2006 CFED Annual Report


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The CFED 2006 Annual Report encompasses inspiration, innovation & ambition all molded into a substantial strategy to further CFED's mission and vision statement. Cultivating a solid business and financial model to propel entrepreneurial goals, housing initiatives and asset building, the 2006 annual report prepares CFED for what's to come next.

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2006 CFED Annual Report

  1. 1. 2006 ANNUAL REPORT
  2. 2. 2006 Annual Report “ Table of Contents Setting the Stage for Future Success (Economic development would allow every American) an ampler CFED’s Strategic Plan sets the stage for sustained growth in all of its Letter from the President — 2 share of freedom … an unfettered start, and a fair chance, in the Letter from the Chair of the Board — 3 areas of expertise. Over the next decade, CFED will increase its impact in asset building while strengthening its role in fostering innovation. race of life … and would elevate the condition of people, … lift CFED’s Impact Across the Nation — 4 CFED will focus on bringing three of its major asset-building efforts ” – matched savings and investment accounts, entrepreneurship, and Financial Security — 6 artificial weights from all shoulders, to clear the paths of laudable manufactured housing – to a scale where they can benefit millions of Economic and Enterprise Development — 8 low- and middle-income families and hundreds of communities. pursuit for all. Manufactured Housing — 10 CFED will also develop a pipeline of innovative ideas with the potential – Abraham Lincoln Innovation — 12 to significantly expand economic opportunity for individuals and Achieving Financial Sustainability: 2006 Financials — 14 communities left out of the economic mainstream. CFED will refine Supporters — 16 its business and financial model to generate the types and amounts of funds required to sustain an entrepreneurial culture and achieve its Staff — 18 ambitious goals. Board of Directors — 19 These strategic and galvanizing goals are motivated by the increasingly urgent need to address growing economic inequality in the United States. They take their roots in the work and partnerships CFED has been steadfastly engaged in for years. Progress made in 2006 provides fuel for what comes next. CFED’s Strategic Plan (2007-2011): A New Birth of Economic Freedom was developed in 2006 and is available online at www.cfed.org/go/strategicplan. CFED expands economic opportunity by helping Americans start and grow businesses, go to college, own a home, and save for their children’s and own economic futures. We identify promising ideas, test and refine them in communities to find out what works, craft policies and products to help good ideas reach scale, and develop partnerships to promote lasting change. We bring together community practice, public policy and private markets in new and effective ways to achieve greater economic impact. Established in 1979 as the Corporation for Enterprise Development, CFED is a nonprofit organization that works nationally and internationally through its offices in Washington, DC; Durham, North Carolina; and San Francisco, California. www.cfed.org CFED 2006 ANNUAL REPORT 1
  3. 3. Letter from the President Letter from the Chair of the Board Dear Colleagues, We doubled our investments in I’M HOME: Innovations in Dear Friends, n Integrity, by making sure our progress toward these goals is duly Manufactured Homes over the past year to produce market and measured and assessed; and During 2006, the CFED staff and Board of Directors created a strategic policy changes so that one million owners of manufactured housing For the first time in our history, CFED has put an explicit statement n Collaboration, the last of these, is at the heart of the way we work, plan to guide the organization from 2007 to 2011. Titled A New Birth – the major source of affordable housing in the country – can earn the of core values at the heart of our strategic plan. Through the very implicit in respect, learning and impact. of Economic Freedom, the plan aims to take CFED to a new level same benefits from homeownership as do owners of site-built homes participative process of developing this plan, it became clear that of operation, performance and, most importantly, economic impact. within five years. identifying and declaring our core values offered a fundamental way of The 2006 Assets Learning Conference tested our ability to I believe that our strategic plan – with its bold vision, ambitious and charting our course, explaining it to others and dealing effectively and collaborate and pull together an increasingly complex field buffeted substantive activities, and measurable outcomes – may be among Our vision for these specific asset-building initiatives is paired with accountably with our partners and the larger world. by huge centrifugal forces. We are proud that we were able to work the most significant documents that we have yet produced for the an equally powerful commitment to expand CFED’s role as a source with an amazing array of partners, and to secure support from 31 organization. That we created this document collectively provides the of innovative ideas, products