To promote change State Farm is pledging $100 million over five years to support minority communities and issues of racial equity and justice. This is just one part of the insurer’s ongoing efforts to bring about change.

“State Farm has a long history and commitment to social justice,” said Victor Terry, Chief Diversity Officer and Vice President of Public Affairs at State Farm. “Today, we take our latest step in this important journey. Doing nothing is unacceptable. Powerful solutions must be brought to the table, and we need a lot of people at the table, too.”

The $100 million contribution will support a variety of community-focused projects, including small business support, funding for affordable housing programs, and educational advancement programs. Funds will be a combination of charitable contributions and community investments.

“This pledge is truly a continuation of our historical, nearly 100 year-support of organizations that help to meet the most pressing needs of the communities where we live and work,” said Terry.

That near 100-year history has included support for affordable housing and economic empowerment for underprivileged communities across the United States. One such organization is the Local Initiatives Support Corporation (LISC). During the 20-year relationship, State Farm has invested $149 million in LISC’s community development programs. Just this year, State Farm provided LISC  $10 million in COVID-19 small business funding for Illinois companies struggling in the wake of a global pandemic.

How did it play in Peoria?

This funding will boost under-invested communities and their residents. One example of its impact is Young’s Popcorn Heaven, a minority, female-owned, gourmet popcorn shop in Peoria, IL. Owners, JoAnn and Greg Young, opened their shop in 2015, and like many new, small businesses, they worked hard to achieve a positive cash flow.

The retired state employee and construction tradesman always dreamt of owning their own business. After saving for years, they finally opened Popcorn Heaven. Then, in 2019, they faced a 50% monthly lease increase and began exploring new locations for their business.

After finding a building and researching different financing options, the Young’s came across LISC. Using State Farm funds, LISC provided a $165,000 loan to purchase and renovate a new building.

“The loan helped me increase my production and sales. My new property is in a more trafficked area, it’s a lot bigger and better for social distancing,” shared Young. “But more importantly, it saved two full-time and five part-time jobs, and decreased our overall expenses. It’s also helping us get through the pandemic, when lots of businesses are closing their doors permanently.”

Equity gaps exacerbated during COVID-19

• The pandemic created a lot of difficulty for small businesses; 15% have closed their doors permanently. Minority-owned businesses were hit worse: more than 26% of Black- and 19% of Latino-owned businesses have closed.¹
• Many American workers lost their jobs or had wages cut significantly as well. Hispanic adults were hit the hardest, 61% of Hispanic adults stating they or someone in their household either lost their job or received less wages – compared to 44% of African Americans and 38% of Whites.^.2

“State Farm helps people realize their dreams. But when some people don’t have the resources to get on a path toward accomplishing their goals – be it an education, an affordable home, or a chance to start the business of their dreams – we strive to be part of the solution,” said Terry.

Sources: ^1-Brookings Institute  ^2-Accion Opportunity Fund

The commitment includes a $4 million national grant to LISC to expand employment, revitalize commercial corridors, promote health and enhance community safety in 12 cities over the next two years. In addition, State Farm has set up a $10 million loan pool with LISC focused on its home state of Illinois. It will specifically address the needs of small businesses and community nonprofits hit hard by COVID-19 in Central Illinois communities like Peoria, Bloomington and Springfield, as well as Chicago.

“This year marks our 20-year anniversary of investing in LISC—an organization vital to connecting resources to communities in need,” said Annette Martinez, senior vice president for State Farm. “We know that together, we are creating economic opportunities to help communities grow and prosper—and providing relief to small businesses and nonprofit organizations struggling due to COVID-19.”

The $10 million pool, announced in late April, will offer low-cost loans of up to $250,000, with LISC’s local program staff in Central Illinois and Chicago connecting with businesses and nonprofits to deploy capital. The loans are one piece of the larger State Farm COVID-19 relief strategy, which includes $2 billion in premium rebates to customers.

At the same time, the new grant from State Farm will fuel national outreach strategies, including support for staffing and tools focused on addressing the root causes of poor health in communities. Grant funds will further advance long-term community investment programs in 12 metro areas, with a particular focus on:

• Financial Opportunity Centers, which provide a range of integrated services to help people build financial stability—from job training and placement to financial coaching and income support.
• Commercial corridor revitalization and anti-displacement strategies in gentrifying communities, to catalyze economic vitality that benefits local residents.
• Community health and safety programs, such as “green” strategies for affordable housing and recreation programs that engage at-risk youth.

Implementation will vary to meet local needs. For example, the new State Farm grant will seed the opening of a new Financial Opportunity Center in Atlanta, so LISC can support financial and employment services for hundreds of residents. In Indianapolis, it will fuel a program that revitalizes underutilized industrial sites, creating jobs and economic vibrancy. In Milwaukee, it will advance public safety strategies that connect community members, businesses and law enforcement in common efforts, while also fueling “creative placemaking” activities to reduce crime. And, in Phoenix, it will support transit-oriented development plans that revitalize businesses in often-overlooked communities.

