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Transforming the Availability of Professional Financial Counseling in America

By Jonathan Mintz, President and CEO, Cities for Financial Empowerment Fund

Last week, city agency staff and nonprofit managers from across the country came together in Nashville, Tennessee to kick off the third year of the Financial Empowerment Center replication initiative. Financial Empowerment Centers provide one-on-one financial counseling as a free city service, helping local residents reduce debt, build assets and move towards financial stability.

The model was pioneered in 2008, under the Bloomberg administration in New York City, and then replicated in 2013 with support from Bloomberg Philanthropies to five cities (Denver, Lansing, Nashville, Philadelphia, and San Antonio).

The Financial Empowerment Center model began as a simple, yet ambitious idea: people in financial trouble need help, not just education. Financial counseling delivered by highly trained professionals could be successfully scaled into a measurable, high-quality public service. Through the Cities for Financial Empowerment (CFE) Fund’s replication initiative, each of the five initial cities demonstrated that this idea works, even across different geographic contexts and resident needs. The success of the model inspired new waves of city administrators to follow suit.

Over our three days in Nashville, I was struck again and again by the impact that Financial Empowerment Centers have had on cities and the residents those cities serve. The key takeaways:

1. Financial Empowerment Centers are building evidence that financial counseling can, and should, be effectively delivered by cities.

    • Across the five cities, 15,000 residents have participated in over 38,000 counseling sessions to date, increasing their savings by more than $1.6 million, while decreasing their debt by a staggering $12 million.
    • These counseling services are now being woven into multiple municipal social services including workforce development, housing counseling, domestic violence services, homeless prevention, prison reentry, and more. Through these integrations, cities have realized a “Supervitamin Effect,” where addressing underlying financial instability improves the outcomes of these social services.

2. Cities have committed resources to fund and sustain Financial Empowerment Centers as a result of the model’s demonstrated, significant impact. 

    • Funding from Bloomberg Philanthropies, coupled with technical assistance from the CFE Fund, provided the initial seed for local programs to launch and grow the model. Based on their impressive results and high resident demand, leaders in each replication city have committed to sustaining the program as a municipal service beyond the three year seed grant.
    • These cities already have secured millions of dollars in public investment, drawing from local, state, and federal funds to ensure continued access to free financial counseling as a city service.

3. Across the country, cities are increasingly recognizing the value of Financial Empowerment Centers. 

    • In January 2014, based on overwhelming interest in the Financial Empowerment Center model, the CFE Fund began providing implementation support to seven additional cities: Cleveland, Hartford, Hawai’i County, Hartford, Los Angeles, Miami, San Francisco and Seattle. Each of these cities is making important progress; Cleveland, Seattle, and San Francisco each have already launched their own FEC programs.
    • Demand for these services remains strong, and last week we announced another opportunity for a new cohort of local governments to receive support to launch and implement the model.

Bloomberg Philanthropies’ Financial Empowerment Center investment did more than spread a successful program – it changed expectations about what cities could accomplish to help residents reduce debt, build assets, shape their families’ futures and stabilize their communities.

Cities today are experiencing increasing demand for public services juxtaposed with increasing budget constraints. And our country is still recovering from a recession fueled in large part by collective individual financial insecurity. The growth of the Financial Empowerment Center model of public service couldn’t come at a better time.

Jonathan Mintz is the President and Chief Executive Officer of the Cities for Financial Empowerment Fund. He previously served as the Commissioner of the New York City Department of Consumer Affairs under Mayor Bloomberg. Cities interested in learning more about the Financial Empowerment Centers and the municipal financial empowerment movement can visit CFEfund.org.