Gentrification has an understandably bad rap, but in Philadelphia, the Samuel S. Fels Fund and a handful of other philanthropies are modeling how anti-poverty funders can respond to and work within the context of gentrifying neighborhoods — for the good of the existing minority residents they serve.
This may sound counterintuitive; after all, a legion of news reports decries gentrification’s role in displacing Hispanics and other minorities, and this study by Stanford shows how it drives Black residents in particular to ever-more disadvantaged neighborhoods. But rather than vilifying the well-to-do young urbanites excited to own or rent property in our nation’s historically notable neighborhoods, would it be possible to tap their social networks to help an area’s current, less-well-to-do residents rise? This may be a tall order given the economic, racial and cultural gulfs that often divide people in even the nation’s most “diverse” cities, but it’s part of the provocative vision of the Prosperity Lab, a new project of the Philadelphia-based nonprofit Xiente.
Formerly known as the Norris Square Community Alliance, Xiente works to disrupt generational poverty in Philadelphia’s largely Puerto Rican neighborhood of Norris Square. Since 1982, it has helped more than 20,000 people in the neighborhood and surrounding areas rise.
The Prosperity Lab is the brainchild of its relatively new executive director, Michelle Carrera Morales. Each family in the lab will have a counselor, a personalized economic mobility plan, and access to current and new programs of the nonprofit — including those that bring current residents and their new neighbors together. This approach has attracted support from Fels and other local, regional and national funders.
“We don’t want to just connect you with benefits, but customize a plan around social capital, human capital, and fiscal capital,” Carrera Morales said.
Helping low-income families stay put
Families participating in the lab also are eligible to rent below-marking housing that Xiente currently owns in the neighborhood, as well as 20 new homes the nonprofit is building with help from a very-low-interest loan of $500,000 from the Samuel S. Fels Fund, which focuses on improving conditions and opportunities for marginalized communities in Philadelphia. The fund invests in community organizations focusing on one of three areas: social, racial and economic justice; immigrants and refugees; and the arts. It was founded in 1935 by soap baron Samuel S. Fels, the son of Jewish refugees from Bavaria. Fels lived in the American South before the end of slavery and developed an early, lifelong commitment to racial justice, workers’ rights and gender equality, according to his bio, which is an inspiring read.
Because of the Fels loan, Xiente will be able to rent out new duplex units to families at 30% of the area median income, which comes out to about $600 or $700 for a two-bedroom today, according to Carrera Morales. With a standard, higher-interest bank loan, Xiente could not offer the units at such a low rent. This kind of creative financing is one way that philanthropy can move more people into stable housing, said Carrera Morales. “If the philanthropic community starts investing in housing through low-interest loans, we are able to solve the housing crisis.”
This loan is one example of the less traditional – but promising – avenues available to philanthropy as it tackles homelessness. I recently wrote about an effort to use grant money to subsidize the cost of new housing construction for former foster youth in Los Angeles, many of whom are at risk of becoming homeless. A handful of funders supported a study to look at whether a small grant could effectively lower construction costs enough to make affordable housing a good investment vehicle for foundations and impact investors. Like the low-interest loan from Fels, the L.A. project showed how transformative a small amount of cash, used creatively, can be in addressing even an intractable-seeming problem.
“They come with a social network that our families don’t have access to”
In Philadelphia, the poorest of all large U.S. cities, according to research cited by Xiente, 23.3% of residents live in poverty. Many are people of color, including immigrants, who live in barrios with neighbors who have equally limited resources. Xiente’s home neighborhood of Norris Square, however, has begun drawing newcomers with deeper pockets to its mid-19th-century Norris Square Park, which is surrounded by stately brick townhomes. The Prosperity Lab aims to leverage the presence of the generally well-educated, solidly employed gentrifiers by connecting them socially to its clients.
Plenty of poverty alleviation programs focus on human capital, and we’ve been following the growing fiscal capital-focused movement around direct cash, including, for instance, the funding intermediary UpTogether’s work on guaranteed income. A less common avenue for funders is tackling the fact that people rise through social networks — basically, acknowledging that connections matter and helping poor people make some powerful ones.
One example of building connections that I’ve covered here is the Ballmer Group’s support of Brotherhood Crusade, a leadership program for kids in South L.A. that includes an internship program with professional sports teams. But through the Prosperity Lab, Xiente is taking a more unusual, bidirectional approach. “The people moving in, the millennials and Gen-Xers, are consumers of experience. They come with a social network that our families don’t have access to,” Carrera Morales said. “We have a rich cultural background in the community. How do we mix those two things and generate income for our families?”
For starters, with food. In November, Xiente will host a sofrito mixer, a chance for new neighbors to learn to cook this staple of Puerto Rican cuisine — and for the existing residents to share their heritage and impart cultural expertise. It plans to build a cooking program and employ culinarily-talented clients as instructors of Puerto Rican and Hispanic cuisine. Other items on the social mobility agenda include classes targeting the needs of both communities, such as parenting guidance. This part of the lab is largely funded by government dollars at the moment, and the nonprofit is looking for foundation support to expand it.
Need early childhood education? We’ll come to you
Xiente is also seeking to enrich Norris Square for current residents with the Busesito, a mobile preschool offering early childhood education for nearly 100 kids. Classes, which take place on the bus, will be taught by certified teachers in two daily groups of eight kids each. Their caregivers will receive 20 hours of training on topics related to child development and health and safety. Philadelphia’s William Penn Foundation (WPF) gave about $412,000 total to the program, in a two-year grant. This grant helped Xiente purchase and retrofit the bus, which was unveiled at the end of September, and will help pay staff. Meanwhile, Vanguard Charitable Trust, also based in Pennsylvania, gave another two-year grant of $150,000 to the Busesito through its Strong Start for Kids program. These funds are partly targeted toward evaluating impact.
We covered the William Penn Foundation’s work on grandparents last year. While the Busesito is not part of its official grandparent-focused portfolio, some of the kids who will attend likely live with their grandparents. WPF’s involvement in the Busesito stemmed from the findings of a recent research project on the informal childcare landscape in Philadelphia it funded, conducted by Mathematica. “We found out through the Mathematica study that there was a lot of variability in providers’ knowledge of child development and kindergarten-readiness skills,” said Kellie Brown, WPF’s program officer overseeing the grant. “We chose this population because it was tremendously under-resourced.”
The idea for the Busesito came from a similar program in Colorado run by Valley Settlement, a nonprofit that offers services for immigrant families. Valley Settlement provided technical assistance with the Busesito, which aims to be part of a broader effort to identify, bolster and unite informal caregiver populations nationwide. “It’s common that the informal provider is under-resourced, but what’s unique is that it begins to create a network of this provider type as they come out of the woodwork,” Brown said.
While some people may question the decision to support unlicensed caregivers, Brown said parents in immigrant communities often don’t trust the system and rely on these types of providers, who also can keep children during evening hours when they may work. “I think it’s important that we name that,” Brown said. “We’re supporting families that need to remain in the workforce and need their children to be prepared for kindergarten. We’re filling an equity gap. I think that might be helpful for other funders. Philanthropy is able to absorb more risk than public funders.”
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