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New this Week! Family Assets Count: Miami

By Paul Day on 12/18/2014 @ 02:30 PM

Tags: Assets & Opportunity Initiative, Data and Research

This week, CFED, in partnership with Citi Community Development and Catalyst Miami, released Family Assets Count: Financial Insecurity in Miami, the latest report in the series that will inform policymaking in ten cities over the next two years.

The report finds that in Miami, 27% of households live in poverty, but 67% are financially vulnerable. These “liquid asset poor” households do not have enough savings to live above the poverty level for just three months if they lose a job, face a medical crisis or suffer another income disruption. Communities of color fare even worse: 79% of African-American households and 74% of Hispanic households in Miami are liquid asset poor.

These households live in a state of persistent financial insecurity, one emergency away from falling into debt or even losing a home. Of households earning $50,000 to $75,000 annually, 55% are liquid asset poor.

“We hope these data ring as a clarion call to action for policymakers who have an important role to play in improving financial security for families in Miami and region-wide,” said Solana Rice, Senior Program Manager at CFED.

Family Assets Count leverages the Assets & Opportunity Local Data Center, a powerful new tool that provides much vital data on household wealth and financial access in cities, counties and regions across the United States. Family Assets Count aims to leverage the power of cities to improve financial stability for families and advances programs and policies that reduce barriers and encourage families to save and build assets.

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Assets & Opportunity Network TA Fund: New Customizable Fact Sheets Available on Seven Key Asset-Building Strategies

By Jennifer Medina on 12/18/2014 @ 09:00 AM

Tags: Assets & Opportunity Initiative

The Assets & Opportunity Network is excited to announce new downloadable one-page strategy documents and customizable, two-page strategy documents describing seven asset-building strategies and programs:

  • Children savings accounts
  • Earned Income Tax Credit & Volunteer Income Tax Assistance
  • Individual Development Accounts
  • Lending circles
  • Overcoming credit card debt
  • Financial education, counseling & access
  • Workplace-based financial education

These documents—which use simple text and graphics to describe each strategy—can be distributed individually to partners, practitioners, clients, policymakers and others to explain how the strategy works and the impact it can have on a family’s financial security. The documents can also be distributed together as an asset-building toolkit for use at conferences, trainings or coalition meetings to raise awareness and start the conversation about opportunities to expand asset-building services and programs in your community.

The strategy documents were originally developed for the Minnesota Asset Building Coalition (MABC) as a part of the Assets & Opportunity Network Technical Assistance Fund, sponsored by JPMorgan Chase, which provided targeted technical assistance to Lead Organizations in the Assets & Opportunity Network to help them meet their specific needs. MABC sought assistance in creating the strategy documents to use at a series of regional convenings across the state. As an emerging coalition, MABC is using the documents as a “conversation starter” at each of its nine convenings to raise awareness about asset-building strategies among service providers and practitioners. The convenings—which bring together 15-25 practitioners and program leaders in each region—are also raising awareness about the coalition, identifying opportunities for increased coordination and collaboration among local programs, and laying the foundation for future policy advocacy at the state level. As Dave Snyder, the Coordinator of MABC noted, “The strategy documents helped spur dialogue about new opportunities to introduce asset-building tools and resources into the community. The stories we shared and the connections we established at the convenings revealed the true wealth of social assets in the room.”

The two-page Minnesota strategy documents include general information about the strategy on the first page and state-specific resources on the second page. In an effort to share these resources with the broader Network, the general information about the strategy is now saved as one-page downloadable PDFs.  The two-page documents, which include Minnesota-specific resources on the second page, are also available for download as two-page, customizable Word documents. You can customize these two-pagers by replacing the Minnesota photos, case studies and contact information with information from your local community, and by adding and your organization’s name and contact information in the footer.

To learn more about the Assets & Opportunity Network Learning Community, click here. To learn more about the JPMorgan Chase-sponsored Assets & Opportunity Network TA Fund, click any of the links below.

Also in This Series

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525,600 Minutes: How Does CFED’s Government Affairs Team Measure in 2014?

By Emanuel Nieves on 12/17/2014 @ 05:30 PM

Tags: Federal Policy

Advocates visiting Capitol Hill during the 2014 Assets Learning Conference.

Much like RENT: The Musical’s signature song, “Seasons of Love,” our team can measure our year in daylights, sunsets, midnights, cups of coffee (a lot!), in laughter and in strife. Though not specifically mentioned in the well-known song, two other important ways to measure a year is through passion and progress. For the Government Affairs team—and CFED as a whole—this year marks a year of passion and progress to help low- and moderate-income communities become more economically stable.

The passion we have for our work, our partners and the people we serve is the reason we’ve created numerous publications, executed countless Hill visits, organized key events and secured meaningful legislative victories over the past year. Below is some of the progress we’ve made over the past year—through advocacy, relationship-building and communications—that continues to move the needle forward towards expanding economic opportunity for all.


Our team has produced a total of 28 federal policy-related publications, including creating two new publication series (Federal Policy Briefs and Federal Policy Proposals). Publications produced over the past year cover topics related to manufactured housing, entrepreneurship, emergency savings, the racial wealth gap, the upside-down tax code, debt, consumer protections and financial capability. These publications take a unique lens by elevating how each of these issues impact low- and moderate-income households’ ability to build assets and achieve financial security.


In 2014, we organized a number of events on Capitol Hill that focused on low-income microenterprise, children’s savings, asset poverty and retirement security. Our “Retirement Security for All: Overcoming Unequal Tax Incentives for Retirement Savings,” was a particular highlight as we co-hosted with the Center for American Progress and featured Senator Elizabeth Warren (D-MA) as the keynote speaker.

Public Comments

We’ve continued to elevate CFED’s voice and influence, as well as the voices of the Assets & Opportunity Network, by submitting individual and joint public comment letters to the administration, federal agencies and Congress on various issues, including affordable housing, consumer protections and credit-building products.

Legislative Process

While it may look like we’ve spent a considerable amount of time moving the needle via non-legislative action, we did manage to notch a few critical asset-building policy victories this year. These victories, accomplished in partnership with the A&O Network and other partners in the field, include preserving states’ rights to lift or waive SNAP asset limits within the 2014 Farm Bill, the passage of the American Savings Promotion Act, allowing banks to offer Prize-Linked Savings and the passage of the ABLE Act, which will allow people with disabilities to build assets without losing critical benefits.

The 113th Congress also saw the introduction of new asset-building legislation, including the USAccounts Act, introduced by Representative Joe Crowley (D-NY), a progressive universal children’s savings accounts proposal, as well as the CSA Opportunity Act, a bipartisan bill offered by Representative Matt Cartwright (D-PA) and Representative Reid Ribble (R-WI), which would eliminate public benefit asset limits for savings in children’s savings accounts.  During the next Congress, CFED will advocate for the re-introduction and passage of these bills.

The legislative victories described above represent a series of small steps in ensuring that all households across the country are able to save their way out of insecurity and into a more stable and resilient economic state. But together, they represent one large stride toward a more inclusive American economy.

Hill Visits

If all of the above wasn’t enough for one year, we also organized the largest Assets Learning Conference (ALC) Capitol Hill Day in CFED’s history. This year’s ALC Capitol Hill Day brought together 400 attendees from 45 states and Puerto Rico to meet with over 200 federal policymakers on the vital work happening on the ground in the asset-building field and the role federal policy can play in expanding economic opportunity for millions of Americans.

As we celebrate a year of passion and progress, we look forward to bringing this momentum into the next 525,600 minutes; we’re excited to see what we will be able to accomplish with our partners and policymakers to improve the financial security of American households.

