First National Bank is now accepting applications for our upcoming community development grant cycle which focuses on programs related to educated workforce initiatives. Apply today if your nonprofit organization is working to strengthening individual core competencies that will improve personal economic self-sufficiency, including adult basic education and vocational and employability training. Programs must be implemented for the benefit of low- or moderate income individuals, families and/or communities within the First National Bank footprint. The application period is open until 5:00 pm CST on July 6, 2018. Click here to learn more or to apply.
At First National Bank, we believe that when people support their communities by banking, shopping, and giving locally, everyone benefits. A community is made up of interconnected elements such as the population’s education and financial literacy, availability of affordable housing, access to jobs, and the general exchange of goods and services. When people bank, shop, and give locally, they are supporting the health of each of these elements and the overall success of their community. However, it could be argued that at the core of every successful community is the presence of local businesses of all sizes and types. Local businesses feed a cycle of community success that makes good things happen for the entire community.
It Begins With Our Customers
When our customers trust us to serve their financial needs, they enable us to give out loans that make things happen in a community that may not otherwise happen. When a loan is given to individuals, it enables them to realize their goals and dreams so they can live prosperous lives. When a loan is given to a local business, they have the ability to start, grow, and thrive. Both of these scenarios feed the cycle of community success that impacts every facet of a community.
Local Businesses Support Communities
When a community is home to local businesses of all sizes and types that offer a variety of goods and services, the whole community benefits. The citizens are able to purchase the items they need and want locally which simultaneously supports the businesses and keeps their hard-earned money within their community. Local businesses may then use their profits to continue expanding their businesses or they may choose to reinvest a portion back into the community. Additionally, the increase in state tax dollars collected helps support local projects and services.
Jobs Are Created
An increase in local businesses results in an increase in the availability of local jobs. More local jobs means citizens won’t have to look outside the community to obtain employment that fits their skillset. Time spent commuting to and from work is reduced, positively impacting physical and mental health. State income tax dollars remain within the community to support public services. Ultimately, citizens remain within that community because it supports all of their needs.
When a community contains a variety of local business, people are attracted to it and want to be a part of it. Housing developments tend to surround these business hubs, creating more housing options for citizens. The jobs that are created by these businesses help individuals qualify for mortgage loans, which increase homeownership rates across the community. Higher homeownership rates are a key factor in helping communities thrive because the pride of homeownership contributes to ongoing neighborhood upkeep, which helps maintain or increase home values. Additionally, when a local business is successful, they are able to reinvest back into the community that supports them. They may choose to do that in the form or philanthropy or by volunteering to support an element of successful communities that they are passionate about.
Whether it is the business owner, the employee, or the an individual positively impacted by philanthropy, the revenue that the local businesses generate enables people to live prosperous lives. These people are in a better position to buy a home, build equity, and start creating wealth that can be passed down to the next generation. They are better able to afford the goods and services they need, the extras that make life enjoyable, and still have enough left over to save for the future.
First National Bank is committed to feeding the cycle of community success by providing loans to aspiring entrepreneurs and by reinvesting in organizations working to help local businesses start, grow, and thrive. Click here to learn more.
At First National Bank, it is our vision that all of the communities we serve will be strong and successful. That’s why we partner with community leaders and direct our investments to eight interconnected assets of a successful community – Strong Local Economies, Educated Workforce, Stable Housing, Vibrant Neighborhoods, Community Cohesion, Access to Culture, Good Health and Sustained Environment. By doing so, we can be assured we’re helping where need is greatest and results are best realized.
Today we published our 2017 First in the Community Impact Report which showcases our community reinvestments throughout our seven-state footprint and the outcomes that we helped our community partners achieve. It shares both individual achievement and collective impact, as well as the progress toward meeting our 2020 goals and objectives. Serving the community is a privilege for which we remain grateful for, and our commitment will remain strong in 2018 and beyond.
Click here to view the full report.
