Q&A with Sam Centellas of CDFI Friendly South Bend
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One South Bend business leader is leading an organization to bolster the efforts of minority- and women-owned small businesses while supporting several initiatives to make the city and region a better place to live.
CDFI Friendly South Bend selected Sam Centellas last year as its executive director, calling him “exactly the kind of entrepreneur” the organization needs. The not-for-profit seeks to connect private developers and companies with the capital needed to complete public interest projects.
He previously led La Casa de Amistad for eight years as executive director. There, he oversaw the community center’s expansion into a new 41,000-square-foot facility. Another group, called West Side South Bend, sprung out of his work at La Casa and routinely gathers community members to learn about the culture, art and businesses on the city’s west side.
As for his efforts in education, Centellas has acted as an advocate for students and underserved families, including serving on the South Bend Empowerment Zone board. Earlier in his career, he also worked for IU South Bend and IUPUI.
As an entrepreneur, Centellas started his firm OutSight Design and Consulting in 2003, where he offers various kinds of consulting and organizational development training. He also has started and led several not-for-profit organizations.
Centellas spoke to Inside INdiana Business about how CDFI Friendly South Bend benefits the area and taking a community approach to boosting economic growth. This interview has been edited for clarity and brevity.
CDFI Friendly South Bend is a newer economic development not-for-profit. What does it bring to the table that South Bend needs?
CDFI Friendly was a product of years of community meetings around what the community needs. I was part of some of those early sessions as the executive director of La Casa. We had screamed quite a bit about what we back then called financial justice. There’s some things that aren’t fair. There’s a myriad of reasons why those things happen and don’t happen or haven’t been fixed yet, but so there was a lot of that. There’s a lot of conversations leading up to it so much so that I think as things were getting close to getting launched, I think people are getting tired of having meetings about this thing that might happen.
Unfortunately for CDFI Friendly, the organization launched in February of 2020, the worst month in the history of time to have a three-year strategic plan about what you’re going to do, right? But the organization was thoroughly thought out, so it survived. We survived the pandemic. And then of course, last year … and then interest rates, we’re still surviving. We’re able to create impact because of the design of what we’re trying to do.
At the core, we’re trying to help minority and women-owned businesses, who have generally had trouble accessing capital. That’s generally finding the right small business loans to help small businesses. We’re trying to help affordable housing developers that, for a myriad of reasons, are having a hard time trying to finance that work in a community like South Bend, and we’re helping do that. Then, the third piece is either working with nonprofit organizations or people who want to create vibrant spaces in our community, whether that’s revitalizing a vacant community asset or growing a local nonprofit. All three of those things are things that generally have trouble accessing traditional financing. We’re working to try to bring traditional groups trying to bring financing to projects that that can bring vibrancy to our community.
Can you talk about CFDI Friendly South Bend and its services and programs?
CDFIs are Community Development Financial Institutions. I boil it down to that they’re basically nonprofit loan funds, so they’re able to do lending on some different criteria than our traditional bank or credit union. We don’t have any of them in South Bend. We don’t have any within an hour drive of us.
The theory behind our work was that a local food-based entrepreneur here wouldn’t be able to connect with a place like Allies for Community Business in Chicago, which has been a kind of very food-focused, business incubator. They run a food-based business incubator in Chicago. They wouldn’t hear about each other. Our job was to be a matchmaker and intermediary. We’re not a broker; we don’t make commissions on these deals. We’re just here to try to help. We help connect those dots. Similarly, we work a lot with Cinnaire, which is an affordable housing developer headquartered out of Lansing, Michigan; They also have an office in Indianapolis. A local developer here was like, “Man, I really wish I could get a loan to buy this property to create an affordable rental for somebody in the community, but I can’t get a loan traditional loan to do that.” They would never hear of them potentially, and so we helped matchmake them saying, “I heard about this person doing this work. I think I know somebody who might lend on your project, and let’s see if we can make that work.” That’s at the core of what we’re doing and how we’re connecting.
We’ve done a couple of pilot programs over our startup time here, and one of them was here in South Bend. They brought back an old festival, community festival called the Ethnic Fest, and it was reimagined as Fusion Fest. One of the things we heard from a lot of the especially ethnic and minority-owned food vendors was that it’s hard to participate in large-scale festivals like that because of the upfront costs. Many of the small-scale vendors they’re caterers so they take a deposit upfront, they do the event. When they get the second payment in the back end, that’s their profit. For a festival, you got to upfront everything. We worked on a plan to put together $2,500 lines of credit for a food vendor to be able to use to participate in a festival, and potentially, use that then throughout a whole year, as a line of credit. We had a handful of vendors that were able to participate in Fusion Fest with our support, and it’s been successful so far. We’re looking to expand that to other parts of the region.
