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Communities&Banking
Federal Reserve Bank of Boston
volume 16, number 4
fall 2005
Stormy Times
Staying Afloat after a
Natural Disaster
Also Inside:
An Umbrella
for Nonprofits
Municipalities
at Risk
The Nonmonetary
Economy
Green Development:
The New Frontier in
Affordable Housing
Contents
Communities & Banking seeks to offer insightful
articles on topics in community development and
fair access to credit, with a focus on innovative
research and effective programs and partnerships in
New England.
3
The implications of research on bankruptcy filings after hurricanes
7
Editor
Caroline Ellis
Natural Disasters and Bankruptcy: A Perspective
by Elizabeth Warren, Harvard Law School
Graphic Design
Julie Weinstein
Massachusetts Communities at Risk: A Report from
the Municipal Finance Task Force
by John Hamill, Sovereign Bank New England
Results and recommendations from an analysis of municipal finances and local aid
during the period 1981 to 2005
Production Coordination
Ann Eggleston
10
Editorial Board
Alex Arteaga
Patricia Allouise
Marques Benton
Katharine Bradbury
Carrie Conaway
Ann Eggleston
Jane Katz
Andrew Olszowy
Matt Quigley
Robert Tannenwald
The Taste of Place: Local and Regional Foods
Transform the Northeast
by Roger Doiron, Northeast Sustainable Agriculture Working Group
Northeast farmers and consumers cooperating to make agriculture survive
If you would like to submit an article for a future
issue of Communities & Banking, please contact the
editor.
The views expressed are not necessarily those of
the Federal Reserve Bank of Boston or the Federal
Reserve System. Information about upcoming events
and organizations is strictly informational and not an
endorsement of these activities.
13
Mapping New England: Farm Concentration
by Ricardo Borgos, Federal Reserve Bank of Boston
14
Thinking Holistically:Woonsocket Neighborhood
Development Corporation
by Caroline Ellis, Federal Reserve Bank of Boston
A new idea in affordable housing—in-home child-care businesses—exemplifies
big-picture thinking in community revitalization
18
Time banking: community service that offers something in return
22
Articles may be reprinted if Communities & Banking and
the author are credited and the above disclaimer is
used. Please send copies to:
Caroline Ellis
Editor, Communities & Banking
Federal Reserve Bank of Boston
600 Atlantic Avenue
Boston, MA 02210
(617) 973-3187
caroline.ellis@bos.frb.org
For free subscriptions, contact:
Public and Community Affairs
Federal Reserve Bank of Boston
600 Atlantic Avenue
Boston, MA 02210
(800) 409-1333
bostonfed.publications@bos.frb.org
Giving and Receiving in the Nonmonetary Economy
by Anna Afshar, Federal Reserve Bank of Boston
How Fiscal Sponsorship Nurtures Nonprofits
by Jonathan Spack,Third Sector New England
Umbrella organizations taking care of administrative details for small nonprofits
25
Green Development: Improving the Health of
Residents and Neighborhoods
by DeWitt Jones, Boston Community Capital
Building sustainable developments for long-term savings and better community health
News from the Bank
28
Phishing and Pharming: Helping Consumers Avoid
Internet Fraud
by Dawn Hicks, Federal Reserve Bank of Boston
The Federal Reserve Bank of Boston’s Consumer Regulation Outreach Group
offers advice to Internet users on avoiding scams.
Available on the web at
www.bos.frb.org/commdev/c&b/index.htm
federal reserve
bank of boston
TM
2
Fall 2005
Cover Photo: Satellite image of hurricane/Digital Vision.
September 2005 flooding in Wayland, Massachusetts. Photographs in this article by Julie Weinstein.
natural disasters
and abankruptcy
perspective
by Elizabeth Warren
Harvard Law School
After the water has receded, after much of the physical devastation is repaired, countless
families face a hurricane’s most lasting legacy: financial disaster. The car may be gone, the house may
be gone, and the credit card bills may have been washed away, but the obligation to pay for all of
them remains. The financial stress on families is easy to predict as many people go weeks or even
months without a paycheck.
When there is a series of major disruptions like the 2005 hurricane season, hundreds of
thousands of middle class families may deplete their savings and turn to credit cards to supplement
the aid they receive from charities and the government. Additionally, victims of natural disasters
often return home to find that they have lost substantial assets. Insurance may cover some of the
damage, but insurance companies’ liability is often limited.1 Every aspect of a family’s financial
circumstances is exposed to the effects of a natural disaster.
Communities & Banking
3
Filing for Bankruptcy
Many disaster victims eventually
turn to bankruptcy. (See the sidebar
“Personal Bankruptcy Options.”) It is
possible to analyze bankruptcy filing
data following hurricanes of the past 25
years, but limitations in the data make
the tools blunt. The filings can be compared only year by year, not quarter by
quarter. More important, the long-term
data are available only on a state-bystate basis.
To Robert Lawless, a professor at
the University of Nevada at Las Vegas,
that seemed problematic. A hurricane
that hit Houston, for example, might
have no effect on families and small
businesses in El Paso, Dallas, or Austin.
In order to detect a difference statistically, the regional effects would have to
be large enough to change the bankruptcy filing numbers for the entire
state. As a result, when Lawless decided
to analyze the data, he expected to find
no statistical correlations. Even if there
were important effects following a hurricane, he thought, the rough data
would reveal only powerful ones.
In fact, Professor Lawless discovered that in the three years following a
hurricane, the growth in bankruptcy filings is about 50 percent higher in states
that have suffered a direct hit.2 In the
same time period, the growth in nearby
states is about 20 percent higher.
The data show that the location of
the disaster also is significant. When the
damage occurs in regions where there
are many low-cost homes, FEMA payments are lower, and there is a corresponding increase in bankruptcy rates.
The highest increase in bankruptcy filings in the past 25 years occurred when
Hurricane Elena hit Mississippi in
1985, resulting in a 71.8 percent bankruptcy-filing increase in the following
three years.
Changes to the Code
At the same time that victims are
digging out from the recent hurricanes,
the legal landscape is changing. The
2005 amendments to the Bankruptcy
Code went into effect on October 17,
about the time the lights were scheduled to go back on in New Orleans. The
amendments to the law, more than 400
pages of new procedures, are designed
to reduce bankruptcy filings through
three principal mechanisms:
• Paperwork. The new law
requires more documentation of a
debtor’s financial circumstances, such as
six months of paycheck stubs, tax
returns, and a full accounting of
the monthly budget down to utility
payments and insurance bills.3
The obligations are not limited to
those who have high incomes or
who have no good reason for filing; they apply across the board.
• Screening. Through the application of a complex formula, debtors
who have incomes above the median for
family size and whose allowable expenses are small enough to leave them with
$100 or more of “excess income” each
month will be denied access to Chapter
7 and debt liquidation.4 In addition,
no debtor may file for bankruptcy without consulting an approved credit
counselor, and no debtor will receive a
discharge without attending financial
education classes.5
4
Fall 2005
• Reduced Protection. Tenants
who could not be evicted from their
apartments under the old laws—so
long as they remained current on their
post-bankruptcy rent payments—now
can be dispossessed.6 In addition, people filing for bankruptcy will not get
relief from as much credit card debt as
would have been the case before
October 17, 2005.7
The new law means that naturaldisaster victims, like anyone else, must
meet a higher standard if they seek
relief through a bankruptcy filing.
Along the Gulf of Mexico right
now are other challenges that those
planning for disasters elsewhere should
note. The legal system in Louisiana was
disrupted, so the state bar urged postponement of the effective date of the
new laws in the disaster areas.8 The bar
described a “widespread paralysis” of
the legal community and difficulty in
communicating with clients. Moreover,
courts and lawyers scrambling to relocate faced a shortage of office space and
adequate infrastructure.
In the three years
following a hurricane,
the growth in
bankruptcy filings is
about 50 percent higher
in states that have
suffered a direct hit.
The new statute has ambiguities
that, in time, litigation will clarify, but
disaster victims seldom have that kind
of time. Additionally, there is uncertainty about whether judges will have
the ability to waive some statute
requirements for the hurricane victims.
Past provisions of the Bankruptcy Code
permitted a judge to consider all the
facts and circumstances in determining
whether a particular bankruptcy petition constituted an “abuse” of the bankruptcy system, but the amended law
gives judges less discretion.9 So, for
example, when Mississippi bankruptcy
judge Edward Ellington was asked
whether debtors whose paperwork was
Average Increase in State Filing Rate
After Hurricane
Percent
50
45
Landfall State
Other Affected States
Unaffected States
40
35
30
25
20
15
10
5
0
12 months
buried in mud could be excused from
producing pay stubs and old bills showing regular household expenses, he
replied, “I can’t grant the waiver on the
front end because I just don’t have the
authority to do it.”10
In recognition of the difficulties
facing victims of natural disasters, on
the eve of implementation of the new
law, the Justice Department issued special guidelines to the court-appointed
officials (trustees) who administer a
filer’s “bankruptcy estate.” The guidelines said trustees would certify that
credit counseling was unavailable
(thereby waiving the requirement that a
debtor be counseled before filing) and
that the trustee would not object if the
debtor did not produce necessary
paperwork, meet statutory deadlines,
and so on.11 Although debtors’ attorneys hailed the acknowledgment of the
problem, they pointed out that creditors may object whenever debtors
violate the law—in short, it is not
within the power of the trustees to
waive statutory requirements.12 Also,
many debtors’ attorneys worry that the
coverage is too narrow, leaving out
24 months
36 months
many Mississippi, Alabama, and Texas
families that were flooded. It is also
unclear how long such waivers will
remain in place.
In spite of such challenges, many
people are likely to seek bankruptcy
relief in the wake of the hurricanes.
