Philadelphia Financial Empowerment Centers
Philadelphia's Financial Empowerment Centers provide one-on-one financial counseling to enhance the outcomes of other social services.
I am not an employee of BNY Mellon, or an immediate family member of a BNY Mellon employee
I am over 18 years of age
My organization is incorporated as a non-profit, for-profit, or hybrid organization, or I have a partner that is incorporated and could accept funds on my behalf
I have already piloted my initiative and have some initial evidence of impact
My organization is headquartered and creating impact in the United States
Where are you making a difference?
Philadelphia: Pennsylvania (19143, 19139, 19121, 19124, 19140)
March 11, 2013
Project Stage: Select the description below that best applies to your approach.
Scaling (expanding impact to many new places or in many new ways)
1.Founding Story: Share a story about the "Aha!" moment that led the founder(s) to get started or the story of how you saw the potential for this to succeed.
In 2013, the Community Action Agency in Philadelphia transformed from a direct service organization to an innovative funding organization committed to leveraging outside resources and partners to accomplish greater poverty reduction. The Office of Community Empowerment & Opportunity (CEO) was born. CEO coordinates several anti-poverty initiatives for the City of Philadelphia, and we believe that financial empowerment is a necessary part of this coordination. CEO administers the Financial Empowerment Centers (FECs) of Philadelphia. The FECs were created to help clients get more from workforce development, benefits access, and other anti-poverty initiatives by helping clients balance budgets, reduce debt, and increase savings.
2. The Problem: What problem are you helping to solve?
Philadelphia has the highest poverty rate (25.7%) of the 10 largest U.S. cities. The city's poverty rate is chronically high, and resources to combat this problem are insufficient to meet the demand using traditional anti-poverty methods. Traditional methods need innovative enhancements that do more to combat poverty. By introducing FEC services, communities flip from a legacy of inter-generational poverty to inter-generational wealth.
3. Your Solution: How are you planning to solve this problem? Share your specific approach.
The Financial Empowerment Centers (FECs) provide free one-on-one financial counseling to all Philadelphians. The FECs' clients are primarily referred by partners engaged in anti-poverty initiatives such as workforce development, benefits access, affordable housing, or consumer protection. The anti-poverty initiatives help clients to overcome the fundamental causes of poverty in their lives, and the FECs ensure that the help is made permanent. FEC counselors help clients to balance their budgets, reduce their debt, increase their savings, improve their credit, and access safe and affordable financial products. These outcomes empower clients to get the most benefit out of increased incomes, reduced expenses, housing security, or other benefits from anti-poverty services. By coupling financial empowerment with other anti-poverty services, communities have the chance to not just get the immediate help that they need, but to use the assistance of professional financial advice to begin to build wealth and escape the trap of inter-generational poverty. This innovative approach provides comprehensive service to ensure lasting results.
4. Example: Please walk us through a specific example of how your solution is working to solve the problem.
Our FECs are co-located with our local legal aid firm, Community Legal Services (CLS). Individuals come to CLS facing foreclosure, having been wrongfully denied benefits, or dealing with utility shut offs. After receiving help from the advocates at CLS, clients are then referred to the FECs to receive help with budgeting, debt reduction, savings, and financial inclusion. At times this effort by the FECs helps clients to avoid repeating the problems that caused them to visit CLS in the first place. Other times, the FECs help clients to achieve greater economic security through the help offered by CLS. FEC counselors help clients receiving mortgage modifications to balance their new budgets, plan for savings, and avoid future mortgage defaults. FEC counselors help clients seeking benefits to avoid high cost debt prior to benefits being awarded, and balance budgets after receiving benefits.
5a. Too many people in the U.S. have unmet needs for financial products and services. How is your work reaching a population(s) that is currently underserved? If it is not reaching an underserved population yet, how might it in the near future?
26.9% of individuals in our region are unbanked or underbanked. To combat this, we recently relaunched the Philadelphia Bank On Coalition, which works closely with our FECs and is a coalition of banks, City agencies, and non-profit agencies that works to reduce the number of unbanked and underbanked individuals. They will begin by advising on our 3-year project to address the financial inclusion needs of New Americans and returning citizens, and our project increasing bank access for youth.
5b. Please specify if the population you are reaching is underserved due to any of the following characteristics:
age - youth
other (please specify on question 5a)
6. Marketplace: Who else is addressing the same problem? How does the proposed project differ from these approaches?
The FECs are a replication project out of New York, and there are currently 4 other cities with a similar model. The difference in our approach is that our FECs are administered out of the same agency as our other anti-poverty programs. This innovative approach ensures that the FECs are fully integrated in other anti-poverty initiatives, ensuring that families seeking to improve their financial destinies are fully supported with the tools and a plan to do so. It isn't enough to provide financial empowerment services without fixing structural income and expense problems. Integration is key.
7. Impact: How has your project made a difference so far?
Since 2013 the FECs have served almost 12,000 clients across 26,500 sessions. Among FEC clients, 1,500 credit scores have improved by at least 35 points, 500 new safe and affordable bank accounts have been opened, savings have increased by $2.25 million, and debt has been reduced by over $15 million. These results have returned $8 to clients for every $1 spent to deliver and administer FEC services. These are the sort of results needed to help low-wealth Philadelphians permanently escape poverty. The key to our success is the delivery of professional financial counseling and coaching, and the integration of that counseling into other anti-poverty programs.
8a. Spread Strategies: Moving forward, what are the main strategies for scaling your impact?
Our sustainability and scaling strategies are inherently linked. Our FECs improve the outcomes of other service delivery and return $8 to the clients served for every $1 invested into the FECs. Scaling and sustainability are achieved by identifying partners whose clients will be best served by also receiving FEC services and working with those partners to identify funding to scale the FECs and ensure their ongoing ability to deliver services with a high ROI.
8b. If applicable, which of the following scaling strategies have you launched?
Large Scale Partnerships
9. Financial Sustainability Plan: What is this solution’s plan to ensure financial sustainability?
As stated above, our sustainability and scaling strategies are inherently linked. By consistently delivering services with a high ROI, our strategy is to position the FECs as a service that delivers more results for fewer resources and thus convincing partners to invest in them. This strategy has already been successful in gaining investment from and partnership with our state's housing finance agency.
10. Team: What is the current composition of your team (types of roles, qualifications, full-time vs. part-time, board members, etc.), and how do you plan to evolve the team’s composition as the project grows?
Our office, which administers the FECs, staffs a full-time program manager for financial empowerment as well as a program evaluation staff, a policy director, and an administrative staff that supports financial empowerment along with our other anti-poverty initiatives. The FECs are staffed by professional financial counselors and coaches from Clarifi, a local financial literacy non-profit. They are overseen by a counseling manager and other administrative staff at Clarifi.
Help Us Support Diversity! Part 1 - Which of the following categories do you identify with? (optional)
Self-identify race, ethnicity, or origin
If you replied "Self-identify race, ethnicity, or origin" in the question above, please specify. (optional)
We have 32 full-time employees, of whom 18 are black, 8 are white, 4 are Hispanic, and 2 are Asian.
Help Us Support Diversity! Part 2 - Do you identify as part of any of the following underrepresented communities? (optional)
If you replied "Other" in the question above, please specify. (optional)
79% of the clients served by our FECs are persons of color.
How did you hear about this challenge?
BNY Mellon page or contact