2006 CFED Annual Report

2006 Annual Report

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Table of Contents Setting the Stage for Future Success
(Economic development would allow every American) an ampler CFED’s Strategic Plan sets the stage for sustained growth in all of its
Letter from the President — 2
share of freedom … an unfettered start, and a fair chance, in the Letter from the Chair of the Board — 3
areas of expertise. Over the next decade, CFED will increase its impact
in asset building while strengthening its role in fostering innovation.
race of life … and would elevate the condition of people, … lift CFED’s Impact Across the Nation — 4 CFED will focus on bringing three of its major asset-building efforts

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– matched savings and investment accounts, entrepreneurship, and
Financial Security — 6
artificial weights from all shoulders, to clear the paths of laudable manufactured housing – to a scale where they can benefit millions of
Economic and Enterprise Development — 8 low- and middle-income families and hundreds of communities.
pursuit for all. Manufactured Housing — 10
CFED will also develop a pipeline of innovative ideas with the potential
– Abraham Lincoln Innovation — 12 to significantly expand economic opportunity for individuals and
Achieving Financial Sustainability: 2006 Financials — 14 communities left out of the economic mainstream. CFED will refine
Supporters — 16 its business and financial model to generate the types and amounts of
funds required to sustain an entrepreneurial culture and achieve its
Staff — 18 ambitious goals.
Board of Directors — 19
These strategic and galvanizing goals are motivated by the increasingly
urgent need to address growing economic inequality in the United
States. They take their roots in the work and partnerships CFED has
been steadfastly engaged in for years. Progress made in 2006 provides
fuel for what comes next.
CFED’s Strategic Plan (2007-2011): A
New Birth of Economic Freedom was
developed in 2006 and is available online
at www.cfed.org/go/strategicplan.

CFED expands economic opportunity
by helping Americans start and grow businesses, go to college, own a home, and save for their children’s and
own economic futures. We identify promising ideas, test and refine them in communities to find out what
works, craft policies and products to help good ideas reach scale, and develop partnerships to promote
lasting change. We bring together community practice, public policy and private markets in new and
effective ways to achieve greater economic impact. Established in 1979 as the Corporation for Enterprise
Development, CFED is a nonprofit organization that works nationally and internationally through its offices in
Washington, DC; Durham, North Carolina; and San Francisco, California.