Some may just put it off. Indeed,
Lawless’s data show that the largest
effects from past hurricanes are felt in
the third year after storms hit, suggesting that many families will recover as
best they can, and then confront their
overall financial condition.
More research on natural disasters’
effect on bankruptcy filing needs to be
done and new techniques discovered
for ferreting out the details. If enough
Katrina victims, for example, remain in
the places where they have taken refuge,
the filing rates may show less relative
increase. A diaspora could present a
new challenge to studying the effects of
natural disasters on bankruptcy filings.
Elizabeth Warren is the Leo Gottlieb
Professor of Law at the Harvard Law
School in Cambridge, Massachusetts.
Communities &Banking
5
Personal Bankruptcy Options
Endnotes
1 Most of those with modest incomes have
no flood insurance, which must be paid for separately. FEMA will provide some insurance for
some of those who can afford the insurance, but
the amount is capped.
2 Robert Lawless, “Bankruptcy Filing Rates
after a Major Hurricane,” Nevada Law Journal
(2005).
3 11 U.S.C. 707(b)(22).
4 11 U.S.C. 707(b)(2)(ii).
5 11 U.S.C. 521(b).
6 11 U.S.C. 362(b)(2).
7 Use of a credit card to obtain cash
advances totaling more that $750 obtained within 70 days of the bankruptcy filing will be presumed fraudulent and nondischargeable. 11
U.S.C. §523(a)(2)(C)(II). This provision is
6
Fall 2005
financial management training before debts can be discharged.The
court can make exceptions if counseling is not available or if, for
example, debtors are incapacitated or on active military duty.
Most of the revisions to the bankruptcy code went into effect
on October 17. The law curbs abuses by limiting the possibilities
for manipulating the system to protect amassed wealth while
charging off accrued debt. It also protects individuals who, because
of financial or other hardships, have a genuine need for bankruptcy protection. It does not address abuses by any creditors that use
mass marketing and lax underwriting to lure consumers into debt.
The full version of the article “Bankruptcy Reform Legislation,” by
Lisa Easterwood, appeared in Partners, the community-development
magazine of the Federal Reserve Bank of Atlanta, www.atl.frb.org.
amended to be more favorable to creditors than
its previous version.
8 Louisiana State Bar Association, et al., An
Open Letter to the United States Congress from
Louisiana with Respect to Relief from Certain
Provisions of the New Bankruptcy Amendments for
Victims of Hurricane Katrina (September 14,
2005).
9 The fact that the amendments create
specific exceptions for military personnel who
are away on active duty or for the disabled
suggests that Congress did not believe it had left
general discretion with the courts to waive
specific requirements. 11 U.S.C. 109(h)(4);
707(b)(2)(D).
10 Brian Tumulty, “Hurricanes Force More
People into Bankruptcy,” TheJournalNews.com
(September 16, 2005). The new amendments
Digital Vision
Until recently, individuals filing for bankruptcy had considerable leeway in choosing whether to liquidate their debts (under
Chapter 7 of the U.S. Bankruptcy Code) or reorganize them and
keep paying creditors over a period of three to five years (Chapter
13). Even though they had to give up their property—except for
necessities like the tools of their trade, clothing, vehicles up to a
certain value, furnishings, appliances, and the like—most people
chose Chapter 7.
On October 17, most provisions of the Bankruptcy Abuse
Prevention and Consumer Protection Act of 2005 went into
effect. Designed to curb abuses of the U.S. Bankruptcy Code, the
act established a needs-based system for qualifying for protection.
The new guidelines include a means test to determine if
debtors with annual income above the state median qualify under
Chapter 7. Debtors who can pay unsecured creditors such as
credit card companies at least $100 per month over five years will
be redirected (provided that the amount is sufficient to pay 25
percent of the debt) to Chapter 13.Those able to pay more than
$166.66 per month will be assumed to be abusing the system and
automatically denied Chapter 7.
The law continues to protect those who face hardships such
as serious medical conditions, so long as the extenuating circumstances are supported by documentation.
Calculations of income, expenses, and the like will no longer
be based on actual income and expenses but on specified calculations and Internal Revenue Service guidelines for reasonable living
expenses “for the support and maintenance of the debtor or the
debtor’s dependents.” Another change is that creditors will be able
to recover a larger portion of the property that does not fall into
that definition.
The new law was written to require that, before filing,
debtors receive credit counseling approved by the courtappointed bankruptcy administrator, or trustee. It also mandates
state that a court shall not grant a discharge to
any debtor that does not produce his or her tax
returns. The specific language of the statute
allows no room for exception in extreme circumstances. Section 1228 of Pub. L. No. 109-8.
11 Office of Legislative Affairs, Department
of Justice, letter to Chairman Sensenbrenner
(October 5, 2005).
12 Statement of the National Association of
Consumer Bankruptcy Attorneys (October 5,
2005).
Massachusetts Communities
at Risk
A Report from the Municipal Finance Task Force
by John Hamill
Chairman, Sovereign Bank New England
For the past nine months, I have been privileged to be chairman of the Municipal
Finance Task Force, a group of Massachusetts leaders from the business sector, the
nonprofit community, unions, municipal government, state government, and
academia. We were charged with analyzing municipal revenues, municipal
expenditures, and local aid, focusing on the period from 1981 to 2005.
Communities &Banking
7
Framingham Town Memorial and Municipal Offices, Framingham, Massachusetts. Photographs for this article by Julie Weinstein.
The study, facilitated by the
Metropolitan Area Planning Council,
came about because Massachusetts cities
and towns saw that local aid was increasingly restricted and unpredictable and
were concerned about a long-term financial crunch for delivering core municipal
services (non-school services).
Residents and taxpayers across the
state—regardless of whether they live in
cities, towns, or rural hamlets—have had
a common experience with local government over the past five years. Their property tax bill has increased dramatically,
and they are now paying fees for many
services that used to be covered by
general revenue.
All residents are affected, and perhaps none more so than those with
low and moderate incomes. Strikingly,
the largest cuts in municipal budgets
have come in the “Health & Welfare”
line item.
8
Fall 2005
As a result of the long-term fiscal
trends, Somerville, for example, has 16
fewer police officers, 13 fewer firefighters,
and 34 fewer public works employees. In
western Massachusetts, after a failed override vote, Hampden shut down its
senior center and recreation department,
and even turned off its streetlights to
save money.
The Municipal Finance Task Force
wanted, first, to understand long-term
trends in municipal finances and their
impact on local budgets and services; second, to help municipalities develop
strategies and policies to better navigate
the trends; and, finally, to provide recommendations for political leaders at the
local and state levels. This fall, we released
a comprehensive report distilling what
we learned.
We are hopeful that our work will
shine a light on the current, imperfect
system for financing local government
and will prompt a public debate.
The Findings
The research findings cover budget
growth, health-insurance issues, core
services, property taxes, and more.
Municipal Budget Growth
Despite stereotypes to the contrary,
municipal budgets have seen only modest
real increases over the past 25 years. Since
1981, per capita annual growth for
municipal budgets has averaged only 1.1
percent after adjustments for inflation.
The anecdotal stories about municipalities’ profligacy with tax dollars might be
true in specific cases, but overall the facts
do not support the argument that municipal budgets are out of control.
Likewise, there is a misperception
about union contracts. The task force
found that municipal wages grew at only
0.7 percent in inflation-adjusted terms
between 1994 and 2003, compared with
1.8 percent for the private sector and 1.0
percent for state employees.
Beyond that, municipal governments in Massachusetts have been shedding employees more steeply than any
other state in the nation. The
Massachusetts Taxpayers Foundation
reported last year that Massachusetts
cities and towns cut 14,200 jobs, or 5.2
percent of municipal employees, between
February 2002 and August 2004.
Municipal Health Insurance Crisis
Like other employers, municipalities
are struggling with soaring health-care
costs. The Massachusetts Taxpayers
Foundation recently surveyed a representative sample of Massachusetts cities and
towns and found that local health-insurance costs have skyrocketed more than 60
percent since 2001.
The foundation’s report also shows
that many municipalities are now spending more than 10 percent of their total
municipal budgets on health-insurance
premiums. In addition, 80 percent of the
21⁄2 percent annual growth in property tax
levies—allowed by the state ballot initiative called Proposition 21⁄2—is absorbed
by that one line item. The rate of growth
in health-insurance premiums for municipalities is nearly double the pace of premium increases for state employees.
Support for Core Local
Government Services
Some people argue that cities and
towns benefited from enormous increases
in local aid from state government
through the 1990s. It is true that there
has been a significant increase in education aid to cities and towns—although
the growth in that aid has varied greatly
by community.
At the same time, non-school aid has
been stagnant or declining for more than
15 years. Most dramatically, non-school
aid known as “Additional Assistance,”
which formerly was distributed to all
Massachusetts cities and towns, now
serves fewer than half of our municipalities and has diminished by more than
$430
million
since
1988.
Increasing Property Taxes
Massachusetts cities and towns have
long cherished their partnership with the
Commonwealth in delivering public
services such as local and state police
protection, roads, and a range of educational services.
But despite the best intentions and
sustained efforts of state policymakers,
local aid, which was 20 percent of total
state expenditures in fiscal 1988, stood at
16.4 percent in 2004. That decline has
hurt the ability of the municipal side of
partnership to deliver services.
Since 1987, per capita
expenditures by cities and
towns for core municipal
services (excluding
employee health
insurance, schools, and
some fixed costs) have
declined by an average of
0.3 percent annually.
The cuts to local aid, in combination with a lack of other local revenue
sources, have resulted in municipalities’
increased dependence on property taxes.