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Congress Passes the ABLE Act: Savings Accounts for People with Disabilities

By Ezra Levin on 12/17/2014 @ 09:30 AM

Tags: Federal Policy

Advocates on Capitol Hill during the 2014 Assets Learning Conference

I can only imagine what Vice President Joe Biden said when he heard the news. In what is being called the “most sweeping legislation to help the disabled in a quarter century,” the Senate passed the Achieving a Better Life Experience (ABLE) Act last night. The legislation will now be signed by the President and become the law of the land.

CFED wrote about the ABLE Act earlier this summer and has advocated for its passage since it was first introduced seven years ago. The bill tackles an issue that nearly everyone in the assets field is familiar with: asset limits. People receiving federal disability benefits face an asset limit of $2,000. Put a little savings away, and you stand to lose your disability benefits that are essential for helping you make ends meet. Many states impose the same or even lower asset limits for other public benefit programs, like SNAP and TANF.

But this world is about to change. We will now have “ABLE Accounts,” flexible savings accounts that can be used for a variety of purposes. From a tax perspective, the ABLE Accounts will function similarly to a Roth IRA or 529 education savings account. Individuals and families will deposit after-tax dollars into the accounts, but the earnings will be tax-free when withdrawn for qualified purposes.

Families will be able to save as much as $100,000 in ABLE Accounts without fear of losing public benefits. They will be able to save for emergencies and for long-term investments in education, homeownership and other asset-building activities. In other words, the ABLE Act stops people with disabilities from being forced to live in liquid asset poverty and will allow them to become more financially secure.

Is the ABLE Act a perfect bill? Of course not—large-scale federal legislation of this type rarely is. The enacted version of the bill was significantly slimmed down and has questionable financing provisions. It limits program eligibility to those who have been diagnosed by age 26. And because it is a disability-focused reform, it does not address the broader public benefit asset limit issues for low-income families outside of the disability system.

But this is what congressional compromise looks like. The lawmakers who came together around the ABLE Act refused to let the perfect be the enemy of the good. They enacted a reform that will allow individuals and families across the country to save, invest and build wealth. In and of itself, the ABLE Act is a huge accomplishment. Yes, future reforms can make it better, but today is a day for celebration.

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Native Asset Building in Practice: Partners for Prosperity Interview

By Paul Day on 12/16/2014 @ 11:15 AM

Tags: Economic Inclusion, Financial Empowerment

We interviewed Jessica Sotelo, Executive Director for Partners for Prosperity (P4P), about her innovative work in Native asset building. P4P is nonprofit organization based in Eastern Idaho that originated in 2001 with a planning grant by the Northwest Area Foundation (NWAF). With the support of CFED and NWAF, P4P is working with the Shoshone-Bannock Tribes to provide financial education and technical support to build assets for low-income and working people in these Native communities.

The partnership between P4P and the Shoshone-Bannock Tribes is one of the first of its kind between a Tribal community and a non-tribal community organization providing financial education. For the past 13 years, P4P has worked with the Tribes to build a relationship and form a partnership with the Tribes based on respect, trust and a recognition of tribal strengths and leadership. P4P works directly with tribal programs under the authority of the tribal council on behalf of a reservation community that struggles with poverty, unemployment and a lack of financial security.

Note: This interview has been edited for readability and concision.

What are the issued facing the Shoshone-Bannock Tribes?

As with all Native American Tribes, the Shoshone-Bannock Tribes are deeply affected by poverty. One of the issues is that it’s very difficult to get a handle on the level of poverty in the Tribes because the data doesn’t capture it. Overall, there is a lack of economic opportunity, financial security and jobs.

Is there anyone else working on these issues?

I don’t know of any other non-Tribal nonprofit organization in the region working with this Tribe on financial education. The Shoshone-Bannock Tribes are very progressive and are looking at creating economic opportunities for themselves. For example, they built a beautiful new convention center hotel, which will support the local Tribal economy and create jobs.

What kind of challenges do you anticipate working on with the tribe?

One of the challenges is more from their perspective. Currently, the community provides its own financial education but when you’re part of a small community it’s difficult to get up in front of the people you know and teach them financial education. There’s a tendency for community members to judge you if you’ve had financial issues, and most people, regardless of where they live, have financial issues in their background.

Clearly, it is important to build capacity and empower Tribal members to deliver their own services and supports. But, on some level, the Tribes recognized that in order for financial education to be a truly effective support, it would need to be delivered by someone other than Tribal members for the time being. However during this process we will also train tribal members to teach the courses and help them get credentials in financial education that lend an additional layer of credibility.

We have a reputation of providing strong financial education supports in our communities. Additionally, we have a long-standing partnership with the Tribes, so when they approached us and asked if we could help them with financial education, we embraced and appreciated the opportunity!

So the Tribe approached P4P. What gap were they trying to fill?

The Tribal council is interested in ensuring that all of their people have access to financial education. I’m talking about the full range of financial education—improving your credit, scam protection, relationships and money, and helping position themselves for increased financial security.

The second piece of that is the Tribes are very keen on making sure their own people get trained to become financial counselors. P4P can assist with training that empowers the Tribal members to be effective coaches and counselors for financial education.

What did you do before you worked for P4P? How has this inspired you?

The Tribal council is interested in ensuring that all of their people have access to financial education. I’m talking about the full range of financial education—improving your credit, scam protection, relationships and money, and helping position themselves for increased financial security.

The second piece of that is the Tribes are very keen on making sure their own people get trained to become financial counselors. P4P can assist with training that empowers the Tribal members to be effective coaches and counselors for financial education.

What did you do before you worked for P4P? How has this inspired you?

I worked for six years at the Idaho Department of Health and Welfare and I loved my work, but I just felt like it wasn’t enough. I felt there was more to be done. I think there are many good people within these government programs who are confined by the parameters of their program. As much as they’d like to work on a solution, they’re limited. I think that’s the beauty of working for a nonprofit organization. We can do the research and really tailor our programs to meet the need locally. That’s critical!

Can you talk a little bit about the role of nonprofits in asset building? Do you think nonprofits can play a strong role in ending poverty and income inequality, getting people banked and building assets?

Clearly those safety nets at the government level are critical and play a very important role in helping families begin to build assets and gain economic security. Oftentimes, when you are so concerned about food, shelter and the necessities of life, you’re not thinking about buying a house or saving for a college education. You are looking to get by in that moment. So clearly, government programs provide critical services that help people get on the path to financial security.

Nonprofits play a complimentary role, where once a family’s basic needs are met, they can build assets, buy a home, save for college, etc. Nonprofits and government agencies need to be working hand-in-hand because each plays an important role.

Let’s think out a year from now: December 2015. What would you like to achieve?

I would really like to see P4P have the ability to offer a greater number of services to a greater number of people. We do have a revenue plan to do this kind of work and I’d like to see that be successful. I’d like to see us have a solid foothold on offering financial education, individual coaching, the ability to offer credit-building loans and potentially even small-dollar loans to build assets.

Have you looked at other examples of asset building in Indian Country?

I know there are number of tribal nonprofits doing an outstanding job. 7 Sisters and First Nations Development Institute do a phenomenal job. I’d like to hear more about non-Tribal nonprofits that are doing this work. I would like to learn more about non-Tribal nonprofits that work with Tribes outside of the Tribal organizations. Although P4P is technically a non-Tribal nonprofit, we have Tribal members on our staff and board.

What’s the difference between Native asset building and asset building in general?

In general you have to understand the different safety net programs within a specific Tribe as well as the Tribal government departments. You also need a good understanding of how things work and some of the politics involved. Things are different in Indian Country, but the need to understand who you are working with and for cuts across all populations.