www.cfed.org
CFED 2006 ANNUAL REPORT 1

Letter from the President Letter from the Chair of the Board
Dear Colleagues, We doubled our investments in I’M HOME: Innovations in Dear Friends, n Integrity, by making sure our progress toward these goals is duly
Manufactured Homes over the past year to produce market and measured and assessed; and
During 2006, the CFED staff and Board of Directors created a strategic policy changes so that one million owners of manufactured housing For the first time in our history, CFED has put an explicit statement n Collaboration, the last of these, is at the heart of the way we work,
plan to guide the organization from 2007 to 2011. Titled A New Birth – the major source of affordable housing in the country – can earn the of core values at the heart of our strategic plan. Through the very implicit in respect, learning and impact.
of Economic Freedom, the plan aims to take CFED to a new level same benefits from homeownership as do owners of site-built homes participative process of developing this plan, it became clear that
of operation, performance and, most importantly, economic impact. within five years. identifying and declaring our core values offered a fundamental way of The 2006 Assets Learning Conference tested our ability to
I believe that our strategic plan – with its bold vision, ambitious and charting our course, explaining it to others and dealing effectively and collaborate and pull together an increasingly complex field buffeted
substantive activities, and measurable outcomes – may be among Our vision for these specific asset-building initiatives is paired with accountably with our partners and the larger world. by huge centrifugal forces. We are proud that we were able to work
the most significant documents that we have yet produced for the an equally powerful commitment to expand CFED’s role as a source with an amazing array of partners, and to secure support from 31
organization. That we created this document collectively provides the of innovative ideas, products and services for building economic We sought a set of values which would describe our core, apply equally sponsors, 19 of them new to the Conference and the field. We are
most revealing evidence of our commitment to make real contributions opportunity. We aim to identify, test and replicate at least two new externally and internally, and would be distinctive yet widely-shared. particularly gratified that among the 1,000 exceedingly varied and
to reverse the rising economic inequality in our country. ideas that each have the potential to build individual and community We believe that the six values, taken together, point unmistakably to talented participants were, for the first time, substantial delegations
assets to benefit millions. To make these commitments feasible, the CFED and characterize our actual behavior. By stating our values, we of the Native American and disability communities, as well as financial
Our experiences during 2006 affirm and challenge us to act upon our organization proposes to diversify its financial structure through new hope people may more easily understand and embrace the strategies institutions. Their inclusion did not just happen, but was the result of
vision of expanding economic opportunity. The 2006 Assets Learning sources of earned and donated income that can offer the flexibility we develop. While we commit ourselves in this plan to measurable applied intent and a lot of honest talk and collaborative work among
Conference was a watershed event for CFED in terms of the breadth necessary to be both entrepreneurial and operate at scale. goals, we know that in a changing world, values can serve as the most CFED, First Nations Development Institute, the World Institute on
and depth of content, number and diversity of participants, quality of reliable guideposts in choosing how to navigate. We know that values Disability and others. We know that collaboration is ongoing work,
the presenters and an unprecedented number of learning partners The inspiration for all this work lies with the millions of Americans are reflected in what you do, not just what you intend, and recognize and that here, as in so many other realms, collaboration is both the
and sponsors. An effort that began a little more than 10 years ago who seek, often against daunting odds, to improve their lives and that living these values requires conscious cultivation within the destination and the way we get there.
to advocate for individual development accounts has evolved into a economic prospects through hard work, education, savings and civic organization, not just choosing colleagues with similar values. We seek
broad-based movement. This new field looks at the role of assets over engagement. The ability to achieve each of our strategic goals is equally to be known by these values, to engage with you, our partners and We look forward to living our values, and giving them fuller expression.
a lifetime to ensure that the financial incentives and structures that dependent on the efforts of our many local, state and national partners, friends, by manifesting them, and invite you to hold us accountable to We believe that you deserve no less, and that we cannot achieve our
build wealth and opportunity so effectively for well-off Americans are whose extraordinary talents, resources and dedication make working in these standards. goals in any other way.
universally shared with all Americans. CFED aims to ensure that one this field a gift every day.
million low- and moderate-income Americans benefit from some form The goals of the strategic plan grow directly out of these values: Sincerely,
of matched savings within the next five years. Thank you all for sharing in a vision that opens the doors of economic n Respect, especially for the productive capacity of low-income
freedom to low-income people. communities to shape their own economic destinies and ours,
We know that savings must be paired with income-producing activities but also for the competence of our partners and the potential
and housing to provide real financial security. Our renewed focus Sincerely, contributions of all sectors;
on entrepreneurship in rural and Native American communities n Enterprise, that creative adding of value, within the public, private
tested new strategies for delivering capital, training and business and nonprofit sectors, and in the strategies themselves; Robert Friedman,
development services that matched the capacity and market needs of n Learning from experience and the insights of our colleagues; Chair of the Board
the entrepreneur, rather than requiring the business owner to fit inside n Impact on potentially millions of working families;
an existing “program.” Our five year goal is to advance entrepreneurial Andrea Levere,
strategies in 10 rural regions or states. President

2 CFED 2006 ANNUAL REPORT CFED 2006 ANNUAL REPORT 3

CFED’s Impact Across the Nation
Collaboration is central to CFED’s success as an innovator in
expanding economic opportunity. CFED significantly advances
its mission by forming key and lasting partnerships with national,
regional and community level organizations equally committed to
giving all Americans the chance to build a financially secure future for

“
themselves and their families.

The map to the right illustrates the extent to which CFED is reaching
out to local grantees, community lenders, financial institutions and
national researchers to share and test ideas, goals and, ultimately,
successes. Each “push pin” represents at least one partner (some
Collaboration is
represent multiple partners) with whom CFED is collaborating. at the heart of the
Currently CFED partners with more than 347 organizations through
20 different programs. way we work, implicit in
Some of CFED’s partners are highlighted in the pages that follow. respect, learning
CFED thanks all its current and future partners for their wisdom,
creativity and commitment. and impact.
Collaboration is both
the destination

”
and the way we get
there.

