Loving the San Francisco Bay Area... Community development, urban ministry, trying to defeat poverty, faith, religion, politics, good music, the quest for the perfect pizza, the Yankees, motorcycles... All in a 'day's life'

Thursday, November 29, 2007

Mortgage Blues

At the Sojourners website, author Danny Schechter has an interesting comments about the current mortgage meltdown, the forces that drove the crisis and the dramatic impact on the broader market and the eventually on the poor. He writes: 
"How was this allowed to happen? These days, instead of holding onto mortgages they make, most banks sell them to Wall Street. There, prominent firms make millions recycling mortgages into securities and other exotic financial instruments, often using them to provide financing for even bigger deals—and sanctioning the unrestrained greed and unregulated chicanery of the predatory lending industry.

It became a classic “the emperor has no clothes” story when it was revealed that many of those “asset-backed securities” had no real assets behind them. Suddenly, the paper proved worthless and the markets panicked. Soon there was a “crisis of liquidity” in financial circles, as it became clear that bad deals had been funded by bad debts. That’s where we are now: trying to figure out what’s real and what’s not, as the markets melt down and mortgage companies that engaged in predatory lending implode.

It’s a major crisis, impacting the people who can least afford it. In September, the Federal Reserve cut interest rates by half a percent—a move that will help bail out bankers, but not the people who are suffering under the burden of debt and foreclosures."
The article then calls for a "a moratorium on all foreclosures until we have a full investigation of the discriminatory and illegal targeting and deceptive marketing used by shady mortgage companies—and of the collusion by investment banks and hedge funds." I'm not sure I'm ready to go that far yet. While I applaud the call to investigate the shady deals that were made and the tactics that brought the vulnerable into the market, I believe that in many cases the borrowers were speculating and knew exactly what they were doing. Bailing those who gambled on the market with borrowed money isn't appealing to me. Helping the poor certainly is. Before we go into a knee jerk reaction I suggest everyone takes a breath and approaches the issue with balance and clarity. Let's aggressively prosecute the predatory lenders, bring aid to those who were duped into bad deals, but let's also hold irresponsible borrowers accountable for speculative decisions. 

Schechter closes with a great observation about our society and the manipulation of the preditory lenders.  Ultimately, as is always the case, unchecked market forces make the 'rich richer and the poor poorer." This furthers my belief that we must educate the people, and help them become responsible stakeholders in society. Beyond welfare - to true ownership.  
"Beyond that, we also need tougher regulation of the whole credit industry, including the predatory practices of credit card companies and payday lenders. These form part of the growing “financialization” of our society, which transfers more and more wealth from the people who have least to those at the top—a process that, in the case of the mortgage meltdown, has now put the entire global economy in jeopardy."

Tuesday, November 27, 2007

Develpers Are Catching On...

You may have heard me talk about this issue before, but here is an excellent article on gentrification in urban communities - and the power of investment with a 'heart' for the poor.

Bob has been on the forefront of this issue coming from a faith based community development perspective. He helped me formulate some of my thoughts regarding our approach to breaking poverty in our community. In the article Bob states:
"But must gentrification always spell displacement for the poor? To some degree, yes. Yet displacement is not entirely bad. There are drug dealers and other rogues that need to be dislodged from a community if it is going to become a healthy place to raise children. Over-crowded tenements and flop houses should be thinned out or cleaned up and this inevitably means displacement of some of the vulnerable along with their predators. Bringing responsible property management back into a neglected community does spell disruption for those who have chosen or been forced by necessity to endure slumlord economics. But what may be disruptive for the moment can become a blessing for those who yearn for a better way of life if - and this is a big if - the poor are included in the reclamation process by the returning gentry."

Find his article on"Gentrificaiton with Justice" here.

Additionally, Siliconvalley.com reports on urban development issues:
"Developers have long shied away from poorer neighborhoods, believing it is too difficult or even impossible to make a profit there. But Lim said the program aims to show how making money and improving a community are not mutually exclusive.

"We see these low- to moderate-income neighborhoods as an opportunity," Lim said. "If we invest in these areas and revitalize them, we can increase our housing stock." "

Fundraising and Grantwriting Tips

Great resource.... thanks, Rudy.

Urbanministry.org recently posted a great list of tips and advice for folks who do fund raising. Find it here.

Monday, November 26, 2007

Who's the Illegal Immigrant, Pilgrim? (by Randy Woodley)

Found this at the Sojourners website.
There seems to be much concern lately over the people being referred to as "illegal immigrants." Let's define our terms: "Immigrant" - somebody who has come to a country and settled there. "Illegal" - forbidden by law. Concern about illegal immigrants has a familiar ring to us Native Americans. We have been empathizing with those concerns for over half a millennium.

Let's see ...Were the first immigrants to America illegal? By every definition - yes! But perhaps if they had a good reason it makes their trespass less offensive. What of their motives? The stated intent of some of the earliest European settlers in America was first to establish military superiority over the inhabitants and then "civilize" them by assimilating them into their form of government and converting them to a foreign religion. Such was the case in the earliest American colonies: From the First Charter of Virginia, April 10, 1606..."[we] may in time bring the Infidels and Savages, living in those parts, to human Civility, and to a settled and quiet Government."

