This post was written by second year MBA students Laura Mixter and Ashley McPhail in October 2014. During this summer, both Laura and Ashley interned at Self-Help in Durham, NC. Their internships were supported by the Summer Internship Fund.
Self-Help is a community development financial institution (CDFI) headquartered in Durham, NC. Working across a variety of functions to improve economic opportunity for all, Self-Help includes Self-Help Credit Union, Self-Help Federal Credit Union, Self-Help Ventures Fund and the Center for Responsible Lending. Self-Help’s work is evident all over Durham. We were exposed to the organization early on through Day in Durham and a Net Impact cabinet meeting at the Center for Responsible Lending where we learned firsthand how Self-Help is working on the ground to make a difference in Durham, North Carolina and across the country.
Self-Help’s strategy to facilitate change and create economic opportunity is to lend to groups left out of traditional banking services, both commercial and personal. The Self-Help Ventures Fund is a nonprofit loan fund that manages Self-Help’s higher-risk business loans, real estate and home loan secondary market. During the summer, we worked in two different departments: Laura on the Secondary Markets program and Ashley on the Real Estate team.
Laura’s Secondary Markets Work
The Secondary Markets program was started in the early 1990’s in partnership with Fannie Mae to provide liquidity to the mortgage market for low and middle-income borrowers. Now the department also purchases portfolios of loans from other CDFIs and lenders. In Secondary Markets, I had many opportunities to use finance skills from the first year in analyzing portfolios of mortgages and home improvement loans. I built a cash flow model to assess prepayment and default rates to improve pricing assumptions for future purchases. This was something completely out of my comfort zone prior to coming to Fuqua, but between the support and encouragement of my team and supervisor and the skills I learned in Global Financial Management, Corporate Finance and Information Management, I felt confident in analyzing performance data.
In addition to working with Self-Help’s own loan portfolios, I performed external research on mortgage default rates to adjust and refine the assumptions made in purchasing portfolios. In my final presentation, I presented my findings to my team, and despite the fact that they live and breathe the mortgage market every day, I felt like my findings and opinions were valued and could really impact future purchasing decisions.
Ashley’s Experience on the Real Estate Team
What makes Self-Help’s Real Estate team different than other commercial developers, is Self-Help looks for real estate projects that can revitalize low-income areas, promote sustainability, and/or create affordable housing. Self-Help first ventured into real estate in 1994, when it noticed how hard it was for a family to purchase affordable, quality housing in the historic Walltown neighborhood of Durham and thought that by investing in the development of affordable housing the organization could act as a catalyst for neighborhood change and growth. (Learn more about Self-Help’s work in Walltown here.)
As part of the team, I had the chance to put my newly acquired MBA finance and accounting skills to use on residential, commercial and mixed-use projects throughout North Carolina. I conducted and presented market research to support potential portfolio expansion by analyzing market fundamentals, government regulations, community impact and key trends. My corporate finance skills definitely came to use, when I modeled pro-forma cash flows and returns for residential and commercial projects with an emphasis on acquisition and development costs and potential rents and expenses. I will continue to learn more about real estate and will have the chance to apply my second year MBA skills to even more projects at Self-Help as I continue my internship throughout the year.
Coming from a traditional nonprofit background and a marketing/communications agency, we had little experience with nonprofits that successfully use traditional business concepts to both help the population they want to serve and support their own operations. Self-Help does both and makes a real difference in the lives of many. There is no better place to see the impact of Self-Help than Durham itself. From the residential transformation of the Walltown neighborhood to many of the restaurants Fuqua students frequent downtown, Self-Help’s stamp is all over our town. Working there for the summer gave both of us the opportunity to master our MBA skills, apply those skills to an impactful nonprofit organization, and to learn so much more about this place we have chosen to call home for two years.
The Summer Internship Fund (SIF) enables first year Duke MBA-Daytime students to learn about the rewards and challenges of social sector management without making a significant financial sacrifice. In addition, the program enables organizations that otherwise could not afford to hire MBA student interns to benefit from students’ expertise. The SIF has supported more than 150 students, distributed nearly $470,000, and helped to further the mission of many nonprofit and government organizations. Funds are raised through student fundraising and from donors who believe in the mission of the program. If you would like to contribute, you can donate online using your credit card.