– Robert Friedman, CFED Founder
and Chair of the Board

= Location of CFED
partner organization


Financial Security
True financial security – the ability to build assets that can be used to attention from candidates for public office in the state. APIC has policy, community development, philanthropy and the financial services
invest for the future, send children to college and weather unexpected OK Task Force Advances Children’s Savings Policy developed a comprehensive plan to pursue the development of a industry to magnify and accelerate asset-building activities such as Asset Building in Hawaii
financial storms such as job loss, medical emergencies or other universal and progressive savings policy for children in California. homeownership, business ownership, savings and investment with
The Oklahoma College In December,
life events – still eludes far too many American families. Providing These organizations join SEED advocates working with CFED and expanded engagement by private markets. To cap off this series, the
Savings Task Force concluded a 16-month
opportunities for financial security to those individuals and families its national partners and advisors to develop state policies to create Federal Reserve Bank’s Board of Governors hosted a July roundtable
its work in late 2006 by CFED
traditionally left out of the economic mainstream has long been or expand progressive savings opportunities for children. These with cosponsors CFED and the Federal Reserve Bank of Richmond,
unanimously adopting a collaboration
CFED’s priority. advocacy partners are The Sargent Shriver National Center on bringing together key leaders on the subject of assets to interpret the
report that recommends the with the
Poverty Law and Voices for Illinois Children, The Community information that emerged through the convening series. The event
development of a matched- Hawai’i
2006 Assets Learning Conference Economic Development Association of Michigan, and focused on financial products, public policy and market information.
savings program for the Alliance for
The 2006 Assets Learning Conference — A Lifetime of Assets: the Oklahoma Kids’ College Savings Campaign managed by the A major outcome was the promise of ongoing collaboration between
Oklahoma 529 College Savings Community-
Building Families, Communities & Economies provided a powerful Community Action Project of Tulsa County. CFED and member banks of the Federal Reserve System on the
Plan. CFED’s SEED state policy partner, the Community Based Economic Development
affirmation of the valuable work CFED and its partners do on behalf matters of economic opportunity and financial security.
Action Project of Tulsa County, and its initiative, the (HACBED) culminated in the release
of those aspiring to live the American dream. Set in Phoenix, Arizona Expanding Native Opportunity of Asset-Building Policy for Hawaii.
Oklahoma Kids’ College Savings Campaign, played
in September, and sponsored by Bank of America, Citigroup, Through the Expanding Native Opportunity: Native IDA Initiative, Bank on San Francisco Based on data from CFED’s Assets and
an instrumental role in the creation of the task force and
JPMorgan Chase, NeighborWorks America and many others, the formulation of the task force’s recommendations. Those CFED furthered its mission to help the country’s Native communities Bank on San Francisco is a collaborative effort to bring 10,000 of Opportunity Scorecard, the report
the biennial Conference (the eighth of its kind) was the largest recommendations include an automatic initial deposit at birth build assets and create sustainable local economies. The Native IDA the city’s estimated 50,000 un-banked households into the financial describes a comprehensive, ambitious
gathering of the assets field to date. It was also the most diverse, with for low- and moderate-income families; progressively matched Initiative is a training and technical assistance program developed mainstream. It illustrates the exciting avenues for asset building that assets agenda for the state. Moved by
greater participation by Native Americans, people with disabilities and deposits; and incorporation of the Oklahoma 529 College to enable Native communities to create and administer Individual can be taken on the local level. CFED welcomed the opportunity the ideas presented in the report, 14
representatives from the financial services industry than ever before. Savings Plan into the state’s K-12 financial education curricula. Development Account (IDA) programs. IDAs are matched savings to work with consultant Anne Stuhldreher, the Mayor’s Office members of the Hawaii State Senate
More than 1,000 participants from the public, private and nonprofit Copies of the report were distributed to the Governor and accounts specially designed to enable low-income individuals to and the Treasurer’s Office of the City and County of San introduced a progressive omnibus
sectors took part in four pre-conference sessions, five plenaries, 60 legislative leaders. In 2007, legislation is expected to put the save, build assets and enter the financial mainstream. This project Francisco, the Federal Reserve Bank of San Francisco, local bill to the legislature in early 2007 to
concurrent sessions, nearly 50 roundtable discussions and countless recommendations into effect. successfully trained and assisted more than 200 individuals from over nonprofit EARN (Earned Assets Resource Network) and provide greater financial education
opportunities for networking and sharing ideas. The 2006 Assets 60 Native American communities in 2006, helping them launch local the city’s financial institutions. Bank on San Francisco goals include and asset-building opportunities to
Learning Conference offered sessions in “tracks” that focused on three IDA programs. Expanding Native Opportunity is offered by CFED, First increasing the supply of starter account products that work for low-income families looking to build a
areas in asset building: research, policy and practice (sponsored by document specific aspects of children’s savings programs. All 12 of the Nations Development Institute and First Nations Oweesta low-income un-banked individuals, as well as raising awareness among better life.
Citigroup, Bank of America and JPMorgan Chase, respectively). initiative’s community and experimental sites achieved full enrollment, Corporation, through the U.S. Department of the Treasury’s un-banked consumers about the benefits of account ownership,
bringing the total of SEED savers to 1,395. Accountholders have Community Development Financial Institutions Fund. spurring them to open accounts.
At the Conference, CFED designed and conducted a policy survey to accumulated, on average, almost $1,200 in initial deposits, savings and
assess attendees’ views on the importance of various asset policy goals, matches. CFED-Federal Reserve System Partnership
features and approaches, as well as their willingness to participate in CFED continued its unprecedented partnership with the Federal
advocacy to support these policies. Four hundred fifty people shared In addition to encouraging savings in SEED, CFED continued its work
Reserve System to host Innovations in Asset Building Policy,
their views – almost half of all Conference attendees – making this with community partners to ensure that families with SEED accounts
Products and Programs, a series of forums across the country. The
the largest asset policy survey ever conducted. The results showed are protected from asset limits in state-administered public assistance
forums – which began in 2005 – brought together leaders in economic
substantial consensus among respondents, affirming that there is more programs, which create a disincentive to save. By year’s end, 10 of the
agreement in the field than dissension. 12 states where SEED programs are operating had either amended
state regulations or received waivers that effectively protect families
Saving for Education, Entrepreneurship and saving in SEED from such limits.
Downpayment (SEED) Policy and Practice Initiative Two additional state policy partners joined the SEED initiative: the
SEED – a 10-year policy, practice and research endeavor to develop, Asset Policy Initiative of California (APIC) and the Southern
test and impel matched savings accounts and financial education for Good Faith Fund (SGFF), in Arkansas. SGFF, which also is a
children and youth – is setting the stage for universal, progressive SEED community partner, has a strong record in asset building
American policy for asset building. Through SEED, CFED brings in Arkansas. Their policy proposal for the most progressive 529
together national and community partners to design, administer and match grant policy in the nation has already received considerable