And talk about attitude ... they even came expecting us to learn their language. For example, I always thought, if you come to Cherokee country, you should speak Cherokee.

Even though the European immigrants said they were fleeing totalitarianism and searching for economic freedom, they did not all come peaceably or with good intent. Attempted genocide, physical force, coercion, and the imposition of colonial structures in order to establish dominance over Native North Americans became their mode of operation. Even many early American Christians' values were evident to the indigene by the settlers' disregard for human life. This supposed Christian witness was evident in their reactions when they arrived on the eastern part of this continent and found that epidemics had wiped out several nations. Such was the case with William Bradford's infamous statement, "The good hand of God ... favored our beginnings ... sweeping away great multitudes of the natives ... that he might make room for us" (Mann, 1491: New Revelations of the Americas Before Columbus, page 56).

The devout Pilgrims did not weep for the lost Wampanoag, Patuxet, and Massachuset civilizations. Instead, one of their leaders, John Winthrop, made a "legal" declaration annulling any native claims to the land. "The Indians," he said, "had not 'subdued' the land, and therefore had only a 'natural' right to it, but not a 'civil right.' A 'natural right' did not have legal standing" (Zinn, A People's History of the United States, page 14).

Early American immigrants, now well established, may have conveniently forgotten that their ancestors did not come as law-abiding citizens, but were intent on making their own laws and disregarding any laws already established by the original Americans. They often justified the taking of innocent lives and the removal of the original inhabitants by their religion. I could go on ... believe me ... I could go on. Suffice it to say, when I look at the track record of the current immigrants compared to the first immigrants, I find much hope for the future of our country.

I also wonder if perhaps the earliest immigrants fear the current ones so much because they somehow understand that, historically, retribution often occurs. There is an old Indian adage that says, "whatever you do, comes back to you." I hope not ...

Instead, I would like to remind us of another old idea: "They kept demanding an answer, so he stood up again and said, "All right, but let the one who has never sinned throw the first stone!" (John 8:7 NLT)

Pastor Strives to Keep East Palo Alto Youths Safe

News article on the Pastor Bains' "Lord's Gym" project:
EAST PALO ALTO — Pingpong balls whizzed by Pastor Paul Bains' head as he played his own game, paddle in hand.

He stared at his opponent across the table and prepared to strike.


The ball smacked the net.

Bains placed the paddle on the table and went about his business — creating positive peer pressure.

Around him, at-risk teens played inside Lord's Gym Community Center on their lunch break last week.

"You have to touch their hearts so you can help them change their minds," Bains said. "We talk to them about staying in school and going to college. These kids have potential. They have energy."

For the last few weeks, the center has been a haven for the community's youth. To them, Bains is known as "Preach," "Uncle Paul" or "Pastor Paul."

The 46-year-old is the pastor at St. Samuel Church of God in Christ on East Bayshore Road and a senior chaplain for the East Palo Alto Police Department.

Bains said he opened the community center because he got tired looking down at the bodies that are "victims of crime and perpetrators of crime."

Last year after a Sunday service, he was called to a double homicide. Bains recalled that those involved were reportedly 13-and 17-year-old rival gang members. The next day, an 18-year-old woman was killed elsewhere.

Bains said she was an innocent bystander.

"I'm tired of looking at bodies," he said, and clasped his hands in frustration. "I'm just sick of it. We have to do a better job of reaching their souls."

So under his nonprofit organization — Project WeHope — Bains decided to rent two warehouse spaces next door to Aspire-Phoenix Academy, a public charter school. His congregation is also helping raise money for Lord's Gym Community Center.

He modeled some of the center after The Lord's Gym Sports Center in Roseville, which was founded by Doug Bird, senior pastor of Abundant Life Fellowship.

"I'm trying to show love to them regardless of where they come from," Bains said. "These guys and girls will make you cry by how they're struggling with their families."

Bains needs to raise $270,000 to fund leasing for a year, hire staff and renovate the warehouse. He has raised around $33,000.

"We've been living hand-to-mouth," Bains said.

At the gym, people from ages 13 to 30 are able to take karate lessons, sponsored by the Ravenswood Youth Athletic Association. They also can take dance classes.

Ideally, Bains' goal is to put in an indoor soccer area and have an exercise and weight area. He also wants the center to be available to the community all day, six days a week.

The cost for kids will soon be $5 a month. But Bains said if there are kids who can't afford that, they can do volunteer work in lieu of the fee.

Meanwhile, students at Aspire-Phoenix Academy often use the center during their lunch period.

"We're having fun and letting out our energy," said 14-year-old Edgar Cruz of East Palo Alto. "I feel safe here."

Pastor John Lotti (Liotti, edit mine) of St. Samuel Church agreed with Bains and said there aren't that many options for kids in the community.