By: Alec Gorynski
Vice President of Community Development and Corporate Philanthropy
First National Bank
Credit is an important and powerful tool for consumers and businesses alike. Access to the capital that credit provides facilitates the purchase of critical assets that otherwise would not be possible or even logical. Think of how your personal life would be different if you were unable to obtain a mortgage, student loans, or even a credit card. For most middle class Americans that would mean we could not own a home, send our children to college, or have access to cash in emergencies. Likewise, imagine how a local bakery would be affected without a loan to purchase baking equipment, a line of credit to buy ingredients, or be able to expand a booming business.
While credit is a necessary tool that can also be leveraged to make our lives possible, access to credit is not a reality for everyone. The 2015 FDIC National Survey on Unbanked and Underbanked Households (FDIC, 2015) revealed that 28 percent of households do not use credit and that 8.2 percent of households use nonbank credit such as pay day loans. The survey also concluded that lower-income households, among other demographic groups, were more likely to use nonbank credit such as a payday loan or not use any credit all. Denied credit applications, feeling discouraged about applying, or falling behind on bills were the primary drivers of this disparity.
The scenario is similar for low-income entrepreneurs who have dreams of owning their own businesses. Data shows that an unmet need for bank credit among aspiring entrepreneurs in predominately underserved communities forces business owners to obtain more expensive loans that eat up their profits. Even more discouraging is that many fail to meet the criteria to qualify for financing in the first place.
Access to credit is a critical tool that can help strengthen our communities, especially when it is available to all citizens. When used responsibly, credit enables individuals and businesses to build wealth and improve financial health. Research shows that the main driver of wealth for everyday Americans is their ability to own their own home. When one is able to qualify for a mortgage loan to purchase their home, they are reinvesting in themselves by building equity each time they make a mortgage payment. As property values tend to increase over time, the equity increases even more, creating a positive effect on net worth. When one has a sense of wealth, they are more likely to spend money on their needs and wants while fueling the local economy. Homeownership has a compounding impact on the neighborhood as a whole; homeownership fosters greater stability brought forth by improved maintenance, longer tenure, and a collective improvement in property values. On the flip side, if an individual who wishes to own a home and experience the benefits of home ownership is only able to rent, they won’t have the opportunity to build the equity that will positively impact their net worth. And since the incidence of homeownership, on average, decreases at lower income levels, many of these families are less likely to build the wealth necessary to help their children exit the cycle of poverty. Neighborhoods then do not experience the stability and growth seen by those with higher homeownership rates, and they will continue to deteriorate.
As a mortgage helps build wealth, lines of credit and credit cards help us deal with life’s inevitable ups and downs. Responsible use of a credit card enables individuals absorb negative impacts of an unexpected expense or take advantage of a purchase opportunity that would otherwise not be possible when relying on liquid cash available or without dipping into savings. Credit cards enable people to pay for the expense over a period of months. When access to credit is used responsibly over a period of time, it helps to build an individual’s credit score. A good credit score enables people to continuously obtain more credit and can even help them obtain employment. This reality is not always the case for individuals and families on the lower end of the income spectrum. When in a bind, these individuals will turn to alternative sources that ultimately cost more and are difficult to repay. When caught in this repayment cycle, it consumes cash that could otherwise be saved or used to cover future expenses.
An entrepreneur or small business owner can also be impacted by the ability or inability to access credit. Credit is a necessity for businesses to operate and grow as it can support purchasing equipment and supplies, it can fund the proper management of inventory, it can allow businesses to improve technology to enhance operations, or even purchase real estate. When a businesses in unable to access the credit, they are unable to get started, operate, and grow.
