(February 7, 2012 – New York, NY) Recognizing the critical role that community development credit unions (CDCUs) play in empowering low- and moderate-income communities across the nation, the Ford Foundation recently provided a series of investments and grants to expand the scale and capacity of several CDCUs and two CDCU support organizations.
The organizations supported by the Ford Foundation include Self-Help Federal Credit Union (Oakland, CA), which received a direct $30 million investment to support their expansion throughout California; and indirectly through an investment in Innovations for Poverty Action’s US Household Finance Initiative, who recently announced several subgrants to CDCUs, including Freedom First Federal Credit Union (Roanoke, VA); Neighborhood Trust Financial Partners, the nonprofit affiliate of Neighborhood Trust Federal Credit Union (New York, NY); Rite Check Cashing, in partnership with Bethex Federal Credit Union (New York, NY) and the Montana Network for Community Development, a nonprofit intermediary, which supports Montana CDCUs.
A long-time proponent of economic development and asset-building through CDCUs, the Ford Foundation has a history of direct investment in these responsible community-based institutions, but also through a series of indirect investments with the National Federation of Community Development Credit Unions (Federation) and other industry intermediaries. The Federation, which has been a Ford grantee for two decades, provides extensive capital, technical and educational resources and advocacy, to a network of more than 240 CDCUs operating in low- and moderate-income communities across the United States.
The Ford Foundation’s investments in the Federation have supported a range of programs and products, most notably secondary capital investments to strengthen CDCUs and help them grow more rapidly; responsible lending products such as the recently launched “Borrow & Save” short-term small-dollar loan with a built-in savings component; Emerging Markets Reviews to help credit unions analyze their current offerings to low- and moderate-income communities and identify opportunities for greater penetration; research and documentation on the impact of CDCUs and the CDFI industry through a variety of funded studies and reports
“Community development credit unions... are critical because they focus on the financial service needs of low-income communities and the people who live there,” said Frank DeGiovanni, Director of Financial Assets at the Ford Foundation. “These institutions are rooted in the community and provide a set of well-designed and responsible financial services to help their members manage their financial lives,” he added.
“Ford’s support of the Federation has allowed us make literally hundreds of investments in CDCUs serving some of the hardest-hit communities across America,” explained Federation President/CEO Cliff Rosenthal. “Their most recent investment in the Federation, $2 million to support secondary capital investments in CDCUs, helped us bolster the net worth ratios of several CDCUs, and given the growing public interest to ‘move your money’ and the Bank Transfer Day phenomenon, these infusions of secondary capital are helping CDCUs grow more rapidly and serve more people in need,” Rosenthal added.
To learn more about the Ford Foundation’s efforts to improve access to innovative financial products and services for low-income people, go to: http://www.fordfoundation.org/issues/economic-fairness/improving-access-to-financial-services.
The following video, featuring the work of Self-Help Federal Credit Union in California is available on the Ford Foundation website and can also be directly accessed at: http://vimeo.com/32172924.
About the Ford Foundation: The Ford Foundation is an independent, nonprofit grant-making organization. For 75 years it has worked with courageous people on the frontlines of social change worldwide, guided by its mission to strengthen democratic values, reduce poverty and injustice, promote international cooperation, and advance human achievement. With headquarters in New York, the foundation has offices in Latin America, Africa, the Middle East and Asia. For more information about the Ford Foundation, go to: http://www.fordfoundation.org.
© 2012 National Federation of Community Development Credit Unions.