Page 26 RAIN Spring 1986 can offer them. We’ve also learned a good bit about the myths of poverty. We've learned—and we try to say to people—that it's a mistake to assume that the problem of the poor is simply that they don't have enough dollars for housing or food or medical care. The fact is that a lot more money flows into the hands and the neighborhoods of the poorest people in this country than most people count. The problem is not that it doesn't flow in but that it flows through as though through a sieve. It's a problem rooted in the fact that the majority of land and housing and jobs in low-income communities are not owned or controlled by the people in those communities. That realization is something that we can speak to—both in identifying the root causes of poverty and in talking about the kinds of purposes and criteria that community loan funds can adopt to strike at those causes. We've also learned that it's a myth that the poor don't get money because the poor are bad credit risks. It's not as simple as that, or we would register a higher loan loss rate than the 0.7 percent that our statistics show for the funds represented here. The poor don't get money because of the class, cultural, and language gap between those who control the flow of capital and those who need it most. The poor don’t get money because, at the outset, their development projects are small, and it's just too troublesome and expensive for financial institutions to service them, and there are a lot of other reasons why the poor don't get money, but it’s not simple poverty. We've learned about that and we have an ability to speak to those issues. Where We’re Going What are we going to do with this knowledge? What are we doing now? For one thing, we are growing at an extraordinary rate. The number of new funds being established is accelerating from year to year, and we can be sure that the rate of capital growth is accelerating also. We're also growing in sophistication, skill, and creativity. Our step is more confident, our pace is quicker. That's why we're together here to share our ideas and look forward. Obviously we're going to go forward. We're going to raise more capital, make more loans. But I'd like to talk about what else I think we can and must do. I think it's something that too often the larger field of social investment does not address. I think that our opportunities for responsibility go far beyond the accumulation, the management, and even the wise, productive use of capital. In a certain sense you can say that we must join the Wizard of Oz. The Wizard of Oz managed to put brains in a scarecrow and a heart in a tin man. It's our job somehow to graft a conscience on the capitalist. We have to create a broad dialogue, a deeper reflection than has yet occurred within this large and diverse community of lenders and borrowers. We need to formulate an affirmative social and political agenda, and we need to make that agenda explicit I think we need to define ourselves as groups that have multiple mission fields. It is our job to address the needs of those who need capital, but it is equally our job to address the people and institutions that invest capital. We have not only to respond to needs but to challenge abundance, to talk about the responsibility of wealth. There is then a third mission field, and that is to address the institutional structures that control the formation of capital, the flow of capital, and the distribution of resources. We must define and commit ourselves to that kind of economic development that will fundamentally change and democratize the economic and social relationships in our communities. We have to help people distinguish between the different kinds of housing programs, the different kinds of businesses. We have to help them look at who owns and controls those business, and at how equity and earnings are distributed. There are people who will listen to us as successful entrepreneurs who wouldn't have listened to us as soapbox orators. People talk about community development, but they don't necessarily think carefully about its long-term impact and benefits. It's our job to talk about those issues—not only to finance development but to talk about development I think it's important for us to realize that the resources that we bring to our tasks are not only capital, but credibility. We are building capital pools to finance community development, but by achieving that goal, by practicing our craft well, we are building political credibility that allows us to stand up in meetings much different from this one and say, “Let me tell you about the myth of poverty,” and be heard. There's a certain amount of prestige and credibility in going out onto the frontier of the market and doing a job that the conventional wisdom said couldn't be done. There are people who will listen to us as successful entrepreneurs who wouldn't have listened to us as soapbox orators. So we are building political capital through our successful development efforts. Needless to say there are going to be doubts and questions raised about our activities. Although our credibility is growing, most people will still say that the jury is going to be out for some time on community investment. We are going to have to prove ourselves over and over again, and we are going to be subjected to standards ofjudgement much more stringent than most conventional financial institutions are judged by. And growth will mean greater scrutiny. We have to be prepared in some measure, I think, to insure and monitor our own performance. If we can work together from this point forward to strengthen and improve our performance, then there are going to be tremendous new opportunities, much greater. I'm convinced, than anything we've seen so far. But we have to understand that the performance of any one will ultimately reflect on all the others. None of us can afford serious mistakes on the part of the others. That is truly why we've gathered here. We've gathered here to map our the challenges and realize the opportunities. O O
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