Economic Opportunity Initiative

City of Portland, Oregon

Bureau of Housing & Community Development

NCDA ANNUAL CONFERENCE Howard Cutler

June 20, 2007

Evolution of the Initiative

• Historic CDBG focus was a place-based strategy to revitalize blighted areas

• 2003 Strategic Plan conclusion: Move to people-based strategies, Reduce # of activities, & Focus on those most in need

• By a deliberative and inclusive process, able to significantly change City’s community development focus

Economic Opp Initiative SnapshotGoal: Increase the incomes and assets of low income Portland

residents by a minimum of 25% within 3 years.

• Strategy: Build a poverty reduction system that builds on the assets of discrete low-income populations

– Programs in the system follow proven best practices – Programs provide training, supports, tools and evaluation

– System uses economy of scale as a leverage to attain added benefits on behalf of participants

• System of 29 projects today serves about 2000 participants– 12 adult workforce, 9 youth workforce, 8 microenterprise

The challenge in 2004...

• 50,000 disadvantaged households in City regardless of how strong the economy.

• “Nothing works” malaise; no improvement despite affordable housing; revitalization had not improved many residents’ living situations; no first rung on the ladder

• Local & national research in poverty reduction best practices: isolated cases, no scale

• CDBG challenging core funding source

Poverty Reduction Best PracticesWorkforce Development: • Build on population skills or sectoral opportunities • Comprehensive support services • Early employer involvement • Peer support • Long-term program relationship

• Sectoral projects develop niches

Key elements are length & comprehensiveness of support. “Give me a real shot at success!”

Poverty Reduction Best Practices

Microenterprise Development: • All Workforce elements/personal supports • Screen out/redirect some dreamers• Business training and mentoring• Multiple financial tools

• Credit repair

Key elements are length & comprehensiveness of support.

Not Your Ordinary RFP

• Directive

• Outreach & Education

• Intense Pre-Proposal Technical Assistance

• Outcome-Driven Designs

What did we fund?

• Homeless adults/multiple barriers

• Homeless and at-risk youth

• Ex-Offenders

• Chronically Mentally Ill

• Sectoral Workforce & Microenterprise

• Women/minorities in the trades

What did we fund - cont.

• Refugees and immigrants

• Underserved & home-based businesses

• Struggling craftswomen using recycled goods

Project Examples

Microenterprise

• Childcare Improvement Project

• 110 home-based bus.

• Unite for support, C.C. improvement, Bus. Ed, purchasing, marketing

Workforce

DevelopmentCorporate Connections• Standard Ins., Bar

Assoc., Comcast• Pre & post training &

support services for high risk youth

Maria Castillo - CCIP

• Immigrant with limited English; disabled abusive husband; 2 kids

• Women in family don’t work outside home, care for children with little or no pay

• Finances became desperate, took in more children but collected little, isolation compounded problems

• Saw notice at church about provider support group & joined CCIP, building

skills and confidence • Small grants improved quality of space and educational program; now

attracting higher paying clients • Emerged as business woman and educator, triple bottom line

• New confidence helped her end abuse, her own kids doing better in school & now buying a home

Christie Haynes – Open Meadow Corporate Connections

• Seriously troubled teen

• Enrolled at Open Meadow, but no motivation

• Heard presentations about Corporate Connections & took tours

• Preston Gates Law Firm had such a calm,warm but professional environment with staff that clearly want to help - “I was hooked”.

• Didn't believe that had anything to offer, but through Corporate Connections trainings, individual counseling and an internship, she began to believe in herself

• Now is firm's receptionist making $17/hr. with full benefits; "I can't believe they trust me to be their clients first impression”

• Preston Gates is paying for her training as paralegal so she can make $25.hr. and contribute even more to the firm’s work

Local HUD

Implementation:Contract Management Best Practices

• IT IS ABOUT RELATIONSHIPS

• Recognition of contractors as allies

• Continuous Quality Improvement; outcome-driven

• We work for them

BHCD

Community Based Organization

Participant

2007 Program Revenue

• Portland CDBG $2,398,281• Portland General Fund $1,560.362• NW Area Foundation $200,000• United Way $200,000

• TOTAL * $4,358,643• *Multiple grants/City increase pending

System Leverage & Coordination• Portland Family of Funds (loan fund) $850,000• Workforce Investment Bd (WIA) $200,000• State & Federal IDA funds (approx.) $32,000• Lewis & Clark Law School $150,000• OR Employment Department $500,000• Kaiser Permanente (health care for formerly homeless)   $500,000 • TANF extensions (approx.) $72,000• Banking Services (Albina Bank) $35,000

• TOTAL from Leveraged Sources $2.339 Mil.

2006 Portfolio

• 2,000 participants

• 389 microenterprises

• 1,476 workers on the job or in training

75%

At or below 30% of MFI.

25%

Between 30% and 50% of MFI.

Year Two Results: Microenterprise Startup Businesses

Average Revenues by number of years enrolled.

Enrollment 1 Year 2 Years

Year Two Results: Microenterprise

Enrollment 1 Year 2 Years

Existing Businesses

Average Revenues by number of years enrolled.

Year Two Results : WorkforceWorkforce Goal: To increase participant income by at least 25% in three years.

The average hourly wage for youth at 6 months was $8.03 and at 12 months $8.83.

For adults, the average hourly wage at 6 months was $10.57 and at 12 months $11.49.

Percentage of participants meeting Workforce Goal by amount of time enrolled in the Initiative.

MEETING WORKFORCE GOAL

Return on Investment

• Average cost per participant:– $5,500 in Year 1 – $1,000 in Year 2 – $1,000 in Year 3

• Year 1 income gains for workforce participants average $15,059

• Average business revenue gains: $25,300 for start-ups, $23,900 for existing businesses

CDBG ELIGIBILITY

• Microenterprise assistance: 570.201(o) • For workforce: A) Maximize use of CBDO

designations (570.204) for non-profits undertaking Community Economic Development activities.

• B) Utilize 570.203(c) with LMC for the National Objective, for non-CBDO projects that train, place, and retain L/M clients

Replication

• NW Area Foundation has contracted with City to provide technical assistance to interested Minnesota communities

• Duluth is on track to introduce an increasing incomes program next April

• Meetings with other CDBG entitlements in Minn. are scheduled for July

Innovations of Economic Opportunity Initiative

• Intensive technical assistance to each project before and after the contract period.

• City choosing to allocate its CDBG monies solely for those at 50% MFI

• Figuring out how to use CDBG for people-based poverty reduction

• Making adherence to best practice models a primary selection criterion

• Leveraging system for participants benefit, i.e. health care, legal, TANF extensions, IDA’s...

Lessons Learned

• We can do this! Pushing the envelope pays dividends

• Intensive technical assistance + joint problem-solving strengthens programs

• Early tracking & evaluation is key

• Clear outcomes sell the program

• One size does not fit all

Lessons Learned cont.

• Best practices work. Scale it up!!

• Use expertise of community partners

• Not all projects, not all clients succeed

• Leverage, coordinate, advocate, innovate !

• Set moderate expectations, then beat them