LISC, Ally Financial launch program to spur economic opportunity for micro-entrepreneurs, homeowners
Program will deliver financial coaching and support in Charlotte, Detroit, Jacksonville and Philadelphia
NEW YORK (Dec. 4, 2019)—Ally Financial, Inc. (NYSE: ALLY) and the Local Initiatives Support Corporation (LISC) are teaming up on a new $3 million program to fuel entrepreneurship and homeownership, focusing particularly on people who might not otherwise have access to the capital and support they need to succeed.
The new program will fund a bundled set of financial and business coaching services for an estimated 4,400 people in Charlotte, Detroit, Jacksonville, Fla., and Philadelphia. It is structured to help people with low-to-moderate incomes stabilize their financial outlook, build their assets, and strengthen their communities.
Ally staff in those four cities will also contribute their time and expertise to the effort, providing support as business mentors and homeownership counselors, and advancing the efforts of local nonprofits to support economic opportunity in their communities.
“There is incredible talent in all of our communities. The job to be done is to match that talent with incredible opportunity.”
— — Maurice A. Jones, LISC CEO
“This program gets to the heart of Ally’s Corporate Citizenship efforts – building economic mobility and addressing inequality in the communities where we live and work,” said Alison Summerville, business administration executive and head of Corporate Citizenship at Ally. “As a digital financial services company, Ally is in a unique position to give the participants a hand up through this program to get their lives on a more stable path.”
The Ally program will tailor its support for micro-entrepreneurs (businesses with five or fewer employees) and potential homeowners to the communities where it will operate. For example, in Philadelphia, it will expand the reach of existing place-based initiatives to spur homeownership and housing repair. In Detroit, it will support economic development by connecting residents and microentrepreneurs in two communities to education, training and financing opportunities.
“There are far-reaching social and economic benefits to helping people build housing or business assets,” explained Maurice A. Jones, LISC president and CEO. “Over the years, we have seen that the median net worth of business owners tends to be more than two times higher than that of non-business owners. But, for a black woman that difference could be multiplied by as much as 10, and for a Latino man it could be multiplied by up to five. When we support their business goals, we support a more equitable, more inclusive economy.”
The same is true of homeownership, said Ally’s Summerville. The net worth of a homeowner is over 44 times greater than that of a renter. What’s more, rising home values may have a long-term impact on the children of owners. A 2014 study by the Boston Federal Reserve, for instance, found that gains in home prices correlated with higher incomes later in life for the children of owners but not for the children of renters living in similar locations.
“There is incredible talent in all of our communities. The job to be done is to match that talent with incredible opportunity,” said Jones. “America’s future depends in no small part on how well we do this job. We’re grateful to Ally for helping people develop skills and build assets that serve as the foundation for long-term stability and growth.”
The Ally program expands on the experience of LISC’s Financial Opportunity Center network, which includes more than 95 community partnerships around the country that help people train for and find good jobs; build their incomes, credit, and savings; improve financial literacy and budgeting skills; and overcome barriers to success, like housing affordability, transportation and childcare. FOC impact data demonstrates that people who access a range of services have more success meeting their financial goals than those in programs offering a single service.
LISC estimates that the people served by the Ally program are likely to reflect the demographics of FOC clients: more than 50 percent are female heads of household in communities of color; 40 percent have no credit scores and another 40 percent have credit scores below 620; 23 percent have no high school diploma or equivalent.