Specifically, the approach to asset building in a Tribal community might be very different. For instance, housing is an issue in Indian Country. If you were in Baltimore you would expect to find affordable housing units with an application process, there may be a wait list, but eventually you can move in to a place of your own.

Housing is a big issue in Indian Country. On many reservations, there is a lack of infrastructure including water and power. Many Tribes lack enough housing to meet the need. Additionally, many Tribes own their own land, so it’s hard to get loans to buy a house or build a house because the land may belong to the Tribe. In tribal communities, homeownership as an asset-building strategy may not be an easy path. So you have to think differently about building assets in Native communities.

How is your partnership with CFED, the Northwest Area Foundation and the Assets & Opportunity Network helping you?

I really feel like CFED is consistently on top of the issues and on the cutting edge of what it’s really going to take to create financial security for low-income and working people. I started going to CFED conferences about eight years ago and felt so much inspiration and got so many ideas to bring home and work with. P4P is a lead organization in the Assets & Opportunity Network, and those opportunities are phenomenal! It’s been a really good go-to organization for information.

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Asset Building News Round Up: December 12, 2014

By Paul Day on 12/12/2014 @ 11:30 PM

Tags: News


Update: Rhode Island Children's Savings Program Launch

On Wednesday, Rhode Island Governor-elect Gina Raimondo joined education and business leaders to announce a new plan, the CollegeBoundbaby fund, designed to make it easier for families to save for college. Here are the latest news stories about the big launch:

From the Providence Journal: Governor-elect Gina Raimondo, the state treasurer’s office and others are making it easier for young parents to enroll their newborns in a college savings fund. Starting Jan. 1, 2015, CollegeBoundbaby will enable parents to sign up at the hospital for a $100 savings fund instead of filling out an application later on. All parents have to do is check a box on the birth certificate worksheet. Read more here.

From ABC6 News (includes video): Every new born or adopted child in Rhode Island will get a 100 deposit in the state "college bound baby" fund. That and money they contribute on their own, earns interest over the years."If you start saving early, start saving at birth – even small amounts – it grows over time. And so the money is there when the child graduates high school and is ready," said Governor-Elect Gina Raimondo, (D) Rhode Island. Read more here.

Other News

From The Hill: The vast majority of Americans who do not own a home still see homeownership as a praiseworthy goal, despite the damage wrought by the subprime mortgage crisis. Ninety-one percent of renters believe homeownership is something to be proud of, according to a survey released Monday by housing giant Freddie Mac. However, just 39 percent of renters surveyed actually plan to buy a home in the next three years. Read more here.

From Shelterforce: Limited and expensive financing options make life even more difficult for the financially vulnerable residents who live in manufactured housing (MH) communities. The continuing consolidation of ownership is taking a toll, and the industry just can’t seem to shake the outdated, negative stereotype of a rusted, flimsy structure with a dog chained to the front porch. Read more here.

From the Cleveland Plain Dealer: Congress members and some economists say that low- and moderate-income Americans might save more of their money if it gave them a shot at big winnings. And so the U.S. Senate Wednesday passed a bill to remove a legal hurdle to bank-sponsored lotteries linked to saving. This followed the House of Representatives' passage in September. President Barack Obama is expected to sign the bill, which could lead to expansion of prize-linked savings accounts. Read more here.

From the Assets & Opportunity Network

From the Coalition for a Prosperous Mississippi: People who have an account with a bank or credit union are better positioned to participate in the economy and contribute to the nation’s recovery. However, a large number of American households do not have access to basic financial tools like checking and savings accounts. According to the 2013 FDIC National Survey of Unbanked and Underbanked Households, more than one in four households (27.7%) are either unbanked or underbanked. Read more here.

From CFED's Story Bank

Here are the latest saver stories from across the asset building field.

From the New Hampshire Community Loan Fund:
Bankrupt Retirees Find Hope in Manufactured Housing
Their retirement years were rolling out as Mike and Kathy Scanlon had wanted: A comfortable home on a lake in Barrington and time to enjoy life. “We had all the toys,” said Kathy. “We had a boat, we had jet skis … We had it all.” “And then we had nothing.”

From the Community Action Agency of Southern New Mexico:
Student uses IDA, Financial Education to Fund College Dreams
When Jorge Dominguez enrolled in the Individual Development Account (IDA) program, he knew that he would be doing some traveling. After all, Jorge was spending the summer working at his family’s restaurant in Silverton, Colorado. But, in order to participate in the IDA program, he had to attend financial literacy classes being held eight hours away, in Las Cruces, NM.

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Victory! Federal Prize-Linked Savings Bill Passes Senate, Will Become Law

By Ezra Levin on 12/11/2014 @ 01:45 PM

Tags: Federal Policy

Advocates on Capitol Hill during the 2014 Assets Learning Conference

More than a year ago, Senators Moran (R-KS) and Brown (D-OH), and Representatives Kilmer (D-WA) and Tom Cotton (R-AR), introduced the American Savings Promotion Act. In September, the legislation unanimously passed the House of Representatives. Last night, the Senate unanimously voted for it as well. And now it will be signed into law by the President of the United States.

CFED sees this as a significant victory because it helps move forward our mission of expanding financial security for low- and moderate-income families by boosting savings. How? Federal regulations prevent banks from offering innovative Prize-Linked Savings (PLS) products. As CFED has described, these savings products capture the excitement of a lottery without taking away participants’ hard-earned cash. You save a little, you get a chance to win a prize. Even if you don’t win a prize, you’ve still got your savings. As Doorways to Dreams (D2D) has found, these accounts work very well for financially vulnerable households. It’s a win-win, but federal regulations have prohibited banks from offering these types of accounts. This legislation removes the federal restrictions while maintaining consumer protections, paving the way for these innovative accounts to be developed throughout the country.

You may think that a bill that ultimately passed both the House and Senate unanimously must have been pretty easy to get through. But things only happen in Congress because of the concerted efforts of Members, their staff and supportive organizations. Interestingly enough, as of this morning, GovTrack (which has not yet updated it webpage), predicted that the bill had only a 5% chance of becoming law.

This legislation beat the odds, and this success has many fathers. D2D has been a real leader in developing the movement around PLS and advocating for this reform. In addition to bringing technical expertise to the table, they used up quite a big lot of shoe leather advocating for the bill in both the House and Senate. They did so with the help of the lead Senate and House members and staff, who relentlessly pursued this legislation over the last several months and were crucial in convincing offices on both sides of the aisle that this was indeed unimpeachable legislation. These Members and Congressional staff represent Congress at its best—coming together to pass legislation that will improve the lives of financially vulnerable Americans.

Needless to say, federal legislative victories for low- and moderate-income Americans are few and far between these days. CFED is thrilled to have been part of this effort, and we’re proud of the local members of the Assets & Opportunity Network who made their voices heard in Congress. Let us all work towards a future filled with more such victories. Onward!

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The Growth of a Field: Celebrating Ten Years of I’M HOME

By Sean Luechtefeld on 12/11/2014 @ 11:00 AM

Tags: Housing and Homeownership

The 2014 I’M HOME Conference in Seattle marked the milestone of our tenth annual gathering of manufactured housing stakeholders, and kicked off a new era as the first of these gatherings open to the public. The event celebrated ten years of remarkable progress, while wrestling with the challenges that still stand in the way of our goals of sustainability, scale and equity for owners of manufactured housing.

The growth of the field on display at this year’s Conference was striking. Ten years ago, we struggled to find four affordable housing experts to discuss manufactured housing on a panel. This year, we filled a ballroom with over 140 participants. I’M HOME has progressed from seeding a field of pioneering practitioners to supporting a wide range of new and growing initiatives across the country. We’ve witnessed new champions emerge as homeowner advocates, developers, community organizers and financial institutions stepped up to be Lead Organizations within the I’M HOME Network. New research, finance and energy efficiency pilots are making an increasingly powerful case for the quality of manufactured housing products. Network members celebrated policy victories that begin to bring manufactured housing onto a level playing field with other housing types.

