The Financial Capability Innovation Fund, managed by the Center for Financial Services Innovation with lead funding from the Citi Foundation, supports new strategies for building the financial capability of low- to moderate-income and underserved consumers throughout the U.S. The Fund provides financial and technical assistance to five innovative nonprofits to develop cutting-edge solutions that increase the financial stability of low- to moderate-income consumers in three ways: leveraging technology, applying behavioral economics concepts and more closely linking education to access to financial products provided by nonprofit partners. The Fund will locate and communicate "best practices" to improve financial outcomes for low- to moderate-income consumers.
The Citi Foundation is supporting the development of a universally accepted outcome measurement tool for social welfare practitioners and policy makers to better identify effective interventions for achieving financial capability. Toynbee Hall and Britain's National Centre for Social Research aim to assess clients' financial health and well-being across three dimensions: 1) participation in the financial sector, including level of access to and use of financial services; 2) degree of household financial stability or hardship; and 3) financial capability, including the ability to develop financial goals and plans and actively manage personal finances effectively. The multi-year project will be guided by a steering group with representatives from the Consumer Financial Education Body, the National Centre for Social Research, The National Audit Office, HM Treasury and leading universities and financial inclusion community organizations.
The Citi Foundation helps build the capacity of major organizations to implement a suite of financial education programs reaching low- to moderate-income families at scale. The China Center for Financial Research at Tsinghua University's Financial Education Hub ("Hub") improves the understanding of financial behavior among Chinese consumers, and promotes consumer and institutional financial education, nationally. In addition to conducting survey research, Citi support will enable the Hub to work directly with thousands of families to improve their financial management skills and track behavior changes over time. Through symposia, academic journals, white papers, and newspaper articles, the Hub will also disseminate its research findings and make recommendations to the People's Bank of China and the China Banking Regulatory Commission to contribute to the development of a national financial education strategy, fostering a better financial environment for low- to moderate-income families.
The Citi Foundation has partnered with Grameen Foundation since 1999 and has supported various initiatives that have catalyzed the organization's capacity to become one of the world's leading microfinance networks. A recent investment from the Citi Foundation is providing funding for Grameen's Human Capital Center of Excellence. This center is designed to inform the microfinance industry as it addresses critical problems facing long-term organizational sustainability stemming from human capital management (HCM) issues.
Since 2008, Grameen has focused on developing best practices and innovations in HCM and will launch a human capital pilot with 5-10 local MFIs in India to prove the concept of strategic HCM practices as a lever for organizational growth and to inform a global strategy that will be executed in the next three years. A set of robust human capital practices will be developed and shared throughout the microfinance sector.
This year, the Citi Foundation will begin helping to design and underwrite a comprehensive analysis of the microfinance sector's use of financial education--not only as a tool for empowering clients to make better financial decisions, but to help them become more powerful drivers of business. Our partners, Monitor Group and Partners for Sustainable Development, are researching and interviewing more than 80 leading financial service providers, educators, thought leaders, and policy-makers, in addition to undertaking field-based research in multiple countries, to determine what works and what does not in product-linked financial education. As part of this research, we will convene a select group of stakeholders to help inform a white paper that will be released in the public domain on the value of, and path forward for, financial education and capability. The project has benefitted from technical input and guidance provided by Citi Microfinance and by linking researchers to a range of Citi Foundation grantees and funding partners.
Established over 30 years ago, Women's World Banking's (WWB) microfinance network of 40 Microfinance Institution (MFI) members represents over 24 million low-income clients in 28 countries. It is the recognized leader in promoting the role of women in microfinance and understanding how financial inclusion impacts the lives of low-income women and families. Through its Developing Best Practice in Financial Capability and Product Innovation Program, funded by the Citi Foundation, WWB will launch an innovative learning program to test different approaches to combining women-focused microfinance products with financial education among their network of MFI members. This will not only bring in more clients to WWB, but will assist them in effectively using asset building products. This program will help WWB and the Citi Foundation to make the business case to the microfinance sector for including financial asset building to acquire and retain MFI customers and enhance consumer financial empowerment outcomes.
The Citi Foundation is a founding member and funder of the Aspen Network of Development Entrepreneurs (ANDE). ANDE was formed through a collaboration of leading companies to support and build the infrastructure necessary to attract investment capital while providing valuable capacity development services to small businesses. To date, ANDE has more than 140 members operating in 130 developing countries and has provided services including investment manager training, impact evaluation design, and capacity development funding.
