But while Craft3 did lots of transactions during its first five years, it did not affect change.

"We spread the butter very, very thin, and we did not link those opportunities to each other," Berdes says, explaining why the fund in 2000 switched from being "opportunistic" to "strategic." With a new focus on "density of outcomes," the idea was that impact compounds if investments are geographically concentrated. Craft3 chose Astoria, Oregon, the center of the regional rural economy, as the initial focus of its new focus.

"You strengthen centers so markets can function," he says. "If you concentrate outcomes, they connect and they amplify."

Compounding Impact
A small coastal town at the mouth of the Columbia River that separates Oregon and Washington, Astoria was a fur trading post established in 1811 by John Jacob Astor and the first permanent U.S. settlement west of the Rocky Mountains.

In the mid-1990s, it was home to the worst brownfield site in the state--a 17-acre greasy, dead pond left over from a plywood mill. The state offered matching funds to clean it up, but no bank would touch the deal. In 1996, Craft3 jumped in and put up the equivalent of 30% of its start-up capital.

"We ended up helping the city position and market the site," Berdes says, explaining how the CDFI recovered its cash 18 months later. 

It was the beginning of Astoria's remarkable revitalization.

Focusing on Astoria, Craft3 provided $10 million to Clatsop Community College, which is based there. It also financed specialty medical offices, a bigger public radio station, Mary Todd's Workers Tavern and the Fort George Brewery, among others.  But none of these investments displaced the town's heritage and traditions with tourist town-like superficiality.

"Astoria is authentic and not Disney," Berdes says. "This revitalization honors the balance between pretty and gritty."

Moving Beyond Red-Blue
Its work in Astoria convinced Craft3 that triple bottom line impact (people, planet and profit) happens as a "process, not an event"--the result of "iterative transactions in a defined place," Berdes says.
But by 2005, Craft3 faced a crossroads: Should it hunker down in the lower Columbia and remain a small niche organization forever or should it take its triple bottom line mission, strategy and tactics to scale?

In l934, the Rural Electrification Act had brought electricity from urban centers to rural America. But in an era of peak resources, resilience requires sending clean energy the other way. As a part of its soul-searching, Craft3 realized that "urban needs rural, and rural needs urban."