Still, achieving equality for homeowners and scale for the field are long-term goals made no simpler by the increasingly complex policy, market and fundraising landscapes of affordable housing. We grappled with these realities throughout the conference, in a series of conversations that yielded many insights about the course ahead, including:

The field needs a deeper and broader evidence base to make the case for public subsidy, private investment and more supportive policy. Practitioners struggle to get major home-replacement initiatives off the ground and nudge them beyond pilot phases without demonstrating—and building an evidence base to support—the size of the market for replacement, the health benefits of replacing substandard housing and the case for taking on debt to replace one’s home.

  • As the field grows, stakeholders are clamoring for a stronger infrastructure to propel it forward. More than ever, as the field grows, its members are demanding more opportunities to convene, stronger communication tools, more customized opportunities for interaction and more ways to share their expertise directly with their peers. The field is also thinking more strategically about how to secure and maintain sustainable funding solutions to carry their work forward. The reinvigorated I’M HOME Network will aim to meet this goal.
  • Owners of manufactured homes are still treated unfairly in the court of public opinion. Many of the changes we seek as a field—from parity in state and local policy to safer, more affordable home financing—will remain insurmountable if we cannot address the stigmatization of manufactured homes and its owners. Stories of “trailer park Tuesday” SPAM sandwich specials at a local Seattle restaurant reminded us that these stereotypes are pervasive and damaging. Our attendees challenged us to think even more critically about how we might inadvertently reinforce stigmas about manufactured homes and their residents, even as we attempt to break those stigmas down.
  • Insights like these will help us shape I’M HOME’s priorities and actions going forward. A dearth of public subsidy and political support for affordable housing, the proliferation of cost-saving construction technologies like factory-building, increased awareness about the dangers of predatory manufactured housing finance, and partnerships between nonprofit and for-profit leaders are all reasons why now is an opportune time to grow the manufactured housing landscape.

We look forward to continuing our work together: here’s to ten more years of growth and many more years of financial security for homeowners!

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1:1 Fund Works to Support College Dreams with Year-End Giving Events

By Sean Luechtefeld on 12/11/2014 @ 10:00 AM

Tags: Children’s Savings Accounts

Since the end of the year is the time when so much charitable giving takes place, it’s a busy time of year for CFED’s 1:1 Fund! The 1:1 Fund makes it easy for children’s savings programs to connect with donors, large and small, whose contributions match the deposits of low-income kids saving for college. This month, we’re working to raise more than $75,000 in matching dollars to help make low-income students’ dreams of going to college a reality. Toward these ends, the 1:1 Fund is hitting the road in December to raise awareness about the transformative potential of college savings.

On December 9, the 1:1 Fund is hosting a major donor fundraiser in San Francisco to raise savings matches for our largest partner, Kindergarten to College. The event is being co-hosted by an all-star cast of children’s savings supporters—California Lieutenant Governor Gavin Newsom, San Francisco Treasurer Jose Cisneros and Oakland Raiders star Justin Tuck, along with his wife, Lauran. The event will be held at Google’s offices in downtown San Francisco, and we are expecting up to 75 people.

Our hope is that the fundraiser at Google will build on the momentum we saw last week when the 1:1 Fund participated in #GivingTuesday. On December 1 and 2, we worked with six of our 1:1 Fund sites to run a 48-hour fundraising sprint, which raised more than $27,000 in matching funds for six of our 1:1 Fund partners! Participating sites included:

With three weeks to go until the year-end deadline for making tax-deductible charitable donations, it’s not too late to get in on the action and help match kids’ college dreams, dollar for dollar. To make a donation to any of our eight 1:1 Fund partner sites, or to the National Match Fund, visit

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Building Assets in Native Communities

By Arohi Pathak on 12/08/2014 @ 11:30 PM

Tags: Economic Inclusion, Financial Empowerment, Integrated Service Delivery

Over two days in mid-November, Tribal leaders, policy experts, and Native and non-Native direct service providers working on housing, TANF, higher education and workforce development came together in St. Paul, MN, for the U.S. Department of Housing and Urban Development’s Office of Native Programs second Native asset-building summit. I was excited to be part of the sharing of ideas, strategies and resources for advancing self-sufficiency and economic opportunity in Native communities across the country. The Summit celebrated Native successes and highlighted asset-building innovations and opportunities in Native communities. My own takeaways from the Summit included the following:

  • It takes patience and investment to move the needle from poverty to prosperity. Many Native leaders spoke compellingly about how getting out of poverty often took several generations and was successful only with a range of supports, including education, employment opportunities, access to microenterprise funding/supports, living wages that help families meet their needs while also saving up for the future, etc.
  • Native asset-building needs to be culturally relevant. Many Native communities subscribe to a broader definition of wealth than non-Native organizations and institutions. Native communities see wealth in cultural assets, their health, their food, their ways and their relationships. In order for Native asset-building to be successful, programs and services need to be anchored by this understanding.
  • As in non-Native contexts, Native asset-building approaches are being integrated across systems. Many of the programs highlighted during the Summit took a “no wrong door” approach to service delivery, which enabled an individual to access a range of eligible services through a variety of entry portals. Many Native organizations are coupling service delivery with financial education, allowing individuals to learn about and access tools and resources that encourage savings, reduce debt and help build long-term economic security when applying for such benefits as SNAP or TANF.
  • Native asset-building programs need diverse sources of funding to sustain their programs and build a pipeline of leaders. One of the challenges frequently heard during the Summit was that funding for financial education and asset building in Native communities was limited and hard to sustain over time. Not surprisingly, this is a major impediment to building economic security and self-sufficiency in the long-run, and impacts the efficacy of existing programs.

Some of the ideas, innovations, successes and best practices highlighted at the summit included:

  • Integrating financial empowerment and coaching models (such as Delaware’s $tand By Me) into Head Start programs. Financial empowerment/coaching supports help enhance outcomes for Head Start employees and parents, empowering them to save and build assets for the future.
  • Using financial literacy and entrepreneurship curriculum in K-12 classrooms to help Native youth populations understand the need for asset building, save for the future, build and support private businesses, become better stewards of money and expand their assets rather than their debts. One workshop on youth financial education highlighted Native Children’s Savings Account programs. Another workshop focused on financial education programs that help youth learn to manage their minor’s trust payouts (sometimes called “18 Money”).
  • Creating access to fair financial marketplaces by moving away from predatory lending options towards safer, more consumer-friendly products like lending circles. The workshop also focused on Native CDFI funds, highlighting how CDFI funds could help build and expand economic opportunities in Native communities.
  • Using tax programs as an access point to benefits screening. Tribal entities (such as Chief Dull Knife College in southeastern Montana) have successfully piloted using Volunteer Income Tax Assistance sites as an intervention point for assisting low- and moderate-income clients in connecting to public benefit programs, as well as showing them the benefit of asset-building and financial empowerment programs.
  • Highlighting how artists in the “creative economy” can play an essential role in economic development and generating assets. New research shows how Native artists can transform community development strategies, catalyzing economic and social change that has benefited communities in both rural and urban areas.

I’m excited to continue working with Native organizations on asset building, applying much of the learning, tools and resources from this conference to Native asset-building efforts.

