Presentation on theme: "Enhancing the philanthropic capacity of communities of color June 2007."— Presentation transcript:
Enhancing the philanthropic capacity of communities of color June 2007
Pan African Community Endowment The Saint Paul Foundation
The Pan African Community Endowment Is one of the component endowments of SpectrumTrust of The Saint Paul Foundation. SpectrumTrust includes three other culturally specific endowments and a multicultural endowment: Multicultural Endowment Asian Pacific Endowment El Fundo de Nuestra Comunidad Pan African Community Endowment Two Feathers Endowment
Photos by Steve Wewerka The Pan African Community Endowment Mission: Promote philanthropy within the Pan African community and develop philanthropic resources appropriate to Pan African history, culture, and traditions. –The Endowment strives to be equitable, diverse, and accountable to its community. –It seeks to work in collaboration with the community to develop a sense of ownership and self- determination.
Pan African Community Endowment Housing Initiative Committee Raising Issues, Funding Solutions
Why a Housing Initiative Committee? Charged with creating a common voice for certain housing issues affecting Minnesota’s Pan African community. Committee work includes: –Convening those working with the Pan African community on housing to discuss and develop strategies to address housing issues. –Publicizing innovative research, organizing, and advocacy activities that support efforts to address housing issues faced by the Pan African community. –Making annual housing grants with a goal of improving public awareness of housing issues that affect Pan African communities and identifying the root causes of inequality in housing as experienced by broad segments of the Pan African community.
Housing grants Affordable housing forums and information packets Affordable housing research (cited in a $325 million nationwide settlement regarding predatory lending) Financial services collaborations Financial literacy education - Greater awareness of the effects of sub- prime lending and foreclosures in the Twin Cities Advocacy/organizing to stop demolition of 900 affordable housing units
The Homeownership Rate for Blacks in Minnesota is Declining
"Blacks left out of Minnesota's rush to own homes," Pioneer Press, 10/3/06, St. Paul, MN Losses Instead of Gains Homeownership rates for blacks in Minnesota slipped from 32% in 2000 to 29% in 2005.
"Blacks left out of Minnesota's rush to own homes," Pioneer Press, 10/3/06, St. Paul, MN A Change in National Ranking Minnesota now ranks 45 th out of 50 states and the District of Columbia in homeownership rates among black households even though the state continues its rank of #1 for homeownership nationally.
"Poverty & Race Research Action Council" July/August 2004, Washington, D.C. In the largest metro areas, the average home loan rejection rate for blacks with incomes above 120% of the metro area’s median income was 21%, well above the 8% average for whites.
"Loan disparity spurs anger: House Dems tell regulators minorities can't keep paying higher interest on mortgages" Charlotte Observer, 6/14/06, Charlotte, NC The Charlotte Observer reported in August ‘06 that blacks who borrowed from 25 of the nation's largest lenders were 4 times more likely than whites to pay high rates. Even blacks with $100,000+ annual incomes were charged higher rates more often than whites with incomes below $40,000.
Jeff Crump, "Subprime Lending and Foreclosure in Hennepin and Ramsey Counties: An Empirical Analysis" CURA Reporter (Spring 2005), research funded in part by the Pan African Community Endowment of The Saint Paul Foundation Foreclosures correspond most closely to census tracts with the highest concentrations of African-Americans, leading many researchers to conclude that African- Americans may be suffering the heaviest impact.
Twin Cities Foreclosures Are Increasing There were more than 2,000 home foreclosures in Minneapolis and St. Paul during 2006
"Foreclosure Hot Spots," Forbes, 5/3/06 Forbes magazine has singled out Hennepin County as one of the nation’s eight metropolitan “foreclosure hotspots”
Minneapolis Mayor R.T. Rybak confirmed the number in his 2007 Housing Budget Proposal In his 2007 Housing Budget Proposal address, Minneapolis Mayor R. T. Rybak reported that there were 300 more foreclosures in Hennepin County during the first six months of 2006 compared to 2005, an increase of 71%.