Economic & Enterprise Development
CFED was founded on the principle that strategic investments in development offices – funds which are distributed from the West Peking University, in Beijing, China; Aavishkaar India Micro Venture
communities and individuals to make the most of inherent resources Virginia Development Office under the Department of Commerce. Capital Fund, in Mumbai (Bombay), India; and FUNDES Argentina,
and talents will create the greatest opportunity for sustainable The organizations are working with state leaders to institute new in Buenos Aires, Argentina – were awarded grants to work with a third-
economic security and growth. Today CFED continues its important program guidelines that would give West Virginia’s 46 local agencies party documenter to produce a case study about their intervention.
work to advance progressive economic development policies and four program funding choices for their respective areas: Industrial,
practices that increase the rate of formation, development and success Tourism, Technology and Entrepreneurship. Currently all state funds Development Report Card for the States
of new and growing enterprises to create wealth for low-income and are designated for use only in industrial recruitment. In January, CFED released the 19th edition of its annual economic
rural residents. n The North Carolina Rural Economic Development Center’s development benchmarking tool, the Development Report Card for
Institute for Rural Entrepreneurship successfully held its the States (DRC). For the first time in the report’s history, CFED
Rural Entrepreneurship Development Systems first Entrepreneurship Policy Summit in April. The summit saw the hosted a Capitol Hill briefing where it presented DRC findings and
The work started in 2005 by the six grantees of the CFED- formation of several policy work groups co-chaired by the leadership federal policy recommendations to more than 35 Hill staffers from 25
managed W.K. Kellogg Foundation Rural Entrepreneurship of collaborative members. These work groups will develop an states. Released since 1987, the DRC grades each state on how well its
Development Systems (EDS) Initiative continued in 2006 entrepreneurship policy action agenda for 2007, including a second economy is doing for its people, how well the economy is doing for the
with solid results. Local collaboratives – representing rural regions policy summit. state’s businesses and how well the state is preparing for its future. The
in Kentucky, Nebraska, New Mexico, North Carolina, Ohio, Oregon, focus of the 2006 report harkened back to the DRC’s origins: business
South Dakota, West Virginia and Wyoming – were tasked with creating The goal in implementing an EDS is the transformation of a region incentive reform. With roughly $60 billion spent each year by states and
a pipeline of entrepreneurs, implementing an entrepreneurship support – transformation of both the culture and practice of community localities on incentive packages to lure businesses, the report’s essay
system and fostering a policy and cultural environment supportive of economic development to create a viable, sustainable rural region. questions the wisdom of many incentive investments, noting some
entrepreneurship within the public, private and nonprofit sectors. The EDS becomes the mechanism for achieving this goal. CFED’s cases where the cost per job attracted was as high as $8.8 million.
work on the W.K. Kellogg Foundation Rural EDS Initiative will
Notable progress took place on the policy front: continue through 2008.
n In January, the Empowering Business Spirit Initiative of Small Business Impact on Poverty
Northern New Mexico introduced a memorial encouraging Learning from Small Businesses around the Globe
Pacific Community Ventures (PCV),
the New Mexico legislative council to develop an entrepreneurs’ Small and medium-sized enterprises (SMEs or “small businesses”) play located in San Francisco, California,
bill of rights and enact an “Entrepreneur’s Day” at the New Mexico a vibrant role in economies throughout the world. Many questions provides wealth-building opportunities
state legislature. remain, however, about how directly a healthy SME sector leads to for low-income workers at its portfolio
n Efforts by Wyoming’s Oweesta Collaborative resulted in the economic growth and poverty reduction. The SME Small Grants companies through mechanisms such as
public recognition by State Treasurer Cynthia M. Lummis that there Program, managed by CFED and commissioned by the Ford profit-sharing, phantom stock programs,
should be permanent state investment in the state’s community Foundation, explores the linkages between SME strategies and 401(k)s and workplace-based individual
development financial institutions, specifically the Wind River poverty reduction. CFED solicited proposals to document innovative development accounts. The organization,
Development Fund, an Oweesta Collaborative member. pro-poor SME programs and/or policies, and received 42 submissions a grantee in the SME Small Grants
n West Virginia’s Advantage Valley collaborative partner and from 11 countries. From that pool, four organizations from around the Program, commissioned by the
policy lead, A Vision Shared, identified an opportunity to change world – Pacific Community Ventures, in San Francisco, California; Ford Foundation and managed by CFED, specifically targets
state policy regarding the use of state funds by local economic Center for Human and Economic Development Studies, at expansion-stage businesses in labor-intensive industries
– sectors such as manufacturing, food processing, distribution/
logistics, consumer products and media. PCV provides
targeted venture capital, business advising, networking and
workforce development services to companies in low-income
communities in California. A double-bottom line investor,
PCV seeks both financial and social returns, measuring social
returns in terms of the number and quality of jobs provided
for low-income individuals.


