January 29, 2018

Monday, January 29, 2018

The State of Our State

Governor Rick Snyder’s final State of the State address last week gave us insights into gains our state has made in several areas including economic development, access to health care, education and beyond.

Fast facts from the address:

  • 540,000 private-sector jobs have been created in the past 7 years

  • Michigan’s per capita personal income has grown 28 percent within the past 7 years, an average of $10,000 more in annual income per resident, making our state number six in the entire nation for such growth

  • While our state has battled a shrinking population, last year for the first time since the turn of the century, more people came into Michigan than left Michigan

  • Our state is number one in the Great Lakes region for inbound residents with bachelor’s degrees

  • 675,000 low-income residents have access to health care through the Healthy Michigan Plan, which is available through the Medicaid expansion under the Affordable Care Act

  • Early/Middle College programs have grown significantly in Michigan, there’s now more than 117 offered statewide, increasing the number of opportunities for high schoolers to earn college credits early

  • The Michigan Department of Corrections (MDOC) prison population fell below 40,000 last fall for the first time since 1993. Snyder points to successful rehabilitation and re-entry programs such as the Vocational Village at prisons in both Ionia and Jackson.

Snyder talked about these programs and many others that are working to create opportunities and growth in Michigan and how far we have come in the last several years by pushing for further investments in our state.

“How do we make it so future generations are better off, not worse off?” Snyder said. “We should look at all our action in Lansing to make sure we are adding to the lives of future generations as opposed to adding to their debts.”

In education, Snyder said he plans to request the largest per pupil funding increase in the last 15 years once he unveils his proposed 2018-2019 fiscal budget in the coming weeks.

Snyder also plans to roll out a new initiative for talent next month, while details are limited, he said it will be aimed at preparing Michigan students for the future and engaging public-private partnerships.

Beginning today through Friday, the governor’s office will also announce a new environmental or infrastructure initiative each day. Snyder said these will include plans around the following areas: rural broadband access; the Clean Michigan initiative; recycling; battling invasive species such as Asian Carp and water infrastructure.

Following the governor’s address, Gilda Jacobs, president and CEO, Michigan League for Public Policy (MLPP) applauded Snyder for his stance against further tax cuts to assure funding to protect programs and services that are helping Michigan families and encouraging increased investments in Michigan. However, Jacobs said the Legislature needs to align to ensure this positive momentum for Michigan continues.

“Some elected officials are talking about wanting to cut taxes even more with a state income tax roll back, further hampering our essential state services,” Jacobs said. “And our state could be further compromised by the new federal tax plan and impending changes to the Healthy Michigan Plan and federal safety net programs state residents and the state budget depend on.”

Snyder is expected to share his proposed state budget in the coming weeks.

Want more?

As we discuss challenges and opportunities in education, there’s still time to sign up to join the P-20 Education Affinity Group for their convening around 3rd grade reading success in Lansing on February 6.

The Green and Blue Network is hosting an event February 23rd to discuss Line 5 as a Case Study: How Can Foundations Grant for Controversial Issues?







The Growth of Children’s Savings Accounts

We’re getting a look at Asset Funders Network's (AFN) first comprehensive survey, supported by the Charles Stewart Mott Foundation, of privately funded children’s savings accounts, demonstrating how philanthropy is supporting this model.

Children’s savings accounts (CSAs) are a growing tool developed by funders, the state and/or community stakeholders, partnering with financial institutions to provide investment accounts for young children to build savings and incentives to attend college.

As CMF reported last year, children’s savings accounts are one of the strategies the National College Access Network (NCAN), of which the Michigan College Access Network (MCAN) is a member, shared in its white paper about ways to create pathways to college. What NCAN says:

  • The effect: A child from a low-income family with a college savings account is more likely to head to college. Research indicates a child “with school savings of $500 or more is about five times more likely to graduate from college.”

  • How it works: A program can partner with local financial institutions to provide saving accounts. There are different structures that can be used for this model, some provide an initial seed deposit and ongoing matched savings.

ASN said CSAs are gaining momentum around the country, engaging more than 312,000 children in 29 states in CSAs. The study attributes the growth to the support of philanthropy, noting that 71 percent of CSAs receive funding from foundations.

What we learned from the study:

  • Private funding (which includes philanthropy, corporations, financial institutions and individual donors) contributed more than $36.5 million to CSAs during 2015-2016.