and services for building economic We sought a set of values which would describe our core, apply equally sponsors, 19 of them new to the Conference and the field. We are most revealing evidence of our commitment to make real contributions opportunity. We aim to identify, test and replicate at least two new externally and internally, and would be distinctive yet widely-shared. particularly gratified that among the 1,000 exceedingly varied and to reverse the rising economic inequality in our country. ideas that each have the potential to build individual and community We believe that the six values, taken together, point unmistakably to talented participants were, for the first time, substantial delegations assets to benefit millions. To make these commitments feasible, the CFED and characterize our actual behavior. By stating our values, we of the Native American and disability communities, as well as financial Our experiences during 2006 affirm and challenge us to act upon our organization proposes to diversify its financial structure through new hope people may more easily understand and embrace the strategies institutions. Their inclusion did not just happen, but was the result of vision of expanding economic opportunity. The 2006 Assets Learning sources of earned and donated income that can offer the flexibility we develop. While we commit ourselves in this plan to measurable applied intent and a lot of honest talk and collaborative work among Conference was a watershed event for CFED in terms of the breadth necessary to be both entrepreneurial and operate at scale. goals, we know that in a changing world, values can serve as the most CFED, First Nations Development Institute, the World Institute on and depth of content, number and diversity of participants, quality of reliable guideposts in choosing how to navigate. We know that values Disability and others. We know that collaboration is ongoing work, the presenters and an unprecedented number of learning partners The inspiration for all this work lies with the millions of Americans are reflected in what you do, not just what you intend, and recognize and that here, as in so many other realms, collaboration is both the and sponsors. An effort that began a little more than 10 years ago who seek, often against daunting odds, to improve their lives and that living these values requires conscious cultivation within the destination and the way we get there. to advocate for individual development accounts has evolved into a economic prospects through hard work, education, savings and civic organization, not just choosing colleagues with similar values. We seek broad-based movement. This new field looks at the role of assets over engagement. The ability to achieve each of our strategic goals is equally to be known by these values, to engage with you, our partners and We look forward to living our values, and giving them fuller expression. a lifetime to ensure that the financial incentives and structures that dependent on the efforts of our many local, state and national partners, friends, by manifesting them, and invite you to hold us accountable to We believe that you deserve no less, and that we cannot achieve our build wealth and opportunity so effectively for well-off Americans are whose extraordinary talents, resources and dedication make working in these standards. goals in any other way. universally shared with all Americans. CFED aims to ensure that one this field a gift every day. million low- and moderate-income Americans benefit from some form The goals of the strategic plan grow directly out of these values: Sincerely, of matched savings within the next five years. Thank you all for sharing in a vision that opens the doors of economic n Respect, especially for the productive capacity of low-income freedom to low-income people. communities to shape their own economic destinies and ours, We know that savings must be paired with income-producing activities but also for the competence of our partners and the potential and housing to provide real financial security. Our renewed focus Sincerely, contributions of all sectors; on entrepreneurship in rural and Native American communities n Enterprise, that creative adding of value, within the public, private tested new strategies for delivering capital, training and business and nonprofit sectors, and in the strategies themselves; Robert Friedman, development services that matched the capacity and market needs of n Learning from experience and the insights of our colleagues; Chair of the Board the entrepreneur, rather than requiring the business owner to fit inside n Impact on potentially millions of working families; an existing “program.” Our five year goal is to advance entrepreneurial Andrea Levere, strategies in 10 rural regions or states. President 2 CFED 2006 ANNUAL REPORT CFED 2006 ANNUAL REPORT 3