The Citi Foundation has supported Root Capital's activities since 2004. Root Capital's mission is to grow rural prosperity by investing in agricultural businesses that help build sustainable livelihoods in Africa and Latin America. Since its launch in 1999, Root Capital has provided financial training and more than $320 million in credit to 350 small and growing businesses in 30 countries - with a 99% repayment rate. By working with small and growing businesses in Africa and Latin America such as coffee farmer cooperatives and artisan associations, Root Capital seeks to fill the underserved gap between micro-credit and commercial financial institutions by lending to businesses that are too big for microfinance, but unable to secure credit from conventional commercial banks.
The Citi Foundation has partnered with Fund Aid for Community Sustainable Development (FSD) in Russia to build on the momentum and support for "triple-bottom line" businesses that promote financial, social and environmental returns. Since 1997, FSD has had a successful track record of fostering a dialogue in Russia about the economic growth opportunities of "green" small enterprises. The organization recognizes that with a fundamental change in the Russian economy resulting in substantial income disparities between rich and poor, coupled with the significant deterioration in environmental quality and degradation of natural resources across the country in recent years, low-income people have fewer employment choices and must rely on self-employment. Accordingly, FSD provides a range of enterprise development training on topics such as business planning and accessing finance.
The Promoting Sustainable Development Program will support 2,000 aspiring entrepreneurs through a publication of a Code of Best Business Practices that will be distributed to leading figures in Russian government, business and civil society. To support this work, FSD will host six roundtables in six cities and invite 200 leading Russian officials to participate in a dialogue that will generate awareness and support for "green" small enterprises.
The Citi Foundation, UNCF (United Negro College Fund), KIPP (Knowledge is Power Program) and CFED (Corporation for Enterprise Development) collaborated to develop the Partnership for College Completion (PCC), a path-breaking initiative to link savings, financial education, scholarships, and academic counseling to increase college attendance and graduation rates and help bring families into the financial mainstream. According to research, when children have a savings account in their name, they are seven times more likely to attend college and make it all the way to graduation than similar youth who do not have an account.1 The Citi Foundation's "More than Philanthropy" approach is helping the PCC increase college graduation rates with both funds and Citi volunteers who will provide financial education and mentoring to the students, parents and KIPP school leaders. In addition, Citi Microfinance has designed a savings product and platform that simplifies the savings process and brings the bank directly to the school and the students and families. The PCC expects to serve over 50,000 students a year across the country by 2020.
Funded by the Citi Foundation, Financial Aid U is a national effort to provide low- to moderate-income students and their families with the information and assistance they need to access the financial aid resources to help them pay for college. Led by the Center for Economic Progress and its National Community Tax Coalition, Financial Aid U helps families to complete their tax returns and the Free Application for Federal Student Aid (FAFSA). In 2010, Financial Aid U served 1,200 students and secured $10.7 million in federal assistance and an additional $4.3 million in low-interest student loans to help them make postsecondary education more affordable. The success of the program has led to replication of the model in ten communities nationally and is providing valuable data to support public policies and procedures that simplify the entire financial aid process.
College Summit is launching a research and U.S. public policy and awareness campaign entitled Launch Pad High Schools designed to dramatically increase the number of young people entering and succeeding in college. This initiative will develop and publish a research report entitled Be the First, consisting of successful strategies for increasing the college-going rates of first-generation and low- to moderate-income students. Using the research, College Summit will organize coalitions at the state and federal level to educate the community about the barriers to postsecondary education and work to address them. In addition, College Summit will launch a leadership program for a select group of College Summit alumni, to be known as Citi Alumni Advocates, who will publicly share the personal experiences that led to their college success. The Citi Foundation's funding will enable College Summit to leverage their track record of engagement in this work and help shape public education policies that will turn thousands of high schools into launch pads for college.
The Citi Foundation has partnered with Junior Achievement Worldwide (JA)—a partnership between the business community, educators and volunteers—for more than three decades to build young people's entrepreneurial skills through real-world business experience. In 2010 and 2011, we are investing in JA to build its capacity to hone young Africans' entrepreneurial skills through business experience. Specifically, the Citi Foundation's support is being directed toward the redesign of JA's Company Program, assisting JA in brokering relationships with microfinance organizations that will enable young people to go beyond just developing skills and actually accessing the resources needed to create a livelihood. Over the next five years, the modified program will be offered to 1.5 million marginalized in-school and out-of-school youth, providing them with training, skills and access to opportunities to get jobs or start their own businesses. With additional support from Citi volunteers, JA will also create and strengthen partnerships with organizations serving at risk young people across the continent.
