Community Development

Breaking the Generational Curse of Incarceration

While the topic of incarceration and reentry is most often focused on the individual who is serving time or being released, the impact of incarceration is not limited to the individual. Over half of the 2.3 million inmates in the United States are parents of children under age 18. For the one in 28 children in the United States with a parent behind bars, this incarcerated person is a mother or father.

A recently published report by the Annie E. Casey Foundation outlines the social, economic, and emotional impacts on children with incarcerated parents and suggests several evidence-based investments and interventions to address these overwhelmingly adverse effects. For example, stigma and shame are often invisible but nonetheless significant burdens these children carry, especially younger children. To help them understand and face these emotional burdens, Sesame Street recently added a new character named Alex whose father is incarcerated.

Regardless of how we feel about incarceration as a method of punishment for crime, it is important to calculate the compound effect it has on future generations and the broader community. There are many neighborhoods where more money is spent incarcerating young people than on preschool, public education, and economic development to create jobs and opportunities. A spatial data visualization report written by Columbia University shows the concentration of criminal justice investment of a million dollars for single blocks in some U.S. cities.

Reentry is a community development opportunity. According to the Annie E. Casey Foundation report, “The high-poverty neighborhoods that are home to many kids and families dealing with incarceration lack quality affordable housing, access to jobs, good schools and key resources.” The lack of investment in these core factors for economic and social success results in neighborhoods that are structurally impaired by the intergenerational disadvantage of incarceration and poverty.

The good news is every sector–public, private and philanthropic–can support the successful reintegration of formerly incarcerated persons. It goes beyond the critical investments and financial support of the programs and organizations working directly with this population.

On a personal level, anyone can challenge his or her own negative perception of someone with a criminal record and be reminded that many people deserve a second chance. In so doing, we as a society can prevent future generational losses represented as poverty, economic stagnation and social isolation and instead reap the positive dividends of economic mobility and cultural richness that define America.

What can we do?

Reentry Solutions: People, Programs and Policy will provide a forum to learn more about the work being done and what remains for effectively reintegrating men and women back into communities and families. In addition to the more traditional interventions such as housing, workforce development and health, attendees will learn about efforts to dampen the negative consequences on children, create resilient community conditions that support reentry, and, most importantly, be inspired by firsthand testimony of men and women who are working to break the generational curse of incarceration. Join us to be part of the solution!

Investing to Reduce Economic and Racial Disparities

“…Physical and economic health are inextricably linked. Prosperity is like a Jenga tower: Take one piece out and the whole thing can fall. And since well-being is the sum of a host of intertwined factors, finding a path to economic mobility and success means addressing them all.”

John Williams, President of the Federal Reserve Bank of San Francisco, in “The Health of Nations” delivered February 10, 2016.

Since the publication of Investing in What Works for America’s Communities, where leaders serving low-income communities voiced a clear call to work across sectors, the SF Fed and the community development field as a whole have embraced this idea that addressing the intertwined challenges that contribute to poverty requires an equally comprehensive approach. John Williams, President of the Federal Reserve Bank of San Francisco, affirmed this idea by stating that economic mobility and well-being requires working together across multiple disciplines in his recent speech to community development practitioners and investors at the National Interagency Community Reinvestment Conference. Risa Lavizzo-Mourey, President of the Robert Wood Johnson Foundation, followed President Williams and told the audience that bankers are some of the most important health workers in the country. To address the disparities of health, where life expectancies can be as large as 25 years depending on where one lives, bankers can more intentionally invest in the social determinants of health through opportunities such as affordable housing closer to public transit, day-care centers, and access to fresh foods, to name just a few examples.

SPARCC - Strong, Prosperous, and Resilient Communities Challenge.

Rooted in this theme of bettering lives through improvements in all contributing factors, the Strong Prosperous and Resilient Communities Challenge (SPARCC) is a response to accelerate how cities can work together to tackle health, environmental, and racial disparities to improve economic opportunities for all people. With billions being invested annually by banks and other financial institutions in low-income communities through the Community Reinvestment Act (CRA), ensuring that these investments make differential impact is even more critical as income inequality grows. With the $90 million from SPARCC that will be available for the winning sites, the SF Fed, in partnership with Enterprise Community Partners, the Low Income Investment Fund, and the Natural Resources Defense Council, aspire to support new models of how cities and regions can work to understand the underlying causes of economic and racial disparities and empower people and leaders to invest in more effective ways. 

With generous support from the Ford, Kresge, and Robert Wood Johnson Foundations, SPARCC will work with the ten invited regions—Atlanta, Chicago, Denver, the San Francisco Bay Area, Los Angeles, Memphis, New Orleans, Philadelphia, Pittsburgh, and Seattle/King County—through the end of the year to ultimately select six winning sites. SPARCC supports the Federal Reserve’s mission of strengthening the economy by ensuring that all communities can reach their economic potential.