Manufactured Housing
Purchasing a home is one of the most powerful investments a family for Best Manufactured Home Subdivision in the United States;
can make in its future.Yet, in many parts of the country, the cost of n Northcountry Cooperative Development Fund’s facilitation
homeownership is increasingly out of reach. Manufactured housing has of the first manufactured home park cooperative conversion in
opened the door to homeownership for millions of families, but only Wisconsin;
part of the way. CFED is working to enable owners of manufactured n Community Reinvestment Association of North Carolina’s
homes to enjoy benefits from homeownership, including asset training session for community development agencies on
appreciation, comparable to those enjoyed by owners of site-built homes. manufactured housing as an asset-building strategy; and
n Frontier Housing’s grand opening of its manufactured housing
I’M HOME – Innovations in Manufactured Homes subdivision in Morehead, Kentucky.
CFED and its partners are working to ensure that homeownership
remains attainable for as many low-income families as possible. The A third round of I’M HOME grants will be awarded in 2007.
Advancing Homeownership Innovations in Manufactured Homes (I’M HOME) initiative,
in Appalachia launched in January 2005 with major funding from the Ford
Foundation, seeks to safeguard the wealth-building promise of
Frontier homeownership for the approximately 10 million American families Preserving Affordable Rental Housing
Housing is living in manufactured housing. The multi-year program will address For the past two years CFED has been working with the John
a Morehead, market gaps and policy issues related to the ways the homes are sold, D. and Catherine T. MacArthur Foundation, its partners,
Kentucky- financed and treated under the law. and a host of experienced public, private and nonprofit leaders
based nonprofit
to support a strategy for affordable rental housing preservation
that provides I’M HOME made over $1 million in new grant commitments to policy. The work encompassed research on field building and
affordable housing solutions that help local organizations dedicated to improving housing quality and policy change, and facilitation of a consensus model policy
build better communities through homeownership opportunities in this previously ignored sector. In its framework for preservation.
homebuyer education, affordable second year, I’M HOME nearly doubled its number of grantees (from
home mortgage loans, subdivision 15 to 27). It expanded its geographic scope, with new local partners in The results from this work include lessons learned and best
development and a range of home regions such as the Pacific Northwest, the Southwest and the Mountain practices for policy change – drawn from asset building and other
choices including site-built, modular West, and a greater presence in New England. fields – and the development of a communications plan and model
and manufactured housing.
policy framework for leading practitioners and stakeholders.
CFED continued to manage relationships with all of its local
Frontier Housing is expanding its partners, as well as with funders and national partners such as New These efforts – which prelude a pivotal Preservation Policy
manufactured housing program with Hampshire Community Loan Fund, NeighborWorks America Symposium, to be held in Washington, D.C. in 2007 – set the
the support of the CFED-led I’M and Opportunity Finance Network. stage for realizing a major goal: stimulating the market and policy
HOME initiative. Frontier Housing has
reforms needed to preserve more than one million affordable
entered into an innovative partnership Local partner successes include: units in 10 years.
with a national manufacturer to n The California-based Oakland Community Housing Inc.’s award
develop a fee-simple community of
approximately 40 homes. With its first
manufactured housing subdivision
in development, and having placed
high-quality manufactured homes on
multiple scattered sites, Frontier is now
ramping up its capacity to serve as a
broker for other nonprofit developers
across Appalachia.