In Brazil, the poor quality of the public school system combined with a lack of access to professional opportunities makes it exceedingly difficult for low-income young people to find work opportunities. Founded in 2004, with major support from the Citi Foundation, Instituto Profissionalizante Paulista (IPP) is a pre-employment center that combines basic academic and professional training with hands-on experience for low-income secondary school students living in Sao Paulo. The program prepares low-income youth for the job market and increases access to career opportunities, enabling them to generate income and become productive members of the community. This model aligns closely with the Brazilian government's policy to reduce unemployment by helping young people build skills to obtain their first job.
The Citi Foundation began supporting the American India Foundation's (AIF) Market Aligned Skills Training Program (MAST) in 2011. The program seeks to provide unemployed low-income youth, predominately from urban slum communities in India, with the training and support needed to access service-sector jobs. AIF has built strong partnerships with government, the private sector, and civil society and in collaboration with these institutions, developed MAST in 2008, which has, to-date, provided over 65,000 low-income youth with the knowledge and skills needed to enter the formal economy and secure gainful employment. It is estimated that 90% of India's youth will drop out of school before completing their secondary education. The majority of these young people will be limited to low paying job opportunities in the informal sector. At the same time, India's rapidly growing economy has resulted in an increased demand for skilled workers. However, the country's capacity to meet this demand lies at less than 30%. The MAST program seeks to address this gap by training unemployed youth for jobs in high growth service sector industries. Importantly, before a new program area is implemented, AIF conducts thorough market research into that community to determine the employment need and recruits and trains the target group to acquire the skills needed to fill those employment opportunities.
In 2011 and 2012, the Citi Foundation will support the Housing Partnership Network (HPN) in cultivating replicable and scalable neighborhood stabilization strategies with the potential to shape more effective and efficient public policies and private sector financing. To advance these models, HPN and the Citi Foundation will offer a $2 million competitive grant program to HPN's national network of leading housing nonprofits to design and test scalable models for foreclosure prevention and, when prevention is not possible, for acquiring, rehabilitating and returning vacant foreclosed properties, or properties on the verge of foreclosure, back to productive use.
In an effort to rapidly address the catastrophic distress brought on by the continuing downward spiral in housing values and the volume of vacant and abandoned properties in low- to moderate-income communities, many nonprofit housing developers focused on getting funds into projects quickly, with little time to strategically pair funding with private-sector capital and property transfer systems. The National Community Stabilization Trust (NCST) was created by six leading nonprofit community development organizations to facilitate the transfer of foreclosed and abandoned properties throughout the U.S. to state and local governments and nonprofit community development organizations. It serves as a unique bridge between financial institutions, government agencies and nonprofit housing developers. Four years after inception, NCST works with housing providers representing 250 communities in 44 states and over 25 of the nation's largest financial institutions. The Citi Foundation is working with NCST to forge innovative public-private partnerships at the national level that can significantly increase investment in activities that stabilize severely distressed neighborhoods in local communities across the U.S. to reverse neighborhood decline.
One of the largest and most successful CDFIs in the U.S., the Low Income Investment Fund (LIIF) is on the cutting edge of community development finance, developing creative capital solutions to critical community development challenges. In 2010, the Citi Foundation supported LIIF in its development of new financing mechanisms for transit oriented development (TOD) projects. These projects will lead to environmentally and financially sustainable communities by building housing and retail centers around public transportation infrastructure. Interest and investment in TOD has soared over the last five years as communities seek environmentally sensitive community development and urban planning models that provide residents with greater access to affordable housing, public transportation, local services and employment opportunities while reducing traffic congestion. The Center for Housing Policy finds that for every dollar a family saves on housing, that family spends an additional 77 cents on transportation costs. LIIF recognized early the urgency of integrating housing for low- to moderate-income families into TOD projects and engaging CDFIs in these financing structures. LIIF is now leading a collaborative of CDFIs in the Bay Area that has launched a $50 million Transit Oriented Development Fund to finance and develop critical housing near transit hubs in the Bay Area.