For the latest SPARCC announcements, please visit

Americans have a new way to start saving: Introducing myRA

The millions of Americans without access to a retirement savings plan through work now have an easy way to start saving. The U.S. Department of the Treasury’s myRA (my Retirement Account) gives people a simple, safe, affordable path to retirement by breaking down common barriers to saving.

7 ways myRA benefits users

  1. myRAis a Roth IRA which offers certain tax advantages1
  2. It costs nothing to open an account, and there are no fees
  3. Users contribute an amount of choice ($2, $20, $200 – whatever fits the budget!)1
  4. myRAcarries no risk of losing money
  5. There are no minimum balance requirements
  6. The account safely earns interest2
  7. Users can withdraw the money they put in without tax and penalty2

Once a myRA user has accumulated some savings, they can transfer or roll over their myRA to a private-sector Roth IRA – at any time – to continue the savings journey. Accounts can be funded directly from paychecks, checking or savings accounts, or federal tax refunds.

Visit the myRA website to learn more, including stories of how businesses are already sharing the program with employees. For service providers, businesses, and tax professionals that want to share this program with their networks, Treasury also offers toolkits to help spread the word.

The value of saving

The American economy is only as reliant as the American household. Examine the systemic causes of financial insecurity and learn about emerging solutions in What It’s Worth: Strengthening the Financial Future of Families, Communities and the Nation, a new book published by the SF Fed and CFED.

What if saving could start with the first paycheck? Explore findings from the first quasi-experimental design study of a youth financial capability initiative seamlessly integrated into a youth workforce development program. The program, MyPath Savings, supports low-income working youth to bank, save, and build their financial confidence through a comprehensive model that includes financial education, goal-setting, and non-custodial accounts.

Financial insecurity affects every facet of life. In the SF Fed’s 2015 annual report, What We’ve Learned…and why it matters, SF Fed Community Development’s David Erickson and Laura Choi sit down with President John Williams to discuss the fragility of American household finances and how to get more families on the road to economic opportunity.

1. Annual and lifetime contribution limits and annual earned income limits apply, as do conditions for tax-free withdrawal of earnings. Limits may be adjusted annually for cost-of-living increases. To learn about key features of a Roth IRA and for other requirements and details, go to

2. Withdraw interest earned without tax and penalty five years after your first contribution if you are over age 59 1/2 or meet certain other conditions, such as using the funds for the purchase of your first home. *Accounts earn interest at the same rate as investments in the Government Securities Fund, which earned 2.04 percent in 2015 and had an average annual return of 2.94 percent over the ten-year period ending December 2015.

Boosting the Power of Youth Paychecks: Integrating Financial Capability into Youth Workforce Programs

Laura Choi
Senior Research Associate, Community Development, Federal Reserve Bank of San Francisco

“At my school, they talk a lot about the future, but nobody ever talks about how we’re supposed to pay for it.” These insightful words came a local teen in San Francisco who recently participated in MyPath, a youth financial capability initiative aimed at low-income youth earning their first paychecks.

Financial capability experts have long discussed the importance of the “teachable moment,” and for this young person, along with the 20.3 million young people who worked this past summer, that moment came in the form of receiving a paycheck. For many lower-income youth, these first paychecks represent an important opportunity to get youth into the financial mainstream, avoid costly predatory financial services, and establish positive financial behaviors and attitudes. The SF Fed, in partnership with MyPath and Eastern Washington University, recently hosted a convening and released a working paper that presents the results of the first quasi-experimental design study of a youth financial capability initiative seamlessly integrated into a youth workforce development program.

MyPath Savings supports low-income working youth to bank, save, and build their financial confidence through a comprehensive model that includes financial education, goal-setting, and non-custodial accounts. MyPath provided technical assistance and training to prepare nonprofit youth employment programs to implement MyPath Savings, as well as to the financial institution partner, Self-Help Federal Credit Union, to ensure the accounts youth received were aligned with MyPath’s Youth Banking Standards.

The study included 375 low-income young people ages 16-21 years old participating in youth workforce and employment programs operated by ten nonprofits in partnership with San Francisco’s Department of Children, Youth and their Families. Participants were assigned to one of two treatment groups, or a comparison group, and received a range of interventions:

Comparison Group:
  • 1 hour workshop on fringe financial products
Standard MyPath:
  • 1 hour in-person workshop
  • Supported enrollment into two accounts
  • Direct deposit
  • Support setting a personal savings goal
  • Three online, interactive financial education modules
MyPath Plus Coaches:
  • 1 hour in-person workshop
  • Supported enrollment into two accounts
  • Direct deposit
  • Support setting a personal savings goal
  • Three online, interactive financial education modules
  • 2 hours of Peer-led Group Coaching