Another one we are working on— it’s a little early; we don’t publicize it a ton yet—but we’ve been creative around how we help small-scale developers find long-term financing because of the costs of construction and development, and because of lower appraisal rates in some of our neighborhoods. We did a pilot in South Bend; we’re looking to expand that pilot into Elkhart next year as a way to help balance out some of the criteria that it takes for a developer to get a loan to be able to take a distressed property in a neighborhood and turn it into a safe, affordable rental for a family. We’re off to a, I think, very successful start. It’s been a really successful pilot, and we’re in the initial stages of looking at where else can we replicate the program.
What are the short- and long-term goals of CDFI Friendly?
In South Bend, right, we use this statistic: in the previous 15 years, before our existence, there was $3.6 million of CDFI investment that happened here. As we process a closing out our 2023 report now, between ’22 and ’23, we did about $3.6 million of CDFI lending. We did what we had done previously in 15 years in two years. That’s capital in our community that would not have been here otherwise.
For us, what that means, from a three-to-five-year span is creating some of the change we’ve made in South Bend, which most of our work has specifically been in the municipality. We want to expand to Elkhart County. We want to do more work in Marshall County. From an impact perspective from CDFIs, it’s abysmal. We want to help bring CDFI capital and or economic development for those who are generally excluded to those communities. We want to do the same in the city of Elkhart specifically, but also in the county. If we could create the change we made in South Bend in Elkhart in the next three years—it took us about three years to do the work here in South Bend—if we can do that in Elkhart in about three would be fantastic.
You spent considerable time leading at La Casa de Amistad. What are some things you’re proud of and what the impact of that organization is?
La Casa Amistad was a really strong organization that wanted to increase its reach and its capacity. I was hired to do that, and it took us a few years to get all the things aligned, but we ultimately moved. When I took over the organization, we were at that time between the building we owned and we leased. We had about 14,000 square feet of space that we used. We moved to a 41,000-square-foot facility that allowed the organization to grow, so just extreme growth for the organization. The thought was, if we had space to create partnerships and grow programming, what would be possible. We put together this visioning strategy around what that would look like. The fundraising has maintained pace, if not a faster pace than we thought it would. We received a big, million-dollar Lilly [Endowment] grant in the fall and a couple other major pieces that we would have never dreamed of when we were this tiny little community center on the west side that we would have access to. The space really transformed the organization.
As we grew, we wanted to grow into a space that we weren’t just trying to, can we figure out how we give 65,000 kids to walk through these doors, right? We wanted to take from 35 to whatever that number is today, and continue to provide the same service, but we needed to scale all the spaces, so we need more space for more adult programming. We need more space for more wraparound services. We need more partners to help us do those things. We really wanted it to be an ecosystem, a self-sustaining ecosystem, that would continue to be able to scale the outcomes for the children and families.
We were also an advocate for the thing for creating change. Whenever there was a problem, I think it’s important that all nonprofits do this. If your nonprofit is working to solve a problem for families, you also have to be working to eliminate that problem from happening. We were always really clear on why we advocated around immigration reform, educational outcomes for our children, all of the key things that impacted the potential long-term outcomes for our families economically, educationally, and as part of our community. That drew us into these other areas, and ultimately, it’s part of what drew me into CDFI Friendly.
From an economic development perspective, can you speak to the importance of educational opportunities as well as the need for them to be accessible to all?
Complicated community issues include everything. That’s why they’re complicated. If anybody thinks that that economic development and education are separate sectors, they’re not, and the people who can thoroughly understand them know that they’re intertwined. At the end of the day, a three-year-old that’s starting early childhood education this year someday has the potential to be a CEO of a corporation in this town. What we’re doing to prepare them—at a minimum to be a great employee, and at the top end to be a CEO someday—is important.
If as a community, we’re not educating our youngest to someday be able to lead local corporations, we’re going to end up failing everybody, not just that child or that family. We’re going to fail those corporations who in the future won’t have good leaders. That’s why I think all those factors are important for us to think about from an economic development lens. How educated not just our workforce, because I hear that a lot, right? We need an educated workforce, and we’re not just educating three year-olds to work in factories someday, right? We’re educating them maybe to work in a factory, maybe to be a CEO, but we need to educate them all the same to make sure that we have a quality community where everybody can thrive in the future.
Can you talk about your time on the South Bend Empowerment Zone and the initiatives you worked on?
We know that in order to have a vibrant community where everybody has to thrive. We can’t leave a neighborhood out. We can’t leave a school out. We can’t leave a side of town out. Historically, neighborhoods, schools and or parts of town have been excluded from focus in development, so that’s where we’re trying to correct some of those historical injustices is through the work of South Bend Empowerment Zone.