Ramsey County Sheriff's Office, 5/31/07 There were 1,531 foreclosures in Ramsey County in 2006. As of May 31, 2007 there have been another 928.
"Drained Wealth, Withered Dreams II: Disparate Impact of Predatory Lending in the Twin Cities," 2004 The Disparate Impact of Predatory Lending In Minneapolis, lower income neighborhoods with large populations of people of color have the highest concentrations of subprime lending.
"Drained Wealth, Withered Dreams II: Disparate Impact of Predatory Lending in the Twin Cities," 2004 Subprime in 4 out of 11 Neighborhoods Subprime lenders accounted for more than 15% of the refinance loans in 4 out of 11 Minneapolis neighborhoods including Near North (35%); Camden (21%); Phillips/Whittier (18%) and Powderhorn (15%).
"Drained Wealth, Withered Dreams II: Disparate Impact of Predatory Lending in the Twin Cities," 2004 Minneapolis neighborhoods that had the lowest rate of subprime lending include Downtown (8%); Southwest (7%); and Calhoun-Isles (8%).
"Drained Wealth, Withered Dreams II: Disparate Impact of Predatory Lending in the Twin Cities," 2004 Near North homeowners who refinanced were 11.6 times more likely than Calhoun-Isles homeowners to receive a subprime loan.
"Drained Wealth, Withered Dreams II: Disparate Impact of Predatory Lending in the Twin Cities," 2004 Homeowners in Twin Cities neighborhoods of color were 6.2 times more likely than homeowners in predominantly white neighborhoods to receive a subprime loan when refinancing.
Center for Responsible Lending, May 2006 Blacks were more likely to receive higher-rate home purchase and refinance loans than similarly situated white borrowers, particularly for loans with prepayment penalties.
Jeff Crump, "Subprime Lending and Foreclosure in Hennepin and Ramsey Counties: An Empirical Analysis," CURA, 2005 The U of M’s Jeffrey Crump's analysis of the federal data from 1997 to 2002 found that Twin Cities blacks had a 34% chance of getting a subprime mortgage, compared with 10% for whites and 8% for Asians. Native Americans and Hispanics had a respective 22% and 13% chance.
"Economic and Housing Research," www.freddiemac.com An analysis of the credit bureau scores and Freddie Mac mortgage purchases confirmed that “African American borrowers... were about three times as likely to have high-risk credit bureau scores (defined as FICO scores below 620) as were white borrowers.”
"Economic and Housing Research," www.freddiemac.com Such differences in FICO scores lead directly to a higher proportion of rejections and higher interest rates.
www.federalreserve.gov, 2004 One of the most revealing statistics on the true nature of subprime borrowing comes from the Federal Reserve it noted that 50% of the subprime borrowers had credit scores above 620 – the threshold to qualify for a prime loan.
"2006 survey of homeless in Minnesota," Wilder Research Center, St. Paul, MN African Americans are particularly over-represented among Minnesota’s homeless adults. Wilder Foundation’s 2006 survey findings indicate that 41% of all homeless adults were black, as compared with just 3% of all Minnesota adults.
"2006 survey of homeless in Minnesota," Wilder Research Center, St. Paul, MN Racial disparities are also present among unaccompanied homeless youth. While only 5% of the general youth population in Minnesota is African American, nearly 33% of homeless youth on their own are African American.
"2006 survey of homeless in Minnesota," Wilder Research Center, St. Paul, MN 53 % of all homeless youth in Minnesota had lived in foster homes. There is a large (18%) over-representation of African American youth in foster care compared to the general population (5%)
An Example of the type of work supported by the Pan African Housing Committee
The African Development Center’s Homeownership Education
"An Evaluation: African Development Center," Rainbow Research, Inc., November 2006 400 in Two Years The African Development Center provided various home ownership services to approximately 400 clients from 2004-2006.