Both Standard MyPath and MyPath Plus Coaches participants experienced increases in youth banking and saving outcomes and significantly improved confidence in their ability to carry out basic financial tasks compared to the comparison group, with no statistically significant differences between the two treatment groups in those areas. Both models prove equally effective in producing youth financial capability outcomes, including:

  • 97 percent of youth participants enrolled into safe youth-friendly accounts.
  • 100 percent set a personal savings goal, using a MyPath Savings contract.
  • 96 percent met their savings goal.
  • Youth in treatment groups were three to five times more likely than those in the comparison group to have increased confidence to carry out basic financial behaviors, including saving, budgeting and smart spending.
  • Youth saved on average 34 percent of their income, for an average of $329 each, amounting to a total of $66,500 in savings across all participants.

Four Key Lessons:

  1. Both models increase youth financial capability, including banking, saving, and money management outcomes. Adding peer led group coaching workshops boosts financial knowledge gains, and is best suited for longer programs or those with more capacity to provide additional financial capability programming.
  2. Blending in-person and online education provides an effective mix of scalability and impact. Technology can help scale programs, while the in-person activities cement learning and action.
  3. Young people bank and save when given the opportunity, but need youth friendly accounts in order to do so. The high take-up and account enrollment rates reflect the strength of using the MyPath Youth Banking Standards with partner financial institutions to reduce youth barriers and maximize enrollment.
  4. Youth workforce staff and settings differ from classroom settings and require different curricula. MyPath Savings’ action-based curriculum is tailored for youth workforce and employment staff and settings: It is shorter and designed to give youth earning their first paychecks a positive experience banking and saving for the first time.

To learn more about the MyPath initiative and details on the research study, read Boosting the Power of Youth Paychecks: Integrating Financial Capability into Youth Workforce Programs.

Link Social Mission with Private Enterprise to Develop Better Affordable Homes

Kristin Siglin
Vice President of Policy, Housing Partnership Network

Would housing policy in the United States benefit from a greater emphasis on institutions that combine deep social mission with strong business acumen? A recent Housing Partnership Network (HPN) paper explores the benefits of such an approach, drawing on lessons learned through the International Housing Partnership (IHP), a collaborative of more than 175 nonprofits from Australia, Canada, the U.K., and the U.S. that collectively operate one million affordable homes. Since the collaborative’s founding in 2003, IHP knowledge exchanges have refined our thinking about innovative models that have the potential to better leverage private sector resources to deliver affordable housing. In our paper, we investigate models of this kind in the U.S. and the U.K., and observe that the British and American affordable housing systems both rely on hybrid public-private, social enterprise–based partnerships that work well in both countries, but in different ways.

For instance, in the U.K. the relatively significant scale and capacity of nonprofit housing associations stems in large part from the Large Scale Voluntary Transfer policy, which over the past 30 years has transferred subsidized housing to new management entities enabled to access private capital in order to make needed repairs. British housing associations have been able to improve the national housing stock and serve more people due to these efficiencies of scale.

The U.S. system also includes elements of public-private partnership. The primary capital source for affordable housing development in the U.S. is the Low Income Housing Tax Credit (LIHTC), which raises private capital from investors who receive credits against their tax liability for project-based investments in affordable housing.

While both systems have served as key affordable housing tools in their respective countries for decades, the particularly innovative impact of Large Scale Voluntary Transfers on the U.K.’s affordable housing stock reveals opportunities for the U.S. to build on its system’s current successes to deliver affordable homes more efficiently. IHP discussions and investigations of both models in our paper suggest five key policy changes drawing on the example of the U.K.’s Large Scale Voluntary Transfers that could enhance the capacity of mission-oriented U.S. housing providers to further leveraging public-private partnerships to develop affordable homes:

  1. Expand the Capital Magnet Fund.
    The Capital Magnet Fund competitively awards grants to nonprofit lenders and qualified nonprofit housing organizations, with a mandatory minimum 10:1 leverage ratio. The Fund has proven to be a uniquely effective tool for leveraging public funds to attract private investments for housing in low-income communities.
  2. Prioritize preservation.
    As resources for affordable housing development shrink, it is critical to preserve the existing stock of safe, decent affordable housing and ensure that it is managed efficiently for the long term. It can be more cost-effective to rehabilitate aging U.S. Department of Housing and Urban Development (HUD) program-assisted properties under new nonprofit management. 
  3. Use a portfolio model for multifamily housing preservation.
    HPN recommends a shift toward portfolio finance for aging HUD-assisted and LIHTC properties. Policies should enable mission-oriented housing providers to acquire and preserve multiple affordable housing properties more cost-effectively by packaging several properties into one financial transaction.
  4. Make housing a platform for improving communities and building assets for residents.
    High-performing housing nonprofits can also link affordable housing development to broader programs of community and individual improvement because of their scale. Social enterprises can advance opportunity for low-income people because they combine excellence in housing development with an extensive network of relationships with social service providers.Holistic community development is easier for organizations with resources and reach. 
  5. Improve access to affordable homeownership.
    Social enterprises also can efficiently deliver homeownership as well as rental housing. Proven approaches to affordable homeownership—including nonprofit acquisition and rehabilitation and rent-to-own programs—have been shown to be effective in both the U.S. and the U.K. and should be expanded.

