by Marva Williams
Community Development departments in the Federal Reserve System work to understand and address barriers to economic mobility, and engage banks, government, and nonprofit intermediaries to channel financial and other resources to places in need of physical, economic, and other forms of community redevelopment. The Federal Reserve System began in 2009 to examine more closely the linkages between place and health. Places with thriving local economies, decent schools, (other) quality public amenities, and high civic engagement and employment levels, tend to have healthier, longer-lived populations, and less incidence of disease.
The Fed’s community development function now seeks to better understand the relationship between economic and physical health, and how community development oriented interventions related to housing, employment, credit access, and other areas, may impact both. We leave strictly health-oriented interventions–such as nutritional awareness and smoking cessation programs–to the public health field. But well-conceived development interventions and investment can mitigate ‘environmental’ factors as diverse as security/safety, pollutants (in and outside the home), and inadequate access to decent schools, fresh food, and recreational and healthcare facilities, all of which significantly impact stress levels and general wellbeing. Numerous Fed conferences including three to date in the Seventh District, coordinated with prominent, health-focused organizations such as the Robert Wood Johnson Foundation, have explored this relationship, as have various Fed (and outside) publications.
As a bank regulator, a core interest of the Fed is how investments by financial institutions fulfill CRA requirements and bring about meaningful change in neighborhoods, but the constraints of CRA and overarching lending risk guidelines limit the types of lending and investment in which banks can engage. Facilities that provide needed health services, and can support debt through a combination of subsidy, philanthropy, and user fees, represent one promising area for bank lending and investment, whether banks invest alone or in partnership with nonprofit financial organizations. Across Illinois, one of the most critical scarcities in healthcare is mental health professionals and facilities. Following are profiles of Cathedral Counseling Center and Trilogy, two mental health clinics in Chicago that serve lower-income individuals; the case studies include discussions of essential relationships with financial institutions.
Cathedral Counseling Center
Formed in 1974, Cathedral Counseling Center (CCC) is a non-profit organization that provides a comprehensive range of mental health services for low- and moderate-income adults and children. CCC offers individual therapy and psychiatric services for clients challenged with: alcohol and other drug abuse; anger and conflict; mental illnesses; and emotional trauma, among other issues. It also provides group counseling as well as premarital and couple counseling. Lastly, CCC has professional therapy education for clergy and mental health clinicians and supervision for mental health professionals.
CCC was founded by an Episcopal minister and funded by Episcopal Charities and Community Services, a Chicago based funder of programs in the diocese. Since its founding, CCC has grown into a major center, with offices in a downtown Chicago as well as Hyde Park and Evanston. In 2014, more than 1,000 clients were served at CCC. CCC does not work with indigent clients—patients must be able to pay at least a portion of their bills. In 2014, almost 40 percent of its clients had income below $10,000 and an additional 32 percent had incomes between over $10,000 to $29,999. The agency receives 75 percent of its income from client fees and insurance and 25 percent through fundraising.
Relationship with IFF
By 2005, CCC had outgrown its space in a Chicago Episcopal church, which limited its ability to expand therapeutic services. A board director of CCC referred the staff to IFF (formerly Illinois Facilities Fund) to conduct an analysis of their space needs and available options. IFF is a community development financial institution (CDFI) that provides loans for community facilities, such as charter schools, housing, grocery stores, primary care clinics, and recreation centers. Headquartered in Chicago, IFF has a 12-state service region, including all five Seventh District states: Illinois, Wisconsin, Iowa, Michigan, and Indiana. IFF also offers real estate development and facility consulting, a critical need for many service organizations, which may not have expertise on staff to determine overall facility feasibility, or even optimal use of space for service delivery and administrative functions. IFF receives funding from a variety of sources, including investments and grants from regulated financial institutions. In return, these financial institutions may receive CRA credit for IFF projects that benefit lower-income communities.
