Five Questions With: Andy Posner

"Since our founding in 2009, we have had aspirations to become a national organization that is headquartered in Providence," says Capital Good Fund Founder and CEO Andy Posner. / PBN FILE PHOTO/MICHAEL SALERNO

Andy Posner is CEO of Capital Good Fund, a nonprofit he founded in 2009 while getting his master’s degree in environmental studies from Brown University. Under his direction, the organization has grown to three offices, not only in Providence and Woonsocket, R.I., but also in Hartford, Conn., and has a staff of 16 employees, more than 25 volunteers, and a budget of $800,000. Posner also is an active blogger, poet and cyclist. Here he discusses the organization’s focus on poverty and empowerment.

PBN: The Capital Good Fund uses a holistic approach to fighting poverty by providing equitable financial services to create pathways to fiscal stability. How does that approach lead to empowerment?
POSNER:
We recognize that poverty is complex and multifaceted; no one intervention can, by itself, empower a family. That’s why we offer low-income families one-on-one financial and health coaching as well as access to small personal loans. In so doing, we enable our clients to build savings, open a bank account, reduce debt, improve their credit score, and take advantage of primary care, to name a few examples. At the same time, we meet their needs for loans to place a security deposit on an apartment, repair a vehicle, purchase a computer, apply for U.S. citizenship, and other key needs.
Our philosophy is that financial services act as a hub around which all other services revolve. Put another way, there is a financial component to almost any issue a family might face. This is why we partner with dozens of Rhode Island nonprofits and places of worship: through collaboration we can truly uplift a family.
Take the example of a survivor of domestic violence. Working with a shelter, she finds a safe and affordable apartment and receives mental, physical and legal counseling. Our role? To provide a loan to cover the cost of a security deposit – an expense that often prevents a survivor from moving out of an abusive situation and one that allows her and her family to prosper. In her case, and in dozens more like it, our products, services and community partnerships help to unlock the potential of our clients and put them on a path toward prosperity.

PBN: What number of Rhode Islanders are living in poverty and what programs has your organization used to counter that?
POSNER:
According to the 2013 American Community Survey, 14.3 percent of Rhode Islanders live below the federal poverty line [as defined by the U.S. Census Bureau]. It’s important to note, however, just how low that standard is: for a family of three, the threshold is a meager $19,790 in annual household income, clearly well below what is needed for a decent standard of living. When we consider how many Rhode Islanders are at 200 percent of the poverty line or below, the percentage jumps to 33 percent, according to the Kaiser Family Foundation.
There are several elements of poverty on which we focus. For instance, 14.4 percent of Rhode Islanders are food insecure, meaning that they don’t get three square meals a day, every day. Another 19.2 percent are asset poor, defined as a household “…without sufficient net worth to subsist at the poverty level for three months in the absence of income…,” according to the national nonprofit Corporation for Enterprise Development. And 73,000 households spend more than the recommended 30 percent of their monthly income on housing, according to Spotlight on Poverty.
Through our financial and health coaching, we work with families to gain access to food stamps, create a budget that allows them to build savings and afford healthy food, and identify affordable housing. Our loans bolster these impacts by covering the cost of placing a security deposit on an affordable apartment, paying off a high-interest debt, repairing a vehicle, and a whole host of other needs.

PBN: Do you track the number of people you’ve helped gain their financial footing? If so, how many have you helped?
POSNER:
We are strong believers in social impact measurement and tracking. We have now served over 700 families with our one-on-one financial and health coaching, disbursed 700 loans totaling $650,000, and provided free tax preparation to 1,700 taxpayers, returning just under $2 million to the community. One of the impacts of which we are most proud is that the average increase in FICO score for our clients is 60 points, especially given that good credit is essential when applying for loans, insurance, housing and even jobs. Another point of pride is that our immigration loan has enabled 15 immigrants to become United States citizens.

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PBN: In August, your nonprofit received a $125,000 federal Community Development Financial Institutions Fund grant to provide microloans and financial coaching to low-income residents and communities across Rhode Island. How have you used that funding?
POSNER
: We are honored to have received this prestigious grant, and thankful to the numerous letters of support we received, including from U.S. Sen. Jack Reed, then-General Treasurer (and now Gov.) Gina M. Raimondo, and Providence Schools Superintendent Susan Lusi. We will use these funds to increase our capacity to make life-changing loans and provide financial coaching to low-income Rhode Islanders.
Specifically, we plan to invest in the people and systems we need to better serve families. For instance, we will hire an additional loan officer, as well an underwriter to handle increased loan demand.
We will also improve our online loan application, making it easier and faster to apply and get a decision. This last point is critical as we compete with predatory lenders, many of whom, while wildly more expensive (payday lenders charge 261 percent APR, compared to 30 percent plus a 4-percent closing fee on ours), are able to make same-day loan decisions. Finally, we will continue to “digitize” our financial coaching program, allowing clients to interact with their coaches and track their progress via an online portal.

PBN: So far, your locations extend to Providence, Woonsocket, and Hartford, Conn. Any plans to expand further? If so, when and where?
POSNER
: Since our founding in 2009, we have had aspirations to become a national organization that is headquartered in Providence. There are several reasons for this desire for expansion. First, we seek to put out of business a $100-billion-a-year predatory industry of payday lenders, check cashers, rent-to-own stores, auto title lenders, and so on. To truly compete with them it is imperative that we achieve significant scale.
Second, the more loans we make, the more interest income we can earn from our loan portfolio, and the greater the percentage of our operating budget is covered by interest income (as opposed to charitable contributions). As our level self-sufficiency increases, so does our flexibility when it comes to growth. And finally, given the efficacy of our business model, we wish to bring our products and services to as many families as possible.
As we look to expand, our next location will be in a state that has a high prevalence of predatory lenders, poverty and unemployment. Potential states include Alabama, Mississippi and Texas; we will make the decision depending on the availability of funding and local support. We anticipate that this expansion will take place in the second half of 2016.

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