Combining the nonprofit mission with private business discipline can generate more affordable housing and lead to more effective management of such properties for the long term. Innovations like these are particularly important now because three quarters of Americans who are income-eligible for housing assistance currently do not receive it, often because there are not enough stable, affordable, and livable units available to meet the housing needs of low-income Americans. The success of the U.K.’s Large Scale Voluntary Transfers reveals that more effectively leveraging private funds to develop, preserve, and operate affordable homes can help to speed up the process and increase and improve the stock available to those who need it. Through our work in the International Housing Partnership, we will continue to identify and highlight similar models that have proven effective in improving and expanding the stock of affordable homes in their countries of origin and could hold promise for future stable housing in neighborhoods around the world. 

Kristin Siglin is Vice President of Policy at the Housing Partnership Network, a business collaborative of the nation’s leading housing and community development nonprofits and a top-rated community development financial institution (CDFI).

How Hospitals Can Help Heal Communities

Ted Howard
President of The Democracy Collaborative

Tyler Norris
Vice President for Total Health Partnerships at Kaiser Permanente

Cincinnati Children’s is one of the best pediatric hospitals in the country—in a city where the infant mortality rate is double the national average, with an infant dying once every three days. 

The Johns Hopkins medical center is an internationally renowned research institution—but in Baltimore’s poorest neighborhoods, life expectancies are on a par with those in failing countries like Yemen. 

 Cleveland is home to the world-class Cleveland Clinic—but the average male resident of the nearby and largely African-American inner city neighborhood of Hough can expect to live, on average, 24 years less than a man in the largely white suburb of Lyndhurst, eight miles due east. 

The list goes on and on—many of America’s finest multi-billion-dollar healthcare institutions make their home in communities beset by poor health outcomes and racial and economic disparities.

Nonprofit hospitals and health systems can no longer accept such disparities as facts of life. Clinical treatment and research, while vitally important, are simply insufficient to ensure the health of the communities they serve—because poverty is the single largest contributing factor to poor health outcomes. That means a hospital that takes its health mission seriously needs to understand its responsibility to leverage its economic activity for community benefit whenever possible in partnership with others in its community.

As part of a $3 trillion sector that commands 18% of the US Gross Domestic Product (GDP), hospitals and health systems have annual expenditures of $780 billion and an estimated $500 billion in their collective investment portfolios. With such financial clout, these institutions can be a powerful force for revitalizing and rebuilding the economies of America’s hardest hit communities: even shifting a relatively small percentage of their purchasing and investments could have an impressive impact.

Encouragingly, such a shift seems to be underway, with leading US health systems developing strategies for more inclusive local hiring, more intentional systems of local procurement, and more targeted use of their investment capital to drive transformative local economic development. (In the fall of 2016, the Democracy Collaborative, with the support of the Robert Wood Johnson Foundation, will be releasing a series of toolkits designed to highlight the emerging best practices in each of these key areas.)

The not-for-profit integrated health care system, Kaiser Permanente, is redirecting its enormous procurement dollars to support sustainable local agriculture, address the health impacts of climate change through massive renewable energy projects, and purchase more than $1.5 billion annually from minority- and women-owned firms. It is calling this approach “total health,” working in partnership to begin to utilize all of its assets to maximize the physical, mental and social well-being of the members and communities it serves.

In Detroit, Henry Ford Health System is working to localize its supply chain, recognizing the tremendous impact it can have on bringing vitality back to Detroit. In Cleveland, University Hospitals has launched “Step Up to UH,” a targeted employment pipeline strategy connecting residents of low-income neighborhoods to good jobs. San Francisco-based Dignity Health, the nation’s fifth largest health system, has established a $100 million low-interest loan fund to develop affordable housing, provide job training, and build wealth in underserved neighborhoods.

These and other hospitals and health systems are “going local” not only because it is simply the right thing to do, but also because it makes the most sense for their mission and their bottom line. By going “upstream” to tackle the underlying social determinants of health in poor communities, hospitals and health systems can produce increased, measurably beneficial impacts on population and community health. Over time, this can reduce preventable demand on the health care sector, lowering costs and making care more affordable.