  4. 4. CFED’s Impact Across the Nation Collaboration is central to CFED’s success as an innovator in expanding economic opportunity. CFED significantly advances its mission by forming key and lasting partnerships with national, regional and community level organizations equally committed to giving all Americans the chance to build a financially secure future for “ themselves and their families. The map to the right illustrates the extent to which CFED is reaching out to local grantees, community lenders, financial institutions and national researchers to share and test ideas, goals and, ultimately, successes. Each “push pin” represents at least one partner (some Collaboration is represent multiple partners) with whom CFED is collaborating. at the heart of the Currently CFED partners with more than 347 organizations through 20 different programs. way we work, implicit in Some of CFED’s partners are highlighted in the pages that follow. respect, learning CFED thanks all its current and future partners for their wisdom, creativity and commitment. and impact. Collaboration is both the destination ” and the way we get there. – Robert Friedman, CFED Founder and Chair of the Board = Location of CFED partner organization 4 CFED 2006 ANNUAL REPORT CFED 2006 ANNUAL REPORT 5
  5. 5. Financial Security True financial security – the ability to build assets that can be used to attention from candidates for public office in the state. APIC has policy, community development, philanthropy and the financial services invest for the future, send children to college and weather unexpected OK Task Force Advances Children’s Savings Policy developed a comprehensive plan to pursue the development of a industry to magnify and accelerate asset-building activities such as Asset Building in Hawaii financial storms such as job loss, medical emergencies or other universal and progressive savings policy for children in California. homeownership, business ownership, savings and investment with The Oklahoma College In December, life events – still eludes far too many American families. Providing These organizations join SEED advocates working with CFED and expanded engagement by private markets. To cap off this series, the Savings Task Force concluded a 16-month opportunities for financial security to those individuals and families its national partners and advisors to develop state policies to create Federal Reserve Bank’s Board of Governors hosted a July roundtable its work in late 2006 by CFED traditionally left out of the economic mainstream has long been or expand progressive savings opportunities for children. These with cosponsors CFED and the Federal Reserve Bank of Richmond, unanimously adopting a collaboration CFED’s priority. advocacy partners are The Sargent Shriver National Center on bringing together key leaders on the subject of assets to interpret the report that recommends the with the Poverty Law and Voices for Illinois Children, The Community information that emerged through the convening series. The event development of a matched- Hawai’i 2006 Assets Learning Conference Economic Development Association of Michigan, and focused on financial products, public policy and market information. savings program for the Alliance for The 2006 Assets Learning Conference — A Lifetime of Assets: the Oklahoma Kids’ College Savings Campaign managed by the A major outcome was the promise of ongoing collaboration between Oklahoma 529 College Savings Community- Building Families, Communities & Economies provided a powerful Community Action Project of Tulsa County. CFED and member banks of the Federal Reserve System on the Plan. CFED’s SEED state policy partner, the Community Based Economic Development affirmation of the valuable work CFED and its partners do on behalf matters of economic opportunity and financial security. Action Project of Tulsa County, and its initiative, the (HACBED) culminated in the release of those aspiring to live the American dream. Set in Phoenix, Arizona Expanding Native Opportunity of Asset-Building Policy for Hawaii. Oklahoma Kids’ College Savings Campaign, played in September, and sponsored by Bank of America, Citigroup, Through the Expanding Native Opportunity: Native IDA Initiative, Bank on San Francisco Based on data from CFED’s Assets and an instrumental role in the creation of the task force and JPMorgan Chase, NeighborWorks America and many others, the formulation of the task force’s recommendations. Those CFED furthered its mission to help the country’s Native communities Bank on San Francisco is a collaborative effort to bring 10,000 of Opportunity Scorecard, the report the biennial Conference (the eighth of its kind) was the largest recommendations include an automatic initial deposit at birth build assets and create sustainable local economies. The Native IDA the city’s estimated 50,000 un-banked households into the financial describes a comprehensive, ambitious gathering of the assets field to date. It was also the most diverse, with for low- and moderate-income families; progressively matched Initiative is a training and technical assistance program developed mainstream. It illustrates the exciting avenues for asset building that assets agenda for the state. Moved by greater participation by Native Americans, people with disabilities and deposits; and incorporation of the Oklahoma 529 College to enable Native communities to create and administer Individual can be taken on the local level. CFED welcomed the opportunity the ideas presented in the report, 14 representatives from the financial services industry than ever before. Savings Plan into the state’s K-12 financial education curricula. Development Account (IDA) programs. IDAs are matched savings to work with consultant Anne Stuhldreher, the Mayor’s Office members of the Hawaii State Senate More than 1,000 participants from the public, private and nonprofit Copies of the report were distributed to the Governor and accounts specially designed to enable low-income individuals to and the Treasurer’s Office of the City and County of San introduced a progressive omnibus sectors took part in four pre-conference sessions, five plenaries, 60 legislative leaders. In 2007, legislation is expected to put the save, build assets and enter the financial mainstream. This project Francisco, the Federal Reserve Bank of San Francisco, local bill to the legislature in early 2007 to concurrent sessions, nearly 50 roundtable discussions and countless recommendations into effect. successfully trained and assisted more than 200 individuals from over nonprofit EARN (Earned Assets Resource Network) and provide greater financial education opportunities for networking and sharing ideas. The 2006 Assets 60 Native American communities in 2006, helping them launch local the city’s financial institutions. Bank on San Francisco goals include and asset-building opportunities to Learning Conference offered sessions in “tracks” that focused on three IDA programs. Expanding Native Opportunity is offered by CFED, First increasing the supply of starter account products that work for low-income families looking to build a areas in asset building: research, policy and practice (sponsored by document specific aspects of children’s savings programs. All 12 of the Nations Development Institute and First Nations Oweesta low-income un-banked individuals, as well as raising awareness among better life. Citigroup, Bank of America and JPMorgan Chase, respectively). initiative’s community and experimental sites achieved full enrollment, Corporation, through the U.S. Department of the Treasury’s un-banked consumers about the benefits of account ownership, bringing the total of SEED savers to 1,395. Accountholders have Community Development Financial Institutions Fund. spurring them to open accounts. At the Conference, CFED designed and conducted a policy survey to accumulated, on average, almost $1,200 in initial deposits, savings and assess attendees’ views on the importance of various asset policy goals, matches. CFED-Federal Reserve System Partnership features and approaches, as well as their willingness to participate in CFED continued its unprecedented partnership with the Federal advocacy to support these policies. Four hundred fifty people shared In addition to encouraging savings in SEED, CFED continued its work Reserve System to host Innovations in Asset Building Policy, their views – almost half of all Conference attendees – making this with community partners to ensure that families with SEED accounts Products and Programs, a series of forums across the country. The the largest asset policy survey ever conducted. The results showed are protected from asset limits in state-administered public assistance forums – which began in 2005 – brought together leaders in economic substantial consensus among respondents, affirming that there is more programs, which create a disincentive to save. By year’s end, 10 of the agreement in the field than dissension. 12 states where SEED programs are operating had either amended state regulations or received waivers that effectively protect families Saving for Education, Entrepreneurship and saving in SEED from such limits. Downpayment (SEED) Policy and Practice Initiative Two additional state policy partners joined the SEED initiative: the SEED – a 10-year policy, practice and research endeavor to develop, Asset Policy Initiative of California (APIC) and the Southern test and impel matched savings accounts and financial education for Good Faith Fund (SGFF), in Arkansas. SGFF, which also is a children and youth – is setting the stage for universal, progressive SEED community partner, has a strong record in asset building American policy for asset building. Through SEED, CFED brings in Arkansas. Their policy proposal for the most progressive 529 together national and community partners to design, administer and match grant policy in the nation has already received considerable 6 CFED 2006 ANNUAL REPORT CFED 2006 ANNUAL REPORT 7
  6. 6. Economic & Enterprise Development CFED was founded on the principle that strategic investments in development offices – funds which are distributed from the West Peking University, in Beijing, China; Aavishkaar India Micro Venture communities and individuals to make the most of inherent resources Virginia Development Office under the Department of Commerce. Capital Fund, in Mumbai (Bombay), India; and FUNDES Argentina, and talents will create the greatest opportunity for sustainable The organizations are working with state leaders to institute new in Buenos Aires, Argentina – were awarded grants to work with a third- economic security and growth. Today CFED continues its important program guidelines that would give West Virginia’s 46 local agencies party documenter to produce a case study about their intervention. work to advance progressive economic development policies and four program funding choices for their respective