Integrating Financial Counseling with Other Municipal Services

  • Household Financial Well Being

Financial counseling can take many forms, depending on the target population, delivery mechanism and pricing structure, and level of training required on the part of the educator—though all seek to help participants address their financial needs and plan for their futures. The Cities for Financial Empowerment (CFE) Fund model, funded through its Financial Empowerment Center, offers individuals free one-on-one coaching sessions. And true to the CFE Fund mission of supporting municipal efforts to improve the financial stability of households, this model relies on integration of financial counseling into existing and new city services, including public benefits enrollment, emergency services, and housing and homeless assistance.

In March 2013, five new Financial Empowerment Centers opened in cities across the country—Denver; Lansing, Michigan; Nashville; Philadelphia; and San Antonio—that were competitively selected by Bloomberg Philanthropies. In 2014, seven new cities were awarded technical assistance grants.1 These centers are modeled after New York's Financial Empowerment Centers, which have been heralded as an innovative approach to service delivery with demonstrable results (see here  and here ). The New York locations were launched in 2008 and have helped more than 25,000 New Yorkers since that time. The CFE Fund currently has a call out for applications from cities seeking technical assistance grants to replicate the model; applications are due by April 6.

In the Southeast2, Nashville is home to a Financial Empowerment Center that is overseen through a partnership between the Mayor's Office of Economic and Community Development and the local United Way. With five counselors spread among two core locations and several satellite locations, the counselors have served over 2,400 clients as of year-end 2014. Perhaps more importantly, data show that these sessions have resulted in a reduction of over $1.1 million in debt for Nashville clients and $323,000 in savings increased for the same group.3

The Atlanta Fed's Nashville Branch recently hosted the CFE Fund's annual meeting, gathering about 30 leaders and managers of local Financial Empowerment Centers from within local governments and nonprofits. Much of the conversation was specific to the centers' operations and the ways in which managers are working with the CFE Fund to fine-tune the model to address local considerations like politics and governance dynamics, ongoing training and education for counselors, and an ability to be responsive to future demographic trends. Additionally, there were some issues and considerations that could be of interest for any type of entity engaged in financial education delivery, including:

  • There is an industry shift in measuring success, moving from strictly tracking the number of clients served and number of classes or sessions sponsored to illustrating tangible results and outcomes. As part of this new approach, the actual number of clients and sessions may decrease, especially for approaches that include more in-depth, one-on-one financial coaching. However, the general sentiment is that results for individual client outcomes are stronger.
  • It is critical to have a clear sense of mission and strategy. Although new partnerships are being encouraged among financial educators and other organizations providing a variety of social services, there is a strong emphasis in staying in one's lane. The thinking is that organizations should focus on their core areas of expertise and avoid overstepping their organizational mission and charge.
  • Organizations should leverage natural connections and opportunities to deploy tools and training effectively. There seem to be connections among the housing and workforce development fields, in that these point-in-time milestones (such as purchasing a home or seeking a job) are opportunities to build in financial education at critical moments and when individuals may be most receptive to the information. This may warrant consideration of whether programs can be written to require financial education as part of other service provisions.
  • Entities that have workforce development initiatives may be prime candidates for partnerships. Some postsecondary institutions (particularly community colleges) and even financial institutions have prioritized workforce development programming that includes financial education. There may be partnership opportunities between these entities and organizations offering the local financial education (such as hosting on-site, satellite financial counseling).
  • Funding for this work may be found in less obvious but flexible streams. Federal and local funding streams that are related to supportive services for vulnerable populations may include or offer flexibility on including financial education as a component of the services. For example, the Community Services Block Grant has some inherent flexibility that is often untapped, according to U.S. Department of Health and Human Services session speakers.
  • Local partners, including policymakers, could benefit from clearer explanation on what constitutes strong and effective financial education. This industry should use its local victories to make the case to policymakers that there are certain components that are the baseline for effective financial education, so that future and existing policies and programs can have clearer definition about what it means to include financial education as an add-on to social service delivery.

The Atlanta Fed's community and economic development (CED) team will continue to highlight resources and research from around the region and the country that are interesting and relevant for supporting household financial stability in the Southeast. The Atlanta Fed's economic and financial education team also offers resources designed to help educators convey principles of personal financial health.

By CED research analyst Emily Mitchell
March 13, 2015


1 Cities receiving technical assistance grants in 2014 included Cleveland; Hartford; Hawaii County, Hawaii; Los Angeles; Miami; San Francisco; and Seattle. These grants will support the cities' efforts to provide free public financial counseling to citizens.

2 The Southeast refers to the six states that make up the Sixth Federal Reserve District: Alabama, Florida, and Georgia and parts of Mississippi, Louisiana, and Tennessee.

3 The Nashville Office of Mayor's Office of Community and Economic Development, as of January 1, 2015.