Banks are critical institutions in providing the credit necessary to help consumers, businesses, and communities realize its positive effects. Deposits in banks enable them to provide the loans that ultimately result is growth, economic activity, wealth creation, and community success. Where banks are unable to provide credit, generally due to regulation or risk concerns, there are multiple nonprofit organizations that can either improve an individual’s credit profile, or even provide direct access to credit in the interim. These include credit counseling organizations and Community Development Financial Institutions to name a few:
Rebuilding damaged credit is much harder than building established credit. Years of delinquent payments or even identity theft can take twice as long to repair. Many nonprofit organizations offer credit counseling services which provide individuals with the direct assistance and personal coaching necessary to build or improve credit as well as saving, spending, and money management skills. Operation Hope, a national nonprofit that provides economic empowerment for adults and youth, offers credit counseling in partnership with local bank branches. Here, clients can boost their credit score which will help them reap the benefits of good credit, such as employment or access to loans.
A consumer loan, such as a home loan, auto loan, or a small dollar loan, can mean the difference between owning a home or not, or even paying a bill or not. Access to credit from a traditional financial institution is not always feasible. Nonprofit Community Development Financial Institutions (CDFI) fill a gap and satisfy credit needs at lower income thresholds. As a result consumers across the income spectrum are given the chance to own a home and build equity, or just help cash flow in times of need. Here in Omaha, NE, for example, Omaha 100 provides home mortgage loans to low-income borrowers with sub-prime credit scores. Since originating its first mortgage in the late 1990s, Omaha 100 has disbursed more than $65MM in home mortgages to more than 1,000 low income families. Similarly, the Community Loan Center in Brownsville, TX offers low-interest, low-fee personal loans to consumers in need of cash in crunch time; times in which families with access to credit would use a credit card or a home equity line. These loans offer reasonable terms that enable the family the repay the loan. In addition to providing credit, these institutions often report to the credit bureaus. As a result, the use of these CDFIs can also help improve credit, moving the individual closer toward a banking relationship with a traditional financial institution.
Small Business Lending
Much like in the consumer lending space, small businesses are sometimes unable to secure the capital needed to start or expand. A lack of business history or financial challenges makes it difficult for traditional lenders to provide credit. Again, enter the Community Development Financial Institution (CDFI). In the small business arena, CDFIs provide loans to purchase equipment, manage inventory, or just start-up operations. The impact is not only realized by the business owner, but also by the community when jobs are created and income generated. The Colorado Enterprise Fund, for example, provides business loans from $1,000 to $500,000 to low-income entrepreneurs starting or operating a small business. Since its inception the Colorado Enterprise Fund has originated $73MM in loans resulting in the creation or retention of over 19,000 jobs.
It is evident that credit is necessary for both our short-term financial health and long-term financial success. With the ability to improve credit scores, or have access to the loans necessary to improve financial success, low and moderate income families can make significant strides in exiting the generational pull of poverty. Financial institutions are in a unique position to expand on their purpose of providing credit for their local communities by providing support for these important community institutions. There is obviously a belief in and passion for the power of credit, and the challenge comes is being able to provide loans when regulation limits certain activities. Partnering with nonprofit organizations that engage in credit counseling and issue loans in places financial instructions can’t is a genuine and impactful way to distribute credit to every corner of the community. Partnership can mean any number of things, each adding their own value. Banks should consider:
- Making investments or loans to Community Development Financial Institutions: while CDFIs can lend, they cannot raise deposits. Leveraging the balance sheet of local financial institutions is a great way to raise the capital necessary to provide loans in these critical areas. It’s important to consider alternative loan terms, so that the CDFI can have flexibility to lend over an extended period of time. Philanthropic foundations are also a great ally of CDFIs, providing Program Related Investments (PRI) directly into the loan pool. CDFIs are quality lenders, and due to the relationship and supplementary support they provide to their borrowers, repayment rates are high and losses low.
- Awarding donations or grants to credit counseling programs: as is the case with most nonprofit organizations, credit counseling and other financial empowerment organizations rely on donations and grants to be able to operate. When a bank provides financial support to these organizations, they are making a philanthropic investment into the future of their company. With these resources, credit counseling organizations have a track record of improving credit scores. As a result, their clients will be more likely to be a successful bank customer in the future.