"Because East Palo Alto has a generally high crime rate and youth delinquency problem, there continues to be a need for places to go that are safe and positive," Lotti (Liotti) said.

Sixteen-year-old Izamar Farias said young people have wanted a community center for a long time.

"I go during lunch, and I make the most of it," the East Palo Alto resident said. "(In the evenings) it helps the youth of East Palo Alto to get together and have a good time."

On Feb.8, Project WeHope will hold a fundraiser for the community center at Four Seasons Hotel in East Palo Alto. For more information, call 650-330-8002.

Find the article here.

Thursday, November 22, 2007


Thanksgiving seemed to come quickly this year. I've been so involved with the credit union construction project and focused on opening day I haven't had much time to think about the holidays. Now that it's here, I'm glad to slow down and reflect. While the drywall finishers wanted to work on Friday, I decided to take the time off. With all that's going on, the early mornings and late nights, I'm feeling spent and relish some time off and away.

We're headed to the Modesto area to spend the holiday with Melissa's family. Melissa's brother Fabian is hosting the meal at his home. We'll hang out with he and his family for the weekend, returning home Saturday or Sunday. Samuel, as always is excited to see his family. Sometimes I swear that he'll move over there as soon as he can.

Thanksgiving has always been my favorite holiday. While consumerism is beginning to creep in (I've been heard it called 'gray Thursday, the day before the big shopping day 'black Friday') - the holiday still remains somewhat unencumbered by the effects of the consumer culture.

We have much to be Thankful for. Melissa and I have fulfilling and exciting jobs. Samuel continues to be the joy of our lives. We're healthy, have a roof over our heads, food, clothes... God is a good God. It's not been the easiest year, but we have much to be thankful for, more than I can ever write here.

The credit union project continues to move along nicely. Below are some progressive photos of the work. It's a little hard to get the true perspective of the project, but you can get the idea. We're pushing toward a goal of opening on 12/19! It's beginning to take shape!

I'm thankful for your prayers and encouragement. Also - thanks for reading this blog! God's blessings and peace to you on this day of reflection and rejoicing.

Tuesday, November 20, 2007

Mo Signs!

I know it's somewhat irrelevant in the grand scheme of things - but Mariano Rivera singed for a three year deal, keeping him in pinstripes for the rest of his career. The Steinbrenner sons, in my opinion, did a good job in putting the team back together this year. ARod should sign in the upcoming days. Things are starting to look up!

The New York Daily News reports:
Mariano Rivera did what he does best Monday: He closed the deal.

Rivera, the team's All-Star closer, agreed to a three-year, $45 million contract, remaining in the only big-league uniform he has ever worn. Rivera's agent, Fernando Cuza, informed the club of the pitcher's decision, which came two days after he returned from a trip to the Dominican Republic.

With Jorge Posada and Rivera back in the fold, the Yankees need only polish off Alex Rodriguez's contract in the coming days to finish off their heavy offseason lifting.

"We've got everybody back," senior vice president Hank Steinbrenner told The Associated Press. "It's good to have both Jorgie and (Rivera) back"

Steve, I don't want to hear anything about the Red Sox or the Lowell signing... The Bronx still rules!

Sunday, November 18, 2007

A-Rod, Yankees and Warren Buffet

I'm very pleased about the outcome of the A-Rod - Yankees drama. In the end, I think the Yankees handled the situation well and Alex, after seeking wise counsel from tycoon Warren Buffet, decided to reign in his agent Scott Boras. The Yankees are the right fit for A-Rod, and visa-versa. As to the $275 million contract I have two reactions. My inner progressive says that it's somewhat sick that we would be willing to pay someone $27 million dollars a year to hit a white ball. How many lives could be saved with that money? However, my inner capitalist (and Yankee fan) says that business is business and the free market has the right to place value where it wants.

In the end it's interesting drama and great for the Yankees and A-Rod. I guess there still is 'safety in a multitude of counselors'.
Mike Lupica from the New York Daily News reports:

Warren Buffet to A-Rod: Dial Yankees

Alex Rodriguez did not just talk to friends in Miami about coming back to the Yankees. And he did not just talk to a few Wall Street guys as he began the process of getting a better deal for himself than his agent, Scott Boras, was ever going to get him anywhere else.

A-Rod even talked to Warren Buffett.

It's exactly as we started to tell you Friday: Last week the once and future Yankee third baseman made a phone call to Buffett at the billionaire investor's Berkshire Hathaway office in Omaha, the two of them having struck up a friendly relationship over the past couple of years. A-Rod explained to Buffett how distressed he was at the way things had ended for him with the Yankees. He talked about how his own free agency - and really, his own agent - had somehow gotten out in front of him.

And Buffett, who makes Scott Boras look like a bellhop when it comes it business, told him to do exactly what he ended up doing - call the Yankees himself.

