Rebuilding Financial Wellness of Communities in Philadelphia: Opportunities and Challenges of Nonprofit Organizations

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Public Domain
November 9, 2017

Philadelphia has the worst poverty rate of the 10 largest U.S. cities. In 2016, the city's overall poverty rate was 26%. Its deep poverty rate of 12.3% was about double the nation's rate. More than 400,000 Philadelphians live below the federal poverty line, 37% of whom are children. What's worse, Philadelphia has a significant portion of chronic high poverty neighborhoods. Merely 5% of people born in poor neighborhoods come out of poverty (Romero, 2016). Poor neighborhoods tend to stay poor.

It is imperative to find effective solutions to build wealth in communities of Philadelphia. As an influential nonprofit player, Urban Affairs Coalition (UAC) has strived to build healthier financial situations for Philadelphia communities since its formation in 1969. Working for Community Economic Development (CED) in UAC, I gained a closer view of how a grassroots-led nonprofit strives to bring capital to communities by building bridges between low- and moderate-income areas and mainstream financial institutions.

The organization focuses on opportunities that matter most to low-income households, working families, and minority-owned businesses. In its foreclosure prevention program, UAC publishes foreclosure constituent brochures annually. The brochures are delivered to offices of city councils, legal aid braches, and community centers. As such, banks are no longer the only source of relevant financial information for households facing foreclosure risks. UAC also provides direct services and workshops to thousands of families and individuals. Through the operation of community-based Financial Advancement Network (FAN) workshops, UAC invites financial experts to talk with low-income households. Over a six-week workshop series, the FAN workshop covers topics including Financial Responsibility & Decision Making, Investing & Retirement Planning, Wills & Estate Planning, and Risk Management & Insurance. It provides financial education and peer support to empower individuals who rarely have access to similar opportunities in other places. Throughout the process, UAC trains the banking experts and club hosts to better utilize their financial expertise to impact the communities they live in.

These financial advancement programs serve a crucial role in bridging the gap between governments and grassroots-level, low-income communities as a fiscal sponsor. They also provide the platform for the low-income households to understand financial issues that are essential for their daily work and lives. In 2015, 88 financial education workshops were organized for 600+ participants. UAC’s network of 55+ partner organizations and programs served more than 150,000 children, youth, and adults.   

Like most nonprofit organizations, UAC has been challenged by government grant shrinking problems in recent years. The coalition’s revenue has decreased significantly over 4 years as a result of decreased government grants and despite an increase of revenues from program services. Correspondingly, the coalition had to cut back its expenses, such as investment costs. Despite ongoing efforts to achieve balance in the budget, the UAC continues to face a dynamic situation as government grant opportunities still continue to decrease, possibly requiring even further cuts to expenses. If the organization must continue cutting expenses, lack of resources may hinder the long-term implementation process of the program.                                       

The UAC has made tangible improvements to the financial wellness of communities in Philadelphia, and financial issues for the organization could have ripple effects across the city. With the wide range of nonprofits suffering from financial pressures, there is a role for the government in improving public funding systems and increasing incentives for private sectors to sponsoring such nonprofit programs. Meanwhile, nonprofits need to find new ways to diversify their financial portfolios and improve their financial management. More effective operating and financial systems are key for nonprofits to cope with relevant risks in the long term.

Fels Institute of Government

The Fels Institute of Government
3814 Walnut St. 
Philadelphia, PA 19104

(215) 898-7326

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