IFF completed a feasibility study for CCC on the purchase of office space, which was preferred by the CCC board of directors to renting space. The feasibility study resulted in a $1.8 million purchase of office condominium space in downtown Chicago in 2006. The project was financed by an $840,000 capital campaign and a $1 million loan from IFF. As CCC continued to grow, the board decided to expand to the entire floor of the building in 2013, resulting in a $1.4 million acquisition and construction project. The same development team was used for the 2013 project, including IFF as consultant. The expansion was financed by a capital campaign that netted over $175,000 and an additional IFF loan for approximately $1.2 million. The space allowed the organization to expand its counseling services and improve the office’s accessibility for people with disabilities.
The role of IFF for these projects was essential. CCC staff had no experience with real estate development or financing, and needed the expertise of IFF to affect the expansion. It was essential to have expertise in purchase negotiation, design oversight, contractor selection, and construction oversight to manage the project budget and development. In addition, CCC required a trusted partner that could advocate for its interests with the development team. Further, IFF carefully balanced the needs of CCC with its financial capacity to repay the loans that financed the purchase and rehabilitation.
Trilogy Behavioral Healthcare
Trilogy Behavioral Healthcare’s (Trilogy) mission is to promote recovery from serious mental illness. Founded in 1971, the agency provides counseling for people with mental health diagnoses. Trilogy’s services include individual and group therapy, case management, and medication management. It also has a linguistically and culturally competent therapy program for Latinos and a drop-in center that is open every day. Trilogy provides supportive services, such as housing, housing advocacy, employment counseling, and occupational therapy to help get people back to work. Their residential program offers a range of services from supportive housing to 24-hour residential assistance at three sites.
Trilogy partners with the state of Illinois to provide independent living opportunities for people who reside at nursing homes. A 2009 lawsuit alleged that the State of Illinois was violating the American with Disabilities Act (ADA) by only providing people with mental disabilities the option of living in nursing homes. In 2010, the US District Court found that people with mental illnesses have the right to choose to live in community-based settings. As a result, the state entered a consent decree that requires it to provide funding to Trilogy to pay for supportive services that enable people with mental illnesses to live more independently. The funding enabled Trilogy to create a team of eight new staff positions, which has since expanded to 10 teams of eight staff, to support alternative housing for people with a mental health diagnosis. The grant also pays for a client’s first month rent, rental deposit, and furniture. Trilogy staff train clients in independent living skills at ‘practice apartments’ and after the clients obtain their own apartments, a trained peer provides coaching and support through a home support program.
Trilogy also provides a range of other services. It works with police, and parole and probation staff to provide mental health services to incarcerated people with acute psychiatric symptoms. Trilogy also partners with several area hospitals and homeless shelters in Chicago and Evanston to provide homeless individuals with mental health services.
The organization promotes integrated mental and physical healthcare. It partners with the Heartland Alliance on a health clinic in Rogers Park that serves approximately 1,500 adults annually.
Over 90 percent of clients of Trilogy have low incomes and are eligible for Medicaid, a state and federal government supported health insurance system. The organization also provides services to the working poor with no health insurance at low or no cost.
The agency has grown significantly. Trilogy has 300 employees, up from 75 employees ten years ago. In addition, the agency budget increased by $5 million to nearly $12 million from 2006 to 2014. The organization now has four locations aside from its main facility in Rogers Park; the newer facilities opened in Lawndale, Uptown, South Shore, and Evanston. Trilogy raises funds through various private sources to assist its clients in meeting basic needs, including groceries, medicine, and housing.
Relationships with its Financial Institution
Trilogy has been a customer of a large national bank since 2012. The bank provides all the financial service accounts for the organization as well as a $3 million line of credit. This line of credit allows Trilogy to pay short-term bills, which is essential because with the exception to the consent decree, the state of Illinois is very slow making payments to the agency. The bank also made a loan to Trilogy to conduct maintenance and repairs to its Rogers Park headquarters. Further, a senior vice president at their bank was appointed to the Trilogy board of directors in 2016. In addition, the bank will consider an additional loan for a property in Lawndale that the agency would like to purchase in 2016.
CDPS will continue to explore the roles of banking institutions subject to CRA in bringing about neighborhood redevelopment and investment that impacts both socioeconomic conditions and general wellbeing.
For more information on CDPS explorations of community health, please see two articles in ProfitWise News and Views written by Susan Longworth: