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Neighborhood Funding Stream
Frequently Asked Questions
What is the Neighborhood Funding Stream?
Philadelphia
was the first Empowerment Zone in the country to create an innovative endowment
called the Neighborhood Funding Stream (NFS). Endowments are often referred
to as the gifts that keep on giving because a portion of the income is reinvested
each year, which allows the endowment to grow and provides a permanent stream
of income over time.
The Community Trust Boards committed certain funds that accrued from the repayment of loans to the endowment and provided a vehicle for grant-making aimed at extending the community’s ability to build on its successes. To date, this fund has already grown to more than $19 million.
The Neighborhood Funding Stream supports a small grant program dedicated to addressing priority needs of the Empowerment Zone communities. During the first grant-making cycle, the income generated through the NFS was used to award $370,000 to 28 community-based organizations. Since its inception, the NFS has awarded over 100 grants.
When was the Neighborhood Funding Stream created?
In 2004, the City of Philadelphia Empowerment Zone (EZ) and the United Way of Southeastern Pennsylvania (UWSEPA) announced their partnership in this signature project. Approved by the local Empowerment Zone Community Trust Boards in the American Street and North Central Empowerment Zone neighborhoods in 2004, and by the West Philadelphia Community Trust Board in 2006, this model also received the support of state and federal governments.
Who is involved?
The
City of Philadelphia Empowerment Zone (EZ) and Neighborhood Transformation
Initiative (NTI) continues to collaborate to provide on-going leadership
and access to capital within the three EZ communities.
The Community Trust Boards play an important leadership role in neighborhood planning and the identification of funding priorities for the Neighborhood Funding Stream. The Finance Committee of the Neighborhood Funding Stream is comprised of members from the Community Trust Board, UWSEPA and the EZ/NTI. The Finance Committee offers guidance concerning the investment and spending polices for the fund.
The United Way of Southeastern Pennsylvania (UWSEPA) joined the NFS partnership in 2004. Based on recommendations from all community stakeholders, UWSEPA developed and implemented the grant program designed to address the needs of residents and organizations in the Empowerment Zone communities.
Vanguard Management Services was selected to develop and manage the NFS investment portfolio.
What is the guiding principle of the Neighborhood Funding Stream?
The NFS is designed to address the primary goals of the Philadelphia Empowerment Zone by funding and supporting economic development, human and social development in the community. This fund contributes to community development initiatives by funding community-based activities, solidifying community networks, and encouraging citywide collaboration.
What are the current funding priorities of the Neighborhood Funding Stream?
The
first distribution cycle of the Neighborhood Funding Stream (2005-06) awarded
community-based grants to improve the Quality of Life of Children, Youth
and Families in the Community. The NFS supported organizations which provided
access to a wide variety of resources (health, cultural, artistic, educational,
economic), and to gave adults access to resources needed to support their families.
In distribution cycle 2006-07, grants were awarded to address the issues related
to Violence Prevention and Public Safety in the Empowerment Zone communities.
In addition to addressing the needs of children and their families, the Community Trust Boards established funding priorities aimed at promoting Economic Development and Equitable Community Development with the support of the endowment. To confront the energy crisis experienced by many Philadelphians during the winter, the Neighborhood Funding Stream also leveraged funds to support the Energy Loan Pool.
Who contributes to the endowment?
Anybody can contribute to the fund. However, the endowment was seeded by repayments of loans made by the Philadelphia Empowerment Zone program. These loans were given to projects with a low risk level and short-term financing need. The repaid loans are deposited in the investment fund. On a monthly basis, Vanguard Management Services and UWSEPA track deposits and withdrawals to the fund. Quarterly reports are made to the Finance Committee of the Neighborhood Funding.
What rate of growth or interest can the CTB expect on the principal, once the funds are repaid and invested to Vanguard?
An accurate estimate of the return to the fund depends on a variety of often interdependent factors including the “ups and downs” of the global economy. While it is extremely difficult to predict the performance of the fund in the short-term, it is to be expected that the fund will grow significantly over a period of 10 years or more.
Contact Information:
Kate Allen-Yoakum
Coordinator, Neighborhood Funding Stream
United Way of Southeastern Pennsylvania
7 Benjamin Franklin Parkway
Philadelphia, PA 19103
Phone: (215) 665.2609
Email: kallen@uwsepa.org
