‘Meeting Halfway’ Builds Partnerships between Community Organizations and Banks
A client receives financial services at the offices of Insituto del Progreso Latino.
When residents of low-income neighborhoods are not connected to the financial mainstream, entire communities suffer.
Without access to mainstream financial products and services, many families find themselves reliant on expensive check cashing services and predatory financial institutions. Banks, in turn, struggle to engage with residents whose lack of resources and financial know-how prevent them from maintaining stable accounts.
Locally, this issue is especially pronounced.
According to Family Assets Count, 16 percent of Chicagoans are unbanked and 25 percent are underbanked, meaning many have neither a checking nor savings account. Compared to their peers in more stable financial situations, individuals in these households are less able to build wealth through investments, prepare for emergencies and pass on good financial habits to their children.
While these problems are deeply entrenched in many communities, a new initiative developed by Emerging Markets Development Corporation and recently spearheaded in Englewood, Logan Square and Pilsen provides reason for hope.
Known as Meeting Halfway, the program emphasizes the establishment of strategic partnerships between community organizations and local banks as a means of building trust and providing tangible benefits to both sides of the arrangement.
“Banks don’t always do a great job of reaching out to people in low-income communities, and community organizations don’t always do a great job of connecting residents with financial institutions that stand to benefit them,” said Caroline Rendon, Assistant Program Officer for Financial Opportunities at LISC Chicago. “If we can help show banks there’s a good business case for working in these neighborhoods while also showing people that their financial wellbeing is better served by mainstream banks than marginal financial institutions, entire neighborhoods will be better off.”
For community organizations, the Meeting Halfway program generates new ideas and initiatives to address the economic marginalization that undergirds many neighborhood problems. For banks, the initiative offers new insight into the financial needs of underserved families and a chance to tailor their products according to these findings.
In strategizing how to enlist community groups with the capacity to develop these partnerships, Emerging Markets Development Corporation turned to LISC Chicago and its network of Financial Opportunity Centers. Located in 12 neighborhoods throughout the city, these centers offer bundled financial, employment and income supports services to low- and moderate-income individuals and families.
“Our Financial Opportunity Centers are really well positioned to convene local partners because they have experience coaching low- and moderate-income clients on how to manage their money and build wealth,” Rendon said. “In many cases, their staff already have connections with local banks and are able to make those connections directly.”
Ultimately, three Centers were selected through an application process to take part: Metropolitan Family Services’ Financial Opportunity Center at Kennedy-King College in Englewood, the Center for Changing Lives in Logan Square and Instituto del Progreso Latino (IDPL) in Pilsen. These institutions were responsible for reaching out to local banks and engaging them in their respective planning processes.
Kimberly Jones, branch manager and assistant vice president of U.S. Bank, came on board early to help Englewood organizers plan a successful process. Having made her career in community banking, she said she was drawn to the project by a desire to help young people understand the role financial institutions play in ensuring a neighborhood’s wellbeing.
“I think we all bought into the idea that we’re here to help, and for me, if that means opening up the bank for a meeting at the end of the business day or opening up our community room on the weekend, I’m happy to do it,” she said. “We all kind of realized it was time to roll up our sleeves and dig in.”
She also welcomed the participation of other local banks, saying Chicago is a large enough market to sustain a wide range of financial institutions.
“I’m excited about the potential to revitalize the community and connect with young people through Metropolitan Family Services,” she said. “Bank involvement is critical to a process like this because we can help people secure the resources they need to really get to that next level in life.”
For their part, Englewood representatives focused on increasing financial literacy for residents between the ages of 18 and 25. Their FOC staff brought years of experience working with Englewood’s young adults and an intimate knowledge of the importance of removing barriers to financial stability.
Similarly, Pilsen representatives are working with small business owners to increase their financial knowledge. Many small businesses in Pilsen are run by individuals using their own capital. IDPL saw a need to provide these business owners with contextualized financial education and capacity, and are better able to do so thanks to the partnerships built with banks and credit unions through Meeting Halfway.
And in Logan Square, organizers focused their energy on increasing their capacity to provide financial education to families with preschool-aged children and early childhood educators. In doing so, they hope to empower low-income families to remain rooted in the neighborhood in spite of ongoing demographic and economic shifts. Starting with this group of preschool parents and educators, the organizers also created a financial advisory council that will work with a neighborhood bank in the coming months to develop family-centered financial products.
“I was surprised at how many young people didn’t have checking accounts, and how they didn’t know how it was so important to have a safe place to hold their money,” said Shunnetta Brown, AmeriCorps Digital Literacy Instructor and a Meeting Halfway attendee. “Young people can be held accountable to be more responsible for the money they make. It will help them in the long run when they get older.”
In each neighborhood, organizers created space for the development of strategies through a series of planning sessions. These gatherings were facilitated by Skill Scout — a Chicago-based company focused on workforce development and removing barriers to employment. In addition to the Financial Opportunity Centers and banks, these meetings were attended by neighborhoods residents and representatives of various public and private institutions.
In an early session in Englewood, Christine Brown of Metropolitan Family Services said she hoped to rebuild trust between community members and banks in the wake of the 2008 recession and the subsequent housing crisis that devastated her neighborhood.
“In the past 10 years, people have lost trust in banks due to foreclosures, the stock market and a number of other factors,” she said. “We want young people to take control of their finances right out the gate so worrying about money doesn’t control their lives.”
Planning processes in Pilsen and Logan Square dealt with similar themes of distrust between the two sides. By bringing people together in a collaborative space, organizers established relationships between residents, community organizations and banks that will serve as the foundation for future partnerships.
The planning sessions now behind them, the groups are hard at work putting their newly articulated visions into action. Projects currently in development include the establishment of financial workshops aimed at youth and co-facilitated by Metropolitan Family Services’ financial coach and bank staff from Marquette Bank, U.S. Bank and Guaranty Bank in Englewood; the organization of financial training and an advisory group for early childhood educators in Logan Square and the development of financial education designed specifically for small business owners in Pilsen.
Moving forward, the groups will continue cultivating relationships, conceptualizing programs and developing educational materials to further bridge the gap between residents and responsible banking institutions.
“This process really got people thinking about how to build these relationships in a new way,” Rendon said. “They helped each other realize that with the right resources and energy, they can really transform their neighborhoods.”
For more information, contact Caroline Rendon, Assistant Program Officer for Financial Opportunities, at 312-422-9560 or CTRendon@lisc.org.
Posted in Financial Opportunities