ComCap, the National Coalition for Community Capital’s annual conference on using community capital to promote shared prosperity, finished in Detroit last week at the College for Creative Studies’ A. Alfred Taubman Center. The national conference came to Detroit this year thanks in part to the work of Ypsilanti-based community capital advocate Angela Barbash.
Among the conference's more than 56 speakers and 30 sessions was Detroit's Margo Dalal, who was recently named one of Crain's Top 20 in their 20s and is the executive director of the Detroit Community Wealth Fund. The fund is a Community Development Financial Institution (CDFI) that provides "non-extractive loans" to cooperative businesses. Dalal is also a founder and director of the Detroit Kite Festival, which takes place on Belle Isle on July 14.
Model D caught up with Dalal during the conference to find out more about her work and what she learned from the conference experience.
Model D: How did you get interested in the topic of financing cooperatives?
Margo Dalal: I got involved because I was interested in working with cooperatives and then I met some folks who were trying to start this loan fund for cooperatives in Detroit. So it was kind of just an opportunity and I wanted to help them.
Model D: Tell us what you do day-to-day in your job as executive director for Detroit Community Wealth Fund.
Dalal: Right now I'm supporting my team in implementing a cooperative academy for Grace in Action for two to three childcare co-ops; we're planning the co-op academy for the fall. We just finished our launch open house, which is really exciting.
I do a lot of meetings and networking and grant writing. I work with two loan projects right now. One is Building Cooperatively, a cooperative rehab business, and another is called Gaddis Gaming (that is working on converting to a co-op). We're working with them to help them grow their businesses.
So I'm basically in like a little bit of the back-end stuff, but also am the project officer for our loans.
Model D: Why is it important to have a loan fund dedicated to cooperatives in Detroit?
Dalal: It's important because co-ops are really hard to finance. Typical lending institutions will look at each individual owner. And if one owner doesn't cut it, then it's really, really hard to get. It's hard to get bank financing no matter what. It's even more hard for a group of three or more people.
A co-op could be anywhere from three to 300 people. It's difficult for lending institutions to want to make deals like that. Because if not everyone has perfect credit, it's just as hard. So what we do through our loan fund and our networks is we don't look at any of that stuff, which means that we're not extractive. We're not looking to benefit off of the failure of any of the co-ops that we work with.
So ... it's easier for co-ops to get financing from us because we look at the group as a whole and we look at the feasibility of the business and the way that the group works together. There are other CDFIs and lending institutions that support co-ops. But we prioritize doing it in a non-extractive way.
Model D: So yesterday you went to ComCap. What was your take on the day?
Dalal: A lot of it was really new for me. I've heard of this concept of community capital, but there was a lot that I didn't know about in ways to raise community capital. I only know of maybe three or four businesses in Detroit that are utilizing community capital to raise funds for their business. So the idea is like, instead of going to a bank and getting a loan from a bank or from another financing institution, you can actually raise capital that you need to start your business from the community, or maybe even from your existing or future customer base.
So you can crowdfund like a couple hundred thousand dollars from local investors or from people who believe in your cause.
Model D: So do you think the concept of community capital can work alongside the cooperative model?
Dalal: In Detroit at least, there are so many people trying to start businesses and it's really hard to find financing. I totally see a possibility for the concept of crowdfunding investment to have a relationship with the types of loans that we do.
Model D: What else did you learn?
Dalal: I think the thing that was most interesting to me was learning about community financing for real estate projects, which I think could be huge in Detroit. And it's something I'd been thinking about personally already. So just seeing what other cities are doing in community finance and real estate development is really cool. It's super-complicated, but it's possible and there are platforms that can help you.