Recent and forthcoming policy changes amplify the case for hospitals to rethink how they spend, hire, and invest.  In Maryland, a closely watched “all-payer” system of Medicare reimbursement replaces the fee-for-service model with one in which hospitals receive a pre-agreed share of available funds—meaning that moving the needle on economic inequality translates, through a reduction in patients, to a more stable bottom line. Nationally, under the Affordable Care Act (ACA), non-profit hospitals are now required as a condition of retaining their tax-exempt status to assess the health needs of their communities—and detail their plans for addressing those needs.

For their own sake, and the sake of the communities they serve, hospitals need to move beyond narrow notions of corporate social responsibility and toward a future where the targeted use of their economic activity has the power to transform lives and neighborhoods. With such a shift beginning across the country, there’s reason to believe that hospitals will be able to help heal America’s communities.

Ted Howard is the President of The Democracy Collaborative and Tyler Norris is the Vice President for Total Health Partnerships at Kaiser Permanente. Howard and Norris authored the new paper “Can Hospitals Heal America’s Communities?”

Supporting Cross-Sector Teams through Designing Effective Learning Communities

Beth Siegel
President, Mt. Auburn Associates

Over the past decade, national foundations and the federal government have designed many multisite initiatives that seek to address complex social problems. These initiatives have spanned many fields, from criminal justice to early childhood education to community development and health. In addition to providing sites with funding and technical assistance, a number of these initiatives have included some type of cross-site convening within the design, often referred to as “learning communities.” Evidence suggests that, when addressing complex problems, the common learning mechanisms in a field, such as traditional conferences, are not effective. Learning communities provide an opportunity to learn and network but with a more deliberate focus on knowledge exchange, team building, and innovation.

While there is extensive literature concerning organizational learning that is relevant to the design of multisite learning communities, including research on “communities of practice,” there is limited literature on best practices in the design of learning communities where multiple stakeholders involved in place-based initiatives are brought together. To fill this gap in the field, the Robert Wood Johnson Foundation asked Mt. Auburn Associates to research how learning communities have been designed, the challenges that have been faced when implementing this work, and what have been some of the best practices in terms of building team cohesion, strengthening the capacity of the stakeholders involved in the work, and sparking new and creative thinking.

With limited literature on the subject, we turned to the experts who have designed learning communities. These interviews revealed many common elements in the design of the learning communities as well as best practices to address implementation challenges.

Interviews found diversity in terms of the goals of the work; some learning communities emphasize peer learning, while others emphasize building strong cross-sector teams. Regardless of the emphasis, however, there was consensus among the interviewees that the goals of the work must be clear and that elements of the design, such as whom to invite and how to structure convenings, must be aligned with those goals. For example, if building cross-sector teams is a goal of the work, having an individual in the role of “team” leader or “champion” and developing both customized support and set responsibilities for this person is important. To achieve this goal, it is also critical that there is some consistency in the team over time. If cross-team peer learning is one of the goals, designers must make sure there is enough commonality across the teams convened that they are able to learn from each other.

Aligning Goals and Design

Goal Who Attends Design Elements
Building Cross-Sector 
Teams Assigned team leader

Consistent core team
Sufficient team time during convenings

Focus on action project at home

Community Coach

Sufficient focus on “how”

Communities of Practice for leads

Cross-Team Learning Sufficient commonalities across teams in terms of role & level of authority

Each community has a peer

Working on similar problems, systems, or results
Sufficient informal time – receptions, etc.

Site Visits

Sufficient focus on strategies

Sub-groups based on common interests

Effective networking platforms
Catalyzing Innovation Diversity in terms of perspectives and roles

Working on similar problems, systems, or results

Open and trusting environment

Use of design labs/innovation labs

Specialized physical environment
Field Building Working on similar problems, systems, or results Use of documentarian

Staffing for policy and best practices reports

Communication and knowledge dissemination strategy

One commonality across all types of learning communities is creating a format and “culture” that encourages honesty and supports risk taking. This helps to create a safe place and level of comfort both within and across teams. Methods for building this safe place include having enough informal time, including receptions and networking time during the meetings, to support personal and professional interactions; encouraging honest feedback and exploring the learning in failure; including work sessions on having honest or difficult conversations as part of the convening; and utilizing design thinking and innovation labs that encourage risk taking and experimentation.

Another area of wide agreement across many of those involved in designing learning communities is the need to balance team time, peer exchanges, and external experts. In particular, while many learning communities include outside experts who make a presentation or an “inspirational” speech, most interviewees felt strongly that this practice should be minimized and that expertise should emerge from within the group. While the initial meetings may devote more time to outside experts or faculty, as the work evolves, much of the convening should be devoted to team time and cross-team sharing.

While the convenings are important platforms to learning, building a learning community can involve other activities that strengthen cross-site relationships and promote knowledge exchange. For example, site visits, learning circles focusing on specific issues or strategies that are of interest to subgroups, and other real-time platforms such as conference calls, video conferencing, and webinars, can all contribute to the outcomes. Similarly, experts agreed that assigning a coach to each community involved and/or to the team leads, providing small grants for experimentation, and providing rapid TA during learning communities and at home are best practices that add significant value to the overall work.

