“Community-development banks, credit unions, and other CDFIs – a mixture of faith-based and secular, for-profit and not-for-profit organizations – constitute what might be called the ‘ethical subprime lending’ industry. Even amid the worst housing crisis since the 1930s, many of these institutions sport healthy payback rates. They haven’t bankrupted their customers or their shareholders. Nor have they rushed to Washington begging for bailouts. Their numbers include tiny startups and veterans.” Daniel Gross.
In my November 5 post, I wrote about East River Development Alliance, a nonprofit nestled in the largest public housing development in the nation. ERDA is in Long Island City, just a subway stop from midtown Manhattan. ERDA transforms and improves NYC’s public housing neighborhoods by providing residents with the tools and opportunities necessary for self-sufficiency and economic mobility. Through a strategically determined mix of services based on a study conducted by Pratt Institute, ERDA helps residents prepare for and get jobs, get millions of dollars in tax returns, reduce their debt, save money, open bank accounts, and in many cases, buy homes (none of which experienced issues with foreclosure or predatory lending). ERDA also helps prepare students for college access.
Credit Where Credit is Due is another superb model. CWCID foresees a city where low-income individuals are informed participants in our economy, realize their potential, and achieve financial mobility and long-term, wealth creation dreams. They pursue their goal via a comprehensive financial services model: a community development credit union as the hub, with an intensive financial education program integrated into credit union operations and embedded within community organizations most effective at reaching the unbanked, their target market.
CWCID was launched in 1994 with support from Echoing Green, a social investor that has supported 450 social entrepreneurs with bold ideas for change in order to launch groundbreaking organizations around the world. Echoing Green was founded as a nonnprofit by General Atlantic, global growth investors, in 1987.
For businesses seeking to engage in high-impact philanthropy and service, you can leverage your dollars by supporting nonprofits that help people advance themselves, while also developing the economies and sustainability of our communities. And the most effective form of service for people with business acumen and networks is through participation on nonprofit boards, where you can help nonprofits expand their impact in improving lives and strengthening communities.