Whereas in 1988, property taxes
accounted for 46.1 percent of all municipal revenues, by 2004, that had
increased to 52.9 percent. In addition,
stagnant commercial property values
have increased the residential share of
property taxes. Residential property now
pays 72 percent of all property taxes, up
from 68 percent in 2000. Excluding 11
communities with residential tax exemptions, the average single-family property
tax bill increased $910 from FY2000 to
FY2005.
Diminishing Core Municipal
Services
All of these trends combined has put
enormous pressure on core municipal
budgets. Possibly the most remarkable
statistic in the report is that since 1987,
per capita expenditures by cities and
towns for core municipal services
(excluding employee health insurance,
schools, and some fixed costs) have
declined by an average of 0.3 percent
annually in real terms.
As an example of what that means,
the task force highlighted that spending
on public works declined from 15 percent of municipal expenditures in fiscal
1987 to 9 percent in 2004. Ultimately,
these long-term trends mean that we have
fewer employees filling potholes, picking
up trash, or plowing snow—basic
quality-of-life services that all citizens
expect their communities to provide. We
see the results of such trends in shortened
library hours, fewer health and human
services, closed fire stations, and fewer
police patrols in neighborhoods. In addition, soaring health-insurance costs make
it more expensive to deliver the services
that remain.
A Blueprint for Reform
The Municipal Finance Task Force
has proposed a comprehensive set of recommendations to stabilize municipal
finances and strengthen the partnership
between the Commonwealth and its
communities. There are no easy answers,
but the viability of local government
must be a central concern for all policymakers and will require sustained commitment. Future policies should ensure
that state assistance is sufficient and predictable. In addition, communities
should be given both flexibility to utilize
revenues other than property taxes and
the tools to control long-term costs.
We hope that the task force’s recommendations will help shape the future
through positive actions and improve residents’ experience with local government
in Massachusetts.
John Hamill is the chairman of Sovereign
Bank New England and served as chairman of the Municipal Finance Task Force.
A full copy of the report and its recommendations is available at www.mapc.org.
Communities &Banking
9
The Taste of Place
Local and Regional Foods Transform the Northeast
by Roger Doiron
Northeast Sustainable Agriculture Working Group
“We must all hang together, or
assuredly we shall all hang separately.”
Those words, spoken by Benjamin
Franklin at the signing of the
Declaration of Independence more
than 200 years ago, could very well be
the modern-day motto of the Northeast
farm sector and its supporters as they
look toward the future. Despite the
common misperception that the
Northeast is a marginal agricultural
region, Northeast farmers—and consumers—are finding new ways to hang
together to keep the region’s agriculture
literally on the map.
The challenges are formidable.
Farms and farmers continue to disappear from the Northeast landscape at an
alarming rate. According to the U.S.
Department of Agriculture’s last
Census of Agriculture, the Northeast—
defined as New England, New York,
10
Fall 2005
New Jersey, Pennsylvania, Maryland,
Delaware, and West Virginia—lost 4.9
percent of its farms between 1997
and 2002.
When farms disappear, so do precious resources, both natural and
human. During this same census period, the Northeast saw its total farm
acres decrease by 6 percent, much of it
gobbled up by suburban sprawl. At
least as worrisome is the loss of expertise as farmers quit the business or retire
without a successor.
In many ways, the challenges facing Northeast agriculture are not
unique to our region. Communities
across the nation are grappling with
many of the same issues. What is
unique to the Northeast are the solutions that are currently being put in
place and the opportunities for
the future.
Small Is Beautiful
It was Earl Butz, former U.S.
Secretary of Agriculture, who famously
offered his own success formula to
farmers back in the 1970s: Get big or
get out. For many farmers in the
Northeast, however, getting big is
simply not possible, given land values
and the nature of the landscape. So
farmers are developing alternatives to
getting out.
A growing number of farmers in
the Northeast have done well for themselves by taking Butz’s advice and turning it on its head. Rather than trying to
get big, many have succeeded by purposely staying small—in scale, in production methods, and in how they market their products to customers.
Similarly, rather than getting out
of agriculture, many farmers from the
region have gone into their communities to restore the farm to its rightful
place at the center of a healthy society.
For example, the Northeast leads the
way in the growth of communitysupported agriculture (CSA). With
CSA, a farm and a community of supporters create a partnership of mutual
commitment. In the CSA model, farm
supporters share both the benefits and
the risks of the farm’s operations by
agreeing at the start of the growing season to buy a certain quantity of farm
products per year.
When in 2004, a CSA farmer in
New York was awarded a prestigious
MacArthur Foundation fellowship for
her work on the development of local
food systems, Cheryl Rogowski contended that it validated everyone in the
CSA movement. “Farmers are often the
economic engines for their communities,” she said. “They provide a quality
of life to the community by retaining
the open spaces and rural character that
so many people are seeking.”
While Rogowski and her CSA colleagues have been redefining what a
farm can be, Tod Murphy of Barre,
Vermont, has been working to sustain
local agriculture by reinventing the
restaurant. Murphy is the founder,
owner, and operator of the Farmers
Diner, a 60-seat eatery that has attracted national attention by doing something unusual for a restaurant: It makes
local and organic foods not only delicious but democratic.
No foie gras or truffles are mentioned anywhere on the menu, which
instead features ordinary foods like
omelets and milkshakes made from
local organic eggs and milk, pancakes,
bread and pastries made with local
grains, and meats raised and cured in
Vermont. Murphy wants the diner ultimately to source 100 percent of its
ingredients from farms located within
50 miles of Barre. That’s an ambitious
goal. According to the WorldWatch
Institute, the ingredients that most
restaurants use travel on average 1,500
miles from field to fork.
Murphy enjoys seeing the steady
flow of satisfied customers passing
through his restaurant’s doors, but his
The Northeast Sustainable
Agriculture Working Group
The Northeast Sustainable Agriculture Working Group (NESAWG) is a network of
organizations and individuals representing farm, environmental, consumer,
food-security, government, education, and other constituencies.
The organization believes that building a food and agriculture system that is
regionally focused—and truly sustainable and secure—calls for a systems approach.
The members work toward food-system transformation through dialogue, mutual
learning, and shared initiatives that link many sectors and stakeholders.
The Northeast Sustainable Agriculture Working Group, www.nesawg.org, focuses on the six New England states, plus New York, Pennsylvania, New Jersey, Maryland,
Delaware, West Virginia, and the District of Columbia. It partners with the National
Campaign for Sustainable Agriculture and other organizations on specific initiatives.
favorite part of the job is writing checks
to farmers. He writes a lot of them. By
2003, the diner was buying $15,000
per month from local farmers and
spurring local economic development
and innovation. Murphy wants the
diner to be the catalyst for farmers and
food businesses to take chances with
new products. “There’s a lot of support
in the community when the community understands that this is about the
people they know and the places they
drive by on the way to work in the
morning,” he says.
The success of private initiatives
like the Farmers Diner is inspiring
other food-serving establishments—
schools, colleges, hospitals—to follow
suit. In New England, colleges such as
Bates,
Middlebury, Yale,
and
Hampshire have attracted notice for
their farm-to-cafeteria programs. A
growing number of these programs use
produce grown by the students themselves on educational farms that serve as
training grounds for the next generation of farmers.
The momentum of the Northeast’s
Photographs in this article are of Hanson’s Farm in Framingham, Massachusetts. Julie Weinstein, photographer.
Communities &Banking
11
local food sector is unmistakable,
whether it’s measured in the growing
number of farmers’ markets, CSA
farms, or “buy local” campaigns. Such
energy is essential for powering the
region’s diverse agricultural base in the
face of growing national and international competition—but is it sufficient?
Ongoing Food-Supply
Challenges
Food and agricultural professionals
and advocates recognize that ensuring
the long-term health of the Northeast’s
agricultural sector requires stronger
regionally scaled cooperation among all
the main actors in the food chain—producers, processors, distributors, retailers, and consumers—as well as support
by policymakers.
Consider the beef sector. Telling
the region’s cattle farmers to think small
and local may work for a few well-situated farms, but not most. Like other
commodity farmers in the Northeast,
12
Fall 2005
beef producers are seeing their margins
squeezed by larger
farms from outside
the region that have
lower
production
costs. Some of the
largest Midwestern
feedlots have as many
as 50,000 cattle each,
more than all of
Maine’s beef farms
combined.
Rather than racing
Midwestern
megafarms to the bottom through lower
costs, more and more
farmers
in
the
Northeast are looking
at new ways of rising
to the top by offering
premium products
and by participating
in innovative cooperative arrangements that
give them better bargaining power with
wholesale buyers. One
example of the latter is Wolfe’s Neck
Farm in Freeport, Maine. Wolfe’s Neck
Farm built a natural beef business from
a single herd to 60 different family
farms cooperatively selling beef to retail
outlets across the region. The assets
were transferred to Pineland Farms
Natural Meats Inc. of New Gloucester
in June, and the endeavor has continued to flourish under the new auspices.
Whether new forms of cooperation
like this emerge will depend in part
on the changing food policy landscape.
There are still many state and federal
regulatory barriers hindering the
development of regional-scale agriculture and food enterprises. Regional
policy networks like the Northeast
States Association for Agricultural
Stewardship are working to examine
such barriers and create a regional identity among state-level lawmakers.
Similarly, members of the U.S.
Congress from the Northeast have started thinking regionally through an
informal policy coordination group
known as the “Eggplant Caucus.” The
caucus has a big task ahead of it with a
new federal farm bill expected in 2007.
Historically, the Northeast has been
more of a policy taker than a policy
maker at the national level.
