The Local Initiatives Support Corporation (LISC) is a powerhouse in the realm of community development, operating across 37 offices and covering 49 states. LISC’s mission revolves around revitalizing distressed communities and fostering economic opportunity. Michael T. Pugh, who became President and CEO of LISC in October 2023, shared his insights and vision in a recent conversation on The Business of Giving podcast.

The Core Pillars of LISC
LISC was founded in 1979 with the support of the Ford Foundation and has since become one of the largest nonprofit Community Development Financial Institutions in the country. Pugh outlines the organization’s three core pillars: affordable housing, economic development, and funds management.

Regarding affordable housing, Pugh says, “We’re very passionate about this work and understand the importance of it.” LISC aims to build and create access to affordable housing across the nation, a mission that’s increasingly critical as housing crises persist.

Economic development is another vital pillar, encompassing over 13 national programs. These programs include supporting small businesses, providing healthy foods, improving transportation, and fostering other elements critical to building healthy communities.

The third pillar, funds management, involves working closely with public and private sectors to raise capital and oversee its use. This capital is crucial for building affordable housing and stimulating small businesses within communities across the country.

Innovative Partnerships and Approaches
LISC’s approach to tackling housing issues involves exploring innovative financing models and non-traditional partnerships. Pugh highlights the organization’s significant impact: “Since being founded in 1979, LISC has invested more than $32 billion to create more than 500,000 affordable homes and apartments across the country.”

One of LISC’s strategies includes direct lending focused on low-income housing tax credits and providing affordable borrowing capabilities to multifamily owners. This approach ensures that tenants can enjoy quality housing at reasonable costs. Moreover, LISC acts as a watchdog and advocate at the policy level, working closely with elected officials to keep housing affordability on the national agenda.

Economic Mobility and Support for Small Businesses
Economic mobility remains a central challenge, particularly for individuals born in lower-income households. Pugh emphasizes the importance of supporting small businesses through financial inclusion programs like the Entrepreneurs of Color Fund and the Black Economic Development Fund. He explains, “We help to be able to deploy capital… so loans to small businesses. These microloans are typically up to about $50,000.”

These funds collaborate with partners like J.P. Morgan and the Kellogg Foundation to deploy capital across the country. Last year, LISC deployed approximately $185 million in capital lending, supporting small businesses in overcoming financial barriers and contributing to local economies.

Embracing Technology and Data
Looking to the future, LISC is focused on leveraging technology and data to enhance impact measurement and decision-making. Pugh mentions exploring artificial intelligence (AI) to disrupt traditional credit scoring paradigms and expand access to capital. He recounts a meeting with small business owners where an entrepreneur shared her struggle: “She had borrowed as much as $500,000 over the course of her business operations and paid it back from a hard money lender, but it never made it to her credit report or scoring.”

By using alternative data sources, such as utility payments and lease payments, LISC aims to build a more inclusive credit model. This innovative approach could help small businesses gain access to necessary capital, further stimulating community development.

Listening and Learning: A Leadership Approach
Pugh’s leadership style emphasizes the importance of listening and learning. Reflecting on his first 90 days at LISC, he committed to a listening tour, saying, “Well, what I would say is that there’s a reason we have two ears and one mouth. Listen twice as much as talk… So my advice would be: participate in a listening tour within your communities, and make sure that you actually follow through on what you hear.”

This approach has enabled Pugh to gather valuable insights from funders, colleagues, and community leaders, helping to shape effective strategies for LISC’s future.

A Vision for the Future
Looking ahead, Pugh envisions LISC continuing to be a role model for community and economic development. He stresses the importance of affordable housing, economic mobility, and climate resiliency. Pugh concludes, “We are the largest nonprofit CDFI in the country. The work that we do is catalytic for community development and growth, and I think there’s more of that work. The best is frankly yet to come.”

LISC’s comprehensive and innovative approach to community development, combined with its commitment to listening and collaboration, positions it well to address the evolving challenges of the next decade. For more information about LISC’s impactful work, visit their website at

To listen to the full interview or read the transcript, just click here.

Denver Frederick, Host of The Business of Giving serves as a Trusted Advisor and Executive Coach to Nonprofit Leaders. His Book, The Business of Giving: New Best Practices for Nonprofit and Philanthropic Leaders in an Uncertain World, is available now on Amazon and Barnes & Noble.

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