The theory behind the South Bend Empowerment Zone was that you break off a small section of a couple schools that allows you to be very tactical, very intentional, about the work that specifically impacts the families that attend those schools. With this hyper-focus, you’re able to be vigilant to try to combat potential issues and find creative solutions that work. That’s the kind of overall theory of it.
I think we’ve done some really creative things, whether it’s from student conduct policies to we’ve been different with our uniforms. We implemented clear backpacks before some of the other schools did. To the way we’ve done teacher training, how long before school starts, how much teacher development training. One of our big things is on Thursdays, our schools get out early, so the teachers have extra training. It’s one of the things that we’ve gotten a lot of praise from our teachers. Our educational outcomes have been better and trended better. We think that those are part of the cause for the improvements we’ve seen in our schools.
The organizations you helmed are each community-oriented. Can you speak to the need for a communal approach to economic success and upliftment?
We know that a vibrant community requires everybody to thrive. Those are things that we say a lot with CDFI Friendly. That’s got to be a core part of how you interact in the space because it impacts the other spaces that you’re either in partially or that not you’re not in. That way, you’re a clear collaborator. From that community development standpoint, it is coming from, what is the system change we want to see? We want to empower people to help them handle their own problems, so part of it’s creating a structure that gets the community engaged in helping to change the thing that they want to see.
When the city did its West Side Main Streets initiative, we really worked hard to be that, “Sam’s not just in these meetings, speaking for the community,” right? Sam’s in the neighborhood, talking to business owners, community members, local residents, priests, and then helping them, empower them to speak up, but also elevate their voices at the same time and help move a process along. But, then fixing the structure of that, and how that how the city does that.
The city was looking for innovative ways to do this as well how they get community input on projects. I would tell the story. Most often, communities in South Bend was the same; when they’re doing a master plan or community thing, they’d be like, “Hey, at 5:30 on a Tuesday, you got to come up to the top floor of the county city building and give us input on what you’d like to see in the plan.” And the city complains, saying “Nobody came and gave us input on the plans. I guess we’ll just figure it out ourselves what to do.” And then they would do it. Then, they’d be like, “I don’t know why people aren’t happy with the plan we put together.” More municipalities are trying to be better about that. South Bend was like, “Let’s do those meetings in the neighborhood, right? Let’s do them at a church. Let’s do them at Community Center. Let’s do them in this neighborhood.” We will be sitting in the neighborhood and asking people around us what they want to see happen, and then with their input, you create a better plan, people appreciate the plan, and everybody’s happy. It’s those kinds of symbiotic ways to help create change that was important.
You bring up talking to community members, to business owners, community stakeholders, not just the people who are going to be in the meetings. Can you talk about doing that and getting a sense of what your community wants, what that brings to initiatives and projects? What does it brings to the community as someone the executive director of an economic development organization?
I see so many times there’s just this disconnect between the provider and the receiver around what they want. I think cities always feel like, “Why aren’t our citizens engaged? And why isn’t this happening? Or we did this project, but the community is not happy about that. We didn’t address this project.” How do you get like the city to say, “Hey, we got a bunch of money to do things, like curbs and sidewalks and projects, right? What are the things people want us to do?”
When we first started the West Side Main Streets project, we’re spending $6 million to improve stuff. We have people coming to the meetings, saying “Well, why aren’t you spending that are improving our schools?” We’re like, “Well, this is city money.” But then we realized we need to help explain this to people this is public works dollars, so this has to go to curbs and sidewalks and trees. But, there’s other ways that if you want to engage around making our schools better, here’s the process for that.
Those kinds of things create that thought and the feeling for residents that this is their community. Their tax dollars are being well spent. They are a part of it. They belong. Those are things that are, in my opinion, really important to do. And, you got to do them well, and you do them consistently. It’s those kinds of pieces that ideally will pay off the most versus the short-term work that you do.
You mentioned earlier you want to help address the root of issues as well as the impact. What are issues this region, business and economic development-wise, that you hope to have a part in solving?
I do think it’s elevating the voice of, especially minorities, but also women-owned businesses in economic development conversations. They are still very male, very white, very wealthy. It’s about how do we create economic development and other ways, besides just giving it to large corporations and hope they do good things with it and that it impacts the community. That’s a very big system change thing that’s needed. I don’t know how to get there. I know continuing to do some of the things we’re doing won’t get us there. I have seen some good initiatives that are happening in the community: diversifying boards, helping to elevate the voices of people who aren’t often heard, giving people who’ve been specifically ostracized from opportunity—not in a handout way, but in a way that that supportive and justifies an end and creates progress is important. I think that’s something that I hope to see more of. That, I think, is important that I will continue to push and is a core part of who CDFI Friendly is.