A rising tide of pressure is coming
from farmers in the region to make federal policy more relevant for their
farms. One way this pressure is exerting
itself is through a louder and more concerted push for reducing the size of government payments to the very largest
farms, few of which are located in the
Northeast. A new policy approach that
rewards farmers for how they farm, not
what or how much they farm, would
be a transforming advantage for
Northeast farmers.
Intelligent policies and new forms
of regional cooperation can help ensure
the future vitality of Northeast agriculture. In the end, though, the type and
scale of our food system will depend at
least as much on consumer choices. If
there are enough eaters voting with
their forks in support of locally and
regionally based farms, then those farms
will not only survive but thrive.
We are well on the way to developing a sense of Northeast “food citizenship.” Many eaters express loyalty to
locally grown products, and “eating
regionally” is emerging as a highly marketable concept. With Cape Cod cranberries, Northeast beef, and restaurants
that feature local produce, hanging
together has never been so easy.
Roger Doiron is regional organizer for
the Northeast Sustainable Agriculture
Working Group. He is based in
Scarborough, Maine.
Mapping
New England
Farm Concentration
In New England, the greatest concentration of farms is often in
the most urban counties.
In 2002, there were 28,254 farms in New England. Almost half of
the farms in New England are located in Maine and Vermont. More
than one-third are between 50 and 179 acres. Maine has the most farmland of any state in acres, but because its farms are large, there are fewer
of them per square mile.
Only 1 percent of the total number of farms in the nation
is located in New England. New England lost a significant number of
farms from 1997 to 2002—11 percent, from 31,601 to 28,254 farms.
Southern New England's counties have a large number of farms
per square mile because of the smaller size of the farms. Almost half of
the farms in New England are between 1 and 49 acres.
195
125
160
100
71
108
200
100
175
168
110
75
127
126
90
108
87
95
100
179
88
116
129
120
125
56
83
80
61
73
41
73
40
67
90
75
70
98
Farm Density
per 10 Square Miles,
by County
50
63
36
Less than 2.5 farms
22
2.5 – 5 farms
88
25
54
48
75
0
56
45
38
30
5 – 7.5 farms
14
59
More than 7.5 farms
26
33
31
31
25
16
30
51
*The number printed on each county
indicates the median farm size in acres.
6
13
32
16
13
25
0
Note: For the purpose of the Census of Agriculture, a farm is any place from which an amount of $1,000 or more of agricultural products
was produced and sold, or normally would have been sold, during the census year. The $1,000 value is not adjusted for inflation.
Map: Ricardo Borgos, Federal Reserve Bank of Boston.
Source: 2002 Census of Agriculture.
A model of WNDC’s mixed-use development, with
43 affordable river-view apartments upstairs and
market-rate retail and office space below. Photographs
in this article by Rik Pierce.
Thinking
Holistically
by Caroline Ellis
Federal Reserve Bank of Boston
Woonsocket Neighborhood Development Corporation
On one level, this is about a new idea
in affordable housing—rental units specially designed for in-home day care so
that low-income providers may get
licensed to work at home and lowincome neighbors may have safe child
care while they are at work.
On another level, it is about how
four particular day-care units built by the
Woonsocket Neighborhood Development Corporation in Rhode Island exemplify the power of holistic thinking in rescuing a city from decline. There is still
work to be done, but with holistic
thinking and critical financial assistance—from Local Initiatives Support
Corporation, low-income tax credits,
NeighborWorks America, Rhode Island
Housing, the U.S. Dept. of Housing and
Urban Development (HUD), the Rhode
Island Housing Commission, and oth-
14
Fall 2005
ers—a remarkable transformation has
begun. It didn’t happen overnight.
“In the early 1990s,” WNDC executive director Joe Garlick recalls, “this
Blackstone River town suffered numerous hits. The departure of mill business,
the recession, and a major Rhode Island
credit union bust had a cascading effect.
Massive housing abandonment was the
result, and institutions like the FDIC
were stuck with unwanted properties.”
Around this time, Woonsocket
Neighborhood Development Corporation, which had been working since 1988
to create affordable housing for families
all around Woonsocket, started to focus
on Constitution Hill. In this once pleasant neighborhood, absentee ownership,
boarded-up buildings, crime, drugs, and
prostitution were making life for the
remaining residents a struggle. Garlick
believes that property owners “had pretty
much given up on the neighborhood.”
Fortunately, two-thirds of the board
of WNDC lived in and around the area
and still cared. They remembered better
days and longed to restore the neighborhood, impossible as that seemed.
Stan Eason, now 39 and a WNDC
construction supervisor, recalls the neighborly Constitution Hill of his childhood.
He also remembers that when things
turned bad, the community heard many
empty promises about improvements.
“All we ever got were trees,” Eason says.
So when WNDC turned its attention to Constitution Hill revitalization in
1994, he understood why the remaining
neighbors were skeptical that it would
ever improve. Nevertheless, Eason and
a few others decided to give WNDC
a chance.
“Even an old car that hasn’t been
maintained can come back if you give it
some oil and start to take care of it,” he
told people. “You need to be a voice for
your neighborhood. Even if things are
beyond your control, you need to get on
the phone and call.”
Joe Garlick believes that the decision
of the Woonsocket police to open a substation for Constitution Hill was “a timely piece that helped” but that having people who cared about the neighborhood
was the most critical element in the eventual turnaround.
Through grants and loans, WNDC
began to buy unwanted neighborhood
property and keep a close eye on it. Until
the group had the funds and permits
to start renovating, it made sure that
buildings were securely boarded to discourage crime. “We cut the grass, we put
strategic lights in, and once we started
construction, there were no longer any
places to hide.”
The Child-Care Units
The idea for child-care units didn’t
surface until 2002, during the third
phase of the affordable-housing development on Constitution Hill. It grew out of
a series of community meetings held as
part of a neighborhood-revitalization
Financial Fitness Classes
All WNDC tenants are supposed to attend a financial fitness class. In
addition, if they think they may want to buy a home, they may take a $35 eightweek home-buyer education class, which provides certification for two years.
The class helps first-time home buyers learn about such matters as saving,
budgets, and getting their credit in order so they can get a mortgage.With the
certification, they can get help with a down payment and closing costs.
planning effort that was funded by
Rhode Island Housing and Mortgage
Finance Corporation.
One of the meetings was with
Connecting for Children and Families,
Inc. (CCF), and with members of CCF’s
home child-care support network.
Through the network, set up to improve
and sustain the supply of affordable
child-care slots in Woonsocket, CCF
provided ongoing training and technical
assistance to providers.
The initial focus of the 2002 meeting was to solicit ideas and suggestions
on projects that would improve targeted
neighborhoods. As the meeting drew to a
close, the conversation turned to the
difficulty of starting a home child-care
business if the provider was a renter.
Landlords were not interested in having
more children around or in making the
Brenda Flores, home child-care provider, with Kiara T. “WNDC gives you an opportunity to progress,”
Flores says.
modifications needed for securing a
license from the R.I. Department of
Children, Youth, and Families. Play
yards, extra exits, smoke detectors, and
the like were unwanted expenses.
At this point in the meeting,
WNDC came up with some holistic and
creative thinking about addressing the
child-care need in its current affordablehousing project.
With help from HUD’s Low
Income Housing Tax-Credit (LIHTC)
program, WNDC was well into the planning phase of a 19-unit project that was
part of its ten-year Constitution Hill initiative. Once this third phase was complete, 109 apartments in 33 buildings
would be substantially rehabilitated and
no abandoned houses would remain.
With the neighborhood safe, what better
time to incorporate apartments for inhome child-care providers?
Several questions needed to be
answered first:
• What additional building-code
and state-licensing requirements would
the child-care units be required to meet;
• Were there any restrictions in the
LIHTC program that would prohibit
incorporating the provider units in the
project; and
• Were there any prohibitions under
the Federal Fair Housing Act or the
Americans with Disabilities Act?
Local
Initiatives
Support
Corporation (a national organization
whose Rhode Island office has over time
invested close to $20 million in WNDC
through loans and grants) provided
$7,000 to research the issues. WNDC’s
architect, John O’Hearne of O’Hearne
Associates in North Smithfield, Rhode
Island, did the necessary code research,
and Kristin DeKuiper and Christopher
Communities &Banking
15
Stan Eason,WNDC construction supervisor, says, “People’s spirit has been rekindled.”
B. Hanback of Holland & Knight, LLC,
addressed other legal and regulatory
issues. The research showed that the idea
could work.
Getting Legal Advice
When Garlick questioned WNDC’s
attorneys in July 2002, a set-aside for inhome child-care units, as far as he knew,
had never been attempted in an affordable-housing project. In a letter, he
described the plan for phase three on
Constitution Hill, which called for senior
housing, child-care, and other units.
Units for in-home child care would
have a finished basement that included a
sink, a half bath, and cabinets. The letter
explained that although none of the finished basements were handicapped accessible and none of the phase-three units
for families were handicapped accessible,
two of the senior-citizen units were.
Since Rhode Island Housing required
that, overall, 5 percent of units in a project be handicapped accessible and two
out of the 19 in phase three qualified,
he believed that the plan exceeded
the regulations.
Continuing to look at the initiative
holistically, Garlick emphasized the need
for child care in Woonsocket: “The latest
RI KidsCount analysis estimates that
there is a shortage of 800 slots in the city.
Renters hoping to start a licensed home
child-care business are at a great disad16
Fall 2005
vantage. This is unfortunate since, in
addition to alleviating a community
shortage of licensed slots, it is also a good
way for very low-income women to supplement their income. Licensed providers
are also eligible to receive state healthcare coverage.”
Hanback’s detailed response included some reassuring language: “Both the
IRS and the Treasury Department have
taken the position that low-income housing projects may give preference to certain classes of tenants as long as those
preferences do not violate HUD nondiscrimination policies. . . .We can think of
no valid reason that setting aside units for
tenants who desire to operate home daycare businesses would violate HUD’s
nondiscrimination policies or the federal
Fair Housing Act.”