areas: Industrial, practices that increase the rate of formation, development and success Tourism, Technology and Entrepreneurship. Currently all state funds Development Report Card for the States of new and growing enterprises to create wealth for low-income and are designated for use only in industrial recruitment. In January, CFED released the 19th edition of its annual economic rural residents. n The North Carolina Rural Economic Development Center’s development benchmarking tool, the Development Report Card for Institute for Rural Entrepreneurship successfully held its the States (DRC). For the first time in the report’s history, CFED Rural Entrepreneurship Development Systems first Entrepreneurship Policy Summit in April. The summit saw the hosted a Capitol Hill briefing where it presented DRC findings and The work started in 2005 by the six grantees of the CFED- formation of several policy work groups co-chaired by the leadership federal policy recommendations to more than 35 Hill staffers from 25 managed W.K. Kellogg Foundation Rural Entrepreneurship of collaborative members. These work groups will develop an states. Released since 1987, the DRC grades each state on how well its Development Systems (EDS) Initiative continued in 2006 entrepreneurship policy action agenda for 2007, including a second economy is doing for its people, how well the economy is doing for the with solid results. Local collaboratives – representing rural regions policy summit. state’s businesses and how well the state is preparing for its future. The in Kentucky, Nebraska, New Mexico, North Carolina, Ohio, Oregon, focus of the 2006 report harkened back to the DRC’s origins: business South Dakota, West Virginia and Wyoming – were tasked with creating The goal in implementing an EDS is the transformation of a region incentive reform. With roughly $60 billion spent each year by states and a pipeline of entrepreneurs, implementing an entrepreneurship support – transformation of both the culture and practice of community localities on incentive packages to lure businesses, the report’s essay system and fostering a policy and cultural environment supportive of economic development to create a viable, sustainable rural region. questions the wisdom of many incentive investments, noting some entrepreneurship within the public, private and nonprofit sectors. The EDS becomes the mechanism for achieving this goal. CFED’s cases where the cost per job attracted was as high as $8.8 million. work on the W.K. Kellogg Foundation Rural EDS Initiative will Notable progress took place on the policy front: continue through 2008. n In January, the Empowering Business Spirit Initiative of Small Business Impact on Poverty Northern New Mexico introduced a memorial encouraging Learning from Small Businesses around the Globe Pacific Community Ventures (PCV), the New Mexico legislative council to develop an entrepreneurs’ Small and medium-sized enterprises (SMEs or “small businesses”) play located in San Francisco, California, bill of rights and enact an “Entrepreneur’s Day” at the New Mexico a vibrant role in economies throughout the world. Many questions provides wealth-building opportunities state legislature. remain, however, about how directly a healthy SME sector leads to for low-income workers at its portfolio n Efforts by Wyoming’s Oweesta Collaborative resulted in the economic growth and poverty reduction. The SME Small Grants companies through mechanisms such as public recognition by State Treasurer Cynthia M. Lummis that there Program, managed by CFED and commissioned by the Ford profit-sharing, phantom stock programs, should be permanent state investment in the state’s community Foundation, explores the linkages between SME strategies and 401(k)s and workplace-based individual development financial institutions, specifically the Wind River poverty reduction. CFED solicited proposals to document innovative development accounts. The organization, Development Fund, an Oweesta Collaborative member. pro-poor SME programs and/or policies, and received 42 submissions a grantee in the SME Small Grants n West Virginia’s Advantage Valley collaborative partner and from 11 countries. From that pool, four organizations from around the Program, commissioned by the policy lead, A Vision Shared, identified an opportunity to change world – Pacific Community Ventures, in San Francisco, California; Ford Foundation and managed by CFED, specifically targets state policy regarding the use of state funds by local economic Center for Human and Economic Development Studies, at expansion-stage businesses in labor-intensive industries – sectors such as manufacturing, food processing, distribution/ logistics, consumer products and media. PCV provides targeted venture capital, business advising, networking and workforce development services to companies in low-income communities in California. A double-bottom line investor, PCV seeks both financial and social returns, measuring social returns in terms of the number and quality of jobs provided for low-income individuals. 8 CFED 2006 ANNUAL REPORT CFED 2006 ANNUAL REPORT 9