As collective impact and other forms of cross-sector collaboration become the norm to address a wide range of community challenges, learning communities provide a critical opportunity for the stakeholders in these collaboratives to meet away from home, to focus their attention on “how” to work together more effectively to make a difference in their communities, and to learn from their peers who are working on similar challenges. As this platform becomes a more important component of the work, it is critical that those sponsoring learning communities are more deliberate about learning from best practices and ensuring that the time spent provides significant value to those attending.

Read Best Practices in the Design and Implementation of Learning Communities for more details about the findings from the literature review and interviews.

Beth Siegel is the president of Mt. Auburn Associates. Over the past decade, she has led the evaluation of a number of multisite initiatives that have involved the use of learning communities. She has particular expertise in the design and evaluation of complex system change initiatives.

The Color of Wealth in Los Angeles

With the demographic shifts already underway in California and across the nation, recognizing and understanding wealth disparities is a step toward building financial stability and net worth among all communities, including communities of color.

On March 10, over 150 stakeholders gathered at the San Francisco Fed’s LA branch to mark the official release of “The Color of Wealth in Los Angeles,” a joint publication of Duke University, The New School, the University of California Los Angeles, and the Insight Center for Community Economic Development. Building on the “The Color of Wealth in Boston” released by the Boston Fed last year, this new report provides detailed data on assets and debts among subpopulations in the Los Angeles metro area according to race, ethnicity, and country of origin. The study includes data on liquid assets, small business ownership, homeownership, retirement assets, as well as various forms of debt such as credit cards, student loans, medical debt, and mortgage and vehicle debt. What emerges is a stark picture of racial wealth inequality in Los Angeles.

Utilizing the National Scorecard for Communities of Color (NASCC) survey, the report features estimates for U.S.-born blacks, blacks who are recent immigrants from Africa (African blacks), Mexicans, other Latinos (inclusive of Puerto Ricans, Cubans, Salvadorans, other South Americans, other Central Americans, and Europeans), Asian Indians, Chinese, Filipinos, Japanese, Koreans, and Vietnamese. Table 1 shows median family income among survey respondents, ranging from $40,000 among other Latinos to $115,000 among African blacks (note that African blacks have a median income more than twice that of U.S. blacks, revealing major differences within the same race category).

Table 1. Los Angeles Metropolitan Statistical Area Sample Characteristics

n= % Bachelor’s Degree or Higher Median Family Income
White 56 56.9 95,000
U.S. Black 45 44.0 53,500
African Black 23 58.9 115,000
Mexican 100 17.8 50,000
Other Latino 31 45.7 40,000
Chinese 75 68.4 70,000
Japanese 68 68.6 75,000
Korean 77 57.1 60,000
Vietnamese 124 36.5 50,000
Filipino 42 76.7 80,000
Asian Indian 41 79.2 100,000

Source: NASCC survey, authors’ calculations

As significant as these income disparities are, they pale in comparison to the wealth differentials across racial groups in Los Angeles. Table 2 reveals that white households in the LA NASCC survey have a median net worth of $355,000, while Mexicans and U.S. blacks have a median net worth of $3,500 and $4,000, respectively (roughly one percent of the wealth of white households). Japanese, Asian Indian, and Chinese households had higher median wealth that whites, while all other racial and ethnic groups had much lower median net worth than white households. The community development field tends to focus on income as a primary metric, but there’s a growing recognition that net worth (assets minus debts) is a better indicator of financial well-being. Even more critical is the ability to transfer wealth from generation to generation, creating greater security for the future.

Table 2. Comparison of White and Nonwhite Household Median Net Worth

Median Net Worth Nonwhite household percentage of white household median net worth
White 355,000 100.0
U.S. Black 4,000 1.1**
African Black 72,000 20.3
Mexican 3,500 1.0**
Other Latino 42,500 12.0*
Chinese 408,200 115.0
Japanese 592,000 166.8
Korean 23,400 6.6**
Vietnamese 61,500 17.3*
Filipino 243,000 68.5
Asian Indian 460,000 129.6

Source: NASCC survey, authors’ calculations

Note: The difference in the percentage of nonwhites as compared with the percentage of white households is statistically significant at the ***99%, **95%, *90% level.

Perhaps one of the most intriguing aspects of the NASCC data in Los Angeles is the detailed disaggregated data on Asian American households, a rarity in many national datasets. Dramatic wealth differentials across Asian American households (with median net worth ranging from $23,000 among Koreans to $460,000 among Asian Indians) reflect the significant variation that often gets masked under the single race grouping.

Stay tuned as we revisit The Color of Wealth in Los Angeles in an upcoming blog post and dig deeper into the data on Asian Americans.

