PUBLIC FINANCE INITIATIVE LAUNCHES NEW RACIAL EQUITY IN BOND MARKETS GRANT AND TECHNICAL ASSISTANCE PROGRAM
Partner programming also includes implementation grants and a peer cohort
BOSTON, March 22, 2023 /PRNewswire/ -- The Public Finance Initiative (PFI) and its collaborating partners are pleased to announce the forthcoming launch of the new Bond Markets and Racial Equity Framework and program. The first-of-its-kind Framework will be launched at a National League of Cities Congressional City Conference this week and offer support and direction for issuers, investors, and other bond market actors interested in catalyzing change for racially inequitable conditions in their communities, via a new technical assistance and grant program.
This launch builds on a yearlong series of focus groups with more than 100 municipal bond issuers and stakeholders, convened in partnership with the National League of Cities, PFM, the Equity and Excellence in Public Finance Program at the Milken Institute, and others who shared their perspectives on racial equity in municipal bond markets.
"As the United States has reckoned with systemic racism in its cities, our goal is to support investors and issuers who want to actively center racial equity through meaningful interventions when they access the capital markets to sell bonds," said Public Finance Initiative Executive Director Lourdes Germán. "We built a program that responds to resounding feedback from issuers regarding the guidance they need to leverage the bond issuance process toward material improvements for communities most negatively impacted by historic or present racial inequities—and to mitigate material risks to their jurisdiction. The framework is a living document - we plan to continue learning from issuers and industry experts throughout the year, incorporate their feedback, and continue to refine the framework to ensure it serves as a resource for market participants who are committed to racial equity. "
To support issuers and borrowers, PFI has partnered with PFM Group Consulting LLC's Center for Budget Equity & Innovation (PFM CBEI) and PFM Financial Advisors LLC, who will together lead a groundbreaking cohort-based national grant and technical assistance program on bond markets and racial equity. "PFM is excited to partner with PFI on this singular opportunity for municipalities, state authorities, and other bond issuers and borrowers," said Matt Stitt, Co-Director of PFM CBEI. "Along with our partners, we look forward to augmenting this landmark Framework for issuers interested in centering racial equity in a bond issuance."
The Government Alliance on Race and Equity (GARE), a national network of local government practitioners and a partner on this project, will offer customized data workshops within the technical assistance program on measuring jurisdictions' racial equity indicators using the ESRI ArcGIS Social Equity technology tool. This project applies GARE's racial equity analysis to demonstrate how government can be a force for achieving racial equity.
"Federal policies like 'redlining', racially exclusive covenants, and steering by real estate agents kept people of color from living and investing in white neighborhoods and effectively blocked public investment in communities," said Gordon F. Goodwin, Senior Director of GARE. "The lack of private-sector investment also negatively impacted these areas' public bond ratings, making them more expensive and less desirable for public financing. The Framework seeks to interrupt that cycle with a public investment standard that recognizes how all neighborhoods—and residents—thrive when everyone benefits from public investment."
With support from the Robert Wood Johnson Foundation (RWJF), the program's founding funder, and others, PFI will also offer grants to bond issuers as part of the program. Issuers can propose to use grant funds for a range of qualified uses, including but not limited to strengthening, testing, or piloting a novel racial equity strategy in a bond issuance.
"Embedding racial equity into municipal bond markets is a commonsense solution for building healthier communities," said RWJF Lead Impact Investment Officer Zoila Jennings. "The Framework's vision represents an important step toward centering communities in investment decisions, and creating conditions for everyone to achieve their best health and wellbeing, no matter who they are or where they live."
This body of work also builds on "Racial Equity as a Topic for Responsible Investment: Why and How Investors Should Engage," a report by David Wood, Director of the Initiative for Responsible Investment at Harvard Kennedy School's Center for Public Leadership, a collaborator and subgrantee on the program, which found that racial equity is a particular topic of concern for responsible investors. As a systemic problem, racial inequity constrains economic performance, and that offers an important lens to identify risks and opportunities in investment analysis. The perspectives from institutional investors and asset owners convened for the study dovetail with the focus group findings that informed the development of the Framework.
In the coming year, PFI will launch additional programming and release new tools for issuers and market stakeholders to share the Framework and encourage its adoption. Additional contributors to the focus groups, Framework development, and other project elements include the Urban Institute, UrbanAC, and Ideas and Action.
About the Public Finance Initiative
The Public Finance Initiative (PFI) develops public finance programs that center the values of equity, sustainability, and inclusive growth in fiscal decision making with leading foundations and partners. PFI furthers city-to-city learning and builds local governments' capacity to use technology and data in improving their governance, fiscal health, and investment operations. The Public Finance Initiative is a fiscally sponsored organization of TSNE MissionWorks, a 501(c)3 tax-exempt organization. Learn more at publicfinanceinitiative.com and stay connected with PFI on Twitter and LinkedIn.
About PFM
PFM is the marketing name for a group of affiliated companies providing a range of services. All services are provided through separate agreements with each company. This material is for general information purposes only and is not intended to provide specific advice or a specific recommendation. Financial advisory services are provided by PFM Financial Advisors LLC, a registered municipal advisor with the Securities and Exchange Commission (SEC) and the Municipal Securities Rulemaking Board (MSRB) under the Dodd-Frank Act of 2010. Consulting services are provided through PFM Group Consulting LLC. For more information regarding PFM's services or entities, please visit pfm.com.
About the Robert Wood Johnson Foundation
The Robert Wood Johnson Foundation (RWJF) is committed to improving health and health equity in the United States. In partnership with others, we are working to develop a Culture of Health rooted in equity that provides every individual with a fair and just opportunity to thrive, no matter who they are, where they live, or how much money they have. For more information, visit rwjf.org.
About the Government Alliance on Race and Equity
The Government Alliance on Race and Equity (GARE) is a national network of practitioners and leaders working to ensure that local government lives out its commitment to ensure all people receive the protections and support we need to form a just, multiracial democracy. We support practitioners by fostering critical connections, shared learning and leadership development to build their skills, influence, capacity, and accountability to achieve racial equity. Achieving racial equity ensures that our society and democracy fulfills its promise of "government of the people, by the people, and for the people" that allows us all to thrive.
SOURCE The Public Finance Initiative
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