And ultimately, because the
Americans with Disabilities Act is less
stringent about renovated buildings than
about new construction, the main modifications were additional exits, smoke
detectors, and bathrooms. Their cost
amounted to $15,000 to $20,000 per
unit. The Rhode Island Housing
Resources Commission, through its
Building Better Communities program,
and the Neighborhood Reinvestment
Corporation (now called NeighborWorks
America) provided the funding to complete the child-care units as a part of the
19-unit project.
Today four home child-care business
are flourishing on Constitution Hill.
Woonsocket Neighborhood Development Corporation’s director of community building and
organizing, Margaux Morisseau, left, with Liz Burch, family home provider consultant for Connecting
for Children and Families.
Mill Town on the Upswing
Margaux Morisseau is the director of community building and
organizing for the Woonsocket Neighborhood Development
Corporation. There is nothing she would rather talk about than
the improvements in Woonsocket since WNDC and other neighborhood groups began collaborating 17 years ago. The granddaughter of French Canadian mill workers who tell stories of dyes
turning the Blackstone River different colors every day, she is as
excited as they are about the cleaner water and the plans for the
abandoned mills.
Her tour of Woonsocket, which may include taking reporters
to a Constitution Hill child-care unit or two, is comprehensive.
One of the neighborhood highlights is the Child Care Center
belonging to Connecting for Children and Families. Morisseau and
Liz Burch, family home provider consultant for CCF, like to reminisce about the building’s former life as the worst bar in
Woonsocket.
“The people in the neighborhood,” says Morisseau, “knew
that nothing would improve until the bar was gone. Joe Garlick
negotiated for the building with the bartender—passing a paper
plate back and forth over the counter until they had a deal.”
On her way to the
Community Art Center,
Morisseau points out the
white picket fences of the
100-year-old and older millworker houses that WNDC
renovated on Constitution
Hill. Nearby is a house
where the owner-residents
“caught the sprucing-up
bug” after seeing the neighborhood improve. A yellow
house has the distinction of
renovation help from Bob
Vila, host of the television
show “This Old House.”
The broad parking space
behind the homes, says
Morisseau as she drives by
the community garden and
playground, tends to generate neighborly cookouts.
At the Community Art
Center, performance artist
Michaelle Saintil, a member
of the Providence Black
Repertory Theater, is the
latest artist-in-residence.
She gets free rent for a three-bedroom unit with a yard and deck.
In exchange, she provides 12 hours a week of after-school classes
to Woonsocket students from first grade through twelfth, keeping
them busy with poetry, the spoken word, acting, photography, and
writing. The center has a full kitchen, with food provided by the
local food bank.
Morisseau says that WNDC, having successfully tested the
teacher-in-residence model for six years, intends to renovate a
boarded-up mill to create a learning center with apartments for
six new teachers. Like the artist-in-residence, the teachers will pay
utilities but no rent.They will have a one-year contract, renewable
each year for three years.
Morisseau gives Garlick much credit for the creative
approach that has involved WNDC in both big innovations like the
child-care units and small ones like using origami to teach young
children fractions (“first you fold the paper in half; then you fold it
in quarters”). But in the end, she adds, the secret of success is “the
people themselves”. . . the people and nonprofits of Woonsocket
collaborating to solve problems and build economic sustainability
in an old Rhode Island mill town.
The exterior decoration of the Community Art Center was created by neighborhood children and an artist-in-residence.
Communities &Banking
17
Digital Vision/Getty Images
Giving and Receiving
in the Nonmonetary Economy:
Time Banks
by Anna Afshar
Federal Reserve
Bank of Boston
18
Fall 2005
A 2001 article by Sue Halpern in
Mother Jones magazine tells the story
of an Ivory Coast immigrant who
assimilated faster than others because
of his involvement in a form of
exchange called time banking.
By night, Issouf Coulibaly worked as
a machine operator in a Portland, Maine,
rotor factory. By day, he swept the floor
of the Portland Ballet, did babysitting, or
translated correspondence into French.
The work was voluntary, but it was not
volunteer work. Coulibaly was a member
of East End Time Bank, a collection of
about 700 people in Portland from all
walks of life who exchange hours of labor.
The bank connects Portland residents with one another and with services.
In exchange for his hours, Coulibaly
bought a computer, saw his first ballet,
and took driving lessons. He also built
friendships through the time bank and
decided to stay in Maine rather than join
fellow Ivorians in Philadelphia.
Time banking is big in New
England. Of the 65 time banks across the
country, 11 are in Massachusetts, Maine,
and New Hampshire. And the New
England Time Banks network, headquartered in Portland, is the clearinghouse for
the national network of time banks, Time
Banks USA (http://www.timedollar.org).
What Is Time Banking and
How Does It Work?
Time banking is an economic and
social exchange. Its currency is time, and
the unit of measure, the hour. Time bank
members contribute hours of labor—gardening, tax preparation, wallpapering,
medical services, and more—in return
for Time Dollars, which they can then
redeem for services from other members.
According to Time Banks USA, the
exchanges provide concrete economic
benefits for communities and the organizations sponsoring them. They also help
build the social networks that all communities need.
Time banking was founded in 1987
by Edgar S. Cahn, a former civil rights
litigator, who believed that all community residents—senior citizens, young
people, professionals, the disabled, immigrants, and others—are important in
implementing change for the better.
Cahn maintains that the social welfare system defines certain people as
recipients, neglecting the strengths,
resources, and talents that they have to
offer. In his book No More Throw Away
People, Cahn coined the phrase co-production to describe the process by which
individuals work with professionals and
social service agencies to produce benefits
for their community. The use of Time
Dollars is one way to promote co-production. When an individual “spends”
the currency for a service from another
member, the recipient then has an obligation to contribute to someone else.
There are two main types of time
bank structure. The first and most popular structure is neighbor to neighbor.
Neighbor-to-neighbor time banks
involve individuals in a defined neighborhood. East End Time Bank is an
example. It began in Munjoy Hill in
1996, when long-time residents were
aging or leaving and immigrants were
moving in. It was so successful at bridging cultures and providing benefits that
additional communities signed on.
The second structure is specialized.
Specialized time banks either limit membership—say, to members of a healthmaintenance organization (HMO) or to
Communities &Banking
19
What Are the Benefits?
Time Banks: Current Uses
• Connecting refugees with local residents and resources in
Portland, Maine
• Mobilizing youth for peer tutoring in Chicago, Illinois
• Providing the elderly with practical help and companionship
in Brooklyn, New York
• Providing support to families of children with severe developmental
and emotional problems in Boston, Massachusetts
• Providing an alternative juvenile justice system in Washington, D.C.
jury of peers and receive sentences of
community service, life-skills training,
and mandatory jury duty in Youth
Court. The intervention makes young
people part of the solution while tapping
community organizations for youth
support services.
Digital Vision/Getty Images
students in a school district—or else
choose a limited scope of activities, such
as tutoring.
An innovative example of a specialized time bank is the Time Dollar Youth
Court in Washington, D.C. It cooperates
with the juvenile justice system to handle
youthful offenders, who appear before a
20
Fall 2005
Time banks can provide individuals
with services that they might not otherwise access and can make up for gaps in
social services. Seventy medical practitioners at East End Time Bank, for example, provide services to members, many
of whom have no health insurance.
Although providers of professional services may receive less in return than they
would in a monetary transaction, most
participate because they want to contribute to their community.
Time banks recognize and promote
the value of work in the nonmonetary
economy. Participants have been known
to use Time Dollars to finance midwife services, a wedding, or a bequest.
The Internal Revenue Service’s rules
for time banking, unlike its rules for
the barter system, consider Time Dollars
tax-exempt.
Time banks also may provide savings
to sponsor organizations. The Sentara
group of hospitals in Richmond,
Virginia, for example, saw a one-year savings of $80,000 after it instituted a call-in
system that paid trained volunteers in
Time Dollars for assessing the condition
of asthma patients, offering help when
possible, and referring serious cases to the
disease-management team.
Another example is Elderplan,
Metropolitan Jewish Health System’s
Social HMO, located in Brooklyn, New
York. In its Member-to-Member (M2M)
program, participants help one another
with errands, transportation to medical
appointments, minor home repairs,
language translation, social visits, and
other services.
A multiyear evaluation of the M2M
program released by Elderplan in 2003
showed that time banks could help
HMOs deliver long-term care effectively
to many elderly patients while postponing their move to nursing facilities.
Although the sample size of the M2M
evaluation was too small for statistically
significant results, the time bank also
appeared to improve members’ mental
health and to decrease loneliness.
Time Banks USA sees time banking
as a vehicle for social change. First, the
initiative redefines the value of individuals and the work they do, with all services valued at the same rate. Second, time
banking fosters reciprocity. Third, it
builds social capital through relationships, trust, and support networks.
Fourth, it enables a broad spectrum of
people to meet. According to Auta Main,
director of New England Time Banks,
time banking is “a way of bringing
together diverse populations of people
that may not have met otherwise. We are
changing the face of communities.” That
said, time banks are often set up to reach
traditionally disadvantaged groups. The
East End Time Bank’s membership, for
example, is 75 percent low-income, 30
percent seniors, 15 percent disabled, and
15 percent single parents.
Who Is Getting Involved?
Although East End Time Bank was
the result of a group of dedicated individuals getting together, often an established
local organization sponsors a time bank.
United Way and the Annie E. Casey
Foundation have sponsored time banks,
as have municipal governments. East End
Time Bank is currently working to
extend its reach through a partnership
with Catholic Charities. Catholic
Charities will make use of its community
knowledge to identify immigrants and
refugees when they move into a neighborhood, and it will invite them to join
the East End network.
