One path open to her was to look for a job that paid enough to support her family, but her dual college major of music and poetry wasn’t a very helpful credential except for low-wage entry-level jobs. But by the time she paid for daycare for two children she would have very little left to live on. “I could easily have ended up on welfare,” she reflects now.
The other path she considered was to follow a dream born years before when she learned to make pottery in school. She could try to support herself as a craftsperson and continue to care for her children herself, but wondered if she would be able to make enough money.
Despite her fears, Walter decided to follow her dream. She hocked her wedding ring, her one resource, and bought a potter’s wheel and kiln. Going into business was a big step, though, and she needed to learn how to build a business that would support her family. At a workshop on “Selling Your Stuff,” Walter learned about the New Hampshire Community Loan Fund and its local peer group, Empowered Entrepreneurs. “I decided to join, even though I didn’t intend to borrow any money,” she told me when I visited her studio in Portsmouth, New Hampshire.
After a few months, Walter said she realized that if her business was to succeed she would need loans to promote her work and buy additional equipment. Her first loan was for $500 and her second for $3,000. Paying back these loans helped her to establish credit and to learn not to fear taking on debt for business development. Now she has a $15,000 line of credit from a traditional bank and her business supports her family and two part-time employees.
Walter said being part of Empowered Entrepreneurs was “a great touching stone” in her life. The group meets monthly to share the joys and struggles of being in business. When one of the members needs a loan, the group reviews the application and recommends approval or denial. “It helps me feel less isolated,” she said. “Each meeting rejuvenates me and gives me new ideas to help my business grow.”
Every day thousands of people in America face decisions like Wendy Walter’s, but most don’t have the options she had. Some don’t qualify for even a low-wage job or they haven’t identified a particular talent or skill they might use to start a business of their own. Thus they begin a downward spiral into poverty, joining the growing numbers of people already there—now 37 million Americans, according to the U.S. Census Bureau.
Since 2001, folksinger Martha Leader and I have conducted twenty Sunday services called “Creating a Just Economic Community” in Unitarian Universalist congregations in the Northeast. Through songs and commentary we lay out major economic challenges of our times and encourage people to explore ways to change things in their communities. At social hour one question almost always comes up: “But what can we do about poverty?” Clearly we need to do more than offer direct services to people living in poverty, as important as these services are in the short term. We need to make systemic changes to transform the factors that lead people into poverty and keep them there.
Members of at least thirty-five Unitarian Universalist congregations have discovered a way to do something about poverty by investing in community loan funds. Community-focused loan funds, banks, and credit unions put resources directly into the communities they serve—through loans to individuals and organizations to start or expand small businesses, build affordable housing, and develop community services. By moving capital into economically underdeveloped communities these relatively new, mostly not-for-profit institutions are sowing seeds of opportunity that help people avoid being plunged into poverty or move out of poverty into economic self-sufficiency.
Last November I took an eye-opening bus tour to visit some of the projects made possible by such investing. Without leaving southern New Hampshire I was able to see three major ways community investing puts money to work to end poverty: affordable housing, community services, and economic opportunity. Sponsored by the New Hampshire Community Loan Fund, which helped Wendy Walter stay out of poverty, the tour enabled investors to see first-hand how their money was being put to work. On the bus I met four members of the Unitarian Universalist Congregation in Milford, one of four UU congregations in New Hampshire that have invested in the loan fund, as have the New Hampshire–Vermont District of the Unitarian Universalist Association of Congregations. Jan Lint, a trustee of the congregation’s endowment fund and a member of its social responsibility committee, explained that the church bylaws require them to invest in socially responsible ways. “We are stunned that we didn’t know about community investing before,” she said. “Right here in our own back yard we have a place where we can see the results of our work.”
The New Hampshire Community Loan Fund helps to strengthen the supply of affordable housing in the state not only through loans to build new housing but also in a more unusual way: helping residents of mobile home parks band together to form cooperatives and buy the land under their units so developers can’t buy the park, evict them, and build shopping centers or luxury condos.
On the bus, loan fund president Julie Eades told us about its founding in 1983 with the goal of putting capital to use to help low-income people participate more fully in the economy. They had no idea they would become the nation’s leading experts in the conversion of mobile home parks to cooperatively owned communities, but their very first request for support came from residents of a park in the Lakes Region, a popular vacation destination.
First the residents had seen long black cars with out-of-state license plates drive through their community, Eades told us. Then they were told they had to leave and lose their homes so a developer could build high-priced condominiums. Loan Fund board member Rebecca Storey, who was studying community development in college at the time, developed a plan as part of her course work. Five banks turned down the proposal, but once the loan fund provided a first loan other financing came through. Ten years later the cooperative paid off its loans and now has the lowest lot rents in the state.