Innovation
At the core of CFED’s mission is identifying, testing, implementing donors primarily, as well as from foundations and corporations, to
and championing innovative ideas that expand economic opportunity. match the savings of low-income families and provide operating

“
Over the next 10 years CFED will advance at least two new ideas that support to high-performing asset-building programs. The Fund’s other
each demonstrate the potential to build wealth and opportunity for goals include raising public awareness of matched savings as an asset-
one million low-income Americans, through a systemic process that building strategy and adapting software technology to facilitate the flow
engages a wide variety of individuals and organizations in the United of information among donors, program providers and accountholders.
States and internationally. CFED is currently engaged in two innovative
projects that could make a lasting positive impact on the lives of many Self-Employment Tax Initiative
low-income Americans: the American Dream Match Fund and the CFED’s Self-Employment Tax Initiative is exploring a new, high- If you’re in the
Self-Employment Tax Initiative. impact approach that would use the tax code to deliver support to up
to 6 million start-up and self-employed microbusinesses annually. While
business of fighting
American Dream Match Fund
CFED has embarked on a new social venture that will expand the
conventional microenterprise programs provide microcredit and/or
self-employment training to start-up businesses, fewer than 200,000
poverty and you’re
national market of donors to assist low-income savers with their per year access this delivery system. By contrast, the tax code presents not in the business of
efforts to save, acquire lifelong assets, and break the intergenerational a complementary delivery system that has the potential to reach many
cycle of poverty. The American Dream Match Fund will stimulate more unserved or poorly served microentrepreneurs. This includes building assets,
the growth of matched savings accounts, like Individual Development millions of informal businesses which forgo voluntary tax compliance
Accounts (IDAs), throughout the United States. due to confusion and unexpected cash-flow realities.
then you’re not in
the business of

”
Historically, the match incentives for such accounts – similar to an CFED began working with microenterprise and Volunteer Income Tax
employer match for 401(k) contributions – have been provided Assistance programs in 13 different states to explore effective tax fighting poverty.
through matching funds from private and public sources. As the preparation assistance and develop related long-term products for self-
number of accounts have increased over the last 10 years – to over employed businesses. Additionally, CFED is investigating how to reform
50,000 IDAs in programs run by more than 500 community-based the tax code’s self-employment interface to make it a more effective
organizations – so too have the challenges asset-building organizations “gateway” that can build the chances of success for first-time business
– Geoffrey Canada,
face when it comes to raising the money that matches participants’ tax filers.
President/CEO,
own savings. Many program sponsors report waiting lists for matched
Harlem Children’s Zone
savings accounts, a situation that arises when the sponsor’s fundraising CFED is the only national nonprofit organization focusing on tax
and/or operating capacity is constrained. policies that impact the self-employed. CFED believes there are
innovative ways to reform this traditionally unwieldy tax interface so
In late 2006, CFED initiated the American Dream Match Fund to that it helps low-income families working up the ladder of success
provide a reliable and sustainable solution to these challenges and to through self-employment.
spur innovation in the field. The Fund will raise money from individual


