During the pandemic, the very nature of work evolved almost overnight in many industries. Few were forced to adapt as quickly and dramatically as food businesses. Farms, food, and beverage manufacturers, grocery stores, and restaurants had to find entirely new ways to survive. 

Because of strategic philanthropic support, Coastal Enterprises, Inc. (CEI) was well-positioned to respond to the needs of small businesses and to scale up our capacity to provide economic relief in rural Maine. CEI is a community development financial institution, or CDFI, a category of mission-driven investors that gets capital and business development resources to entrepreneurs and communities that are underserved or underinvested by the traditional financial system. As the pandemic broke out, we, and our CDFI colleagues across the nation, were first responders to the unfolding economic crisis. 

The timing of the pandemic was particularly punishing for agriculture, aquaculture, fisheries, and food system businesses. Farmers found that customers and markets vanished overnight after they had already made seasonal investments in equipment, seeds, and staff to prepare for the growing season ahead. But a $100,000 grant from the Henry P. Kendall Foundation in May 2020 allowed Maine farms with active CEI loans three months’ worth of debt relief — principal and interest payments — at a critical time. As executive director Andrew Kendall said, the goal was so CEI’s farm partners would not only weather this unprecedented storm but emerge from it stronger and more resilient. 

As the pandemic deepened, farmers, food and beverage manufacturers, and others throughout Maine’s interdependent food economy invested in their futures, pivoting their operations and making capital investments in packing equipment, freezer space, new storage units, technology, and more, all with the hopes that these changes and innovations would enable them to survive. Blackstone Seed Growers in Caribou, Maine, near the Canadian border, invested in conveyors to extend the physical distance required for workers to be safe while inspecting the farm’s potatoes before going into storage. Allagash Brewing Company invested in an onsite liquid nitrogen tank to avoid production disruptions. 

Putting CARES Act Funds to Work

In Nov. 2020, the Maine Department of Agriculture, Conservation and Forestry made an announcement: it would distribute $10 million in CARES Act grants to Maine’s farms and food businesses to reimburse unexpected costs the companies had incurred responding to the pandemic. 

The state knew the capillary-like reach of CEI, and our ability to move capital quickly to where it’s needed most. So, while grantmaking isn’t typical for CEI, we responded to the state’s invitation to partner and in record time – less than a month – used our lending and business advice infrastructure to administer the grant program. Knowing that a first-come-first-served grant program might leave eligible businesses behind, CEI twice requested additional funds from the state to meet the needs of as many businesses as possible. By Dec. 30, every eligible application was approved for funding and nearly $18 million in reimbursement grants was awarded to 450 farms, food producers, and processors across Maine. 

Philanthropic Support for Community Investment

Our ability to manage a competitive grants program in a compressed time frame was possible due to capacity-building support from the Heron Foundation. A multi-year enterprise grant in 2018 allowed CEI to invest in upgrading our organizational IT systems and within days of the first COVID cases in Maine, CEI’s team was 100% operational in remote offices, responding to urgent requests. This grant was supplemented by several small but timely grants from NeighborWorks America, which CEI had used for planning and initiating our IT upgrade effort. And then, in the early months of the pandemic, Heron converted a separate impact investment into a grant, to ensure that CEI would have the financial strength to withstand a potential wave of loan losses.

Collectively, CDFIs steward $211 billion in total assets, with the mission to serve people and communities with low incomes. While we uphold rigorous due diligence and underwriting standards, we are not regulated the same way that banks or commercial lenders are. This gives us the flexibility to meet the needs of business owners where they are, by offering patient, flexible capital that matches cash flow, or filling gaps in the capital stack. We build in-house industry expertise on our lending and business advising teams to serve specific industries like sustainable regional food systems.   

Transforming the way our economy works is the true work ahead. CEI is focused on three priority areas that affect well beyond the food economy: 

  • Empowering people. A significant number of people across the nation are losing and changing jobs, and need skills, training, credentials and supports like child care and broadband internet access to gain a foothold and advance in the post-pandemic economy. 
  • Investing in innovation. Entrepreneurial people, particularly those of us who aren’t well-served by the traditional business support ecosystem, need advice and financing to start up new businesses, while established businesses hit hard by this health and economic crisis need capital and expertise to power a pivot or fuel a new venture. With 8 million fewer jobs in the economy since a year ago, we will need a new generation of diverse entrepreneurs and the growth capital, business advice, and networks to fertilize their growth in rural regions as well as urban centers.
  • Build-in equity and sustainability from the beginning. The recovery needs to be driven by policies designed to address racial, gender, and economic inequities, and combat climate change, in order to achieve a more equitable and resilient economy and society. 

Partnerships between philanthropic donors, impact investors, and CDFIs can help ensure that everyone -- no matter where we were born and who we are -- can build wealth and secure a decent livelihood for themselves and their family.