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Asset Building News Round Up: December 5, 2014

By Paul Day on 12/05/2014 @ 08:30 AM

Tags: News


The House overwhelmingly passed a bill Wednesday that will help the disabled pay for a host of expenses—including education, housing, transportation, and health. The bipartisan bill—known as the Achieving a Better Life Experience, or ABLE Act—would help the severely disabled establish tax-advantaged savings accounts so they could pocket tax-free savings to cover various qualified expenses. That would allow the disabled to qualify for means-tested benefit programs like Medicaid because much of their savings wouldn’t be included. Read more here.

TIAA-CREF's Ready to Retire survey points to a retirement savings landscape where millions of Americans believe they won't have enough cash to live on in retirement and wish they’d emphasized "financial readiness" capacity during their saving years. The report says 52% of Americans approaching retirement say "they wish they had started saving for the future sooner" and that many worry about not having enough money to cover their monthly expenses (45%), while others are anxious about how health care costs (35%) or inflation (32%) could deplete their retirement savings. Read more here.

Since the housing bust, renting has been in and owning a home has been out, especially among young adults who in earlier decades would have been first-time home buyers. As the rate of homeownership has declined, from a peak of nearly 70 percent in 2004 to a 20-year low of 64.3 percent recently, the number of owner-occupied homes has barely budged, while the number occupied by renters has increased by nearly 25 percent. Read more here.

Nationwide, the foreclosure crisis has abated, and thousands of foreclosures have been purchased by investors and homeowners. The opportunity to buy a bargain-priced foreclosure hasn’t completely passed, though, because some foreclosures are still coming on the market in the Washington area, particularly in Prince George’s County. When Anne Guglik, a fire investigator in the District and 10-year member of the National Guard, wanted a larger condominium in her Greenbelt neighborhood, she didn’t specifically look for a foreclosure. But when she found a three-bedroom condo foreclosure listed at $128,400, she jumped at the opportunity. Read more here.

Small business owners are upbeat as 2015 approaches, according to a survey released by Wells Fargo & Co. The bank's fourth-quarter Small Business Index came in at 58, up from 49 in the third quarter and the highest since it was at 83 in the first quarter of 2008, just after the start of the recession but before the financial industry collapse that occurred half a year later. The survey questioned 601 small business owners in mid-November. Read more here.

From the main streets in towns like Parker, Colorado to 1600 Pennsylvania Avenue, there was an overwhelming support for local independent businesses on Small Business Saturday, celebrating it’s fifth year. Small Business Saturday was created by American Express in 2010 in response to small business owners’ most challenging obstacle - gaining more customers. As a result,  Small Business Saturday was brought to life in an effort to support local businesses that create jobs, boost the economy and preserve neighborhoods around the country. Read more here.

From the Assets & Opportunity Network

From the Coalition for a Prosperous Mississippi: Earlier this week, Governor Bryant released his budget recommendation for the next budget year. The twelve months of the Fiscal Year plus the lapse period. His plan includes recommended funding levels for schools, law enforcement, healthcare and other state services. Also included, was a plan supporting working families through the Mississippi Working Families Tax Credit. Read more here.

From Southern Bancorp Community Partners: In October, the Census Bureau released the poverty rate based on the Supplemental Poverty Measure (SPM). This snapshot of poverty in America, which varies somewhat from the standard official measure released in September, accounts for regional differences in the prices of housing and other local living costs by using more updated formulas associated with consumption patterns and family structures to calculate the rate. It also deducts essential costs—food, clothing, housing and utilities—and accounts for government assistance programs. Read more here.

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Increasing Financial Well-Being through Integration

By Alicia Atkinson on 12/04/2014 @ 04:00 PM

Interest in integrating financial capability services into other social services to address the multiple needs of families is growing among community practitioners, social service programs, employers and foundations across the country. A growing body of on-the-ground experience is demonstrating how integration can increase the impact of a primary social service, such as helping an individual find a job, while also addressing other financial challenges and barriers that person may be facing. CFED’s newest federal policy publication series, “Increasing Financial Well-Being through Integration,” chronicles policy changes that could increase the impact of social service programs by boosting families’ overall economic outcomes.

By meeting low- and moderate-income families where they are and expanding financial capability solutions into existing services, we see programs improve by creating holistic solutions that help families overcome a range of financial challenges through increased knowledge and access to quality financial products. A growing number of federal and state leaders have begun innovating and collaborating in this space. Now, the asset-building field must capitalize on this energy and provide federal agencies and Congress with concrete recommendations to expand this vital work.

The first in CFED’s five-part series, Meeting People Where They Are,” highlights the need and opportunity for integrating financial capability services into social service programs to improve financial well-being. This introductory brief covers (1) the state of households’ finances, (2) the impact of financial insecurity on families, (3) the financial challenges experienced by households beyond lack of income and wealth, (4) the definitions of financial capability and integration, (5) the federal government’s investment in innovation and cross-agency dialogue regarding integration and financial capability, and (6) the framework for future policy recommendations.

Future briefs will cover the value of integrating financial capability services in order to boost other programmatic outcomes, including:

  • Finding and retaining employment
  • Gaining housing stability
  • Reaching and succeeding in higher education
  • Improving health

Future briefs in this series will be released in early 2015. Look for announcements on CFED’s blog and in the special reports section of CFED’s federal policy website for more information.

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Virtual Training Series Expands Communications Capacity of Network Members

By Sean Luechtefeld and Fran Rosebush on 12/04/2014 @ 12:00 PM

Tags: Assets & Opportunity Initiative

One of the core principles guiding CFED’s work as the backbone organization for the Assets & Opportunity Network is to rely on the feedback of Network members to inform how we support the Network. Last winter, when we asked Network members which key challenges were inhibiting their effectiveness, an overwhelming number of organizations indicated that they wanted help with communications and networking. Several of them asked questions like, “How can I gain visibility for my program if I don’t have a communications budget?” Or, “What can I do that doesn’t require a lot of time but would still make a difference when it comes to communications and outreach?”

These questions, we learned, loom over the heads of so many asset-building professionals. With limited time and financial resources, it is essential that organizations are strategic with the ways they expend energy communicating about their programs. But, that strategic thinking isn’t always easy, especially for organizations that don’t have a dedicated communications staff. Thus, to help organizations overcome this challenge, CFED delivered a five-part Virtual Training series. This series—part of the Assets & Opportunity Network’s Technical Assistance (TA) Fund, which was supported by JPMorgan Chase—was designed to help people of varying backgrounds and skill levels identify easy but meaningful ways of improving their communications and networking effectiveness.

The Virtual Training series, convened between May and August of this year, proceeded in five parts:

  1. Introductory Session (Slides)
    In this session, speakers discussed the basics of putting together a communications strategy and previewed parts 2-4 of the series.
  2. Email Marketing (Recording; Slides)
    In this session, speakers discussed the ins and outs of email marketing, including how to choose the right platform and how to build a mailing list.
  3. Managing Your Online Presence (Recording; Slides)
    In this session, speakers discussed the various ways in which organizations can manage their online presence, including the use of blogs, social media and websites.
  4. Webinars & Online Learning (Recording; Slides)
    In this session, speakers discussed how to deliver high-quality online learning opportunities, including how to execute an informative and engaging webinar.
  5. Blogging, LinkedIn, Google AdWords and Web Analytics (Recording; Slides)
    In this session, speakers discussed topics chosen by series participants, including how to write for blogs, how to use LinkedIn to market content, how to use Google AdWords to drive website traffic and how to set up your web analytics monitoring.

Each of these sessions fit well within the Assets & Opportunity Network Learning Community’s mission of providing easy-to-use and timely resources to its members. Along with our monthly communications tips emails, these resources can help you gain visibility for the important work you’re doing and connect with the audiences who can benefit from working with you to expand the reach and deepen the impact of asset-based strategies for building financial security.

To learn more about the Assets & Opportunity Network Learning Community, click here. To learn more about the JPMorgan Chase TA Fund, click any of the links below.

