Wells Fargo to Donate $1 Billion to Address Housing Affordability Crisis
SAN FRANCISCO, June 8, 2019 /3BL Media/ Wells Fargo today announced an evolution of its philanthropic strategy to help address three critical issues affecting underserved communities: housing affordability, financial health and small business growth.
The Company, through its business and the Wells Fargo Foundation, will use its resources and expertise to develop new ideas and implement solutions in communities of need in collaboration with public- and private-sector organizations. In particular, Wells Fargo will commit $1 billion in philanthropy alone through 2025 to address the U.S. housing affordability crisis, including homelessness, available and affordable rentals, transitional housing and home ownership.
“Wells Fargo is focused on creating a path to stability and financial success for individuals and families that lack access to affordable housing, tools to manage financial health and capital for small business growth,” said Allen Parker, interim CEO and president of Wells Fargo. “Together, we can help spark systemic change and economic development for underserved communities. When people start businesses, build wealth and are able to afford homes in their neighborhood, communities thrive.”
Last year, Wells Fargo donated a total of $444 million to more than 11,000 nonprofits to help address economic and social needs in underserved communities. Beginning in 2019, Wells Fargo is targeting 2% of its after-tax profits for corporate philanthropy, concentrating on housing affordability, small business growth and financial health. The Company also will allocate funding for particular community needs at the local level, such as education, disaster relief and the arts.
To oversee this work, Wells Fargo also announced today that financial services industry veteran Brandee McHale will join the Company to head the Wells Fargo Foundation, effective Aug. 1, 2019. McHale brings more than 30 years of experience in public and private philanthropy to Wells Fargo, most recently as head of Corporate Citizenship at Citigroup Inc. and president of the Citi Foundation. McHale also previously worked at the Ford Foundation, developing a portfolio of investments designed to help low-income households achieve financial success. She will be based in New York City and report to Jim Rowe, head of Stakeholder Relations at Wells Fargo.
In her role, McHale will succeed Jon Campbell, current head of corporate philanthropy and community relations, who previously announced his retirement from Wells Fargo as of Dec. 31, 2019, after a distinguished 42-year career serving the Company in a variety of roles.
The Joint Center for Housing Studies at Harvard University states that nearly one-third of U.S. households spend more than 30% of their income on housing, and 18 million commit more than 50% for a safe place to live. According to the National Low-Income Housing Coalition, no state or metro in the U.S. has enough affordable rental inventory to meet the existing demand for its lowest-income residents. In addition, Urban Institute reports that 54 million residents of rural communities are living in areas with a “most severe” or “moderately severe” need for more affordable housing, as defined by the U.S. Department of Agriculture.
To address challenges in construction, financing and support services for low- and moderate-income families, the elderly and the homeless, Wells Fargo is also launching a $20 million Housing Affordability Challenge. The challenge grant is aimed at uncovering new, more rapid ways to increase the availability and sustainability of affordable housing.
“America’s housing affordability crisis isn’t restricted to cities on the East and West Coasts,” said Jon Campbell, head of Corporate Philanthropy and Community Relations at Wells Fargo. “Families everywhere are sacrificing necessities like food, healthcare and education in order to afford a place to live. Wells Fargo will bring local and national nonprofits and policy leaders together to better understand and address the full spectrum of housing affordability — from homelessness to rental housing to homeownership — and unlock more housing options for those in need.”
Since 2012, Wells Fargo has provided more charitable grants for homebuyers than any other bank in the U.S. through its philanthropic NeighborhoodLIFT ® and other LIFT programs in collaboration with NeighborWorks® America. More than 21,000 homeowners, the majority from low- and moderate-income households, have been created through over $460 million in down-payment assistance grants.
“The state of affordable housing is at a crisis point,” said Jonathan Reckford, CEO of Habitat for Humanity. “Markets all over the country that used to be affordable are seeing housing prices soar. Some people who may not have experienced housing struggles before are getting a glimpse into the impact that an unaffordable home can have on a family’s health, educational opportunities and financial stability. We are working diligently with Wells Fargo and our other committed partners to find solutions and create policies that will help millions of people meet their most basic needs.”
The Federal Reserve Board reports that nearly 40% of adults would have to resort to techniques such as borrowing money or selling something to cover an unexpected expense of $400. Wells Fargo will help expand access to financial education, financial coaching, homebuyer counseling and other programs or products that improve healthy financial habits and increase overall financial success.
This work complements existing efforts by the Company to help consumers — in particular, unbanked and underbanked individuals and families who are living outside the financial mainstream — succeed financially. In 2018, Wells Fargo team members volunteered more than 47,000 hours in support of the financial health and well-being of individuals and families, especially in underserved communities. Wells Fargo is collaborating with the Bank On movement to support local coalitions in delivering greater access to safe, affordable banking products and financial education. In addition, Wells Fargo offers Hands On Banking/El futuro en tus manos ® — a free, non-commercial financial education program in English and Spanish — to teach people about responsible money management, including through specific modules designed for youth, adults, veterans, seniors and entrepreneurs.
Small business growth
Small businesses are growing, with 52% saying revenues increased over the past year, according to the Wells Fargo/Gallup Small Business Index. In particular, however, diverse entrepreneurs need consistent access to capital and training to stay in the neighborhoods they love and bring well-paying jobs to the community. Wells Fargo will intensify efforts to develop and enhance technical assistance — such as business plan development, budgeting and marketing — alongside initiatives that will deliver more stability to startups and existing small businesses.
Wells Fargo already has committed $175 million through its Wells Fargo Works for Small Business ®: Diverse Community Capital program with funding to Community Development Financial Institutions to empower diverse entrepreneurs through innovative loan products and technical training. The program, conducted in collaboration with Opportunity Finance Network, has so far helped create more than 46,000 local jobs through assistance to minority-, women- and veteran-owned businesses in 36 states; Washington, D.C.; and Puerto Rico.
For an overview of Wells Fargo’s philanthropic strategy and look at local community impact, visit www.wellsfargo.com/impact.
About Wells Fargo
Founded in 1852 and headquartered in San Francisco, Wells Fargo & Company (NYSE:WFC) provides banking, investment and mortgage products and services, as well as consumer and commercial finance, through 7,700 locations, more than 13,000 ATMs, and the internet (wellsfargo.com). With approximately 262,000 team members, Wells Fargo serves one in three households in the United States. With its corporate philanthropy, Wells Fargo aims to pave a path to stability and financial success for underserved communities by applying a problem-solving mindset to housing affordability, small business growth, and financial health, among other local community needs. In 2018, Wells Fargo donated $444 million to nearly 11,000 nonprofits. For 10 consecutive years, Wells Fargo has held the honor of No. 1 in workplace giving by United Way Worldwide. Wells Fargo team members also actively support communities by donating more than 2 million hours of volunteer time in the last year. News, insights and more information on the company’s overall corporate responsibility are available at Wells Fargo Stories and www.wellsfargo.com/impact.