  • While some CSAs may have one or two funders, most CSAs rely on several funders, for instance 55 different funders support the 14 programs in place in Indiana.

  • Charles Stewart Mott Foundation is noted as one of the major funders supporting three or more CSAs.

  • Foundations are the most common type of funding support for CSAs, with financial institutions serving as the second major source of private funding.

  • Community foundations, family foundations and independent foundations are the top three foundation types that are currently supporting the most CSAs nationwide.

  • The study says that in the Great Lakes region, Michigan and Indiana are moving CSAs forward, with 16 total CSA programs supported by 41 funders.

  • Kickstart to Career, a CSA developed and led by the Barry County Community Foundation, Hastings City Bank and Barry County schools, is in the top six in the U.S. for highest levels of total private funding of CSAs, at $1.28 million. The program provides local kindergartners with a savings account seeded with $50 and educates families about the importance of financial literacy.

  • Lansing SAVE is another CSA program in Michigan where kindergarten students are automatically enrolled in a savings account at the Michigan State University Federal Credit Union. The CSA launched in partnership with the credit union, the Lansing School District and the city of Lansing.

The study notes the growing support of philanthropy is fueling the momentum of this model as funders who may have historically supported traditional college scholarships are exploring CSAs.

“Because traditional scholarships often go to people who are already college bound, the early award approach can make scholarship money accessible to more people and widen the pool of applicants pursuing postsecondary education,” the study shares. “Additionally, early award scholarship programs can deepen the impact of financial aid dollars through CSAs’ documented impact on educational aspirations and a college.”

The Community Economic Development Association of Michigan (CEDAM), serves as the Michigan resource organization for CSA work. CEDAM recently announced its accepting request for proposals (RFP) for its CSA Replication program now through April 5.

CEDAM said that award recipients will receive up to $10,000 in funding to assist in the planning and development of a local CSA program.

Want more?

 Read ASN’s Children’s Savings Account: Survey of Private Funding.

Learn more about Kickstart to Career that’s underway in Barry County.

Connect with CEDAM.







New Report Calls for Action to Support Human Service Providers

We’re getting an inside look at some of the challenges facing community-based organizations (CBOs) which are nonprofits delivering critical human services to our communities.

A National Imperative: Joining Forces to Strengthen Human Services in America, a report commissioned by the Alliance for Strong Families and Communities and the American Public Human Services Association(APHSA) and funded in part by The Kresge Foundation, details the challenges facing these organizations and provides a call to action for cross-sector collaboration and support.

CBOs serve a wide range of community needs including child welfare; health care; services for our aging population; violence and abuse prevention; employment services; early childhood education; transportation services; housing and homelessness; public safety and more.

What we learned about CBOs from the study:

  • There are more than 210,000 human services CBOs serving communities across the country

  • 1 in 5 Americans receive critical services from the human services ecosystem

  • Human services CBOs employ approximately 3.2 million Americans and generate $200 million in economic impact for our country

  • Those who receive human services have access to both preventative services and support in a crisis situation, which the report says, “allows them to lead healthier and more productive lives.”

  • Human service CBOs have led to “increased investments in targeted, ‘upstream’ human services that have demonstrated to improve the social determinants of health and have the potential to transform how our society approaches and pays for human services. Additionally, this impact has a ripple effect on other vital and expensive sectors, including the health care, education, judiciary, and corrections systems.”

While the report highlights the value of CBOs to our communities it also examines the challenges facing CBOs, especially the concerns around their financial health and how it could negatively impact our most vulnerable populations.

The report states, “Against the backdrop of an increasing need for human services, driven by persistent poverty rates, income inequality, an aging population, and the challenge of the opioid epidemic, the financial stability of CBOs is increasingly becoming tenuous.”  

“CBOs have cut a lot of the supports for staff to put as much money as possible into direct service," Kate White, executive director, Michigan Community Action told CMF. "That means that human service workers receive less training and professional development, less time to support one another on the job, and the constant pressure to do more with less. You can only make so much stone soup.”

The study shares challenges facing CBOs, highlights include:

  • More than 40 percent of human service CBOs lack liquidity to meet short-term financial obligations

  • Nearly 1 in 8 CBOs have liabilities exceeding their assets

  • CBOs who deliver housing and shelter, mental health and general human services are facing more financial stress

  • There are constraints for CBOs with government contracts, for instance the government may not reimburse the CBO for the full cost of providing the services due to funding levels or a belief that philanthropy may fill the gap

  • Restricted donations by philanthropy can also be a challenge as it’s difficult for a CBO to determine what the need may be in the future

  • Compliance with the current regulatory and legal environment can place an undue burden on many CBOs who are forced to spend large amounts of staff time on paperwork to meet reporting requirements

  • Many CBOs face problems such as lack of access to capital for investment in technology and systemic barriers, which limit opportunities for data sharing and integration.