Also in This Series

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New Federal Legislation to Reform Asset Limits and Support Children’s Savings Accounts

By Ezra Levin on 12/03/2014 @ 06:00 PM

Tags: Children’s Savings Accounts, Federal Policy

Let’s talk perverse incentives. A couple of low-income parents on TANF put away $50 a month for their child’s future education costs. After 20 months, they’ve saved $1,000 plus interest. Here we have a great example of parents working to break the cycle of poverty and expand opportunity for their child. And it’s exactly the type of behavior that our current welfare system viciously penalizes.

In many states, $1,000 in a Children’s Savings Account (CSA) is enough to disqualify a family from TANF. In many more states, $2,000 is enough to disqualify a family from Food Stamps (SNAP). Throughout the country, meager savings—even in restricted education-only savings accounts—disqualifies families from receiving support for basic necessities.

The choice is clear: you can save for you children’s future or receive welfare. You can’t do both.

If we want our welfare system to empower families to help themselves, this feature of the system is ridiculously counterproductive. The good news is that two members of Congress are working across the aisle to fix it.

Today, Rep. Matt Cartwright (D-PA) and Rep. Reid Ribble (R-WI) introduced the CSA Opportunity Act. This bipartisan legislation would eliminate savings into 529s and other CSAs from the asset tests for the main federal mean-tested programs. In short, the legislation would allow families on welfare to save for their children’s future without fear of losing the essential benefits that help them make ends meet today.

This type of reform has historical precedent. Back in 2008, Congress passed a bipartisan Farm Bill that eliminated savings into 529s from the SNAP asset test. The CSA Opportunity Act expands on this common sense reform.

This is a much-needed reform. As a recent CFED report showed, last year the federal government spent $1.75 billion on 529s and Coverdells—two federally-subsidized education savings accounts. But the lowest-income 50% of Americans (including essentially all families on welfare) own almost none of the savings in these accounts. So while the federal government spends nearly $2 billion on these accounts, these accounts are not expanding educational opportunity for most families. One of the reasons for this upside-down picture is that federal law actively discourages low-income families from saving for their children. The legislation by Rep. Cartwright and Rep. Ribble will help turn these upside-down programs right-side up.

The bill also supports a rapidly growing local movement throughout the country to create universal CSA programs. As CFED presented earlier this year to the bipartisan Senate Economic Mobility Caucus, the numbers of these programs has grown rapidly in an ideologically diverse set of locales, including San Francisco, Cuyahoga County, and the State of Nevada.

At a time when Congress is often characterized by unproductive partisan gridlock, Rep. Cartwright and Rep. Ribble have worked together to introduce a bipartisan bill that supports local initiatives, reforms upside-down tax programs, and expands economic opportunity for American families in all corners of the country. Let’s hope the rest of Congress follows their lead.

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Banking the Underbanked: It’s Harder than You Think

By Sean Luechtefeld on 12/02/2014 @ 10:00 AM

Tags: Bank On, Economic Inclusion

Last month, I had the pleasure of attending the Cities for Financial Empowerment (CFE) Fund’s Bank On 2.0 Conference, Building a National Platform for Local Banking Access Programs. The Conference was held at the Newseum, which, if I can be honest, is the venue I want for all future events I ever attend. The conference facilities were beautiful, with a terrace overlooking Pennsylvania Avenue and a catering staff who knows their way around a kitchen (seriously, the hors d’oeuvres during the reception were amazing).

I came to the Bank On 2.0 Conference from somewhat of a different vantage point than the other 150 or so attendees, in that I don’t work directly on a financial access initiative such as Bank On. Rather, I manage, the online home for almost 80 of the Bank On programs that exist in communities across the country. While I learn a lot from talking with many of the Bank On program managers, I went to the Bank On 2.0 Conference hoping to get a better understanding of the challenges facing folks trying to connect un- and underbanked households with safe and affordable transaction accounts.

If I had to assess my conference experience, I’d consider my mission accomplished. Here were just a few of my takeaways about the challenges facing people working to expand financial access:

  • Having a bank account means little if you can’t access the bank. Prior to the conference, it was easy to imagine what a community without bank branches would look like: in my mind, it was a farm town in middle America where people are used to driving 30 minutes for services I take for granted in my urban neighborhood. What I didn’t imagine was South Bronx, where, prior to Spring Bank, there were no bank branches in the community at all. Of course the underbanked population there is high—without a branch, having a bank account means relatively little. Unfortunately, South Bronx is not alone, as there are tens of dozens of communities across the nation where traditional banks simply do not exist.
  • Having a bank account isn’t the silver bullet. Access to a bank account (and a bank branch where you can interact with people who can help you use it) matters. However, in many cases, the account is one of many financial products that a financially vulnerable household needs to make ends meet. As the program manager from Bank On Houston pointed out, a lot of her clients can benefit from personal lines of credit that are small and affordable, but essential for weathering emergencies. But, at most banks, you’d have to know about products like these in order to get them, because they’re not marketed like checking accounts, savings accounts or money markets. There are a host of products out there to help people be more financially secure, and it’s important to know which is right for your clients.
  • Having a bank account works best when paired with a relationship built on trust. As FDIC Chair Martin Gruenberg mentioned in his presentation, besides having a job, a relationship with a bank is one of the most important keys to financial success. Crucial here is the word ‘relationship,’ because one reason many people do not seek products and services from a traditional bank has to do with skepticism. If you don’t trust the bank offering the account product—because of previous experiences, cultural differences and the like—then you don’t want to take advantage of what it has to offer. Therefore, beyond simply having access, it’s imperative that people have someone they feel they can go and talk to.

The title of this blog post suggests that there’s more there than meets the eye when it comes to connecting financially vulnerable people with what they need to build a stronger financial footing. These challenges may not actually be surprising to the people who work on these issues day in and day out. But for me, I couldn’t help but think time and time again during the Bank On 2.0 Conference about just how complex these challenges are, and how there is no one-size-fits-all approach to financial access.

For these reasons, I’m glad CFE Fund is taking on the task of identifying the next iteration of Bank On. So much more work remains to be done, and because of the strong foundation which the asset-building field has built together, I’m confident about the new directions in which we’ll go.

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Small Business Saturday Puts Microbusiness Owners in the Spotlight

By Katherine Lucas McKay on 12/01/2014 @ 06:00 PM

Tags: Entreprenuership

As Black Friday grew from retailers’ favorite day of the year to an all-out shopping bonanza, small businesses started to feel left out. Unlike the big box stores and major ecommerce sites, small businesses can’t slash prices by 30% or more and simply make up the difference in volume. They don’t generally stay open for 24 to 48 hours from Thanksgiving Day all the way through Friday. Many don’t have online stores, so they miss out on the Cyber Monday spending spree, as well. So how can they get their piece of the $50 billion Thanksgiving shopping pie?

That’s where Small Business Saturday comes in. American Express created Small Business Saturday in 2010, inspired by campaigns that encourage shoppers to patronize locally-owned businesses. The event celebrates shopping at small businesses the day after Black Friday. Small business owners can promote their shops through the AmEx website, and shoppers can use the site to find participating businesses in their communities.

Small Business Saturday quickly gained steam, winning recognition from President Obama, the U.S. Senate, the Small Business Administration (SBA) and numerous state and local government agencies. This year, the First Family celebrated Small Business Saturday with a trip to Politics and Prose, a beloved independent bookstore in Washington, D.C.

Shoppers themselves have embraced the idea, spending an estimated $5.7 billion at small, independent businesses on Small Business Saturday 2013. The National Retail Federation estimates that half of the 134 million consumers who did holiday shopping over the Thanksgiving weekend made purchases at small businesses on Saturday. The vast majority (75%) said they were specifically there to participate in Small Business Saturday.