Then, in 1986, the residents of the Souhegan Valley Cooperative in Milford faced a similar situation. Residents got eviction notices right before Christmas and were told they had only thirty days to leave their park, which is on a busy highway and was a prime location for a shopping center. This was the bus tour’s first stop. We were invited into the community meetinghouse, where owners meet regularly to manage the affairs of their park. Co-op president Bob Cook and treasurer Ethel LaCasse greeted us and told us their story.
When residents received their eviction notices, they remembered reading a newspaper story about how the loan fund had helped residents of another park avoid eviction. They formed a tenants association, contacted the loan fund for assistance, and challenged the evictions. That slowed the process and they began negotiating.
After buying their land, members of the new cooperative continued working to improve state laws governing parks. Now park owners who want to sell their land must first offer it to residents and allow sixty days for them to match any offer that has been made. This new activism on the part of park residents is not an isolated phenomenon. “Through the process of becoming a resident-owned community, people get more connected to their larger town community,” said loan fund vice president Al Cantor. “In many cases co-op leaders go on to become town officials. They go from being pariahs to pillars of the community.”
Recently the owner-residents had to install and pay for a new water and sewer system and then repave their roads. They would like to renovate the meeting space where we were gathered, but first they need to build up their emergency reserve fund. Because the park is a supportive, affordable community, owners tend to remain longer than in the average site-built community. President Bob Cook estimates that 45 percent of the residents have been there since the park became a cooperative two decades ago, and that 75 percent have been there more than ten years. There’s a long waiting list.
The New Hampshire fund has helped residents of seventy-two parks become cooperative landowners, which inspired an award for innovation from the Opportunity Finance Network, a national association of more than 160 like-minded financial institutions. Cantor said the parks are the strongest part of the loan fund portfolio and have always repaid loans.
The second stop on our bus tour was ten miles away in Nashua. Marguerite’s Place was founded by a Roman Catholic religious order called the Gray Nuns to help women and children in crisis. This project helps women between the ages of 18 and 45 who are pregnant or have children under the age of 12. Most of the women have been abused or homeless.
Sister Mary Sharon Walsh and another nun came to Nashua in 1992 with a car, clothes, and an out-of-date computer, hoping to open a transitional housing and daycare program like their group operated in Philadelphia. Their first job was to raise funds, which they accomplished mostly through their connections with Catholic churches. They opened Marguerite’s Place on a Friday in 1994; by Monday it was full and had a long waiting list. In 1996 they bought a second building with financing from the city but turned to the loan fund for the $60,000 they needed to develop a childcare center and three units of transitional housing, since city financing was not available for these purposes.
The facility is sparkling clean and welcoming. The space between the buildings is devoted to play areas on a deck and in a tiny yard ringed by walls with brightly colored murals painted by local community groups and schools. With daycare on site, residents are encouraged to find jobs or go to school to prepare for jobs, and are helped to manage their finances and save for the future. And the staff helps the children deal with behavioral problems that often result from the chaotic lives they have led.
Many of the women who come to Marguerite’s Place have problems with drug and alcohol addiction. The program helps them deal with their problems, learn to be good parents, and eventually move into their own self-supporting independent living situations. After they leave, they can continue to use the daycare free of charge, and many do. Sister Walsh reports they have an amazing success rate: 80 percent of the women never return to rehab or to the shelter system.
Next we visited Milette Manor and the Parish Nurse Center for Wellness. Converted from a former Catholic school, this facility provides twenty-two accessible and affordable apartments for seniors, with a large community meeting room, kitchen, classrooms, and the Center for Wellness below. The Center serves more than 360 seniors through daily programs ranging from health screenings to exercise classes, Reiki, acupuncture, social activities, and classes on end-of-life issues. This is a project of Neighborhood Housing Services of Greater Nashua, a community-based development organization established to empower families to become economically self-sufficient and help solve their housing and neighborhood needs. In 2000, the Loan Fund helped Neighborhood Housing Services get the program started with a $300,000 short-term “bridge loan.” That loan helped it qualify for the $3.8 million required to rehabilitate an abandoned building into a community center.
When I visited Wendy Walter’s sky-lit teaching studio in a healing arts center in Portsmouth, I was immediately struck by the words that line the top of one wall, separated by stars: “Accept I Dream I Ask I Believe I Imagine I Create I Be I Laugh I Open I Trust I Forgive I Change.” This would be a great Sunday school room, I thought to myself.
Walter began using this studio two years ago, as a way of moving part of her business out of the garage of the house she rents several miles away. Here she teaches four classes each week, two for adults and two for children ages five and up. There are three potter’s wheels and a variety of student work in various stages of development.