  • Organizational silos pose issues, as many clients have a wide range of needs where a coordinated or integrated human services system could better serve them and improve efficiency

  • Current funding levels of CBOs do not reflect the costs of competitive salaries and it’s difficult to maintain talent, yet the need continues to grow. This is a growing issue, as the study states: By 2025, the Health Resources and Services Administration predicts that there will be a shortage of 20,000 – 50,000 mental health and substance abuse social workers, a shortage of up to 20,000 psychiatrists, and a shortage of up to 60,000 clinical, counseling, and school psychologists.

These are just a few highlights from the study, but as the research shows addressing these challenges will require a cross-sector response involving CBOs, government and philanthropy.

“As government funding changes, and core funding streams for CBOs are reduced, the need for a return to funding for multi-year general operating support from foundations and private donors is critical," White said. "It would be ideal if CBOs could focus on delivering services and be able to keep their grant writing and special events to a manageable level.”

The report provides five guiding initiatives that can support CBOs and serve as a road map to strengthen the human services ecosystem, they include:

  • Commitment to Outcomes: Efforts should be focused on a common set of widely used outcomes and core measures with accountability and appropriate flexibility. Funding should be targeted to outcomes and results rather than outputs or services delivered.

  • Capacity for Innovation: Public and private funders will also need to recognize the importance of the capacity for innovation, the need for better data and analysis, and the need to support that through funding.

  • Strategic Partnerships: Grants from public and private funders should include allocating financial resources toward partnership development for CBOs.

  • New Financial Strategies: CBOs and their boards of directors must look to develop more robust finance and financial risk management capabilities, including scenario planning, recovery and program continuity planning, benchmarking and self-rating, reporting, and disclosure.

  • Regulatory Modernization: Regulators at all levels should engage with human services community-based organizations in a review and reform of CBO regulation.

Want more?

 Read the full report: A National Imperative: Joining Forces to Strengthen Human Services in America.








CCM Impact Investing Fund with Michigan-specific focus named as a top performing fund

Content excerpted and adapted from Community Capital Management press release. Read the full release here.

The Michigan Collaborative, part of Community Capital Management’s (CCM) impact investing CRANX fund, has been named the best performing fund by Morningstar, an investment research firm, in its intermediate government category, out of more than 250 funds.

The CRANX fund is the fund that is available for CMF members to invest in targeted fixed income investments in affordable housing, small business lending, and civic infrastructure, through an initiative announced last August, Investing for Impact: The Michigan Collaborative.

Battle Creek Community Foundation (BCCF) is one of the CMF members working in impact investing and has invested in The Michigan Collaborative.

“We are pleased to see that our investment at CCM continues to be maintained in a fund that receives a high ranking in the industry,” Brenda Hunt, president and CEO, Battle Creek Community Foundation said. “We are also pleased with CCM's work to determine their potential to invest in some of our more unique impact investing efforts.”

CMF is also an investor in the Michigan Collaborative. 

The CRANX fund:

  • Is ranked number 1 in its Morningstar category

  • Has led to more than $875 million of investments in environmental and social initiatives as directed by the funders/investors making the investments

  • Also, recently received the top impact rating by Aeris, a ratings and information service for impact investors, indicating ‘exceptional alignment of its impact mission, strategies, activities, and data that guide its investment programs and planning.’ This rating made the CCM fund the first publicly-traded mutual fund to receive a third-party, impact management rating.

“We are enormously gratified of the year CRANX had and are excited to see our investor base continue to grow amongst foundations, religious organizations, endowments, not-for-profits, healthcare companies, and high net worth investors,” David Sand, chief impact strategist, CCM said. “Thanks to these investors ongoing commitment to our firm and impact investing, we have invested over $8.3 billion, since inception, in impact initiatives nationwide on their behalf.”

Want more?

Learn about Investing for Impact: The Michigan Collaborative.

Have a question? Connect with our Impact Investing Team, they’re on hand to answer your questions!

Check out what fellow CMF members are doing in our impact investing video series.

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