NEW YORK (2/8/12)--The Ford Foundation recently provided a series of investments and grants to expand the scale and capacity of several community development credit unions (CDCUs) and two CDCU support organizations. The support was given to recognize the critical role that CDCUs play in empowering low- and moderate-income communities nationwide, the foundation said.
The Ford Foundation made an indirect investment in Innovations for Poverty Action's U.S. Household Finance Initiative, which recently announced several subgrants to CDCUs, including: Freedom First FCU, Roanoke, Va.; Neighborhood Trust Financial Partners, the nonprofit affiliate of Neighborhood Trust FCU, New York; Rite Check Cashing, in partnership with Bethex FCU, New York; and the Montana Network for Community Development, a nonprofit intermediary, which supports Montana CDCUs.
The Ford Foundation also supported Self-Help FCU, Oakland, Calif., which received a direct $30 million investment to support its expansion throughout California (See News Now article Feb. 3--use the link).
The federation, which has been a Ford grantee for two decades, provides capital, technical and educational resources and advocacy, to a network of more than 240 CDCUs operating in low- and moderate-income communities across the U.S.
"Community development credit unions ... are critical because they focus on the financial service needs of low-income communities and the people who live there," said Frank DeGiovanni, Ford Foundation director of financial assets. "These institutions are rooted in the community and provide a set of well-designed and responsible financial services to help their members manage their financial lives."
A long-time supporter of economic development and asset-building through CDCUs, the Ford Foundation has a history of direct investment in community-based institutions, but also through a series of indirect investments with the National Federation of Community Development Credit Unions and other industry intermediaries.
"Ford's support of the federation has allowed us make literally hundreds of investments in CDCUs serving some of the hardest-hit communities across America," said federation president/CEO Cliff Rosenthal. "Their most recent investment in the federation, $2 million to support secondary capital investments in CDCUs, helped us bolster the net worth ratios of several CDCUs, and given the growing public interest to 'move your money' and the Bank Transfer Day phenomenon, these infusions of secondary capital are helping CDCUs grow more rapidly and serve more people in need."
The Ford Foundation's investments in the federation have supported several programs and products, most notably secondary capital investments to strengthen CDCUs and help them grow more rapidly; responsible lending products such as the recently launched "Borrow & Save" short-term small-dollar loan with a built-in savings component; Emerging Markets Reviews to help credit unions analyze their current offerings to low- and moderate-income communities and identify opportunities for greater penetration; research and documentation on the impact of CDCUs and the Community Development Financial Institution industry through funded studies and reports.