There was nothing earth-shattering about what Buffett told him, which is that he better get on the phone himself with the Steinbrenners and do it fast. But maybe Warren Buffett, sitting out there in Omaha, a genius of business and common sense and even a great card player - bridge - had figured out something by then that A-Rod's agent should have figured out from the jump:

That the New York Yankees were always going to make the best offer to this player, even when they were bidding against themselves.

Wednesday, November 14, 2007

Hunger in the Richest Country on Earth?

Reuters reports:
The U.S. government said the number of Americans who went hungry in 2006 was held in check at 35 million people from the prior year, but food advocacy groups said on Wednesday more needs to be done.

The U.S. Agriculture Department said a total of 12.65 million households were "food insecure," or 10.9 percent of U.S. homes, up from 12.59 million a year ago.

The USDA defines food insecurity - its metric for measuring hunger - as having difficulty acquiring enough food for the household throughout the year.

What I'm reading right now....

I always have about three books going at once, one devotional, one for work related issues and one for recreational reading. My recreational books usually are history, biographies or novels. I wish I could say I finish every book I start - but I think I do a pretty good job of completing them... Here's what I'm reading these days:

"A Knock At Midnight" - A collection of sermons from the Rev. Dr. Martin Luther King. Truly inspiring work. Go and buy this now...

"The Day of Battle: The War in Sicily and Italy" by Rick Atkinson. A great historical account of the battles in Sicily and Italy. I'm especially intrigued by the generals Eisenhower, Patton and Montgomery. How dysfunctional they were but still did amazing feats.

"Class Matters" by various New York Times correspondents. This is a truly fascinating book speaking to the issues of poverty and class differences in America. Is the 'new' racism and segregation based on class? Does class segregation betray a deeper racial divide? Interesting stuff for those of us who work in urban or rural poverty.

Tuesday, November 13, 2007

MLK on the Church - "A Knock at Midnight"

If the church does not recapture it's prophetic zeal, it will become an irrelevant social club without moral or spiritual authority. If the church does not participate actively in the struggle for peace and for economic and racial justice, it will forfeit the loyalty of millions and cause men everywhere to say that it has atrophied it's will.

But if the church will free itself from the shackles of a deadening status quo and, recovering its great historic mission, will speak and act fearlessly and insistently in terms of justice and peace, it will enkindle the imagination of mankind and fire the souls of men, imbuing them with a glowing and ardent love for truth, justice and peace. Men far and near will know the church as a great fellowship of love that provides light and bread for lonely travelers at midnight.
- Excerpt from Dr. Martin Luther King's sermon, 'A Knock at Midnight'.

I truly love the Church. My heart resonates with what Dr. King says here. I truly believe that the church, by extending the Kingdom of God into the world, is the answer to the world's problems. If we can get our focus off the kingdom of this age, and the desires that cloud our vision, we can and will change the world as we wait with expectancy for the return of Christ.

I see the credit union project, our youth financial literacy project and the like as part of the answer, and part of my role as pastor and member of the glorious Body of Christ.

Q. What do you see the role of the church in society? How is your church changing the world? Do you agree / disagree with Dr. King?

Lord, Your Grace....

Listened to this song from Fred Hammond this morning...
Lord Your grace
Covering me like a soft summer shower
Raining down on me
Goodness and mercy
Loving me daily
Forgiving me freely

Poor and afraid left out lost and alone
Til Your tender love came and made me your own
How could I make it and where would I be
Without Your grace, (undeserved favor) grace, grace

Where sin abounds grace abounds so much more
Covering me from the sun to the floor
And if I forget then the spirit of grace cries out
(And I remember)
Sweet peace

I am no longer a prisioner of shame for the truth is
I know that I am complete in Your grace

As I look back over all the years that I made it through
I can't imagine where I'd be now if it wasn't for You
Why Your favor rests upon me I could never explain
But I'm so glad that I cansay

Your grace in my life lasts forever
Your goodness and mercy and grace lasts forever
Your grace in my life lasts forever
And I'm so glad that I can say
Can I get a witness up in here??!!

Monday, November 12, 2007

Is Al Gore a Venture Capitialist?

Former VP is hanging in our back yard! Interesting article.
Al Gore's next act: Planet-saving VC

The recovering politician is teaming with a legendary venture capitalist and bigtime moneyman to make over the $6 trillion global energy business.

(Fortune Magazine) -- It's lunchtime on Sand Hill Road, and Al Gore wants answers. "How does the efficiency decline with latitude?" he asks. "What size community could be served by one plant? If a manufacturer like GE wanted to make smaller turbines, would the technology support a smaller scale?"

We're sitting in the giant conference room at Kleiner Perkins Caufield & Byers, where the partners hold their weekly meetings. After loading his plate with Chinese food from a buffet, Gore is firing detailed questions at the management team of Ausra, a Kleiner-backed company in Palo Alto whose technology uses mirrors the width of a flatbed truck that focus the sun's energy to generate electricity.

Read the entire article here.

Extreme Makeover Home Edition

Rudy said if I mentioned Extreme Makeover Home Edition it would pump up my blog visitors number... Let's see!

Really Digging this Record...