We here at CFED love Small Business Saturday—it is a fantastic opportunity to celebrate the nation’s 26 million microbusiness owners. Whether or not you shopped local this weekend, most of the holiday season is still ahead of us. Here are some facts that might inspire you to head to your local small businesses throughout December:

  • According to the Association for Enterprise Opportunity, almost 1 in 3 microbusiness owners work full-time for the business and have revenues under $50,000 per year. That’s just revenues; their profits are less. Slightly fewer microbusiness owners work full-time for the business and generate revenues above $50,000.
  • CFED found that more than half of microbusiness owners surveyed didn’t have enough savings to cover at least one month’s worth of operating expenses. Low profits and low sales were the most commonly cited reasons for not saving more.
  • In a survey of nearly 1,000 microbusiness owners, CFED found that these entrepreneurs frequently skip, delay or reduce their own salaries to pay for business expenses when sales are low.

Shopping local this holiday season is a great way to invest in your community, help small businesses thrive, and enable small entrepreneurs to achieve their business dreams.

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Advocates Receive Awards for Dedication to Manufactured Housing Excellence

By Lissette Flores on 11/26/2014 @ 11:00 AM

Tags: Housing and Homeownership

On October 7 at the 21st annual Housing Washington conference, Ishbel Dickens was recognized by the Washington State Housing Finance Commission for her work on behalf of owners of manufactured homes. She received the Margaret M. Sevy Affordable Housing Lifetime Achievement Award for exceptional contributions, vision and unwavering commitment to promoting affordable housing in Washington State.

Ishbel’s passion for activism began in 1987 when she joined a team of volunteers to collect signatures in an effort to prevent the closure of a manufactured housing community in Seattle. She has served as a housing advocate for 27 years, and currently serves as the Executive Director for the National Manufactured Home Owners Association (NMHOA).

Ishbel is no stranger to recognition. In 2007 she was awarded the Washington State Housing Finance Commission “Friend of Housing” Award and in 2009 she received the first-ever “Housing Hero of the Decade” award at the 2009 Housing and Homelessness Advocacy Day held in Olympia, WA. In 2010, she completed the “Achieving Excellence Program” at Harvard’s Kennedy School with a focus on expanding manufactured housing community preservation efforts in Washington.

Just three weeks after Ishbel was recognized for her dedication to affordable housing, the Washington State Housing Finance Commission earned a Special Achievement award from the National Council of State Housing Finance Agencies.

Between January 2013 and August 2014, the Washington State Housing Finance Commission partnered with ROC USA and Northwest Cooperative Development Center’s ROC Northwest program to form cooperatives in five manufactured housing communities. In doing so, the partnership has empowered residents to become owners of their communities. Often, owners of manufactured homes are at risk because they do not own the land on which their homes sit, and they can often be subject to community closures, rent increases and the threat of displacement. Thanks to ROC USA, ROC Northwest and the Commission, these homeowners can build equity and feel safe in their own homes.

The recently formed cooperative communities are Lakeview Terrace, Ponderosa and Cascade Village in Moses Lakes; Whispering Pines in Whidbey Island; and Duvall Roverside Village in Duvall, King County. The resident purchase of these communities was made possible with financing from ROC USA Capital and the Commission, and a sixth community purchase in Rochester, WA is in process.

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Unsexy Entrepreneurship

By Jonny Price, Guest Contributor on 11/25/2014 @ 02:00 PM

Tags: Entreprenuership

EDITOR’S NOTE: This post comes to us from Jonny Price, Senior Director at Kiva Zip. Like CFED, Kiva Zip is committed to identifying products and services that empower low-income people to become entrepreneurs and build better futures for themselves and their families.

I’m currently on a flight back from Louisville, where I was honored to be invited to present Kiva Zip to a conference of mayors representing cities throughout America. The conference was organized by the Kauffman Foundation, and the focus was on entrepreneurship. In his opening address, Dane Stangler (from Kauffman) highlighted some reasons for pessimism about the future of U.S. entrepreneurship – for example, the concerning downward trends in small business creation rates over the last two decades.

But he also posited some reasons for optimism. One such reason was the growing proliferation of accelerators and incubators focused on, well, accelerating and incubating entrepreneurs – Up Global, 500 Startups, Three Day Startup, etc. Now don’t take what I’m about to write the wrong way – I think these organizations, and this movement, is awesome. Its orientation towards action and lean startup principles are proving highly effective and valuable for the entrepreneurs they are supporting. And it provides a welcome contrast to traditional technical assistance, which is, at times, at risk of becoming overly formulaic and academic.

But at Kiva Zip, we observe two things:

Firstly, that (as Josh McManus from the Knight Foundation eloquently put it at the Mayors Conference on Entrepreneurship) “in a city like Detroit, where 85% of the population is African-American, the populations of these incubators is overwhelmingly ‘whitewashed’ “.

And secondly, that this movement only really addresses the tiny minority of America’s 25 million entrepreneurs that are extremely high growth, usually technology-focused, and “sexy”.

On the first observation, where African-American and Latin-American entrepreneurs are three times more likely to see their small business loan applications declined than their Caucasian counterparts, we are proud that 60% of the Kiva Zip loans we have made over the last three years have been to ethnic minority entrepreneurs.

But in this blog post I want to focus on the second observation. Because attending this conference really helped me realize that, while we are excited for Kiva Zip to continue supporting some high-growth, “sexy” startups, they are not our focus. Rather, our focus is on coffee shops and barbershops, on cleaning companies and plumbers, on Etsy artisans and Ebay sellers, on taco trucks and fashion trucks, and on small-scale farmers and food producers. These small businesses might be conventionally classified as “unsexy”, but we see them creating and sustaining millions and millions of jobs, injecting color and character into our neighborhoods and communities, and representing the vast majority of businesses in America.

A little bit of everything

We believe that a healthy economy needs both “sexy” and “unsexy” small businesses. The rapidly-growing tech startups may turn into AirBnBs, Lyfts and Pinterests, creating thousands of jobs. But their employees will get their clothes dry-cleaned, their nails done, and their coffees brewed at the small businesses in their neighborhoods.

While it might seem to the economic development department of a city (or the country) that the pursuit of both these ends of the entrepreneurial spectrum could be conflicting or distracting, the encouraging thing is that there is actually important synergy between the two worlds:

Firstly, in a positive way. I don’t know many Square, Google or Yelp (or more nascent startups) employees who would choose Starbucks over an artisanal local coffee shop. Entrepreneurs appreciate other entrepreneurs – even “unsexy” ones. I also suspect that where cities foster a vibrant and thriving bedrock of “neighborhood entrepreneurs”, they forge a cultural fabric of creativity and diversity that is also conducive to more “sexy” entrepreneurship. And of course, let’s not forget that the core customers of Square, Google and Yelp are those millions of “unsexy” entrepreneurs.

And secondly, in a more ominous way. In San Francisco, there has been significant friction in recent months and years, between big tech companies and existing residents, who are concerned by rising rents and costs of living. If we (collectively) refrain from investing in the small businesses, and associated economic vitality, of neighborhoods like San Francisco’s Tenderloin (where Twitter and Square recently moved their headquarters to), Chicago’s South Side, Pittsburgh’s Homewood, or Louisville’s Shawnee, their economic marginalization will bring growing problems of crime, poverty and social immobility. In cities that neglect “unsexy” small businesses, the tensions we are currently witnessing in San Francisco will escalate, stymying the expansion of these high-growth companies, and making these cities less attractive places for these companies to locate into. Cultivation of high-growth entrepreneurship must go hand in hand with support for neighborhood entrepreneurship. And the development of an ecosystem for neighborhood small businesses will handily and symbiotically accelerate the development of high-growth, high-tech companies.