“Now, as we all face uncertain days ahead, State Farm has once again stepped up to help, both responding to the immediate crisis and continuing to support long-term opportunities for stability, opportunity and growth," said Maurice A. Jones, LISC CEO.

In addition to these four cities, the State Farm grant will support similar local efforts in the Bay Area (Oakland/San Francisco), Chicago, Houston, Minneapolis/St. Paul, New York, Peoria, Ill., Philadelphia, and Tacoma, Wash.

“Even before the global health crisis, State Farm had long supported strategies to build stronger, more inclusive local economies where families and businesses could thrive,” said Maurice A. Jones, LISC president and CEO. “Now, as we all face uncertain days ahead, State Farm has once again stepped up to help, both responding to the immediate crisis and continuing to support long-term opportunities for stability, opportunity and growth. We are enormously grateful for their steadfast support.”

Over the last 20 years, State Farm has invested $149 million in LISC’s community development programs, leveraging more than $11 billion to build or rehabilitate 53,000 affordable homes, create more than 20 million square feet of retail, community, and educational space, and serve nearly 215,000 people through income- and wealth-building initiatives.

In the News:

• WGLT:  State Farm to Fund Load Programs for NonProfits (04/21/20) 

When gang members shattered his windows and tried to set his house on fire – Rob Castaneda’s hope faded. He and his wife recently moved to Little Village - eager to start a new life chapter. But the Chicago crime in their southwest side neighborhood overshadowed their dreams for the future.

With a damaged home and broken hopes, the Castanedas were ready to say goodbye - but their neighbors weren’t. They rallied behind the family, encouraging them to stay on the block. That determination inspired the Castanedas. They realized moving wouldn’t solve the neighborhood problems. But something else could help the area bounce back.Castaneda started Beyond the Ball – a basketball program designed to get youth off the streets and on the court. Kids began playing at the school gym, a spot free from violence. News of the safe place to play spread quickly, and program participation skyrocketed. The momentum didn’t stop there. Shortly after creating Beyond the Ball, the Hoops in the Hood program emerged. Founded by LISC Chicago, this summer league gives hundreds of Chicago students an opportunity to play basketball, compete in tournaments and show their team spirit. Today, Beyond the Ball is part of the Hoops in the Hood network.

“LISC Chicago saw a program that was working for one of our community partners, and with leadership and support from State Farm, scaled it to a citywide level,” said LISC Chicago Executive Director Meghan Harte. “LISC ensures Hoops in the Hood is community run and flexible to each neighborhood’s needs. That’s a big part of what makes it so successful.”

Changing the Neighborhood One Kid at a Time

Andrell Bryant never expected basketball to change his life. But it did – 10 years ago. The high school freshman had no plans for summer break. So Castaneda encouraged him to join the Hoops in the Hood program. Bryant hit the ground running, participating every summer until his graduation four years later. “I had aged out of Hoops in the Hood, but wanted to stay involved,” he said.

Bryant decided to coach Hoops in the Hood athletes. He also officiates summer games and became a program coordinator. “I love it,” he said. “Every time the season ends, I want to start again – even though I know I’ll have to wait another seven months. It’s about building relationships with the kids and helping them build for the future.”Today, Bryant is a full-time security guard and works as a part-time basketball coach through the Chicago Park District. “My passion is to work with students,” he said. “To open my own gym in the future, and to show kids this is what hard work is like if you want to be an athlete. Too many students don’t have the ability to go to a gym in their own neighborhoods.”

Bryant credits his outlook and success from his Hoops in the Hood experience. “Being a coach, mentor and role model in the program taught me a lot. And each child that’s gone through it has elevated my value of the game. It’s made me a better person. I want to continue that positivity.”

Nicole had been working with a company for more than two years when she unexpectedly found herself unemployed.

“My world was turned upside down,” she says. She worried about her ability to support her three children while she went to school to earn her communications degree. “The job market was so tight. I had to uproot my family from our apartment to one that was more affordable.”

Nicole had been jobless for almost a year when she overheard a group of people talking about a resource center that helped community residents find employment. Nicole made a mental note to stop in later that day. That decision would change her life.

“I walked past the Woodlawn Financial Opportunity Center (FOC) over a thousand times. I never would have gone in if it weren’t for those strangers on the train,” says Nicole.

Financial Opportunity Centers (FOC) are an initiative of Local Initiatives Support Corporation (LISC). The goal of FOCs is to provide bundled services to help unemployed or underemployed individuals. The services include financial coaching and career planning, employment services, and access to public benefits and other income supports.