The Shepherd's Dog by Iron and Wine. Shades of Paul Simon... Buy it here or on you favorite digital music provider. I'm still partial to itunes...

The more I listen to Iron and Wine the more I like them. Mellow stuff, spacial sounds...

Sunday, November 11, 2007

Veterens Day Memory - Park named after my uncle in Staten Island


This playground honors the memory Sergeant Carmine Liotti (1924-1945) and Private First Class Lloyd Ikefugi (1923-1945), two young men from Staten Island who died fighting for their country in World War II.

Carmine Liotti, born December 13, 1924, lived in New Brighton at 18 Ely Street and attended P.S. 17 on Harvard Avenue. At McKee High School he played football, and the Journal of American Football listed him as an all-star player. Liotti joined the army immediately after high school and became a medic in 319th Infantry. By April 15, 1945, Liotti’s unit advanced to the town of Glauchau, in the Saxony region of Germany. While Liotti attended to wounded men on the battlefield and prepared them for transport to the hospital in town, a German nurse called upon him to help evacuate an injured German as well. Lifting the German onto his litter jeep, Liotti proceeded up the main street of the town. An enemy soldier, perhaps unaware that a German lay in the vehicle, threw a grenade at the jeep, and shrapnel inflicted Liotti with mortal wounds. He lived just long enough for a priest to administer last rights.

Find more info here.

BORN DEC. 13, 1924
BORN SEPT. 16, 1923
POST NO. 1296."

Saturday, November 10, 2007

Two Masters

Bono and Luciano, Soul brothers for sure.

Rest in peace, Maestro...

What an amazing video!

Friday, November 09, 2007

New NCUD Newsletter...

Dear NCUD Friends,

As I write this letter I'm brimming with excitement and thankfulness. Our journey began three years ago with a seemingly random conversation with NCUD co-founder Marc Prioleau regarding poverty, justice, opportunities and economic development in East Palo Alto. That conversation planted a seed of faith that now, after much planning, praying, crying, countless meetings and much perseverance, has blossomed into two very significant milestones: the opening of Community Trust Credit Union of East Palo Alto this December and the kicking off of our youth financial literacy initiative!

Credit Union Update
Earlier this month we received our final building permits from the City, paving the way to a projected opening in mid-December. I can now say that East Palo Alto, for the first time in history, will have it's own community focused financial institution - by the people and for the people! Finally there is a safe alternative to predatory lenders and check cashers. There will now be choices other than storing money in "mattresses and cookie jars". The residents of East Palo Alto no longer have to look elsewhere for basic financial services.

Since we've received the permits our lives have been a flurry of activity as we are making final plans, discussing the exciting and mundane topics of paint colors and door hardware, lining up contractors and laborers, and sharing the great news about the soon-to-open institution with community leaders and citizens. The space we now occupy on Bay Road will be transformed into the new credit union branch. Many of you have been a vital part of this effort; I cannot thank you enough. After the new year we will have a grand opening celebration which all of you are invited to attend.

Youth Program Update
As exciting as the credit union opening is, it's not the entire vision of NCUD. The credit union merely serves us as a launching pad and support for an array of innovative and critical programs. One of our next goals is to reach children and youth so that by the time they approach adulthood they will be equipped to make the right choices regarding debt and finances.

In September, we kicked off our youth financial literacy initiative. For this effort, we are working with five other organizations including New Creation Home Ministries, O'Keefe Family Center, College Track, the YMCA, and Beechwood School. All together we are working with about 100 middle and high schoolers teaching financial literacy skills. Some students are enrolled in our 'Economis' training program where they learn checking, saving, budgeting, investing and philanthropy skills through a cutting-edge, on-line 'token economy' program. The organizations we’re working with would not be able to offer this program to their students without our assistance.

Even with our fledgling effort we're seeing great success and excitement with the students as they learn vital skills that will help them succeed. Students have many misconceptions about money that makes the need for financial literacy a stark reality. One student asked why he would want to put his money in a bank if there was a real danger that the bank could get robbed. He believed it was safer in a hidden place, under his "control". Many of the students are learning about saving with 'token' money through our Economis program. It was a new and exciting realization for many of them that they could gain interest on money they deposited into a savings account. It's important to correct the students' misconceptions about finances, so they can make good decisions before they make crucial mistakes that will affect their lives for years.

Moving Forward
With all the great progress we've made, there are still many ways that you can help us complete our goals. A gift right now will go a long way in helping us expand our capacity to offer youth programs to other organizations and schools. With the credit union opening, the next year is critical as we build the emerging community of members that the new institution will serve. This is an exciting but seminal time for us: your support will serve to enhance and secure our efforts, further building our momentum.

Again we want to thank you for standing with us over the past years. Many of you took a risk by investing your time, talents, and prayers, and by giving sacrificially. Our hope is that you feel as much a sense of accomplishment as we do! We're looking forward to many great things to come as we finish out 2007 and look forward to 2008.

