Community Empowerment Fund

The Community Empowerment Fund (CEF) is a student-run organization at Carolina that provides small loans to local individuals who are homeless or at risk of homelessness. CEF is the only domestic microfinance group that extends loans to the homeless.

CEF also works with a wide network of volunteers and service providers to link clients, applicants and the larger community with financial literacy training, skills-building workshops, substance abuse and mental health counseling and other forms of support.

In November, CEF received a 2009-10 Seagraves Service Grant from the Carolina Center for Public Service.

How CEF works:

  • CEF trains volunteers to act as loan officers and mentors for borrowers. Volunteers are paired with borrowers to guide them through the process and connect them with other resources.
  • CEF subjects each loan application to a rigorous review. Loans can be used for limited reasons related to housing or employment. The maximum loan amount is $300. CEF requires that each borrower open and maintain a savings account. CEF will match savings on a dollar-for-dollar basis, up to $100.
  • In addition to connecting clients and applicants with local service agencies and nonprofits, CEF offers monthly or bimonthly workshops focusing on topics such as financial literacy, small business ideas, computer skills, and basic budgeting.
  • After a borrower repays a loan in full, he or she is eligible to join CEF as a board member or loan officer. Borrowers who "graduate" from the program are also eligible to receive a second, larger loan.

After months of fundraising, focus groups and many meetings, CEF launched their pilot project in the summer of 2009. They considered 18 applicants, five of whom were approved for a loan. The applicants' median age was 47, with ages ranging from 21 to 59. Many applicants were skilled, possessing such vocational abilities as painting, machinery operations, counseling, management, culinary arts, floor refinishing, sales, construction, truck driving, and wiring.

Twelve of the 18 applicants were living in one of Chapel Hill's homeless shelters; two were homeless but staying in a shelter; two were in a supportive housing program; and two lived in their own apartments.

Loan recipients are using their loan money to start a small business, purchase a cell phone, pay for public transportation to school, put down a housing deposit and pay for the first month of rent.

CEF will continue working with current clients and reach out to new ones in fall of 2009. With the support of the Durham Rotary Club and others, CEF will expand to Durham in the spring of 2010.

CEF is a partnership between two student groups--the Carolina Microfinance Initiative (CMI) and Homeless Outreach Poverty Eradication (HOPE)--and the Poverty Center. CEF also collaborates with a large number of local agencies and nonprofit organizations, including:

  • Programs Assisting Transitions from Homelessness (PATH)
  • Inter-Faith Council for Social Services
  • Orange County Dept. of Social Services
  • Orange-Person-Chatham Mental Health Counseling Area Programs
  • Freedom House Recovery Center
  • Triangle Residential Options for Substance Abusers (TROSA)
  • JobLink
  • Orange County Literacy Council
  • St. Thomas More Catholic Church
  • Good Work
  • Oxford House
  • Chapel Hill Downtown Partnership
  • Senior Corps of Retired Executives (SCORE)