When Nicole visited the center, she shared what she wanted to gain from the financial coaching. Center staff worked with her to restructure her credit and pulled up her credit report and showed her some debt she didn’t even know she had. With one of her kids in need of braces, and another graduating soon, the center showed Nicole how to put together a budget, helping her to make ends meet.

Nicole’s work history and resume proved so impressive the center hired her as its office manager even though she had no previous finance experience. She now recruits others who need the help she once did so they can also take advantage of the FOC.

“When people hear ‘financial coaching,’ it’s a turnoff,” says Nicole. “But people don’t really know what it entails. It’s not supposed to be an intrusive process.” Instead, FOCs help clients to find workable solutions to financial problems.

“When you’re in the middle of the storm, having someone there to help you and guide you can take a lot of the stress away,” shared Nicole.

Financial coaching at FOCs is tailored to each individual’s needs—it is not a cookie cutter approach. Coaches take the time to talk with clients, get to know their situations, and assess far more than work history. From there, they work with clients according to their needs. Clients may require a refresher on how to interview for a job or they may need help finding work opportunities that best fit their skills.

Nicole works at the Woodlawn Resource Center, a FOC run by LISC partner Preservation of Affordable Housing (POAH) in Chicago. In addition to coaching, the center has a computer lab so people in the community can use the internet to look for employment or create resumes, as well as an on-site mental health specialist, family support services, and lots of free programs like digital literacy courses.

Nicole encourages everyone—whether they are in a good financial position or not—to take advantage of FOC services, and not just because it is part of her job.

“Everyone can stand to learn from the centers,” says Nicole. “I wouldn’t be where I am today without them.”

Many job placement centers simply tell people what to do after they get a job. FOC advisors offer one-on-one follow up and hold clients accountable to their goals.

“It’s not enough to just help people get jobs,” says Seung Kim, LISC Program Director. “FOCs provide multiple interventions simultaneously to remove barriers and to provide participants with the tools to stick with their jobs over the long term. Financial coaching helps clients learn to navigate the financial system, build good habits, and take the steps they need to reach their goals.”

Along with work-force development services and financial coaching, FOCs help with access to income support such as public and medical benefits, childcare subsidies, and private benefits like access to eyeglasses.

Many clients first come into a FOC simply looking for work. However, the job-readiness program requires clients to meet with a financial coach.

“At first they’re usually hesitant to meet with a coach because they just want a job,” says Seung. “But afterwards, the majority realize the importance of coaching—80 percent of clients come back for additional sessions.”

Most FOC clients have very low income—80 percent are in the lowest American household income bracket. Even saying they have “low-to-moderate income” (LMI) is generous; many are 200% below the poverty level.

Problems range from chronic unemployment to financial stressors like having no transportation to work. Even sick days are a systemic issue for lower-level employees. They often don’t have benefits like sick days.

“There are a lot of ups and downs for our clients,” says Seung, “We try to think about success in terms of job retention. We measure financial capability in terms of net income, net worth, and making sure people are improving their credit scores.”

However, it is not always an upwards path. When you’re working with clients over the long-term, things can go wrong. Sometimes clients lose their jobs.

“Sometimes they just need a nudge in the right direction,” Seung says. “Our coaches empower clients with skills to weather the storms.”

From addiction to stability

Before 49-year-old Traci found one of LISC’s FOCs, she was recovering from drug addiction. She had a credit score in the 400s, and was struggling to pay off debt. Traci first learned about the FOC at Volunteers of America-Texas in Houston when she brought her sister, who was also struggling financially, to seek help there. As they sat through the orientation, she realized she needed help too.

Traci got involved in all the FOC had to offer. She attended a four-day workshop to learn how to create a strong resume, enhanced her writing skills, and took advantage of other resources to improve her job search.

Traci was paired with financial coach Danita Wadley. Danita helped her put together a budget and taught strategies for getting a financial foothold. She met with Traci several times a week and showed her the steps necessary to better understand and meet her financial responsibilities.

When asked about the program, Traci speaks fondly of the coach with whom she forged a deep bond. “Danita worked around my circumstances,” Traci recalls. “She would check up on me every now and then, and it really helped to keep me accountable.”

Traci believes her relationship with Danita is beyond that of coach and client—she sees Danita as a mentor who has helped her accomplish things she would not have believed herself capable of two years ago.

“It’s still shocking to me,” she says about how far she has come. “I never would have thought this was possible.”

With her newfound skills, Traci has gone beyond settling her debts and raising her credit score, now over 700. She has also set money aside in a savings account, paid off a dump truck she bought for her business, and is saving for her own house.

But Traci is not stopping there. She has not forgotten her roots and those who are in the position she once was. Traci took her brother to the FOC to help him figure out his finances and get his own truck for the business.

On top of that, she is going to school to earn an associate’s degree in counseling people in order to help people with substance abuse issues. Now clean for more than five years, she hopes her recovery success story will inspire hope and motivation in others struggling to recover and get back on their feet.