Time banking is expanding at a
steady pace. In the Gulf Coast region, the
first time bank set up in response to a
natural disaster will help victims of
Hurricane Katrina. There are currently
300 banks in 21 countries, including 65
in the United States. The United
Kingdom is investigating formally incorporating time banks into its national
health system.
Recent examples of New England
time banking include both government
and social service initiatives:
• The
mayor
of
Somerville,
Massachusetts, Joseph Curtatone, has put
his weight behind a city program that
promotes mutual assistance among seniors and is coordinated by the city’s
Council on Aging. Several city agencies
Steps to Start a Time Bank
1. Consider how a time bank can help your organization further
its mission.
2. Become familiar with time banking: visit a time bank in your area
or attend a time-banking introductory workshop. Consider
running a “mock” time bank.
3. Find a fiscal sponsor or obtain 501(c)(3) status. Raise funds for the
annual membership and start-up training fees.
4. Complete the two-day start-up training.
5. Start your time bank
will participate, and nearby Cambridge
College has already conducted a training
course for staff.
• The Brazilian Immigration Center,
the largest Brazilian social service agency
in the region, is working with New England
Time Banks network to establish a time
bank in Allston, Massachusetts, for the
local Portuguese-speaking community.
• In Lynn, Massachusetts, three social
service agencies have pooled funds to create an experimental model to help families of mentally retarded children connect
with and help one another.
Starting a Time Bank
Key elements in starting a time bank
are dedicated individuals, assessment of
the potential, and some start-up capital.
The capital is for launching a database for
tracking hours, providing training, paying the annual membership fee to the
national time-bank network (which provides access to regional meetings, national conferences, and advanced training),
and paying a coordinator.
A coordinator, even if only parttime, is needed for the first three years to
enlist community partners, recruit and
engage members, and coordinate and
track the service exchanges. After a while,
as members learn the system and contribute time to running the time bank, it
can become self-managing.
When an individual
“spends” the currency for
a service from another
member, the recipient
then has an obligation
to contribute to
someone else.
Anna Afshar is a senior research associate
at the Federal Reserve Bank of Boston.
Communities &Banking
21
22
{
Fall 2005
How Fiscal
Sponsorship
Nurtures
Nonprofits
by Jonathan Spack
Third Sector New England
When Tracy Hewitt founded
Resource Generation in 1998 to
help wealthy young people reach
out to the disadvantaged and
promote social justice, she realized
that her new group lacked the
administrative capacity to support
its programmatic efforts. So she
decided to leave the back-office
details to a fiscal sponsor and
focus her organization’s efforts on
its mission.
The sponsorship mechanism enables
groups to organize around societal
concerns without having to incorporate.
It provides an infrastructure that nurtures
new leadership, and it can help start-ups
organize to challenge conventional practices and approaches to addressing unmet
societal needs. It also offers a way to
manage specialized responses to cultural
communities. In other words, fiscal sponsorships can be a real boon to the
fluidity, innovative capacity, and diversity
of the community-development and
nonprofit sector.
How Does Fiscal
Sponsorship Work?
Fiscal sponsors are 501(c)(3) charitable corporations that give unincorporated
groups whose missions are aligned with
their own a tax-exempt home. Although
sponsored programs are not completely
independent—they are legally part of
the sponsor organization—they nevertheless retain programmatic autonomy
and often have separate advisory boards
making their strategic decisions. They are
responsible for their own fund-raising,
and they absorb any shortfall and retain
any surplus.
Typically, the sponsor provides
accounting, human resources, and other
back-office services, with its cost covered
by an administrative charge applied to
the revenues or expenses of the sponsored
program. Third Sector New England has
been sponsoring client organizations
since its inception, with the typical group
staying for several years. Lately, more of
them have been asking for help with
building their organizational
capacity. So TSNE has begun to
offer program assessment,
information-technology
consultation, and strategicplanning guidance.
Who Does Fiscal
Sponsorship?
The kinds of groups offering fiscalsponsorship services are varied. At one
end of the spectrum might be might
be a church, community foundation, or
agency helping an emerging
organization on an occasional
basis because the sponsor recognizes a mission overlap. At the other
end are a handful of groups organized
specifically to provide such services.
Often these professional fiscal sponsors
serve a particular field.
Earth Island Institute in San
Francisco, for example, incubates groups
involved in environmental activism.
TSNE and the Tides Center (San
Francisco) provide support mainly to
social justice groups. PHFE Management
Solutions in Los Angeles works mostly
with federally funded projects.
The level of service provided by fiscal sponsors also varies, depending on the
sophistication of sponsors’ financial and
human-resource systems, the availability
of shared office space, and the sponsors’
capacity to provide mentoring, grant
writing, technology support, and organizational development.
Who Uses Fiscal Sponsors?
The groups that seek out sponsors
are even more diverse. They may be
new groups exploring their viability in
terms of attracting members, raising
funds, and tackling the host of challenges
involved in long-term survival. Such
groups often consist of marginalized populations or people passionate about social
issues that are not yet recognized by
mainstream groups.
Or the client organizations may be
well-established and well-funded but
aware that their expertise is programmatic, not administrative. Such groups
are nearly always unincorporated but
have evolved to scale under the
comfort and security of fiscal
sponsorship and have no incentive
to change. In both kinds of groups
are a few that want to remain
fiscally sponsored projects indefinitely.
One sponsored project has actually been
with TSNE for 23 years. Such groups do
not intend to institutionalize their operations ever, opting to do their community
work with as few bureaucratic headaches
as possible.
If any sponsored group
decides it is not going to be viable
in the long term, the fiscal partnership allows for a natural, relatively painless phasing out, especially compared
with winding down an incorporation
with its potential liability issues and the
paperwork for government agencies.
What Are the Risks?
As good as fiscal sponsorship sounds,
there are significant risks on both sides of
the relationship. On one side, fiscal sponsors are legally responsible for all of the
activities of the groups they house. They
must therefore screen those organizations
carefully before agreeing to partner and
must engage in diligent oversight.
Sponsoring a nonprofit that has shaky
finances or disarrayed leadership and governance is asking for trouble.
On the other side, the group that
gets sponsored is dependent on the competence of its sponsor’s staff and the reliability of its systems. Due diligence is in
order when groups choose a sponsor so
that they do not find themselves switching to another organization under chaotic circumstances. A prospective sponsor
should have the following:
• A mission and vision similar to
that of the group seeking
sponsorship;
• Sufficient financial resources to
ensure continuous, uninterrupted
operation;
• Strong systems plus internal protocols and controls that are based
on generally accepted financial
and accounting principles and
regulations;
• Written policies and procedures
for administration and risk
management;
• A long-term organizational commitment to fiscal sponsorship;
• Sufficient staff to fulfill the
agreed-upon services; and
• Staff people trained to see their
role as primarily customer service.
Communities &Banking
23
Achieving Goals
Together
Good fiscal sponsorships
provide a win-win for everyone. The
families and communities served
through the partnerships are benefited.
The unincorporated groups, projects,
and grassroots coalitions that have
strong, experienced fiscal sponsors can
focus their attention on their mission
and programs. And the sponsors themselves are able to achieve their own missions more broadly. After all, helping
partners achieve their mission is the raison d’être of fiscal sponsorship. And
alignment between sponsor and sponsored program, required by IRS rules
and regulations, results in more
resources getting directed toward the
high-level, shared mission.
“At least 15 percent of
the time that I would
have had to spend on
administrative work is
put into fund-raising,
management,
programming, and other
critical activities.”
Because fiscal sponsorship is by
definition a behind-the-scenes service,
it is often under the public and philanthropic radar. Both sides to potential
partnerships have nowhere to go for
reliable information on the pros and
cons, the criteria to weigh in advance,
or appropriate partnership behavior.
There is no organized network to
connect up fiscal sponsors with
organizations seeking sponsors.
According to TSNE’s
research and experience, the
absence of information has several
consequences:
• Many groups cannot find fiscal
sponsors at all, which means that they
either die on the vine or incorporate
independently and devote a dispropor-
24
Fall 2005
{
tionate amount of time and resources to
administration. That is an especially
critical issue for grassroots groups and
those in low-income or minority communities, where the infrastructure support is less developed.
• The quality of fiscal sponsorship
varies greatly, and there is no easy
way for sponsored groups to evaluate
the type and quality of service they
are getting.
• Community-based fiscal sponsors that take on groups aligned with
their mission sometimes jeopardize
their own organization because they
do not understand the legal and financial risks.
Recently, a handful of fiscal sponsorship organizations, including TSNE,
have joined forces to form the National
Network of Fiscal Sponsors. The goal is
to build the field in a systematic way,
transforming it from a poorly understood, high-risk endeavor to one that is
widely accessible, credible, and wellsupported. The first collective product
of the national organization will be a set
of standards. Nearly completed, it will
be followed in short order by a handbook for fiscal sponsors.
Fiscal sponsorship is an idea whose
time has come. As the current director
of Resource Generation, Hez Norton,
says of TSNE’s help, “At least 15 percent of the time that I would have had
to spend on administrative work [without a fiscal sponsor] is put into fundraising, management, programming,
and other critical activities that a director needs to do.”
In addition to building the capacities of fledgling groups and helping
them achieve sustainability, fiscal
sponsorship promotes more
practical thinking among everyone in nonprofit world about
the viability of longer-term,
shared administrative models.
Jonathan Spack is executive director of
Third Sector New England, a regional
nonprofit management resource center
headquartered in Boston.
by DeWitt Jones
Boston Community Capital
Green
Development:
Improving the Health of
Residents and Neighborhoods
David Shipler, author of The Working Poor:
Invisible in America, recounts a New England
story. The mother of an eight-year-old asthmatic boy took him to Boston Medical Center,
where doctors gave him inhalers and steroids
and urged that environmental changes be made
to his home. But the mother ended up bringing
the boy back often, missing work and risking
her job. The situation didn’t turn around until a
hospital attorney reinforced the mother’s
demands that the landlord fix her apartment’s
mold-producing leaky pipe and discard the
carpet full of dust mites.
It doesn’t need to be that way. The “green”
movement—designing buildings for indoor air
quality, energy efficiency, water conservation,
and the like—is starting to take hold. The ErieEllington homes that Codman Square
Neighborhood Development Corporation
helped build in 2000, for example, provided 50
green rental units that reduced asthma and
other common problems. Cambridge, Mass.based GreenVillage, a participant in the U.S.
Department of Energy Building America
Program, designed the development. When
GreenVillage’s research affiliate, Hickory
Consortium, conducted subsequent interviews,
it found that 100 percent of the residents
who had asthma prior to moving in, had
seen improvement.
Community-development financial intermediary Boston Community Capital, which
finances projects similar to Erie-Ellington, is
one group taking a green approach to funding.
BCC’s mission is to invest in projects that provide affordable housing, good jobs, needed
goods and services, and new opportunities for
people who have been locked out of the economic mainstream. Green approaches can boost
all four goals.
Energy efficient homes on Ellington Street in the Erie-Ellington area of Dorchester
built in 2000. Photographs in this article are from the Heart of the City database,
www.heartofcity.info.
Erie-Ellington Playground on Erie Street in Dorchester.
Communities &Banking
25
Energy efficient homes on Ellington Street.
But what about cost? Considering
the cost to society and property owners of
cheaply constructed or run-down housing, some added expense on the front end
would seem reasonable. But the remarkable fact is that green design doesn’t have
to be much more expensive. Once green
standards are refined, comparisons of
green building and conventional building
will be more precise, but credible research
that included Erie-Ellington showed that
total development costs for the projects
in the study were on average only 2 percent higher than conventional development costs.1
Why Green?
Organizations serving low-income
communities do not have to be experts in
environmental, engineering, technology,
regulatory, or energy issues to be aware
of the consequences of not using green
principles. Poor environmental, publichealth, and design policies have clearly
placed an extra burden on low-income
individuals. Fortunately, good design can
address not just the poor ventilation,
mold, and moisture that cause respiratory disease, but other concerns as well.
For example, design that places safe,
well-maintained playgrounds and parks
in convenient walking distance of homes
and schools can improve a community’s
quality of life while diminishing the obesity epidemic among young people.
Similarly, business construction that
limits the exposure of workers and neigh-
26
Fall 2005
borhoods to toxic materials can reduce
future societal costs. Jobs in nail salons,
floor refinishing, and car painting are
often entry points into the economy
for immigrants, and design can make
them safer.
BCC and its partners in the Green
Building Production Network (New
Ecology, Tellus Institute, Massachusetts
Association of Community Development
Corporations, and Local Initiatives
Support Corporation) want to help community-development corporations benefit from green trends. Increasingly accepted as standard in the market, green practices can reduce chronic poor health and
the absenteeism that undermine advancement in school and work. They can also
save energy and heating costs for lowincome people.
Many sustainable technologies have
proved effective and economical, and
policymakers are catching on. For example, Massachusetts now uses sustainabledevelopment principles to evaluate projects it funds. Even developers not funded
by the state must meet higher standards
for energy efficiency and “healthy”
homes. And Boston is asking all major
projects to meet the U.S. Green Building
Council’s LEED (Leadership in Energy
and Environmental Design) standards.
Boston Community Capital also sees
potential economic benefits in green
development, construction, and renovation. More workers will be needed to
fill specialized jobs, and if low-income
people get to work on green projects
in their communities (where there will
be entry-level positions with opportunities for training and promotion),
their knowledge is likely to be in
demand elsewhere.
One Way to Go Green
Any funding group that chooses to
go green should develop its own definitions. For BCC, there are six aspects to a
green focus:
First, to be green, BCC-financed
development must benefit both the people who live in the new spaces and the
borrowers who build the developments.
Second, BCC should focus on areas
where it knows it can make a difference—indoor air quality, energy costs,
and siting of projects, as opposed to, say,
global warming.
Third, the green elements sought for
a given project must be appropriate. For
example, the renovation of a leased childcare facility could improve indoor air
quality and upgrade lighting fixtures,
whereas heating systems, windows, and
building-orientation issues, which would
be beyond the facility’s control, would
not be required.
Fourth, BCC will encourage green
elements but not insist on specific standards or benchmarks until it gains more
experience. It will align its funding, information, and technical assistance to help
borrowers get the expertise to make the
projects as green as possible.
Fifth, BCC will take into account
tight budget constraints of communitydevelopment borrowers and not require
projects to absorb the costs of experimental technologies. However, in looking at
cost effectiveness, BCC will consider lifecycle costs, not just initial costs for
design, appliances, and building systems.
For example, some insulation may cost
more but be tighter and more healthful.
Finally, because green technology,
regulations, standards, costs, and pricing are evolving quickly, BCC’s framework, policies, and requirements will
be dynamic.
Other funding organizations interested in taking a green approach to community development should check the
LEED standards and also the Enterprise
Foundation and the National Resources
Defense Council’s Green Communities
criteria. Their standards define green elements including siting, solar orientation,
natural lighting, use of materials, indoor
air quality, energy, water-efficient appliances, use of renewable energy or distributed generation capacity, and recycling of
building materials.
What Has Been Learned
Boston Community Capital’s experiences with early-stage financing and
technical assistance to borrowers, combined with its observations of others’
community-based green initiatives, have
informed its commitment to green
standards. Five major lessons have been
learned so far:
• The most effective and least costly
way to incorporate green features into a
project is to consider greening opportunities at the earliest stages of the development process—especially through an
integrated design approach.
• Borrowers are interested in
embracing the principals of sustainable
development, but many do not believe
they have the knowledge to make appropriate choices about including green elements in projects.
• Although green development practices have advantages such as enhancing
the asset value of buildings, and lowering
operating and maintenance costs, those
benefits generally are not recognized or
captured in the market or in the financing system—particularly when it comes
to housing. Gaining recognition is complicated because the life-cycle benefits of
lower operating costs often accrue to new
owners or lessees rather than project
developers. Also, regulations often
inhibit the use of innovative technologies
and materials and may have requirements that would be redundant in
green construction.
• The strategies that lower the costs,
speed up innovation, and limit the risks
of adopting new technologies require a
level of collaboration and aggregation
that is unfamiliar in the disaggregated
field of community development.
• Few financing tools are available to
nonprofit organizations at the critical
early stages of development. Moreover,
those resources that are available are not
easily accessed and provide no incentives
for funding the early-stage costs of
green development.
Initial Steps
The Green Building Production
Network is focusing on three areas:
developing financing products to support
green development; aligning borrowers
and projects with resources, public
approval procedures, incentives, and
innovation from other fields; and captur-
ing and sharing
information, data,
and best practices on
green development.
Because startup funding is the
hardest financing for
community-development groups to
acquire,
Boston
Community Capital
is expanding its
financing products
to cover the earlystage costs for integrated and green
development. It will Home in the process
also consider financ- area of Dorchester.
ing specific first-cost
investments that generate savings in utilities or operating costs. Where applicable,
it will work with borrowers to arrange
alternative financing, such as leasing or
contracts with energy-service companies,
and it will explore financing-aggregation
strategies that can capture underutilized
financial and tax benefits.
Despite widespread interest in green
development, the financing, permitting,
and policy systems are rarely aligned
to support it. For example, agencies that
encourage green development as public
policy may shy away from approving
higher-density projects, may have
funding requirements that limit capital
or first-cost expenses, or may have
permitting policies that do not accept
new technologies.
Additionally, the finance system for
community development is fragmented
and loosely coordinated, requiring many
sources of funding, separate approval
procedures and timetables, and multiple
or even competing views of green development and technology.
The Green Building Production
Network is working on models for aligning community-development systems
and green policy goals. Future discussions
among the network’s development teams
and public agencies should lead to a more
efficient and streamlined process for public review and approval. The process
needs to include early involvement of
of renovation on Hewins Street in Erie-Ellington
regulatory staff, common staff across all
green projects, and concurrent—not
sequential—review.
The network also will explore customized relationships with green product
manufacturers, distributors, and utility
companies, offering them an urban test
market or R&D laboratory for new products and the chance to develop long-term
customer relationships.
Boston Community Capital plans to
create financing incentives that encourage borrowers to share specialized green
expertise. It also envisions a web-based
green checklist linking to best practices,
development of common measures for
tracking a building’s long-term performance, and research on the best ways to
market green properties.
DeWitt Jones is Loan Fund President and
COO of Boston Community Capital,
which provides debt and equity financing
throughout the Northeast.
Endnote
1“The Costs and Benefits of Green Affordable
Housing” (Cambridge, Massachusetts: New
Ecology, 2005), http://www.newecology.org.
Communities &Banking
27
news from the bank
Phishing and Pharming:
Helping Consumers Avoid Internet Fraud
Photodisc/Getty Images
by Dawn Hicks
Federal Reserve Bank of Boston
Gone are the days when consumers
had to step outside to purchase groceries,
book flights and vacations, rent or purchase cars, or just transfer money
between bank accounts. Today, they can
simply grab their checkbooks, debit
cards, or credit cards, sit down at a computer in the comfort and safety of their
homes and complete such transactions
with passwords and personal identification numbers, or PINs. Thanks to
advances in technology, the types of
transactions they can now complete
online are seemingly endless.