  7. 7. Manufactured Housing Purchasing a home is one of the most powerful investments a family for Best Manufactured Home Subdivision in the United States; can make in its future.Yet, in many parts of the country, the cost of n Northcountry Cooperative Development Fund’s facilitation homeownership is increasingly out of reach. Manufactured housing has of the first manufactured home park cooperative conversion in opened the door to homeownership for millions of families, but only Wisconsin; part of the way. CFED is working to enable owners of manufactured n Community Reinvestment Association of North Carolina’s homes to enjoy benefits from homeownership, including asset training session for community development agencies on appreciation, comparable to those enjoyed by owners of site-built homes. manufactured housing as an asset-building strategy; and n Frontier Housing’s grand opening of its manufactured housing I’M HOME – Innovations in Manufactured Homes subdivision in Morehead, Kentucky. CFED and its partners are working to ensure that homeownership remains attainable for as many low-income families as possible. The A third round of I’M HOME grants will be awarded in 2007. Advancing Homeownership Innovations in Manufactured Homes (I’M HOME) initiative, in Appalachia launched in January 2005 with major funding from the Ford Foundation, seeks to safeguard the wealth-building promise of Frontier homeownership for the approximately 10 million American families Preserving Affordable Rental Housing Housing is living in manufactured housing. The multi-year program will address For the past two years CFED has been working with the John a Morehead, market gaps and policy issues related to the ways the homes are sold, D. and Catherine T. MacArthur Foundation, its partners, Kentucky- financed and treated under the law. and a host of experienced public, private and nonprofit leaders based nonprofit to support a strategy for affordable rental housing preservation that provides I’M HOME made over $1 million in new grant commitments to policy. The work encompassed research on field building and affordable housing solutions that help local organizations dedicated to improving housing quality and policy change, and facilitation of a consensus model policy build better communities through homeownership opportunities in this previously ignored sector. In its framework for preservation. homebuyer education, affordable second year, I’M HOME nearly doubled its number of grantees (from home mortgage loans, subdivision 15 to 27). It expanded its geographic scope, with new local partners in The results from this work include lessons learned and best development and a range of home regions such as the Pacific Northwest, the Southwest and the Mountain practices for policy change – drawn from asset building and other choices including site-built, modular West, and a greater presence in New England. fields – and the development of a communications plan and model and manufactured housing. policy framework for leading practitioners and stakeholders. CFED continued to manage relationships with all of its local Frontier Housing is expanding its partners, as well as with funders and national partners such as New These efforts – which prelude a pivotal Preservation Policy manufactured housing program with Hampshire Community Loan Fund, NeighborWorks America Symposium, to be held in Washington, D.C. in 2007 – set the the support of the CFED-led I’M and Opportunity Finance Network. stage for realizing a major goal: stimulating the market and policy HOME initiative. Frontier Housing has reforms needed to preserve more than one million affordable entered into an innovative partnership Local partner successes include: units in 10 years. with a national manufacturer to n The California-based Oakland Community Housing Inc.’s award develop a fee-simple community of approximately 40 homes. With its first manufactured housing subdivision in development, and having placed high-quality manufactured homes on multiple scattered sites, Frontier is now ramping up its capacity to serve as a broker for other nonprofit developers across Appalachia. 10 CFED 2006 ANNUAL REPORT CFED 2006 ANNUAL REPORT 11
  8. 8. Innovation At the core of CFED’s mission is identifying, testing, implementing donors primarily, as well as from foundations and corporations, to and championing innovative ideas that expand economic opportunity. match the savings of low-income families and provide operating “ Over the next 10 years CFED will advance at least two new ideas that support to high-performing asset-building programs. The Fund’s other each demonstrate the potential to build wealth and opportunity for goals include raising public awareness of matched savings as an asset- one million low-income Americans, through a systemic process that building strategy and adapting software technology to facilitate the flow engages a wide variety of individuals and organizations in the United of information among donors, program providers and accountholders. States and internationally. CFED is currently engaged in two innovative projects that could make a lasting positive impact on the lives of many Self-Employment Tax Initiative low-income Americans: the American Dream Match Fund and the CFED’s Self-Employment Tax Initiative is exploring a new, high- If you’re in the Self-Employment Tax Initiative. impact approach that would use the tax code