Economic Opportunity + a National Culture of Health: Did You Miss a Game-changer?

Originally published by the Build Healthy Places Network on February 17, 2016

Douglas Jutte, MD, MPH and Colby Dailey, MPP
Directors, Build Healthy Places Network

If you missed the speeches by Williams and Lavizzo-Mourey that closed out the National Interagency Community Reinvestment Conference (NICRC) in Los Angeles, you missed a game changer.

Really?  Yes.

John C. Williams, President and CEO of the Federal Reserve Bank of San Francisco, talked about health.

Risa Lavizzo-Mourey, President and CEO of the Robert Wood Johnson Foundation (RWJF), talked about finance (and walked us through a New Markets Tax Credit deal in Philly!).

In a unique role reversal, a leading macro economist and banker, whose jurisdiction includes one-fifth of our country’s population, and the physician-CEO of our largest domestic health foundation nailed it: you can’t expect to succeed if you separate poverty, economic prosperity and health. This, in front of a full room of 1200 bankers. In the words of Lavizzo-Mourey, talk does nothing, “investment makes changes.”

All across America, financiers, community development, philanthropy, public health and health systems are choosing to make progress together. It was not always this way.

Less than six years ago there was a landmark meeting at the Federal Reserve Board of Governors in Washington DC, co-sponsored by RWJF. A leadership audience — half from the Fed’s constituency and half from RWJF’s world — were introduced to each other. Like a high school prom, they clustered with their own, but left intrigued: at this low-point for American prosperity, was there a better way forward? The painful Great Recession had highlighted that America’s economic stability rests on the shoulders of its people, and America needed every resource, every new strategy and every opportunity to complete a turnaround. It all begins with everyone having a pathway to opportunity. And with nearly one-in-five people living in low-income neighborhoods where those pathways were scarce, the bad times triggered a call for fundamental change. Exposure to each other’s work and the potential for collaboration has led leaders across sectors to evolve rapidly.

For community development and health, the message is clear: stable families support a stable economy, which supports our nation’s stability, prosperity and health. Or, as Williams put it, “physical and economic health are inextricably linked. Prosperity is like a Jenga tower: take out one piece and the whole thing can fall.”

Six ways economic opportunity and the Culture of Health are moving forward together

Here is what we are seeing now:

  1. Initial curiosity has progressed to enthusiasm and to real innovation; as Lavizzo-Mourey said, “we are standing on the threshold of a new era.”

    The Low Income Investment Fund (LIIF) jumped ahead of the pack, creating a Social Impact Calculator to help community developers demonstrate the monetary value of social returns as well as financial ROI.

    Stewards for Affordable Housing for the Future (SAHF) also took an early stand and developed a set of outcome measures to track not just medical needs of their residents but also important social determinants of health like community engagement and child educational success.
  2. In communities, partnerships are demonstrating how to improve economic opportunity, opportunity for better health and better lives.

    Purpose Built’s Villages of East Lake in Atlanta developed a vibrant, new, mixed-income community where there had been a public housing project. One outcome: where previously 5% of low-income children were reading at grade level, now 98% do, surpassing children from the wealthiest suburbs—an example of how a strong community can begin to break the cycle of poverty.
  3. There are increasingly more funders interested in cross-sector projects, more CDFIs as well as new players including Federal programs like Medicaid, health systems like Kaiser Permanente, anchor institutions like hospitals, and more.

    The Children’s Hospital of Philadelphia (CHOP), the city government, and a cluster of other investors have pieced together $42.5 million to build the Community Health & Literacy Center, bringing together better access to health care, a new library and a beautiful recreational center, all in a neighborhood where the poverty rate is 24 percent.

    Meanwhile, in New York, Medicaid allocated $47 million for supportive housing units for high-cost Medicaid recipients. (Read more here)
  4. Philanthropy is engaging in new ways to support cross-sector initiatives.

    At the NICRC plenary, Lavizzo-Mourey announced a new $30 million program funded by RWJF and other national foundations, in collaboration with LIIF, Enterprise Community Partners, the National Resources Defense Council and the Federal Reserve Bank of San Francisco, to transform the social determinants of health in up to 10 metropolitan regions.

    And, the Healthy Futures Fund, a joint effort of the Kresge Foundation, Local Initiatives Support Corporation (LISC) and Morgan Stanley bank, provided financial support to So Others Might Eat (SOME), a faith-based community organization focused on poverty, for the $90 million Conway Center in Washington, D.C. Sited in a high-poverty neighborhood, it will include more than 200 affordable apartments, a health center, job-training center, shops, offices and green space – all across from a Metro station.
  5. Increasingly, the market is valuing health.

