systemic change is obligatory, and why the CCL lending model exists.

“Acknowledge the dynamics, then keep growing. Have an understanding on the front end of the race, class, gender, ability, geographic, and other power dynamics that exist between you. And also remember that these are constructs. Be in the complexity of living inside these constructs while evolving beyond them through relationship.” ¹

We seek to understand and acknowledge the systemic dynamics, then keep iterating and growing at the direction of our Lending Partners. Per Jeremie Greer’s recent commentary: Wealth Building Won’t Work While Wealth Extraction Continues, traditional financial evaluation methodologies perpetuate extractive practices, predominantly from communities with fewer resources. This lack of resources is often due to discrimination experienced within the financial system, either historically or in present day (see how Wells Fargo continues to reject half of Black mortgage applicants). We acknowledge this cyclical, adverse dynamic and that the financial system needs a complete reorientation in order to support everyone to thrive. To accomplish this, CCL defers to our Lending Partners and the relationships held within their communities. The insight that connection builds enables CCL to support Lending Partners and borrowers effectively. To facilitate affordability and access to credit and evolve beyond perpetuating a cycle of inequity in the financial system, CCL relies on our donor relationships. In short, donors pay so borrowers—a person, a business owner, their ideas and goals, their families—don’t have to.

We are all part of the solution.

By collectively working together, we are all part of the solution. We embolden you to add your individual spark to this communal change. Interdependence and co-creation are the lifeblood of community. Whether financial support, social amplification and engagement, thought partnership, or shifting conversations, we all are the do-ers in this work and it will take all of us to shift the financial system.

Check out our new donate page and learn more about community-centric fundraising principles:

In addition to single donations via PayPal, we can accept stock donations, monthly donations via Patreon, crypto donations, and donations from donor advised funds and corporate sponsors. Email us to learn more:


¹ From Emergent Strategy: Shaping Change, Changing Worlds, (p. 80), by adrienne maree brown, 2017, Chico: AK Press.


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