to deliver support to up to 6 million start-up and self-employed microbusinesses annually. While business of fighting American Dream Match Fund CFED has embarked on a new social venture that will expand the conventional microenterprise programs provide microcredit and/or self-employment training to start-up businesses, fewer than 200,000 poverty and you’re national market of donors to assist low-income savers with their per year access this delivery system. By contrast, the tax code presents not in the business of efforts to save, acquire lifelong assets, and break the intergenerational a complementary delivery system that has the potential to reach many cycle of poverty. The American Dream Match Fund will stimulate more unserved or poorly served microentrepreneurs. This includes building assets, the growth of matched savings accounts, like Individual Development millions of informal businesses which forgo voluntary tax compliance Accounts (IDAs), throughout the United States. due to confusion and unexpected cash-flow realities. then you’re not in the business of ” Historically, the match incentives for such accounts – similar to an CFED began working with microenterprise and Volunteer Income Tax employer match for 401(k) contributions – have been provided Assistance programs in 13 different states to explore effective tax fighting poverty. through matching funds from private and public sources. As the preparation assistance and develop related long-term products for self- number of accounts have increased over the last 10 years – to over employed businesses. Additionally, CFED is investigating how to reform 50,000 IDAs in programs run by more than 500 community-based the tax code’s self-employment interface to make it a more effective organizations – so too have the challenges asset-building organizations “gateway” that can build the chances of success for first-time business – Geoffrey Canada, face when it comes to raising the money that matches participants’ tax filers. President/CEO, own savings. Many program sponsors report waiting lists for matched Harlem Children’s Zone savings accounts, a situation that arises when the sponsor’s fundraising CFED is the only national nonprofit organization focusing on tax and/or operating capacity is constrained. policies that impact the self-employed. CFED believes there are innovative ways to reform this traditionally unwieldy tax interface so In late 2006, CFED initiated the American Dream Match Fund to that it helps low-income families working up the ladder of success provide a reliable and sustainable solution to these challenges and to through self-employment. spur innovation in the field. The Fund will raise money from individual 12 CFED 2006 ANNUAL REPORT CFED 2006 ANNUAL REPORT 13
  9. 9. Achieving Financial Sustainability 2006 Sources of Funds 2006 Statement of Activities Combined Schedule of Financial Position Net Assets (unrestricted funds) (excluding temporarily restricted funds) as of December 31 Contributions Government Contracts $5,000,000 and Grants: 74% and Service Fees: 13% Sources of Funds 2006 2005 Assets 2006 2005 Unrestricted Funds 4,000,000 Cash and cash equivalents $ 6,190,602 $ 9,746,455 2005 Grants and Contributions $ 9,385,888 $ 7,466,908 Investments 6,537,058 4,822,861 Governments Contracts and Service Fees 1,612,654 521,766 Contributions Conference Revenue 960,641 — Accounts Receivable 648,305 396,392 3,000,000 Permanently and Grants: 93% 674,810 Investment Income 626,340 219,816 Grants Receivable 1,029,810 Restricted Funds Other Income 30,843 113,030 Prepaid Expenses 46,377 21,773 2,000,000 Total 12,616,366 8,321,520 Fixed Assets, Net of Accumulated Depreciation 284,432 230,430 Deposit 2,242 2,242 1,000,000 Government Uses of Funds Total Assets $14,738,826 $15,894,963 Conference Other Revenue: 8% Income: 1% Contracts and Investment Income: 5% Service Fees: 4% Program Services Liabilities Investment Applied Research and Innovation 3,153,282 2,890,145 2005 2006 Income: 2% Field Development 2,821,501 1,525,068 Line of Credit $ — $ — Policy 476,431 535,615 Accounts Payable and Accrued Expenses 518,513 378,335 2006 Uses of Funds SEED 4,605,105 2,775,345 Capital Lease Payable 120,951 97,531 2006 Net Assets Distribution Communications 443,902 — Grants Payable 1,489,550 631,620 542,540 Permanently Policy: 3% Total Program Services 11,500,221 7,726,173 Incentives Payable 2,012,987 Field Development: 23% Restricted: 40% Unrestricted: 18% Total Liabilities 4,142,001 1,650,026 SEED: 38% Supporting Services Fundraising 404,573 341,415 Net Assets 2005 Management and General 367,942 235,265 2005 Field Policy: 7% Temporarily Unrestricted 1,931,734 1,588,104 Development: 18% Total Supporting Services 772,515 576,680 Temporarily Restricted 4,435,791 10,656,833 Restricted: 75% SEED: 33% Total Expenses 12,272,736 8,302,853 Permanently Restricted 4,229,300 2,000,000 Change in net assets 343,630 18,667 Total Net Assets 10,596,825 14,244,937 Net assets, beginning of year 1,588,104 1,569,437 Applied Research and Innovation: 35% Net assets, end of year $ 1,931,734 $ 1,588,104 Total Liabilities and Net Assets $14,738,826 $15,894,963 Applied Research and Innovation: 26% Permanently Temporarily Restricted: 14% Communications: 4% Management Restricted: 42% Fundraising: 3% and General: 4% Unrestricted: 11% Fundraising: 3% Management and General: 3% A complete copy of the independent auditor’s report is available upon request. 14 CFED 2006 ANNUAL REPORT CFED 2006 ANNUAL REPORT 15