    It takes investment to create real change, and capital is flowing. If we add it all up, the examples noted here plus many others, we’re talking about more than a billion dollars in current investments that address social determinants of health.
  6. With the ACA requiring nonprofit hospitals to conduct a community health needs assessment, and the CRA requiring banks to conduct a community needs assessment, there is an opportunity for new alignment at the local level.

    By working together to assess a community’s needs, both investors in economic growth and the payers who foot the bill for poor health can craft a more holistic and promising pathway forward. A brief by St. Luke’s Health Initiative in Arizona outlines concrete, discrete ways community developers can be part of the needs assessment process.

Where we are headed; are you going with us?

For too long our country has tried to fix intractable problems in isolation: an economic fix or a health improvement fix or an educational fix or a jobs fix. We’re now seeing the Jenga tower. As Williams said, “we have a broad definition of health that encompasses jobs, education and safety.” And from Lavizzo-Mourey’s perspective, “health is the bedrock of personal fulfillment, the backbone of prosperity and the core of a strong competitive nation.” We applaud Williams and Lavizzo-Mourey for standing together across sectors, linking America’s problems and opportunities, and, in the words of Lavizzo-Mourey, embracing new allies.

At the Build Healthy Places Network, we represent cross-sector perspectives, expertise and advocacy. We are energized by the rapid, exciting changes we see – and share. As a “connector” among leaders, practitioners, investors and policymakers, across sectors, we strive to advance progress by synthesizing research, identifying best practices, encouraging measurement and providing capacity-building tools and resources.

Williams and Lavizzo-Mourey epitomized leadership at the conference, but we are also seeing leadership and best practices explode in neighborhoods around the country.

Challenges we all face

We commend everyone—across finance, community development, health and health care—who has taken the plunge, working in tandem to improve opportunities in our poorest neighborhoods.

Our challenge now is to spread and sustain cross-sector, systemic changes in policies, financing, and long-held practices that compartmentalize problems and solutions. So what do we need to do to keep the momentum?

  • Ensure that enthusiasm does not outpace strategies that will work;
  • Grow the evidence showing that cross-sector projects, programs and policies produce success—economically for our nation and personally for our families—and that we can achieve both;
  • Open even more channels between sectors and keep them open—share the challenges, share new approaches, share what works.

That’s where the Network comes in.  We hope that you will share with us what you have learned and what you see coming down the pike. Send us examples of success, and your ideas for effective cross sector collaboration.

A new era

In Investing in What Works for America’s Communities, published by the Federal Reserve Bank of San Francisco and LIIF in 2012, Lavizzo-Mourey wrote:

“I envision a time in the near future when our fields and the people who work in them…will be working side by side in communities, in states, and nationally, with common aims, combining our best assets and skills to improve the lives of all Americans.”

Last week we heard it loud and clear–the dawn of that future is here! We’re excited to usher it in.

Community Development Crowdfunding: The Need for Better Data

Rodrigo Davies
MIT Center for Civic Media

Amanda Sheldon Roberts
Federal Reserve Board of Governors

In the past half-decade, crowdfunding has emerged as a popular way to raise money online for a wide range of projects, from films and video games to technology and clothing. It has grown both due to its success as a fundraising mechanism and its ability to build demand and engagement among audiences.

Social causes also have the potential to benefit from crowdfunding. The community development field in particular might be uniquely positioned to benefit because crowdfunding has the potential to create fresh pathways to community-led development and to bring an infusion of new capital into an industry that has seen repeated cuts in government funding in recent years. In addition to being a fundraising mechanism, community development crowdfunding can serve as a way for members of a community to express their preferences, and the intensity of these preferences, as measured by dollars donated to a project. 

Despite these possibilities, the idea of using crowdfunding for community development remains largely unexplored and the field is small and scattered. In our recently published working paper Understanding the Crowd, Following the Community: The Need for Better Data in Community Development Crowdfunding, we argue that the lack of reliable and comprehensive data is a key limit on the field’s expansion. Why focus on data? Without it, there is no way to know who is contributing to crowdfunding projects or what their motivations are. There is also no way to conduct large-scale analysis of community development crowdfunding activity and outcomes, which discourages the involvement of established impact-driven organizations. Better data can help the field in a few keys ways: it can provide transparency and help enhance the credibility of crowdfunding; it can inform user expectations and decisions by donors and campaign organizers; and it can allow researchers to measure the impact of community development crowdfunding. 

Our paper thus makes the case that in order for community development crowdfunding to reach its potential scale, and to involve the full range of potential stakeholders, better standards of data reporting and collection need to be established. Our paper proposes a draft crowdfunding data model to enable community development professionals and the crowdfunding industry to more thoroughly analyze the field, begin to measure the impact of crowdfunding and better understand its potential future pathways. We offer these ideas not as prescriptions, but rather as stimuli for further debate among crowdfunding platforms, community development professionals, and other stakeholders.

Download the working paper (pdf, 368.13 kb)