Millions of U.S. households struggle with large amounts of debt and a lack of information and resources to help them better their financial prospects. By delivering one-on-one financial counseling and making it a part of city services, the Financial Empowerment Center model offers cities a variety of effective strategies to help those most in need of critical financial planning support. Through a partnership with the Cities for Financial Empowerment Fund, Bloomberg Philanthropies is helping cities implement this innovative model.
THERE IS A GROWING DEMAND FOR CITIES TO INTRODUCE STRATEGIES THAT HELP LOW-INCOME RESIDENTS IMPROVE THEIR ECONOMIC OUTLOOK
According to recent statistics, 54 million American households collectively owe more than $800 billion in debt to credit card companies — and the average debt per consumer in the 20 largest US cities is between $24,000 and $27,000. Meanwhile, the services and support available to low-income residents are inconsistent at best and counterproductive at worst.
Bloomberg Philanthropies is spreading a proven model that helps low-income citizens reduce debt and build assets.
ENCOURAGING AND SPREADING FINANCIAL STABILITY AND SAVINGS
Piloted in New York City, Financial Empowerment Centers offer free, professional, one-on-one financial counseling. The Centers provide citizens with tools and information to take charge of their own financial situations and achieve financial stability. Launched in 2008, NYC’s Financial Empowerment Centers have helped tens of thousands of residents reduce their debt by tens of millions of dollars and build substantial savings.
Local governments implement social service programs that connect residents with schools, benefits, housing, and other resources. They are therefore uniquely positioned to integrate financial counseling into social service delivery systems. Financial instability is often the underlying backdrop for residents seeking social services.
Through a partnership with the Cities for Financial Empowerment Fund, Bloomberg Philanthropies is supporting the replication of this proven model in a dozen American cities.
In March 2013, thanks to cash grants made possible by Bloomberg Philanthropies, new Centers opened their doors in Denver, Lansing, Nashville, Philadelphia, and San Antonio. In their first year of operation, these Centers served more than 8,000 clients, helping them to reduce their debt by more than $5 million and increase their savings by nearly $1 million. As these cities demonstrate the Centers value locally, they are beginning to secure public funding to sustain the efforts after their grant funding ends.
In January 2014, responding to increased demand from around the country, in-kind technical assistance grants were awarded to seven additional cities – Cleveland, Hawaii County, Hartford, Los Angeles, Miami, San Francisco and Seattle. By the fall of 2014, Centers will be operating in each of these cities, dramatically expanding the reach of the innovative approach.
By investing in these 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.
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