NEIGHBORHOOD TRUST FINANCIAL PARTNERS INC
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Mission Statement
Neighborhood Trust’s mission is to empower low-income individuals to become productive participants in the U.S. financial system and achieve their financial goals. We provide free, trusted financial coaching and enrollment in financial products and benefits to get workers out of debt, build cash flow and savings, and improve their credit. Our North Star is freedom from debt — a precondition for financial security — with a focus on eliminating extractive, predatory debt. By getting workers out of debt, we enable them to recoup money that would otherwise be lost to interest and fees, so they can instead apply those dollars to what really matters: housing, medical care, groceries, childcare, and building savings or pursuing asset-building goals, such as homeownership or entrepreneurship.
About This Cause
Below is a profile of Neighborhood Trust, including an overview of our history and programs; the community we serve; our impact; and our organizational goals. OUR HISTORY AND PROGRAMS Neighborhood Trust is a nonprofit social enterprise that improves the financial security of low-wage workers. Our North Star is freedom from debt, which we believe is a precondition for economic security. We were founded thirty years ago to help open the Neighborhood Trust Federal Credit Union in Upper Manhattan’s Washington Heights, where we offered the local Latino immigrant community a trusted, inclusive, alternative to the predatory financial services providers in the neighborhood. We pioneered financial coaching in the community environments that enable us to reach marginalized, low-income households where they are already accessing their money and benefits – and today we are experts at delivering this model in partnership with employers, benefits networks, and worker advocacy organizations. Since expanding nationally in 2012, we have offered our trusted, human-touch financial coaching to nearly 70,000 workers in 49 states. We improve financial security through our model of trusted financial coaching that is designed specifically to meet the needs of low-wage workers, enabling them to overcome their reliance on debt and vulnerability to exploitative financial services. At no cost to them, our clients have access to an expert, empathetic Financial Coach who has deep knowledge of the financial services ecosystem and how to make it work to their clients’ advantage, connecting them with the debt-relieving strategies, tools, and vetted financial products that support their individual goals. Our comprehensive, human-centered approach enables workers to build personalized plans to overcome their debt, giving them back the dollars, credit, and agency needed to build assets and become financially secure. As a social enterprise, we deliver our core model of trusted financial coaching by partnering with institutional channels that put us in front of the low-wage workers who are likely to be financially distressed and burdened by debt, and allow us to connect with those workers in the settings they are already thinking about their money or benefits, like the workplace or their financial institution. We reach workers nationally through our core product lines, which each apply our signature approach to trusted financial coaching in distinct ways: -TrustPlus is Neighborhood Trust’s signature financial security solution, provided to low-wage workers at no cost to them through partnerships with employers, nonprofits, CDFIs, and other worker networks. TrustPlus pairs workers with a trusted human Financial Coach who provides expert guidance alongside recommendations to money-saving financial products, benefits, and programs. Our tele-coaching model allows us to reach workers across the country and offer live financial coaching “anytime, anywhere.” -Pathways to Financial Empowerment is our technical assistance model delivered to credit unions in partnership with Inclusiv. Pathways provides local credit unions around the country with our signature training and outcomes-tracking platform, helping them stand up their own financial coaching programs to support their members’ financial well-being. In NYC, Neighborhood Trust is the leading provider of free, one-on-one financial coaching to all city residents through New York City’s Financial Empowerment Centers (FEC) initiative. We were a founding partner to the City’s FEC centers under the Bloomberg Administration, and we now offer our coaching in both English and Spanish at community partners in all 5 boroughs. We’ve replicated this model in more than 30 municipalities nationwide through our partnership with the Cities for Financial Empowerment Fund. We also fight for workers’ financial security through our Worker Insights Initiative. We use the powerful data from our direct service to workers – and our Financial Coaches’ understanding of their clients’ complex financial realities and aspirations – – both to develop our own innovative solutions that put money and power back in the hands of low-wage workers, and to surface insights that support our allies in fighting for a competitive, inclusive financial services ecosystem. POPULATION SERVED Neighborhood Trust serves low-wage workers whose limited income and lack of financial leverage cause them to go into debt to make ends meet. Our clients are among the 54 million U.S. households earning under the United Way’s criteria for Asset-Limited, Income-Constrained, Employed (ALICE) individuals. Their low wages do not cover essentials like housing, food, and transportation, leaving many with no choice but to take on debt to make ends meet or weather a financial shock. Over time, their debt burdens mount, saddling them with high monthly payments – much of which are lost to interest and fees – that worsen their financial precarity. Among our clients, 95% are low- to moderate-income, with a median income of $30,720 as frontline workers in industries like healthcare, retail, hospitality, and food service. Upon intake to our service, 93% carry consumer debt at a median of $15,086 and half spend more than 20% of their income on debt. Our clients are disproportionately from marginalized communities, and up against systemic barriers to financial security. 26% are Black or African American; 40% are Latino/a/x, and 64% are women. Our clients’ median age is 40 and 42% support dependents in their homes. OUR INTENDED IMPACT We believe freedom from debt is a necessary precondition for workers to become financially secure and pursue wealth-building. Therefore, our intended impact is to enable low-wage workers to eliminate and avoid burdensome debt – especially from the kind of exploitative predatory financial services that trap them in cycles of financial precarity. We capture this intended impact by measuring clients’ financial outcomes at 6- and 12-months after their initial service, via indicators such as: -Dollars of debt reduced across different types of debt (consumer, collections, predatory) -Debt payments as a percent of income reduced -Delinquent debt reduced (i.e., fewer missed payments) -Credit score improvements -Cash flow improvements -Self-efficacy, via a validated scale included in our intake and follow-up surveys -Overall Financial Well-Being, via the CFPB Financial Well-Being Scale -Use of financial products, particularly when used in lieu of expensive/predatory products The outcomes achieved by our clients have the potential to transform their lives, pulling them out of a vicious cycle of debt and onto a path to financial security and mobility. With more cash, better credit, trusted information, and stronger feelings of agency, they have more choice over the job they take, the apartment they lease, and the credit card they sign up for. They stop losing money to interest, fines, and extra fees tacked on just because the lender knows they have no other alternative — and they can instead put those dollars to what really matters to them. They no longer feel trapped, ashamed, or stressed about debt, and instead start feeling a sense of hope. This impact on financial security has powerful implications for society as a whole, from increasing civic engagement and desire to reduce social divisions to supporting health and access to medical care. A snapshot of the outcomes our clients achieved six months after coaching: -48% reduce their consumer debt by a median of more than $5,312, reducing their monthly debt burdens by over $200–freeing up their cash flow to pay for essentials and save -63% of clients with accounts in collections reduce them, and 48% reduce instances of late payments–improving their credit profiles and removing barriers to qualifying for good financial products -59% improve their credit by an average of 68 points, with 41% improving by at least one full scoring tier–increasing their access to safe and affordable financial products, helping them secure lower interest rates, and opening up better housing opportunities -50% will enroll in a new product or benefit OUR ORGANIZATIONAL GOALS We're now further scaling the reach and impact of our financial coaching solutions, via the following strategic goals: -Grow to serve more workers across the country by embedding our financial coaching solutions within employers, financial institutions, and allied worker membership organizations. -Recognizing that a good financial product has the power to break the cycle of debt, we aim to expand workers' access to inclusive products – and replace their need for exploitative, damaging options on the market – by enrolling them in equitable and inclusive credit unions and CDFI products and services around the country. -Use the power of our financial health data and platform to effect broader systems change that benefits workers; we will track the trends affecting low-wage workers, surface the stories of the people we serve, and draw on our data and insights to advocate for more inclusive financial products, services, and benefits.