Interiview of Mohammad Yunus from Grameen Bank

Yunus is a Nobel Prize recipient and the author of the seminal book on micro finance
"Banker to the Poor." He was recently interviewed on CNN. You can see the interview here. Here are some key quotes from the interview:
  • “Women have a long-term vision, she wants to move up to something”
  • “It’s not Grameen Bank came and told them to do that; it is in their hearts”
  • “We developed a system which doesn’t need collateral, guarantee, legal”
  • “We citizens, we individuals, are capable people addressing social issues”
Inspiring stuff...

Wednesday, November 07, 2007

Leaving San Antonio, Words from the Boss

Headed home, picked up a copy of Rolling Stone with Bruce Springsteen on the cover. There is an EXCELLENT article with the Boss. He's now 58 and is starting to look back. He ends the article talking about his life and what's really important. His words were poignant to me (and perhaps those in ministry / non-profit worlds).
Q. What did you learn (after stepping back and changing scenery for 10 years)?
A. I guess life outside of work. This is a very satisfying life work, but it's a part of your overall life. How do you have relationships? How do you commit to things that are forever? How do you break all the old habits, or some of them?

I had to work on it (changing) the way that I had to work on playing the guitar when I first started - many , many hours and a lot of intense devotion. I realized that some people may come to that naturally, but I was someone that was going to have to learn it, because my instincts were wrong.

(speaking about connection to family and friends - stability, continuity and connection)

You got to have the whole picture at this point. You need the fullness of life. Without that, it's an exercise. You don't wan the things that you're writing and singing about to remain an abstraction to yourself. I always like the scene at the end of The Searchers: John Wayne brings the girl back home, but he can't enter the house himself. Very tragic.
When I read this I thought about my life and ministry. I'm trying to help the poor, share the love of Christ, but am I experiencing the fullness of life that the Kingdom of God offers? Many time those of us in ministry are some of the loneliness. We wrap ourselves in purpose, vision and the Call. But in the end, we lose balance and what is good and right become more 'flesh' than 'Spirit'.

Tuesday, November 06, 2007

Micro Enterprise Summit Breakout - Micro Enterprise and Philanthropy

Panelists: Jack Litzenburg (Charles Stewart Mott Foundation), Terry Bell (Rockwell Fund), Tracy Kartye (Anne E. Casey Foundation)

Comments from Jack Litzenburg

Mott Foundation - national funder
- Early entry into the ME market
- Helped build equity in early ME funds
- Documented lessons in ME
- Today the foundation has turned it's attention to:
  • Started ME Funders Group
    • operated through the Aspen Institute. See document created to educate funders. They created a series of funder guides
  • Funded "Micro Test" collects data to identify best practices
  • Building scale in US M.E.
    • Interested to see what the impact of building scale is on the community / organizations
- Tomorrow?
  • Micro Enterprise Leadership Academy
  • Develop entrepreneurial network for entrepreneurs
    • Cost of money is a big deal in the emerging world. In our economy the major hurdle is getting to market, competing with the big guys.
    • Ex. creation of brand name speciality foods from Appalachia that helps bring products to larger markets (Cracker Barrel Restaurants) (ACENET?)
  • Community Colleges have a role to play
    • connection between economic ed, developmental ed, adult ed
- If we are to be competitive in the world market, we must help our low income people engage in the economy

Comments from Tracy Kartye (Anne E. Casey Foundation)

Mission - to build better futures for disadvantaged children and their families

- $100m endowment for social investment
  • Expect market rate investment
Outcomes for Business Investments
  • Economic Development
  • Job Creation
  • Income patching
Comments from Terry Bell (Rockwell Fund)

- We don't really do micro credit / loaning in the US. We just can charge enough interest (in India they charge 60% interest)
- Philanthropy makes up the difference between what we can charge vs. overhead to run a program. Bell contends that overhead can't be covered by interest alone.
- Groups like Accion helps mitigate losses through relationships
- Why are philanthropists (foundations) good partners
  • they have time (don't report quarterly)
  • they have flexibility
  • can help mitigate risk
  • misconception: we're easy. there is a move in philanthropy to be more demanding, have more accountability
What do philanthropists look for in projects?
  • Bottom line
  • Measurable success
  • Begin with the end in sight
  • See that things work
Q and A with Panel:

Q. How to achieve scale?

J.L. - Most ME lending isn't so much a dollar and cents transaction these days, it's one of education. Don't underestimate the true cost of education.

Q. Will scale cost?

T.B. - Perhaps, cited example of Midwest company who were bought out and lost personal touch. Micro businesses need attention

Q. Consolidation in the ME industry:

J.L. YES! He's love to see one loan pool per city with different underwriters applying to. Having separate loan pools is suicidal. One pool would be most effective and efficient.

Accion: Has developed a common loan pool and management of loan portfolio. Check with Aspen Institute.

Q. What forces would drive that?

J.L. Perhaps by the founders for more efficient use of loan funds.