Achieving Financial Sustainability
2006 Sources of Funds 2006 Statement of Activities Combined Schedule of Financial Position Net Assets
(unrestricted funds) (excluding temporarily restricted funds)
as of December 31
Contributions Government Contracts $5,000,000
and Grants: 74% and Service Fees: 13% Sources of Funds 2006 2005 Assets 2006 2005
Unrestricted Funds
4,000,000
Cash and cash equivalents $ 6,190,602 $ 9,746,455
2005 Grants and Contributions $ 9,385,888 $ 7,466,908
Investments 6,537,058 4,822,861
Governments Contracts and Service Fees 1,612,654 521,766
Contributions Conference Revenue 960,641 — Accounts Receivable 648,305 396,392 3,000,000 Permanently
and Grants: 93% 674,810
Investment Income 626,340 219,816 Grants Receivable 1,029,810 Restricted Funds
Other Income 30,843 113,030 Prepaid Expenses 46,377 21,773 2,000,000
Total 12,616,366 8,321,520 Fixed Assets, Net of Accumulated Depreciation 284,432 230,430
Deposit 2,242 2,242
1,000,000
Government
Uses of Funds Total Assets $14,738,826 $15,894,963
Conference Other
Revenue: 8% Income: 1% Contracts and
Investment Income: 5% Service Fees: 4% Program Services Liabilities
Investment Applied Research and Innovation 3,153,282 2,890,145 2005 2006
Income: 2% Field Development 2,821,501 1,525,068 Line of Credit $ — $ —
Policy 476,431 535,615 Accounts Payable and Accrued Expenses 518,513 378,335
2006 Uses of Funds SEED 4,605,105 2,775,345 Capital Lease Payable 120,951 97,531 2006 Net Assets Distribution
Communications 443,902 — Grants Payable 1,489,550 631,620
542,540 Permanently
Policy: 3% Total Program Services 11,500,221 7,726,173 Incentives Payable 2,012,987
Field Development: 23% Restricted: 40% Unrestricted: 18%
Total Liabilities 4,142,001 1,650,026
SEED: 38% Supporting Services
Fundraising 404,573 341,415 Net Assets
2005 Management and General 367,942 235,265 2005
Field Policy: 7% Temporarily
Unrestricted 1,931,734 1,588,104
Development: 18% Total Supporting Services 772,515 576,680
Temporarily Restricted 4,435,791 10,656,833 Restricted: 75%
SEED: 33% Total Expenses 12,272,736 8,302,853 Permanently Restricted 4,229,300 2,000,000

Change in net assets 343,630 18,667 Total Net Assets 10,596,825 14,244,937
Net assets, beginning of year 1,588,104 1,569,437
Applied Research
and Innovation: 35% Net assets, end of year $ 1,931,734 $ 1,588,104 Total Liabilities and Net Assets $14,738,826 $15,894,963
Applied Research
and Innovation: 26% Permanently
Temporarily
Restricted: 14%
Communications: 4% Management Restricted: 42%
Fundraising: 3%
and General: 4% Unrestricted: 11%
Fundraising: 3% Management
and General: 3%
A complete copy of the independent auditor’s report is available upon request.


Supporters
CFED expresses many grateful thanks to its supporters:

AARP Foundation David Friedman and Paulette Meyer Nancy Meyer and Marc Weiss Lena Warner
Diane Aboulafia-D’Jaen Eleanor Friedman and Jonathan Cohen Investors Promoting Opportunity Maurice Lim Miller Washington Area Women’s Foundation IPO Fund: Investors
Adina Abramowitz Phyllis K. Friedman Ralph and Dana Moore on behalf of Mr. and Mrs.Trevor Coe Washington Mutual Promoting Opportunity
Irvin André Alexander, III and Kevin McGowan Robert Friedman and Kristina Kiehl Investors Promoting Opportunity Ms. Foundation for Women Carol Wayman ‘Initial public offerings,’ or IPOs, on
Alliance Bank Adrienne Gallo on behalf of Jessica Young and Trevor Coe Nathan Cummings Foundation Stanley S. and Muriel Casper Weithorn Wall Street enable people to invest
Ameriquest Mortgage Company Ethan Goldberg on behalf of Jessica Young and Trevor Coe NeighborWorks America Wells Fargo in dynamic companies providing new
Annie E. Casey Foundation Fred and Wendy Goldberg Torod Neptune and Sabrina Michaux-Neptune Nicola Wood products and services that people
Arizona Community Foundation John and Marcia Goldman Northwest Area Foundation Z. Smith Reynolds Foundation need. CFED’s IPO Fund invites
Gerson and Barbara Bakar Betty Lucas and Steve Golub Investors Promoting Opportunity Opportunity Finance Network Investors Promoting Opportunity
Bank of America Foundation Anthony C. Gooch Chris and Janet Page to invest in CFED’s proven ability to
Kristen Barden Nan and Steven Grand-Jean Investors Promoting Opportunity Chuck and Nancy Parrish … and those who choose to remain anonymous identify, test and share new ideas and
Samuel and Sandra Bishop Ronald Grzywinski Kimberly Pate approaches that help people break out
Victoria and Hank Bjorklund Investors Promoting Opportunity H&R Block Sally G. Paynter of poverty. A contribution to the IPO
Lew and Sheana Butler Investors Promoting Opportunity Colleen and Robert D. Haas The Philanthropic Collaborative Fund is an investment in two of the
Capital One Services, Inc. Joanne and Peter Haas, Jr. Richard & Rhoda Goldman Fund most critical and powerful elements of
Catholic Healthcare West Julie and Walter J. Haas Barbara Rosen CFED’s work:
Center for Financial Services Innovation Richard and Joan M. Haber Barbara and Richard Rosenberg Investors Promoting Opportunity
Charles and Helen Schwab Foundation Midge and Sylvan Heumann Investors Promoting Opportunity Ruth Salzman Investor Promoting Opportunity n Innovation: identifying promising
Charles Schwab Bank Thomas Higgins Investor Promoting Opportunity Charles and Heather Muench Sandel Investors Promoting Opportunity new ideas to make the economy
Charles Stewart Mott Foundation Michael J. Hirschhorn and Jimena P. Martinez ShoreBank work for everyone; and
Citigroup James C. Hormel Nancy Stark and David Siegel n Improving Public Policies:
Citigroup Foundation HSBC State Farm Insurance impacting millions of people in need
William K. Coblentz Leslie and George Hume with appreciation for all the ways in which Bob and the Theodore R. and Vivian M. Johnson Scholarship Foundation, Inc. through public policies based on
Ann Cohen Friedman family help the community Leigh Tivol programs that work.
Commercebank N.A. Jim Casey Youth Opportunities Initiative Michael Torrens and Claudia Radel
Community Development Financial Institutions Fund, U.S. Department John D. and Catherine T. MacArthur Foundation Barry and Marjorie Traub Many IPO Investors make multi-year
of the Treasury Harry Johnson on behalf of Jessica Young and Trevor Coe Devin and Jenese Tucker commitments because innovation and
Corporation for National and Community Service JPMorgan Chase Foundation United Way of America policy work are long-term efforts.
David Dodson Mitchell and Joleen Julis in memory of Debra Levere W.K. Kellogg Foundation Investors Promoting Opportunity are
Denise Durham Williams James M. and Catherine P. Koshland Wachovia Foundation designated in the list to the left. CFED
eBay Foundation Ellen and Paul Lazar Marilyn and Murry Waldman in honor of Bob Friedman thanks and salutes them.
Evelyn and Walter Haas, Jr. Fund Andrea Levere and Michael Mazerov Walter and Elise Haas Fund
Betsy and Roy Eisenhardt Steven Levere and Patricia Sue Plumer in memory of Debra Levere
F.B. Heron Foundation Levi Strauss Foundation
Fair Isaac Corporation Anne S. Li and Edward R. Muldoon
A Special Thanks
Fannie Mae Foundation Lia Fund of Triangle Community Foundation
Special thanks to the Federal Faultline Foundation Michael Liburd
Reserve System for an extraordinary Federal Home Loan Bank of San Francisco Local Initiatives Support Corporation
partnership, including the Innovations Federal Home Loan Banks Mary Reynolds Babcock Foundation
in Asset-Building Policy, Products & Wayne and Leslee Feinstein in honor of Bob Friedman Kate McKee
Programs series of regional forums. Ford Foundation Elsie Meeks
Daniel and Patricia Lowy Frank Merrill Lynch Community Development Company L.L.C.


2006 CFED Annual Report

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2006 CFED Annual Report