So how does Kiva Zip fit in?

Over the last three years, we have certainly supported high-growth entrepreneurs on Kiva Zip. In July 2013, we made a $5,000 loan to MakersKit, endorsed by Zaarly. In the words of co-founder Mike Stone, the injection of capital “helped us grow faster and better than we could have ever imagined”. MakersKit went on to raise $1.5M in seed funding to rapidly expand their business. And Matt Wilkins, creator of Pedal Forward (who received a $5,000 Kiva Zip loan in August 2014), recently shared the stage with Bill Clinton at the Clinton Global Initiative in New York, because his company was deemed to have so much exciting potential.

Many superficially “unsexy” businesses can also produce rapid growth in revenues and employment. One Kiva Zip borrower in Oregon borrowed $5,000 to upgrade his equipment, and then won government contracts worth over a million dollars. And Victor, one of our first ever cohort of six borrowers, borrowed $5,000 to open Cafeto coffee shop in early 2012, and has since opened another coffee shop (partly funded by a larger, $10,000 Kiva Zip loan), and (just last week) a full-scale restaurant in South San Francisco. Collectively, this one Kiva Zip borrower, and his three establishments, have now created 15 jobs. On the Kiva Zip team, we’re encouraged by these success stories, and the analogy with the venture capital business model, which is sustained by the tiny minority of investments that “go big”.

But the vast majority of the small businesses funded by Kiva Zip will never take over the world. They will remain small. But they will provide jobs and incomes for their small number of employees, and a significant source of pride and passion for their hard-working, entrepreneurial owners. And they will infuse life and energy into the street corners and commercial corridors that they culturally and economically enhance. These neighborhood entrepreneurs might be “unsexy”…but on the Kiva Zip team, we’re pretty turned on.

Also From This Author

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Higher Education, Pathway to Success or Poverty? A Reflection on CNN’s “Ivory Tower”

By Dominique Derbigny on 11/24/2014 @ 03:00 AM

Tags: Children’s Savings Accounts, Education

Recently, CNN featured a new film, “Ivory Tower,” on the cost, value and methods of higher education in the US, prompting us to consider if a college degree is really worth the cost. A college degree is the linchpin to economic mobility for many families, but we need to consider whether schools are preparing students well for their futures. CNN’s film highlighted myriad uncertainties about the direction of higher education in this country. Below are three critical questions that were explored:

Is a college degree overrated?

Our education system is fraught with tension between the mission to educate and the competition for prestige. Over recent decades, many private universities have shifted their focus from creating academic rigor to generating opportunities for accolades. Conversely, some large, public four-year institutions are expanding enrollment by showcasing party environments while diluting academic expectations. In either case, what’s in it for the student? How do we shift the focus back toward the student as a learner and to the cultivation of knowledge and skills?

Is college worth the cost?

Public institutions have suffered dramatic cuts in state education funding, and financial aid has failed to keep pace with skyrocketing tuition costs. During the 1970s, the federal Pell grant covered the full cost of education at a public institution, but now it covers less than half the cost. As a result, the burden of paying for college has shifted to parents and students who are expected to fill gaps with student loans. The average American student now graduates more than $25,000 in debt.

Additionally, career attainment has been bleak for recent graduates. Nearly half of all graduates under age 25 were unemployed or underemployed in 2013. One graduate in the film mentioned that she couldn’t even get a job cleaning toilets at a hotel! Still, median lifetime earnings of those with a bachelor’s degree are nearly double those with just a high school diploma. How do we reduce the debt trap and create pathways to employment for students?

What are the alternatives?

It’s no surprise that alternative teaching methods are emerging in response. Under the UnCollege model, mentors are teaching students how to hack their education and pursue their career goals sans college degree. Colleges and other programs, like Coursera, Udacity, and EdX, have started offering MOOCs—massive open online courses—that are free to the public. But the effectiveness of these methods is questionable. Pass rates for the free online courses are relatively low, under 30% for many classes. With the marketization of education, students who can afford college will get face-to-face interaction and coaching, while those who cannot must turn to technology. Will this further exacerbate the growing educational and economic disparities in our society?

College was once considered a right for all Americans, but it is now regarded as a privilege. Instead of deciding that not everyone should get a college education, we should think about how we can improve college access and affordability. For example, by helping families better prepare to absorb the cost through Children’s Savings Account programs, changing the cost curve through increases in state education funding that lowers tuition and better financial aid options. We are approaching a tipping point with higher education, and perhaps we should seriously consider what type of society we want to be. I think college is still worth the cost, but perhaps not the current cost or the debt.

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Asset Building News Round Up: November 21, 2014

By Paul Day on 11/21/2014 @ 11:57 AM

Tags: News


Five years ago, Ohio passed the most robust payday lending regulation in the country in response to the revelation that there were more payday lenders in Ohio than the three most common fast-food chains combined. The legislation was supposed to protect consumers from predatory lenders charging outrageous fees for small loans that had to be repaid in two weeks or less. Everyone cheered, except the payday lenders. So why are more than 1,000 outlets are still charging 391% interest rates? Read more here.

The Maryland Department of Housing and Community Development is rolling out a $100 million mortgage initiative in collaboration with Prince George's County that will provide qualifying residents up to $20,000 toward a down payment and closing costs. The Maryland Mortgage Program TriplePlay Initiative aims to help some 500 families buy homes in targeted parts of the county — Capitol Heights, Upper Marlboro and Lanham among them — most deeply hit by foreclosures. Read more here.

A median-income household can only afford a median-priced home in 10 of the 25 largest U.S. metropolitan areas, according to a new report. That’s actually an improvement from last year, when the median-income household fell short in all but eight of the 25 metros. And it's not totally out of line with similar findings. Homebuilders, for example, also say home affordability is slipping. They report the national median home price increased from $214,000 in the second quarter to $221,000 in the third quarter, while average mortgage interest rates decreased from 4.44% to 4.35% in the same period. Read more here.

Saving for college is hard enough. You would think that state programs that sponsor so-called “529″ savings plans would make it easier — and cheaper — for you. Unfortunately, some of the plans are bad deals because they are layered up with fund management fees and commissions. Yet there are a handful of “direct-sold” 529 plans, that is, they don’t have a commission and charge low fees, that make the most amount of sense for college savers. Read more here.

U.S. Rep. Cathy McMorris Rodgers said that the House will vote in December on the ABLE Act, which would offer people with disabilities a new way to save. McMorris Rodgers, who is a co-sponsor of the bill, has a 7-year-old son with Down syndrome. With little time to spare, a vote will happen this year on a bill that would allow people with disabilities to save money without jeopardizing their benefits, a key member of Congress says. Read more here.

From the Assets & Opportunity Network

From The Community Loan Center of Texas: A network of nonprofit organizations are working together to jumpstart the program and raise loan capital from several sources including a CrowdFunding campaign on Indiegogo. Through grassroots efforts we hope to raise $20K through crowdfunding for our initial loan pool. These funds will help more than 150 employees borrow money at reasonable rates and save them over $500,000 in fees compared to the costs of payday or auto-title loans. We’ve now raised over $2,000 toward this goal from 40 individuals who think the Community Loan Center is an idea worth investing in. Read more here.

From Southern Bancorp Community Partners: As a Community Development Financial Institution (CDFI) seeking to provide affordable and accessible financial services to Arkansans and Mississippians, a recently released FDIC survey on unbanked and underbanked households in America caught our attention. The study breaks down the rates of unbanked and underbanked households by state as well as providing information on rates of savings account ownership and usage of prepaid debit cards and mobile financial services. Read more here.

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