How can corporate partnerships help us (other than banks)?
  • Procurement (supplies)
  • Understanding the demand side of the labor markets
  • How to enter the global markets

Micro Enterprise Summit Afternoon Plenery - Building Wealth and Assets in Underserved Communities

Panel: Hon. Anna Escobedo Cabral (US Treasurer), Michael Barrera (US Hispanic Chamber), Leizhu Lui (United for a Fair Economy) , Regina Montoya, Moderator (New America Alliance)

Meizhu Lui is the author of the book
The Color of Wealth.

Notes from Michael Barrera's comments:

- Latino micro business is one the rise. 108k latino businesses in the US.
- Asset building is key, Latino's understand business
- SBA has been a key help
- Assets are a key determinant for loans since they determine lending criteria
- Example - working out, start with 5 lbs and work up to 200 lbs. Micro lending institutions are like personal trainers that help build up small business.
- IDA's are becoming more and more popular with lenders. Drawbacks are high admin costs and lack of interest.
- Black and Hispanic median met worth is currently flat. White median net worth gained 6%.
- Assets = leverage.
- Businesses with assets are able to build capacity
- 17% of US business meet the official definition of micro enterprise
- Many folks have the desire and skills to provide a service, but not to run a business. They require additional information regarding bookkeeping... (basic business skills)
- Real estate downtrend
  • Many start ups leveraged homes
  • lost tax revenue
  • 10% decline in housing prices to come in the next year
Notes on comments from Meizhu Lui

- Race and gender matters (from her personal story)
- Middle class is losing ground
  • Manufacturing jobs are gone
  • micro businesses can make up
Income gap between rich and poor is growing. Racial income gap remains (quoted statistics)
  • Important - helps 'weather storms'
  • 1:14 net worth ration between white and people of color
  • Not having enough money to last three months if income is lost = asset poor if
  • Minority households are far behind white households
How do people gain assets and wealth?
  • Common perception is that there is a level playing field and is due to lack of initiative
There is a huge need for non profits to play a role in being a conduit for resources.

Notes on comments from Hon. Anna Escobedo Cabral

Remember: it's also about the children and families.

We have to help kids stay in school. It's the beginning of success. Even in the largest / most successful economy in the world kids (esp. Latino) kids are dropping out.

Financial education is ABSOLUTELY essential.
  • Too many kids are graduating high school without basic knowledge. We have the highest amount of dropout rates for 18 to 29 year olds.
  • It's also important to families... We must do a better job in educating the public
We must get the word out to people who will face a mortgage reset in the next 12 to 24 months
  • Individuals were qualified at the 'teaser' rates they got at origination, not the adjusted rate.
  • People have to reach out and call their lender to work out an arrangement
  • Financial literacy and education coalition at Treasury
  • 10 million unbanked in the US (many deal in cash only)
  • Life is costly when individuals don't have a banking relationship
    • remittances, bill pay, money orders, check cashing...
- Treasury understands the need to work internationally

Audience Q and A:

Immigration reform: those for comprehensive reform are being out witted. While we march, others are calling and writing. Congressmen are getting 20:1 letters against reform. We must get involved in the process.

Financial Literacy: President is considering financial education council. Bring together community based organizations and leaders to speak about issues and needs. Information is everywhere, intersection with individuals at critical times is paramount. Community orgs, government.. all have a role to play.

Micro Enterprise Summit Keynote speech from Federal Reserve Chairman Bernake

Goal of Micro-enterprise: Offer small loans to people so they can increase their income and promote self employment.

Theme: Development of ME development in the US

  • expand opportunities and community economic development
  • more flexible terms than banks
In US credit is only one part
    • education and training are important part
      • improves survival rate / credit repayment
      • laws are regulations are significant here, more so than the informal setting outside of the US
      • There are alternative sources for credit in US
      • Lending is not essential to the broader mission of starting businesses
  • Huge benefit to families and communities
Small business = less than 500 employees.
Micro business= less than 5

ME programs are about more than the extension of credit... mentoring / networking / training / sales programs / connections to banks, colleges... Offers borrowers technical support thereby helping sucess rates.

Can ME programs become self sustaining?

  • Income from check cashing and remittances
  • Reduced costs through technology
  • Partnerships with mainstream banks. Partnership helps mainstream institutions gain new customers.
Affirms role ME programs have in starting successful businesses and how vital they are to individuals and the economy.

Micro Enterprise Summit Breakout - Local Impacts of Micro Lending

- ME has both direct and indirect impact on the overall economy.
- It also reduces the reliance on the social systems (welfare, food stamps..)
- Positive effects on families. Children see their parents succeeding (dignity building). Has inter generational affects.

- Micro finance enables creativity on a local and personal level

- 'Micro Equity' products are now emerging

- ME lending is a 'wrap around' process including basic financial literacy training, etc...

- Hear beyond the need for a loan.

- "Grow' loans. Start small with clients, help them step up to larger loans.

- Develop network of business owners. This can protect the investments by mutually growing businesses.