- Volunteering: Like donations, volunteers are necessary resources for our nonprofit partners. Credit counseling organizations and CDFIs are unique in that they need volunteers with knowledge, skills, and abilities in personal and business finance. Bank employees are valuable assets when they serve on loan and credit committees, or even teach courses on various financial topics.
- Using your operations: For a bank, servicing a loan or even having an office is not a tremendous burden or at least one that can be reasonable absorbed. Due to their size and dependence on financial support, CDFIs and other nonprofit financial empowerment organizations would greatly benefit from the pro-bono support of local banks. Stepping up to service a loan portfolio or providing an office for a local credit counseling organization would go a long way in maintaining the stability and ultimately the impact of these necessary community partners.
Credit is a powerful tool that can play a significant role in the success and individual, and company, and the community at large. It opens doors for individuals and businesses to build wealth, manage through rough patches, and reach financial goals. When each individual and company has the ability to thrive, the entire community succeeds. The inability to obtain and/or manage credit responsibly can contribute to a vicious cycle of poor financial health, failed businesses, and poverty. In turn, the entire community suffers. Banks and their nonprofit partners have the ability and a responsibility to create proprietary and partnership solutions that ensure all members of a community have the access to credit they need in order to live prosperous lives.
About the Author:
Alec Gorynski serves as the Vice President of Community Development and Corporate Philanthropy for First National Bank and President of the First National Community Development Corporation, both located in Omaha, Nebraska. First National Bank is the largest privately-owned bank in the United States, with over $20BB in assets across 7 Midwestern states. First National Bank reinvested over $26MM back into its local communities in 2017, with an active portfolio of over $88 million in investments, much of which is focused on building financial health and credit with CDFIs and other nonprofit partners. In his role he heads the bank’s efforts to be an agent of positive change in its footprint communities through philanthropy, investing, leadership, and the use other bank tools across its seven-state footprint. Complementing his professional experience Mr. Gorynski is a co-founder and board member of Spark – a community development intermediary; past-president and Treasurer of Omaha 100 – a nonprofit CDFI; and holds board and sub-committee positions with the Nebraska Arts Council, the Omaha Community Foundation, and InCommon Community Development. He holds a Masters of Public Administration from the University of Nebraska at Omaha, and Bachelor of Science degrees in Psychology and Criminal Justice from Peru State College.
Operation HOPE, Inc. (HOPE) is the leading global provider of financial empowerment programs for low and moderate-income individuals and families. The organization’s mission is to disrupt poverty and empower inclusion by providing financial literacy, access to capital, and equity of opportunity for the underserved. Founded in 1992, HOPE has improved the economic quality of life for more than 2.8 million individuals through programs that create stakeholders: converting check cashing customers into banking customers, renters into homeowners, small business dreamers into small business owners, minimum wage workers into living wage workers, and uncertain disaster victims into financially empowered disaster survivors.
In 2016, First National Bank partnered with HOPE to bring its community uplift programming model, HOPE Inside, to Omaha, Nebraska. HOPE Inside is an in-branch program that provides credit and money management, small business development, and homeownership counseling to adults in the Greater Omaha metropolitan area so that they can ultimately achieve financial wellness and inclusion. This program was the first of its kind in the Omaha area and since its inception has helped more than 390 individuals move toward financial wellness. Of these individuals, 235 participated in credit and money management educational workshops and 146 enrolled in one-on-one credit coaching.
All of these in-branch services are provided at no cost to the client by onsite Operation HOPE Financial Wellbeing Coach, Tracey Rucker. Tracey leads individual and group sessions out of the First National Bank branch located at 50th and Ames in Omaha and shares that it is both an eye-opening and rewarding job. “It is exciting to see people change their lives just by educating them with basic financial tools,” said Tracey “Operation HOPE helps remove the barriers that have prevented someone from fully realizing their dreams. No matter what that dream is, we can help them take that first step.”