  10. 10. Supporters CFED expresses many grateful thanks to its supporters: AARP Foundation David Friedman and Paulette Meyer Nancy Meyer and Marc Weiss Lena Warner Diane Aboulafia-D’Jaen Eleanor Friedman and Jonathan Cohen Investors Promoting Opportunity Maurice Lim Miller Washington Area Women’s Foundation IPO Fund: Investors Adina Abramowitz Phyllis K. Friedman Ralph and Dana Moore on behalf of Mr. and Mrs.Trevor Coe Washington Mutual Promoting Opportunity Irvin André Alexander, III and Kevin McGowan Robert Friedman and Kristina Kiehl Investors Promoting Opportunity Ms. Foundation for Women Carol Wayman ‘Initial public offerings,’ or IPOs, on Alliance Bank Adrienne Gallo on behalf of Jessica Young and Trevor Coe Nathan Cummings Foundation Stanley S. and Muriel Casper Weithorn Wall Street enable people to invest Ameriquest Mortgage Company Ethan Goldberg on behalf of Jessica Young and Trevor Coe NeighborWorks America Wells Fargo in dynamic companies providing new Annie E. Casey Foundation Fred and Wendy Goldberg Torod Neptune and Sabrina Michaux-Neptune Nicola Wood products and services that people Arizona Community Foundation John and Marcia Goldman Northwest Area Foundation Z. Smith Reynolds Foundation need. CFED’s IPO Fund invites Gerson and Barbara Bakar Betty Lucas and Steve Golub Investors Promoting Opportunity Opportunity Finance Network Investors Promoting Opportunity Bank of America Foundation Anthony C. Gooch Chris and Janet Page to invest in CFED’s proven ability to Kristen Barden Nan and Steven Grand-Jean Investors Promoting Opportunity Chuck and Nancy Parrish … and those who choose to remain anonymous identify, test and share new ideas and Samuel and Sandra Bishop Ronald Grzywinski Kimberly Pate approaches that help people break out Victoria and Hank Bjorklund Investors Promoting Opportunity H&R Block Sally G. Paynter of poverty. A contribution to the IPO Lew and Sheana Butler Investors Promoting Opportunity Colleen and Robert D. Haas The Philanthropic Collaborative Fund is an investment in two of the Capital One Services, Inc. Joanne and Peter Haas, Jr. Richard & Rhoda Goldman Fund most critical and powerful elements of Catholic Healthcare West Julie and Walter J. Haas Barbara Rosen CFED’s work: Center for Financial Services Innovation Richard and Joan M. Haber Barbara and Richard Rosenberg Investors Promoting Opportunity Charles and Helen Schwab Foundation Midge and Sylvan Heumann Investors Promoting Opportunity Ruth Salzman Investor Promoting Opportunity n Innovation: identifying promising Charles Schwab Bank Thomas Higgins Investor Promoting Opportunity Charles and Heather Muench Sandel Investors Promoting Opportunity new ideas to make the economy Charles Stewart Mott Foundation Michael J. Hirschhorn and Jimena P. Martinez ShoreBank work for everyone; and Citigroup James C. Hormel Nancy Stark and David Siegel n Improving Public Policies: Citigroup Foundation HSBC State Farm Insurance impacting millions of people in need William K. Coblentz Leslie and George Hume with appreciation for all the ways in which Bob and the Theodore R. and Vivian M. Johnson Scholarship Foundation, Inc. through public policies based on Ann Cohen Friedman family help the community Leigh Tivol programs that work. Commercebank N.A. Jim Casey Youth Opportunities Initiative Michael Torrens and Claudia Radel Community Development Financial Institutions Fund, U.S. Department John D. and Catherine T. MacArthur Foundation Barry and Marjorie Traub Many IPO Investors make multi-year of the Treasury Harry Johnson on behalf of Jessica Young and Trevor Coe Devin and Jenese Tucker commitments because innovation and Corporation for National and Community Service JPMorgan Chase Foundation United Way of America policy work are long-term efforts. David Dodson Mitchell and Joleen Julis in memory of Debra Levere W.K. Kellogg Foundation Investors Promoting Opportunity are Denise Durham Williams James M. and Catherine P. Koshland Wachovia Foundation designated in the list to the left. CFED eBay Foundation Ellen and Paul Lazar Marilyn and Murry Waldman in honor of Bob Friedman thanks and salutes them. Evelyn and Walter Haas, Jr. Fund Andrea Levere and Michael Mazerov Walter and Elise Haas Fund Betsy and Roy Eisenhardt Steven Levere and Patricia Sue Plumer in memory of Debra Levere F.B. Heron Foundation Levi Strauss Foundation Fair Isaac Corporation Anne S. Li and Edward R. Muldoon A Special Thanks Fannie Mae Foundation Lia Fund of Triangle Community Foundation Special thanks to the Federal Faultline Foundation Michael Liburd Reserve System for an extraordinary Federal Home Loan Bank of San Francisco Local Initiatives Support Corporation partnership, including the Innovations Federal Home Loan Banks Mary Reynolds Babcock Foundation in Asset-Building Policy, Products & Wayne and Leslee Feinstein in honor of Bob Friedman Kate McKee Programs series of regional forums. Ford Foundation Elsie Meeks Daniel and Patricia Lowy Frank Merrill Lynch Community Development Company L.L.C. 16 CFED 2006 ANNUAL REPORT CFED 2006 ANNUAL REPORT 17