"An Evaluation: African Development Center," Rainbow Research, Inc., November 2006 40% (159) of ADC’s Clients Participated in the Homestretch Program During 2004-06 29% (46) of ADC’s Homestretch clients purchased homes
The ADC has Found That New and Established African Immigrants are Making Progress
"An Evaluation: African Development Center," Rainbow Research, Inc., November 2006 Few Delinquent Loans All but one of the 46 homeowners have never been delinquent with their mortgage payments. All but one never defaulted on a home loan since participating in the program.
"An Evaluation: African Development Center," Rainbow Research, Inc., November 2006 94% of the clients served by ADC work full-time and earn less than $30,000 a year
"An Evaluation: African Development Center," Rainbow Research, Inc., November 2006 So far, NONE of the ADC clients have become victims of predatory subprime lending
The Pan African Community Endowment Has Joined With ADC, NRRC and Other Organizations to Address These Housing Issues in the Pan African Community
Committee Members Michelle Rooks, Committee Chair, Wells Fargo Home Mortgage – Emerging Markets Janayah Bagurusi, Twin Cities LISC Stephanie Battle, YWCA – St. Paul Phillip L. Buchanan, Richard Allen Community Services, Inc. Herman Milligan,Wells Fargo Home Mortgage Marketing Hussein Samatar, African Development Center Sheri Pugh Sullivan, NRRC Stephen Wreh-Wilson, African Development Center The Pan African Community Endowment Housing Initiative is staffed by Karen Gray and Nora Hall, Ph.D., GrayHall LLP
Housing Committee’s Accomplishments Worked with Harvest Consulting Group’s, Dr. Wayne L. Thornhill to develop and implement a strategic plan for the Housing Initiative. Funded and distributed a study of “Sub-Prime Lending and Foreclosure in the Twin Cities.” The research was conducted by Dr. Jeff Crump, Professor of Housing Studies at the University of Minnesota which provides empirical analysis of homeownership in underserved populations. Met with the sponsors of the “Don’t Borrow Trouble Campaign” to share Dr. Crump’s research and discuss ways to broaden the campaign’s connections with the Twin Cities Pan African community.
Provided grants to organizations for financial literacy services to African and African American residents, including a seed grant to the African Development Center (a housing and economic development organization that primarily serves Twin Cities African immigrants). The grant from the Pan African Endowment was the African Development Center's first grant. It now has a budget over $450,000. The Selby Area Community Development Corporation and the Northside Residents Redevelopment Council also received grants. Developed a template for a housing Community Organizer position that could work in Twin Cities Pan African communities. Shared funding of the position was discussed. Provided emergency funding to an alliance of housing advocates for a direct mail community education campaign to stop the demolition of 900 units of affordable housing in Brooklyn Park. The demolition of the targeted affordable housing would have disproportionately affected Brooklyn Park Pan African residents. The $35 million bond referendum supporting the demolition of affordable units failed to pass.
Developed a multi-sector list of Pan African stakeholders in the Twin Cities area that are interested in housing research, trends, public policy, and system-change activities. Developed a multi-sector list of partner stakeholders who have an interest in supporting Pan African housing issues. Partnered with Fannie Mae and the Governor’s Emerging Homeownership Marketing Task Force to present a financial literacy dialogue with Vada Hill, Senior Vice President and Senior Marketing Officer, Fannie Mae. Approximately 50 people attended the event. Wrote and distributed summaries of the dialogue with Vada Hill and financial literacy workshop series.
Became a founding funder of the local chapter of the Urban Financial Services Coalition which provides access to industry people nationally, offers scholarships and financial literacy partnerships to people of color. Established a faith-based financial literacy initiative involving local churches and the Minnesota branch of World Vision, an internationally based faith organization. Partnered with the Urban Financial Services Coalition, Wells Fargo, US Bank, RBC Dain Rauscher, and the Federal Reserve Bank of Minneapolis to support a five-workshop financial literacy series. Topics included Wealth Building, Demystifying Your Credit: Understanding Your Credit Score and Its Impact on Your Financial Future; What You Need To Know Before You Buy A Home; Financing Your Small Business; and Enhancing A Career in the Financial Services Industry.