HOPE Inside clients realize life-changing impacts when they participate in the program. Sarah and Mark (actual names have been changed to protect their privacy), who participated in credit and money management programs, realized their dream of home ownership through their participation in the program. “The lending industry is a tricky place which can be very confusing for the amateur homebuyer,” said Sarah. “My husband and I rely on Tracey’s expertise to guide us in the right direction. Recently, we decided we were ready to purchase a home and knew we could go to Tracey for advice. She educated us on how to improve our credit score to receive optimal financing which included reducing debt and resolving damaging issues from our credit histories.” Mark shared “Tracey always displays a positive and professional attitude and her years of experience cannot be ignored. Without Tracey, we would surely be lost.”
The HOPE Inside program is not limited to First National Bank customers at the 50th and Ames branch. Anyone in the Greater Omaha area that can benefit from the program may contact Tracey for assistance at (402) 359-3946.
To learn more about HOPE and their financial empowerment programs, visit operationhope.org.
Local and national statistics show that about 1 in 3 women and 1 in 7 men have experienced some type of violence by an intimate partner at some point in their lifetime. Many survivors experience physical injury, depression, anxiety, low self-esteem, suicide attempts, and other health problems as a result of victimization. A nonprofit organization is Omaha, Nebraska is looking to turn life around for these victims. “The Women’s Center for Advancement (WCA) is the go-to place in the Omaha area for anyone who is experiencing domestic violence, sexual assault, stalking, or human trafficking,” said Amy Richardson, WCA CEO & President. “Our mission is to assist victims of domestic violence and sexual assault and their children to achieve safety and to empower them to lead self-determined lives.” And the WCA is doing just that as they save hundreds of lives each year through their free, high-quality services which provide immediate safety needs followed by programs and supports that help women lead independent lives.
The WCA identifies financial insecurity as a primary concern that prevents victims from leaving their abusers. “Controlling a victim’s ability to acquire, use, or maintain financial resources, is a common element of an abusive relationship known as economic abuse,” said Richardson. To counter this, WCA’s developed the Self-Sufficiency Program which addresses economic issues faced by those in an abusive relationship by increasing basic life skills, facilitating community resources, improving financial literacy, and preparing clients to seek sustainable employment.
During the Self-Sufficiency Program, each client works one on one with a case manager who assesses the client’s self-sufficiency needs, gives them a score of 0-100%, and then creates an individualized action plan to address their sufficiency needs. During their time in the program, clients are proactively referred to other WCA programs as appropriate that focus on career services and resume workshops, changing patterns of learned behavior, life skills related to self-sufficiency, and even trauma sensitive yoga. Richardson shared that “In one year, more than 824 individuals have worked with our Self-Sufficiency Case Managers through this program. One that really sticks out is Mary.”
Mary was at risk of homelessness when she started working with a Case Manager at the WCA. She was unemployed, living on a couch at a friend’s house, and had temporarily lost custody of her children to their father. One and a half months later after working with her WCA Case Manager, Mary found safe and secure apartment of her own, had secured a fulltime job, and regained custody of her children!
“The success of the self-sufficiency program could not be achieved without the support of various donors and community partners such as First National Bank,” said Richardson. “Their gift means a great deal to WCA and has allowed us to make partnerships with other financial organization in town. The Bank’s support and leadership is felt beyond the financial contribution and allows the WCA to provide a holistic approach to self-sufficiency.”
Learn more about Women’s Center for Advancement.
For 10 years, Grameen America has pursued its mission to alleviate poverty through entrepreneurship by offering loans and financial services to low-income women who wish to start a business throughout the U.S., including Omaha.
