The Financial Empowerment Centers were initially launched in New York City by a mayoral agency called NYC Department of Consumer Affairs/Office of Financial Empowerment (OFE). Nonprofit grantees were selected by OFE to provide client services (1 on 1 financial counseling). Often different nonprofit organizations physically hosted the services within their organizations. Social service providers from other NYC mayoral agencies saw value in the financial counseling services and integrated such services into the own programs to best serve their clients. In some instances, they required their clients to go to Financial Empowerment Centers. Partner agencies include: Department of Homeless Services (serving people in the shelter system), Human Resources Administration (providing “one‐shot” emergency grants, signing people up for government benefits), Housing Authority (serving those in the public housing to get people new/better jobs), and Parks Department (serving transitional employment program participants).
Funding was initially provided by private foundations, mostly from financial institutions, who made donations to the City’s nonprofit 501(c)3 entity for tax purposes. The City’s nonprofit then paid the non‐ private contractors for services provided.
Eventually, NYC government used tax‐levy dollars to fund the program and the City released a Request for Proposals to officially select contractors for this program.
The replication projects are being funded similarly with the funding all coming from a single private family foundation.
The Cities for Financial Empowerment Fund’s definition of financial counseling is to convey personalized— not general educational—information to directly and measurably improve a client’s unique financial situation. The model relies on a comprehensive financial health assessment that financial counselors complete with each client in order to understand their unique needs and current financial condition. This allows counselors to work together with clients to develop a customized service plan to help clients achieve milestones along their path to achieving their financial goals and, ultimately, their goals for their individual or family stability.
Outlining a clear path and timeline to reaching personal goals encourages clients to return and to see the progress they are making over time toward their goals. Expectations for client service levels and outcomes (to reduce debt, improve credit, increase savings, open safe and affordable bank accounts) also provide consistent standards and guidance for financial counselors and for integration partners as well as clients.
- Integrated: Deep partnerships with many NYC government agencies (homeless services, human resources administration, children’s services, housing authority, etc.) that recommend or even require their participants to receive financial counseling
- Demonstrated success: Success of New York City model, which relied on private funding in the first three years, demonstrated success so that in 2010, the program was included (using taxpayer levy dollars) into the general New York City budget. Some outcomes include $2.2 million of savings and $12.4 million of debt reduced to date.
- Replicable: Successful replication of model to five additional cities (launched in March 2013), which have all built the program from scratch based on integrated partnerships.