In 2020, the Urban Institute conducted a midterm evaluation of the Wells Fargo’s Diverse Community Capital (DCC) program, which has distributed $175 million in capital from 2016 to 2021 to CDFIs that serve small businesses. Our evaluation focuses on seven grantee CDFIs selected during the seventh round of the program in 2018. In this brief, we provide preliminary findings from our assessments of the progress made as of late 2020:

• Many CDFIs reported that the volume of lending they deployed in 2020 would not have been possible without the activator grant.
• Investments in technology and other areas through the grant program improved awardees’ capacity to process the unprecedented amount of loan requests that came with PPP.
• Although some initial plans had to be abandoned with the onset of the pandemic, the heightened and urgent need for small-business capital presented new opportunities to reach new markets.
• While some grantees implemented direct approaches to improve the capital readiness of their small business clients through technical assistance efforts, others opted for indirect efforts to help entrepreneurs become credit ready.
• Some program components like reporting which loans could be ascribed specifically to the DCC activator grants, and the use of program-reimbursed consulting services, faced a few challenges for timely implementation.