Unfortunately, the increase in online
transactions has been accompanied by an
increase in online identity theft.
Moreover, fraudulent access to personal
information over the Internet is increasingly sophisticated. Two forms of identity theft, phishing and pharming, are at the
forefront of this Internet piracy.
The Crimes
Phishing lures consumers into
divulging their personal financial information to fraudulent web sites, also
known as spoofed web sites. The phisher
may send an unsuspecting victim an email with a link to a fraudulent bank site.
The e-mail instructs the recipient to click
on the supposed bank’s link to confirm
personal account information. Often the
message sounds plausible, describing a
problem that feels serious to victims. To
straighten out, say, a purported overdraft,
trusting customers provide PIN numbers
or passwords. The phisher can then use
that personal data to clean out bank
accounts or commit other identity theft
Pharming is more sophisticated.
Pharmers also send e-mails. However, the
consumer can be duped by the pharmer
without clicking on a link or opening an
attachment. Simply opening the e-mail
message does the damage. The pharming
e-mail message contains viruses, or
Trojan horses, that install small software
programs on the user’s computer—a
good reason to advise everyone to get
antivirus software. The pharming e-mail
installs the stealth application so that
whenever the consumer tries to visit the
official web site of an organization, the
program redirects the browser to the
pharmer’s fake web site.1 Thus, instead
of going phishing for personal data by
luring victims through a web link, the
pharmer harvests information that the
oblivious victim enters into the counterfeit web site.
And that’s not all. The latest form
of pharming doesn’t even require e-mail.
The Anti-Phishing Working Group
(APWG) reports that password-stealing
Trojan horses can attack through
Microsoft Messenger using something
called keyloggers. Keyloggers are viruses
that track a user’s keystrokes on
Communities &Banking
29
legitimate sites and steal passwords.2
Victims who use the same password on
many sites thus expose themselves to
multiple frauds.
The Impact
The APWG estimates that phishing
attacks grew by an average of 36 percent
between July 2004 and October 2004.
Between August 2004 and October
2004, the number of new and unique
phishing e-mail messages more than
tripled from 2,158 to 6,597.3 The
APWG also reports that the leading geographic location for phishers is the
United States, with 32 percent of the
world’s phishing sites.4
As much as 81 percent of all phishing attempts made by January 2005 were
targeted at customers of large financial
institutions, although phishers prey on
others as well.5 Recent trends reveal that
phishers also are targeting smaller financial institutions, such as community
banks and credit unions. The smaller
financial institutions tend to be more
vulnerable to attacks because they
have fewer resources to employ large
security teams or implement effective
security systems.
The financial loss to consumers and
institutions can be tremendous. Gartner,
Inc., a Stamford, Connecticut-based
research and advisory firm, conducted a
survey on phishing and identity theft in
May 2005. The study revealed that 1.2
million Americans lost a total of $929
million in the previous year because of
phishing.6 And in his study “Phishing: A
Growing Threat to Financial Institutions
and E-Commerce,” Frederick W.
Stakelbeck, Jr., of Philadelphia’s Federal
Reserve Bank determined that a typical
phishing attack can cost a financial institution between $50 and $60 per account
compromised, or $50,000 per attack.7
Those figures do not even cover the cost
of time spent disabling the phishing sites,
resetting legitimate user passwords, and
installing software patches.
In advising consumers,
advocates should be careful
that their warnings do not
cause anyone to overreact and
give up online transactions.
Exaggerated perceptions of
threats can undermine customer convenience, as well as
being damaging to financial
organizations. A Forrester
Research study reveals, for
example, that 26 percent of
consumers have elected not
to apply for a financial
product online; 20 percent
decided not to open e-mail
from their financial providers;
and 19 percent would not
enroll in online banking or
bill payment.8
The Solution
Photodisc/Getty Images
Institutions are taking
steps to protect customers
from phishers and pharmers.
In June 2005, Bank of
America, for example, initiated SiteKey, a web site authentication service. The software
makes it easier for users to
30
Fall 2005
determine when they are on the authentic Bank of America site.9 Bank of
America also implemented a personal
digital-image system. The customer
chooses a “secret image” for logging on to
the web site, and if the secret image does
not appear when he or she goes to an
apparently authentic Bank of America
site, it is a fake site.
Frederick Stakelbeck
of the Federal Reserve
Bank of Philadelphia
determined that a typical
phishing attack can cost a
financial institution
between $50 and $60 per
account compromised, or
$50,000 per attack.
Software companies also are taking
steps to prevent Internet piracy.
Microsoft recently announced that it is
creating an “antiphishing” feature for
Windows Internet Explorer 7, the next
version of its browser. Users will be interrupted and warned if they attempt to
visit a known phishing site.10 In addition, antiphishing developers have new
software that can collect and encrypt personal data and store it safely on the user’s
hard drive. When the user enters personal information in response to an
unknown e-mailer or a mysterious
pop-up box, the software will display
an alert.11
Netcraft, www.netcraft.com, offers
an antiphishing toolbar that also works
for pharming. The software alerts users to
the geographical location of the site they
are accessing. Then if users attempt
to visit their U.S. bank’s web site and
the software reveals that the site is
actually originating from Ukraine, for
example, they know they should contact
the institution through recognized
channels before divulging personal financial information.12
The U.S. Congress also is taking
steps to protect Internet users. In his
February 2005 introduction to the AntiPhishing Act of 2005, Vermont Senator
Advocates also might tell consumers
that if they believe they are being targeted by phishing or pharming, they should
Photodisc/Getty Images
Patrick Leahy said that the act would add
two new laws to the U.S. Code. The first
law would “prohibit the creation or procurement of a web site that represents
itself to be that of a legitimate business,
and that attempts to induce the victim to
divulge personal information, with the
intent to commit a crime of fraud or
identity theft.”13 The second would prohibit “the creation or procurement of an
e-mail that represents itself to be that of a
legitimate business, and that attempts to
induce the victim to divulge personal
information, with the intent to commit a
crime of fraud or identity theft.”
The fraudulent e-mail itself would
be sufficient for prosecution, whereas
under current law, phishers can be prosecuted only if the crime has taken place
and been reported. Unfortunately, by
that point, the thieves have already
packed up their fake sites and moved on.
The proposed legislation would help law
enforcement entities to intervene sooner.
In the meantime, awareness is key.
Consumer advocates might recommend
the preventive measures listed on the
APWG web site:
• Be suspicious of any e-mail with
urgent requests for personal financial information;
• Do not use the links in an e-mail
to get to any web page;
• Avoid completing forms in e-mail
messages that ask for personal
financial information;
• Be sure to use a secure web site
when submitting credit card or
other sensitive information via the
web browser;
• Consider installing a web browser
tool bar for protection from
known phishing fraud web sites
• Regularly log on to online
accounts;
• Regularly check bank, credit, and
debit card statements to ensure all
transactions are legitimate;
• Make sure the browser is up-todate and security patches are
applied.14
notify the Internet Fraud Complaint
Center of the FBI by filing a complaint at
www.ifccfbi.gov. Alternatively, they may
forward the entire suspect e-mail to one
or more of these:
• reportphishing@antiphishing.com
• the Federal Trade Commission at
spam@uce.gov
• the company that has been mis
represented (for example, an email purporting to be from eBay,
should
be
forwarded
to
spoof@ebay.com)
Dawn Hicks is a member of the Federal
Reserve Bank of Boston’s Consumer
Regulation Outreach Group.
Endnotes
1 US Netizen, “A New Security Threat –
Pharming” (2005), http://www.usnetizen.com/articles/pharming.html.
2 Jane Larson, “ ‘Pharmers’ hit online bank users
with fraud scam,” The Arizona Republic, April 26,
2005.
3 John Leyden, “Phishers tapping botnets to automate attacks,” The Register, November 2004,
http://www.theregister.co.uk/2004/11/26/antiphishing_report.
4 Other top countries are China, 13 percent;
Korea, 10 percent; Japan, 3.1 percent; Germany,
2.7 percent; Brazil, 2.7 percent; Romania, 2.2 percent; Canada, 2.1 percent; France, 2.7 percent; and
Australia, 2.1 percent.
5 See NW3C: National White Collar Crime
Center, http://www.nw3c.org/.
6 Gregg Keizer, “Phishing costs nearly $1 billion,”
TechWeb News, June 24, 2005.
7 Frederick W. Stakelbeck, Jr., “Phishing: A growing threat to financial institutions and e-commerce,” SRC Insights, fall 2004.
8 Paul Gibler, “Phishing, pharming, spimming,
and spoofing,” Credit Union Executive Newsletter,
April 18, 2005, p. 7.
9 Cameron Sturdevant, “Spam tools take on antifraud chores,” eWeek, June 20, 2005,
http://www.eweek.com.
10 Ina Fried, “Microsoft MSN offers scam-site
detector,” ZDNet News, August 25, 2005,
http://news.zdnet.com/2100-1009_225843325.html.
11 Paul L. Kerstein, “How can we stop phishing
and pharming scams?” CSO Update, July 19, 2005,
http://www.csoonline.com/talkback/071905.html.
12 Amanda C. Kooser, “Pharm’s way: Learn how
to protect yourself from the latest Internet attack,”
Entrepreneur, July 2005, p. 22.
13 Patrick Leahy, “Statement of Senator
Patrick Leahy: Introduction of the anti-phishing act
of 2005,” February 28, 2005.
14
For
more
information,
visit
www.antiphishing.org/consumer_recs.html.
Communities &Banking
31
Inside this issue:
Thinking
Holistically
Woonsocket
Neighborhood
Development
Corporation
Photograph by Rik Pierce.
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