Back in 1978, with a promise of two grants for $25,000, one of which fell through, Bob Friedman set out to do something about assets and financial inclusion for the poor. He started the Corporation for Enterprise Development (CFED) which has gone on to become a leader in the asset building field. Now, 37 years later, the field has become a well-funded movement, and is poised for a new stage of growth.
But Friedman is not your typical policy entrepreneur. He's also hung around the funding side of things, and there, too, has helped advance the asset building cause.
"I was born lucky, and have majored in it ever since," he says. Friedman comes from the Levi Strauss family. His grandfather, Dan Koshland, Sr., worked for the family business all his life, rising to become CEO of the iconic jeans maker.
"I revered my grandfather," said Friedman."He could have established his own foundation, but he didn't. Instead, he established the San Francisco Foundation. He fundamentally believed in community. He was also one of those rare people who loved paying taxes. He said he figured if he was paying a lot of taxes, he must be doing pretty well."
Philanthropy related to the Levi Strauss company was part of the fabric of the family Friedman grew up in, and earlier in his career, he served as a board member both for the corporation and its foundation. Perhaps not surprisingly, the Levi Strauss Foundation has long been a funder of asset building work. In a recent year, for example, it gave out 22 grants in this area to fund initiatives both in the U.S. and abroad.
That grantmaking captures the diversity of the asset building movement, and the different ways that foundation dollars are being deployed to help poor people build wealth. For example, the foundation supported an effort by the Earned Assets Resource Network "to connect low-wage workers to the financial mainstream through direct deposit and electronic payroll" and also backed an effort for "financial literacy training, matched savings and micro-enterprise development program for workers in the apparel industry in Medellin, Colombia."
As well, Levis Strauss money has gone to build up the asset building movement as a whole, with grants for networking and capacity building to boost coordinated work at the local, state, and national level. Bolstering research on assets and wealth has been another priority of the foundation, which also funds in the areas of HIV, disaster relief, and worker rights. In 2013, the foundation gave away $6.4 million and reported assets of $66 million.
Friedman does not now sit on the board of the Levi Strauss Foundation, which has a professional staff. And he's shy about taking credit for Levi's strong asset building focus:
I wouldn't claim to have shaped it. I share a lot of the corporate and foundation values. I was proud of the company for integrating plants in the south way before it was common to do so, and for maintaining employees during the Great Depression even if it meant they were polishing the floors. I think that the foundation has been courageous in addressing issues of economic justice and opportunity and diversity.
That said, it was Friedman who brought the idea of focusing on asset building to the Levi Strauss Foundation, from his work at CFED. He recalled talking with Judy Belk, who was president of the Levi Strauss Foundation at the time (she is now CEO of the California Wellness Foundation) about what it was like for low-income people to buy a house, and how having parents who could loan you the money for a down payment was not usually an option. "I told her about IDA's (Individual Development Accounts) and asset building, and she immediately got it on a fundamental level."
Mainly, though, Friedman has been a grantseeker, and we asked him about starting CFED and where he got his funding. He acknowledged that many of the early years were filled with trial and error. "I must say, those first five years, I was wandering in the desert, learning how to do fundraising, trying to establish that we knew something, which basically we did by respecting innovation at the community level."
During the first 10 years, he recalled receiving one major grant from the Department of Labor, which had to be signed off by both a Democratic and Republican secretary of labor. As a testament to how asset building has attracted an unusual range of supporters, Stuart Butler at Heritage Foundation was instrumental in securing the second approval. Still, funds were scarce in those early days.
Friedman remembered the first major foundation grant, for $500,000, coming from the Ford Foundation's rural program in 1990. Later, in the mid-1990s, Ford would go all in for asset building in a way that transformed the field. Its new president at the time, Susan Berresford, made this a top foundation priority and, to lead this work, hired Melvin Oliver, a sociologist and co-author (with Tom Shapiro) of Black Wealth/White Wealth, one of the bibles of the asset building movement. Ford went on to spend millions to scale up the asset building field, most notably with a $50 million give to Self Help, the North Carolina credit union, which Friedman says helped prove that "low income people can be homeowners with 3 percent down payments and fixed thirty-year rate mortgages, and that they're a good bet."
Friedman expresses gratitude about Ford's leadership in this area, including that of Frank DeGiovanni, who still directs the foundation's asset building work. "They're huge," Friedman said emphatically, adding that Ford's embrace of assets represented a crucial move away from a "poverty" frame.
But make no mistake: Bob Friedman was developing this field long before America's then-biggest foundation came along and helped supersize it.
Another key pioneer, of course, was Michael Sherraden, the author of the seminal 1991 book, Assets and the Poor. No book has been more important to the asset building movement, and Friedman recalls being introduced to Sherraden when the book was still in draft form. Learning about Sherraden's ideas, and particularly his proposal for Individual Development Accounts, was pivotal.
Friedman described how he found in Sherraden's concept of the IDA the basic building block of a truly "democratic and inclusive human investment system." Plenty of funders turned out to be equally excited, and Friedman says the IDA concept was crucial in helping asset building get traction with top foundations.
The Joyce Foundation (Craig Kennedy, Debby Leff, Unmi Song with little-known board member Barack Obama) and Charles Stewart Mott (Jack Litzenberg, a giant, Benita Melton, Bill White and so many others) were there to back the first three IDA programs, where we didn't have any model; we had Sherraden's idea, but it seemed clear to me that unless we got stuff on the ground, the idea wouldn't go far and so the Joyce Foundation invested in these three nascent initiatives.
Then CFED joined with Sherraden and the Center for Social Development to launch the American Dream Demonstration and we got 12 major foundations to invest significantly led by Ford, Mott, MacArthur, Citigroup (first financial institution foundation to support us, thanks to Janet Thompson, Pam Flaherty, Brandee McHale, and Bob Annibale), FB Heron (which became the first to devote its whole mission to asset-building under the leadership of Sharon King), MacArthur, Kaufmann, Fannie Mae, Joyce, Levi Strauss, Rockefeller, Moriah, and Met Life.
That demonstration and that support really enabled us to develop the IDA field, and maybe it's because we didn't know what we didn't know but it seemed like every step was progress, and we did at the end of the day prove that low income people, with labor-intensive community programs, would save and build assets.
The rest is history, as they say. Asset building remains a major focus of many funders and the movement continues to gain steam.
As for Bob Friedman, he long ago decided to hand off the management of CFED to others but remains its board chair and general counsel—titles that don't capture what he really is: the godfather of one of the most significant policy movements of recent decades.