Micro Equity Product:
  • VC usually don't go down to ME lending
  • Identify individually already in portfolio who have potently
    • Specifically picking individuals
  • Education about VC is part of the process
    • pros and cons of VC money
Accion NM founded LLC to capitalize loan fund:
  • EQ2 products end up as debt
  • For profit LLC finds investments to consolidate (need to do more investigation on this, check with Anne from Accion New Mexico)
Loan processing - are underwriting policies compatible?

Accion looks at character. As loans increase greater standards are in place.

Competition - you will never beat Wal Mart, Starbucks... However service, creativity, etc... there is an opportunity for niche markets.

When casting vision, talk about real people... not just numbers...

Live Blogging at Summit on Microfinance in the US

I'm currently at the Summit on Micro finance in the U.S. hosted by Accion Texas in San Antonio. Micro finance is one of the next issues I'm interested in, since there is such a need in our community for developing small businesses.

Micro enterprise (ME) in the US - Robert Annibale, Citi
  • Much opportunity in the US immigrant communities
  • Micro finance (MF) institution - one that brings financial services to the unbanked. Many types of institutions. Most are not empowered to take deposits.
  • Mexico - 75% of families don't have access to financial services
  • 12% of individuals in U.K. don't have bank account
  • 12% of US adults are 'unbanked' - lack of financial services designed for their needs
  • Low income Hispanic
  • Small businesses, 'Mom and Pop'
  • Needs are more than credit - it's about capacity building and providing access to other services
  • Book: "Fortune at the Bottom of the Pyramid"
  • Community focused banks are best positioned to play a role
  • Supplier credit is main source of credit for many ME
  • Credit Unions are playing an important role with ME development
  • How can we leverage the current players and providers
    • The ability to reach scale is important - cost of financial services
      • Poor pay disproportionately more for all financial services
    • MF institutions have good performing portfolios, sometimes better than banks
      • knowing clients / relationship based.
    • How to bring scale
      • more than credit or philanthropy - individuals are clients
      • low cost is important
      • collaboration of institutions is important
        • leveraging the capacity of partners, 'mutual footprints' (key objective)
        • Citi chose to act and get involved beyond funding
        • Integration between MF / ME institutions and the banking community is an important piece
Panleists - Linda DeLaVina, UTSA

Microfinance: Knowledge for a New World

Macroeconomic forces affect the role of ME in the US
  • Decline of mfg sector and loss of well paying jobs
  • Downsizing of corporations and outsourcing use of temporary workers
  • Working parents and their care giving roles
    • changes in 'safety net' - recipients are now required to work, time limits. Has moved women into this sector
    • decline of rural communities
    • creates 'niche markets' - opportunities as well. Business services in ethnic enclaves
ME in the US
  • 2001 - 20.7 million MEs in the US
  • 86% of all enterprises in the US
  • Contribute 16.6% of total non farm employment
    • How do we help ME progress into small businesses?
ME Issues:
  • Progress to next stage
  • Increase valuation
  • Financial Literacy

The Role of Business schools
  • develop mechanisms to strengthen interaction between academics and practicing managers
  • Research / Training / policy development / finance innovations
Latino Financial Issues Program at UTSA
  • Partnership with Accion
  • Year long integrated academic and service leaning program
  • Exposes students to: financial literacy training, CED policies, entrepreneurship, challenges in minority and low income communities
  • Service leaning with high school students and micro enterprises
Elaine Edgecomb - Aspen Institute, Seek Network

MEs - 5 or fewer employees - 30 million jobs in the US

10 million facing barriers to credit and business services

1/2 of clients are women 1/2 are people of color, 2/3 are low income

How to achieve success in ME Development:

Proper assessment of risk
financial literacy
credit improvement
technical assistance
4% loan loss rate for MF in US (7% industry wide)

Trends in the Industry:
  • Pursuit of scale
    • easy to find start up funding, hard to find capacity building funding
    • Aspen launched 'Scale Academy'
  • Deepening Outreach of Immigrant Markets
  • Broadening Products and Services
    • Move up the ladder to larger investments to those who still don't meet lending criteria for large institutions
    • IDA's
    • Credit Repair / Financial Literacy
    • "Credit Builders Alliance"
  • Increased Focus on Entrepreneurial Development
    • Entrepreneurship development systems partnerships between serving organizations, schools... Meets needs from start up to high growth
    • 'regional flavor initiatives' - built around regionally characteristics
  • Using the Tax System as a Portal to Business Development Services
    • Tax forms as 'teachable moment'


Association for Enterprise Opportunity - Trade Association

Q and A from Audience:

Cultural issues (group lending) in US? Group model is less the model in the US. Community Banks are perhaps the model for group lending in the US.

How do you bring MF to scale in the US? Growing strong ME / ML orgs. Developing much tighter relationships with banking sector and other orgs. M and As in certain fields.

Contrasts between MF lenders and tradtional banks? Lower the loan loss rate the lower the costs. Invest in credit valuations. Outreach and innovation is key in MF orgs. Refine models / grater scale. Broaden references to evaluate individual's risk.