The Progress Fund
$2.75 Million Awardee
For more than 60 years, the economy of southwestern Pennsylvania has struggled. “We lost our basic industry—steel and the businesses it supported,” says David Kahley, the President and CEO of The Progress Fund. “Since the end of World War II, it’s been more bust than boom. Even in good times, we don’t catch up.”
The Progress Fund was established in 1997 to help put an end to the bust. The organization works to create economic opportunity throughout a 39-county region that includes western Maryland, West Virginia, and eastern Ohio, as well as southwestern and northern Pennsylvania. And while its basic strategy—providing loans and technical assistance to underserved entrepreneurs—is typical of many CDFIs, its highly focused approach to lending is not.
Rather than being what Kahley calls a “come-all kind of lender” that simply reacts to individual requests for financing, The Progress Fund proactively identifies the local industries that offer the best opportunities for growth, and then directs its capital to businesses that will spur the development of those industries. The intent is to create an economic development strategy that will benefit the entire region.
One of the promising industries The Progress Fund has identified is tourism, and the organization’s focused lending approach is well demonstrated by the Trail Town Program, an innovative initiative that The Progress Fund developed with the Allegheny Trail Alliance to capitalize upon the remarkable popularity of a regional bicycle trail called the Great Allegheny Passage.
The 150-mile Great Allegheny Passage runs from Homestead, Pennsylvania, to Cumberland, Maryland, where it connects with the 184-mile C&O; Canal Towpath to form a 334-mile route between Pittsburgh and Washington, D.C. The trail has been named one of the country’s best bike trails and in 2010 attracted 800,000 visitors.
The Trail Town Program launched in 2007. Its primary goals are to retain existing trailside businesses and to increase their revenues; to recruit sustainable new businesses; to improve the buildings and infrastructure in trailside towns; and to promote collective action among the towns to create a world class recreational destination.
The Progress Fund initially focused its efforts on six towns along the trail—the number has since grown to eight—and has provided operational funding for the program and played a leadership role in forming partnerships with a variety of foundations, government agencies, and other supporters. It has also provided experienced staff to help the towns maximize the trail’s economic potential and supplied critical start-up capital for new trail-related businesses, such as inns, B&Bs;, outfitters, and retail shops. From 2007 to 2010, 61 new businesses opened and another 12 expanded operations.
The Progress Fund will use its Wachovia Wells Fargo NEXT Award to continue making loans through the Trail Town Program. It will also use the added visibility that the NEXT Award affords to introduce the program to a wider audience.
Indeed, Kahley believes the program—or at least the highly focused lending approach on which it is founded—can be replicated by other CDFIs. The key, he says, is for CDFIs to play to their own strengths and to find opportunities in their own areas. “We found bicycling. Others will find other things,” he says. “You decide what you have in your community that’s good and you support that.”