Bloomberg Philanthropies and Living Cities’ Cities for Financial Empowerment (CFE) Fund today announced Financial Empowerment Center grants to five cities to replicate New York City’s evidence-based Financial Empowerment Center model. The model provides free, one-on-one financial counseling by trained professionals to low-income residents both at new local Financial Empowerment Centers and by integrating counseling into the delivery of municipal services.
The Financial Empowerment Center initiative is the latest investment from Bloomberg Philanthropies’ Mayors Project, the government innovation program which seeks to spread proven and promising ideas among cities. Through a $16.2 million investment in Living Cities' CFE Fund, Bloomberg Philanthropies will provide grants to Denver, CO; Lansing, MI; Nashville, TN; Philadelphia, PA; and San Antonio, TX, and enable extensive technical assistance to help each city replicate and customize the model. Centers will be open for service in March of 2013 and expect to serve more than 30,000 people over three years. By investing in these five cities, Bloomberg Philanthropies seeks to further demonstrate the effectiveness of the model, making a powerful case for even more cities around the country to begin taking up this important work.
“The innovative financial empowerment initiatives we pioneered here in New York City have been an important part of our work to help New Yorkers weather the national economic downturn," said philanthropist and New York City Mayor Michael R. Bloomberg. “The Mayors Project at Bloomberg Philanthropies spreads effective solutions to challenges that many cities face, and we know that mayors are increasingly seeking strategies that will help their residents achieve long-term financial stability. We are excited to bring this model to five cities and hope this innovative, data-tested program spreads to even more cities nationwide.”
In 2008, Mayor Bloomberg announced that the City of New York would pilot Financial Empowerment Centers as part of a broad effort to test and refine new approaches to alleviating poverty. While initially privately funded, the Centers became publicly funded after their data-proven impact. Since the pilot commenced, the program has grown to nearly 30 Centers, helping more than 19,000 New Yorkers reduce their debt by more than $9 million and save nearly $1 million. Financial counselors help their clients reduce debt and build savings in tangible and measurable ways, including: erasing erroneous debts and correcting credit histories; advocating with creditors directly to lower old fees and penalties; negotiating with creditors for more favorable payment plans, total debts owed, and ongoing interest rates; identifying new sources of income such as unclaimed benefits like the childcare tax credit, the earned income tax credit, and others; and creating budgets and payment plans that facilitate realistic savings plans.
Denver, Lansing, Nashville, Philadelphia, and San Antonio were selected to receive Financial Empowerment Center grants through a competitive process in which nearly fifty cities applied. These cities exhibited the most thoughtful, creative approach, as well as committed leadership and strong partnerships for replicating the model in their local contexts:
“Financial Empowerment Centers are a nationally recognized model of success with a proven track-record in New York, providing better, faster, and less costly outcomes,” said Living Cities President Ben Hecht. “Living Cities’ CFE Fund is focused on changing the way municipal governments are thinking about social service delivery, particularly in this time of decreased resources. We are thrilled to partner with Bloomberg Philanthropies to bring these solutions to more cities and their residents in need.”
According to a 2011 survey from the Federal Deposit Insurance Corporation, more than one in four U.S. households are either unbanked or under-banked, and almost 30 percent of households do not have a savings account. This presents an ongoing challenge to save and build wealth, especially since those who lack access to credit or have bad credit may be prevented from getting a job and can fall deeper into poverty without savings when an emergency strikes. Local data from Denver, Lansing, Nashville, Philadelphia, and San Antonio suggests that high percentages of residents live below the federal poverty line and have a critical need to improve their financial condition. The Financial Empowerment Centers provide a safe haven and preemptive solution to such consumer protection challenges.
To learn more about the Living Cities’ CFE Fund grants, visit www.cfefund.org. Join the conversation on Twitter using #FinancialEmpowerment.
About Bloomberg Philanthropies
Bloomberg Philanthropies works primarily to advance five areas globally: the Arts, Education, the Environment, Government Innovation, and Public Health. In 2011, $330 million was distributed. Government Innovation efforts, including the Financial Empowerment Centers, are part of the Mayors Project, which seeks to spread proven and promising ideas among cities. Other Mayors Project investments include Cities of Service, Innovation Delivery Teams, and the Mayors Challenge.
About Living Cities
Founded in 1991, Living Cities is an innovative collaborative of 22 of the world’s largest foundations and financial institutions. In nearly 20 years Living Cities' members have collectively invested almost $1 billion, helping shape federal funding programs, redirecting public and private resources, and helping communities to build homes, stores, schools, community facilities and more. For more information, please visit: http://www.livingcities.org/.
About The CFE Fund
Living Cities’ CFE Fund supports municipal efforts to improve the financial stability of households by leveraging opportunities unique to local government. By translating cutting edge experience with large scale programs, research, and policy in cities of all sizes, the CFE Fund assists mayors and other local leaders to identify, develop, fund, implement, and research pilots and programs that help families build assets and make the most of their financial resources. For more information, please visit http://www.cfefund.org/ or email us at email@example.com.