Looking at the numbers, it is easy to understand why Grameen America is recognized as the fastest growing microfinance organization in the nation. According to Tanzila Salahuddin and Julia Akselrud, representatives from Grameen America, since the Omaha branch opened in 2009, it has issued more than $66.4 million in loans to more than 7,000 women in the greater Omaha area. Last year alone, the branch issued $13.7 million in loans to more than 3,200 women, resulting in 117 new businesses opened and 334 jobs created or retained.
The Omaha branch is one of the largest in the Grameen America network, which includes 20 locations in 13 cities. Across the nation, more than $820 million in loans have been disbursed to over 98,000 women since 2008. Remarkably, Grameen maintains a 99.8 percent repayment rate.
When an entrepreneur initially seeks a small business loan from Grameen America, they are limited to a maximum of $1,500, which is repaid over a six-month period. After the initial loan is repaid, the women become eligible to receive larger loans to invest in their businesses, allowing them to accept more clients, stock more inventory or add an employee. Approximately 85 percent of women who complete their first loan cycle come back for a second loan.
“We have Omaha members who have larger loans of over $7,000 depending on how long they have been in the program,” Tanzila shares. “And after the second or third loan cycle, we see about 90 percent of our members stay with the program and come back for larger loans.”
The loans are used for a wide range of business start-ups such as food and beverage operations, cosmetic sales, clothing and fashion apparel, and a range of miscellaneous sales and services. Many businesses in Omaha operate out of the member’s home before eventually moving into a storefront.
Credit building is a major emphasis of the Grameen America business model. To qualify for a loan, financial training sessions are required. “Just by being a Grameen America member and making weekly repayments, our members are building credit files,” says Julia. “These sessions help members understand how to read their credit report and what actions to take to improve their credit scores and the impact that will have on their lives.”
Part of what makes the Grameen America business model work so well is the support of organizations from the communities they serve. Since 2013, Grameen America has enjoyed a partnership with First National Bank, which has provided $2.5 million in Equity-Equivalent Investments and more than $110,000 in grants.
“First National Bank has really helped us grow our portfolio in Omaha, as well as assist with operating expenses at our branch because the grants are directly being used to support the salaries of staff members who work very closely with our members,” Tanzila emphasizes.
Likewise, First National Bank is proud of its partnership with Grameen America who is working to promote economic develop and self-sufficiency for low to moderate income women.
We believe that an individual’s life- and job-skills have a direct correlation to their employment status and overall financial wellness. Read More
For 160 years, First National Bank has been actively supporting the communities we serve so that they remain strong and continue to grow. That’s why we are passionate about partnering with community organizations who are working to creative positive impacts where need is the greatest and results are best realized. Today, we are pleased to announce that we are kicking off the Community First Awards, a campaign that recognizes and celebrates nonprofit organizations who are contributing to the success of our communities. If you know a local nonprofit organization that has made significant contributions to the growth and strength of our community, nominate them today!
Nominations for the 2017 Community First Awards are open to the public from July 7 through July 28. Nominations will be evaluated based on the nonprofit’s impact on community needs and positive presence in the community. The highest scoring nominations will then be presented for a public vote starting on August 28. There will be one winner and runner-up selected from each of the following areas: Nebraska/South Dakota, Kansas, Illinois and Colorado. The winners will be announced in mid-September when the winning nonprofits in each area will receive a $10,000 cash donation and the runner-up a $2,500 donation. Click here for complete rules and to nominate a nonprofit organization.
First National Bank is now accepting applications for our upcoming community development grant cycle which is focused on programs related to educated workforce initiatives. The application period begins on June 5, 2017 and runs through 5:00pm CST on July 3, 2017.
Applications will be accepted from 501(c)(3) organizations working to create an educated workforce through programs dedicated to strengthening individual core competencies that improve personal economic self-sufficiency, including adult basic education, and vocational and employability training. Programs must be implemented for the benefit of low or moderate income individuals, families and/or communities and must operate within the First National Bank footprint.
Click here for more information or to apply for a community development grant.