Walter does her own pottery work in her garage studio. This allows her to continue to be directly involved in the lives of her children, one of whom she is homeschooling. She hopes someday to be able to buy her own house and may be able to do so with the help of an individual development account (IDA), another way that community banks and loan funds help people move beyond poverty.
Middle- and upper-income people can take advantage of government subsidies that boost their savings and investments—such as tax deductions for mortgage interest and real estate taxes, tax-sheltered investment accounts such as IRAs, and preferential capital gains tax rates. But without real estate or investments, low-income people enjoy few such subsidies. This is where IDAs make a difference.
IDAs offer a boost toward home ownership, small business development, or post-secondary education for low-income people. To prepare participants to make the best use of their savings, the IDA program requires continuing financial education, including classes for first-time homebuyers. When Walter achieves her goal of saving $2,000 over two years, the Loan Fund will triple that amount with funds it gets from donors and from federal and state programs. This will net Walter $8,000—plus interest on the money she saved—that she will be able to use toward a down payment on a home.
Nearly every piece of pottery Walter creates has stars on it. In addition to functional pieces like cups and bowls, one of her best-selling items is a bag of stars—called Dream Stars—with a word of inspiration on each one and an accompanying meditation. Many of her creations contain a message, an interpretation of the energy within each form.
“It is this interpretation that empowers the voice within the clay,” Walter said. (She named her business Voice of Clay, she told me, because she knew intuitively that clay has its own voice and that listening to that voice would bring out her own and others’ creativity and authenticity.) The cup, for instance, contains the message “Nurturer, Improve Health, Invite Warmth and Comfort.” In this way she shares her philosophy of conscious living with all who use her pottery. For Walter, life and her work are integrated and inseparable. “We’re human beings,” she said. “We have feelings, we have needs, and we have direction and purpose. There is no way to separate who we are from what we do.”
Kristin Faust, president of Enterprise Housing Financial Services, the third largest community development loan fund in the United States and a member of All Souls Church, Unitarian, in Washington, D.C., describes her community development work as a calling. “Just by existing, by making loans and getting them paid back, we show that investing in lower-income communities works,” she said.
From the handful of community development institutions that existed twenty years ago, the industry has grown exponentially. Now there are about thirty community banks, hundreds of credit unions, and thousands of community loan funds focused on helping to end poverty in the United States. One of these institutions is the Unitarian Universalist Affordable Housing Corporation, founded in 1989 by UU congregations in the Washington-Baltimore area. Over the years the UUAHC has financed 2,064 housing units and provided $11 million in financing for affordable-housing development.
For more than thirty years, the Unitarian Universalist Association has made increasing commitments to community investing, beginning in the 1970s when $500,000 was designated to be invested in minority-owned banks and in enterprises that make a high social contribution.
Now at least thirty-five congregations nationally and one UUA district have invested in community loan funds. A UUA program matches congregational and district investments of $2,000 to $10,000, thus magnifying their impact.
Jerry Gabert, the Association’s treasurer, expresses surprise that more congregations haven’t participated. “The UUA is making an offer to congregations to double their impact locally,” he said. “This is a serious commitment, but we have yet to convince enough congregations and districts to participate.” The Association has $1.5 million invested in communities now.
Each congregation that has invested has its own story, but perhaps none is quite so impressive as that of the Unitarian Universalist Church of Manchester, New Hampshire. In the fall of 2004, Kelly Teevan and his 11-year-old daughter went on a tour of projects funded by the New Hampshire Community Loan Fund. Teevan, a member of the church finance committee, told me that he brought loan fund brochures to the next committee meeting. But before he could say anything, the Rev. Mary Wellemeyer, the church’s senior minister and a supporter of socially responsible investing, recommended that the congregation invest in the fund. With that great—and wholly unexpected—lead, Teevan passed out the brochures. After deliberation the decision was made to invest $25,000, about 5 percent of the church’s endowment.
“We tend to face inward at each other and try to figure out how to make the church work, but what Unitarian Universalism is really about is what we get done in the world,” Teevan said. “Investing in the community loan fund would help us see what’s possible in our own community.”
Teevan is campaigning to get fellow parishioners to make fund investments as well. He invited Al Cantor to speak after a Sunday service, which inspired several immediate investments.
His next project is to take members of the congregation on a tour of some loan fund projects in Manchester. On the way, he plans to take them to visit the graves of early church members whose endowment gifts still help support their church and whose money is now partly invested in the loan fund. “I want to bring home to people what their investments can make happen,” he said. “They can be like these church founders and put their money to work to serve their values.”
- UUA Community Investing Matching Program. The Unitarian Universalist Association can double the impact of your congregation's investment. (UUA.org)