Like many around the country, earlier this month Opportunity Fund nervously awaited the federal budget decision (which funds our government through September). On one hand, we hoped for a bipartisan agreement to keep the government running. On the other, we feared that critical federal programs, upon which Opportunity Fund and our clients rely, might be cut. When the final agreement was concluded, we were left with an important (although temporary) win as well as a big loss.
As we wrote earlier this month, the President’s proposed budget essentially eliminated the Community Development Financial Institution (CDFI) Fund within the Treasury Department – a key source of equity capital which supports our small business lending. Along with our supporters and peers, Opportunity Fund worked hard to make the case for the impact of the CDFI Fund to California Congressional representatives – through phone calls, letters, meetings, blogs, tweets, press coverage and more. We are pleased to report that strong bipartisan support for the CDFI Fund continues: the program was fully funded through the end of this (fiscal) year. In fact, the CDFI Fund received a $15 Million increase in its budget. THANK YOU to all of you who weighed in to save this program! We have already begun advocating for this funding to continue into the next fiscal year – something that is far from certain in this tumultuous political climate. Please stay tuned for future ways to support the CDFI Fund. We cannot rest. We must continue to advocate! While this is a temporary victory, it is an important one for low and moderate-income business owners, undercapitalized neighborhoods, and the jobs small businesses create. [UPDATE! See below.]
It is with a heavy heart that we also share the news that the Assets for Independence (AFI) program, which provides critical funding for matched savings programs around the country (including ours) has been completely eliminated. We had no indication that this 19 year old, highly impactful program was at risk. Although the funding was only cut for this fiscal year, policy experts indicate it will be politically impossible to bring this program back, at least in the short term. I led Opportunity Fund’s savings program from 2006-2010 and had the honor to work directly with hundreds of families saving for their futures, so this loss feels very close to home.
What this means: Around the country there are hundreds of organizations like Opportunity Fund working in cities, rural areas and Native reservations to empower low-income families to start saving for their future through matched savings accounts. Unlike middle and upper-income families who have many wealth building opportunities through the tax code, the working poor had few avenues to build up savings and assets – except for the AFI program. Income inequality leads to significant challenges for a family’s health and well-being. But asset inequality is even more pernicious – it allows inequity to be passed from generation to generation, keeping low-income children from attending college or aspiring entrepreneurs from launching new ventures. Ultimately, asset inequality is one of the gravest threats to our democracy. Without AFI, we have lost a critical tool for creating opportunity for those who need it most.
To do the work we do at Opportunity Fund we have to be optimists. We are optimistic about the potential of minority, immigrant and women owned businesses. We are optimistic about the potential of first generation college students. Our optimism is guided by our core values: Opportunity, Dignity, and Responsibility.
What does the end of AFI mean for Opportunity Fund? Prior to learning last week that the AFI program would be zeroed out, we made commitments to over 85 students who were recently enrolled – or about to enroll - in our College Savers program. We told them: “If you save $2,000 for school, Opportunity Fund will match your savings with $4,000 because we believe in your college dream.” AFI was supposed to provide $2,000 for each student, and our generous donors would provide the other $2,000 in savings incentives. Even when our elected officials do not uphold their promises, Opportunity Fund honors our commitments. Therefore, we are asking our supporters to consider making a special gift to support these 85 College Savers who have taken the first step to save for their college dreams. We need to raise a total of $150,000 to support these enterprising young people who want to follow in the footsteps of Savers like Fernanda, Jaime, and Kiara. We can’t replace the AFI program but we can uphold our promise to the students who are counting on us.
Today, the Trump Administration released its proposed FY18 budget, which eliminates funding for the U.S. Treasury Department’s Community Development Financial Institutions Fund (CDFI Fund) grants. We are not surprised. We are dismayed. We remain vigilant. We continue to work with our representatives in Washington to advocate on behalf of this critically important (and wildly successful) program.
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We just got word that we were awarded a grant of $916,905 from the CDFI Fund! The CDFI Fund is a critical source of funding for Opportunity Fund's growth, so this is great news. The funds will be used to continue our expansion in California and beyond, including providing loan loss reserves for our lending outside California. This grant comes from the previous year's CDFI Fund appropriations and we are still watching closely to ensure Congress fully funds the CDFI Fund for FY18; currently, the House has proposed less funding than in prior years.