In the Growing Push for Financial Inclusion, Funders See Cities As Key Players

The political scientist Benjamin Barber published an intriguing book recently, If Mayors Ruled the World, arguing that cities are increasingly at the forefront in solving problems worldwide at a time that national governments have become more dysfunctional.

We're certainly seeing that in the United States, along with an uptick in philanthropic funding that aims to foster innovative urban governance, as well as more civic engagement and community development. 

Well, here's yet one more problem that's now firmly on mayoral agendas: financial inclusion. 

New research from the National League of Cities (NLC) reports that in 65 percent of the cities surveyed, city leaders and policymakers are working with community partners to increase the availability of financial education and counseling. These cities also report that they are connecting families with safe and affordable financial services and access to vital public benefits.

That makes a lot of sense. If more urban residents can escape the vice-like grip of high-interest lenders, join the world of mainstream banking, and build assets, that increased financial stability would only be good for cities. 

The MetLife Foundation sponsored this new research by the NLC, which included a detailed survey of city leaders and their community partners, and follow-up phone interviews with a select group of respondents.

Cities are embracing financial inclusion in various ways. In San Francisco, every child enrolled in kindergarten receives a savings account seeded with $50. Lansing, Michigan, and Nashville, Tennessee are now providing services dedicated to families for financial counseling. Boston has launched a new Office of Financial Empowerment which provides full-service centers with job search assistance, training for career development, and financial coaching to manage resources and obtain benefits. 

MetLife is a leader in promoting efforts for financial inclusion and literacy, both in the U.S. and abroad. It sponsors the Junior League both in the U.S. and internationally; it works to educate youth about financial issues, helping to put them one step ahead of the game in adulthood. This is part of its $200 million commitment to advance financial inclusion globally, which we've reported on several times. 

Of course, MetLife isn't the only funder in this mix. The League of Cities Institute—the research, education, and training affiliate of the NLC—has received funding to work on issues of financial literacy and inclusion from many foundation. Earlier this year, the Charles Stewart Mott Foundation gave the institute $150,000 for its Cities Building Bridges to Postsecondary Success program. This program engages municipal leaders to promote children's savings accounts and helps to integrate this with other efforts to financially prepare families for college.

Ford has also supported the NLC on financial inclusion, and in 2013, gave $300,000 to the league's institute "To pilot and evaluate the Local Interventions for Financial Empowerment through Utility Payments (LIFT-UP) initiative to help families reduce debt owed to municipal utilities and build financial assets."

In support not directly related to financial services, Mott also gave the NLC Institute $450,000 in 2014 for efforts to support after-school and summer programming and bring more attention to the importance of high quality after-school programs in educational success. The Robert Wood Johnson Foundation is also a big supporter of the NLC Institute, with a 2014 grant for $600,000 for work on childhood obesity at the local level. In 2013, the Walmart Foundation provided the League with $1.5 million in funding for public policy research.

These kinds of grants underscore the broader point that cities are increasingly becoming venues to solve various problems. This especially makes sense for liberal funders, whose agendas are now often stalled by Republican majorities in Congress and in many state legislatures. Meanwhile, progressive mayors—starting with Eric Garcetti and Bill de Blasio—are on a roll from coast to coast, and with better research and policy ideas, they might achieve even more.