2018 ANNUAL REPORT

COMPASSIONCOMPASSION

RESPECTRESPECT

DIGNITYDIGNITY

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We have come a long way since our founding in 2009. The thousands of clients we have served at our four Excel Center locations have found doors opened to enhanced opportunities and a financial freedom that is equipping them with the ability to build savings for themselves and their families. And the evidence is in the number of car loans made, the houses purchased, the school tuition paid for and the credit scores steadily rising.

This does not happen by accident. It takes persistent, dedicated, and committed persons who understand their clientele and know the strategies and solutions that will help each and every person. Our team of compassionate, seasoned, and carefully trained coaches shepherd our clients through the ups and downs of their financial lives. There is no one set script and one size does not fit all, yet, we serve all our clients equally with dignity and respect. The Board thanks our outstanding staff for a very positive year of accomplishments and for their professional and passionate approach to their work.

The work our staff does at RedDough and the Excel Centers is augmented by the tremendous outpouring of partners who share their time, expertise, skills, and financial resources. Through their support, our team integrates financial education and services with holistic approaches to address economic inequities facing families throughout the region. Without our partners or our volunteers, we could not achieve our mission.

Our efforts this year have been widely recognized. Specifically, in August 2018, Forward Through Ferguson (FTF) released its inaugural State of the Report, a comprehensive look at progress towards implementing the Ferguson Commission’s 47 signature priority Calls to Action. Prosperity Connection’s efforts to expand the financial knowledge and confidence of consumers, as well as our work to combat payday lenders was called out as an early success in these long-term efforts to build a more equitable St. Louis for all.

So, on behalf of our talented Board of thought leaders and passionate individuals, we invite you to read about the accomplishments of this past year. As we approach our 10th anniversary, there is increasing evidence of our ability to bridge connections between public, private, and philanthropic entities intent on helping diverse communities achieve a more stable and prosperous future.

In appreciation,

Susan E. Katzman Chairperson

CHAIRPERSON’S REPORT NEW BOARD MEMBERS AND COMMITTEESFINDING SOLUTIONS

AND BRIDGING CONNECTIONSAs Prosperity Connection has grown over the past nine years, so too has our need to build the capacity of the organization to manage our finances, monitor programming, and raise additional funds to sustain our efforts. As such, we were excited to welcome Tom Boyle of Enterprise Car Sales to our Board of Directors, as well as establish two new committees: Finance and Development.

Joyce Kampwerth of Parkside Financial Bank & Trust has joined existing Board Members Tom Sullivan and Tony Janssen on the Finance Committee, while Kathy Siddens of US Bank, Kathy Reeves of Enterprise Holdings, Loura Gilbert of Commerce Bank, and community volunteer Charlotte Slankard have joined Board Member Felicia Pulliam on our Development Committee. The wealth of knowledge, experience, and passion these individuals bring to our organization is appreciated and will no doubt expand Prosperity Connection’s ability to better serve the St. Louis region.

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For Prosperity Connection, 2018 proved to be a year of growth and change. Gracie Aeschbacher joined the team as our new Director of Operations, while Sara Middendorf, Ashley Fisher-Knox, and Tamika Staten were hired to lead efforts for existing and new focus areas related to our financial coaching program. Through these hires, we will continue to provide the residents of the 24:1 Community high quality financial education opportunities, as well as expand our services to the Metro East and in close alignment with our new partners at Tower Grove Neighborhood CDC (TGNCDC) in South St. Louis City. Last, but certainly not least, at the end of 2018 we created the Marketing & Operations Associate position, filled by Danielle Randall, in order to expand our ability to more effectively promote and facilitate our programs throughout the region.

Our work with TGNCDC has been made possible through the generous support of the Equifax

Foundation. We are working with our new partners to assist individuals who have been declined for an apartment due to a number of factors related to credit, some of which might include: bankruptcy, outstanding collection items, previous evictions, and more. By helping these individuals overcome credit challenges, we hope to assist them in accessing higher quality housing through landlords like TGNCDC. Our efforts in the Metro East, specifically in East St. Louis, are just getting started. We look forward to establishing our programs in Illinois throughout 2019 and reporting outcomes in the coming year.

RedDough Money Center continues to grow its market presence throughout the St. Louis region. In addition to operating two conveniently located storefronts, our team has been working closely with employers to

help meet the needs of individuals who experience a financial emergency or who are just having trouble making ends meet. Whatever the reason for the loan, RedDough staff are helping people save money. In fact, we estimate that the nearly 1,100 loans we issued in 2018 saved our borrowers approximately $1.4 million in interest charges and fees!

Our work continues to attract recognition from civic leaders, partners, and regional associations. Specifically, Prosperity Connection was honored to share the St. Louis Regional Chamber’s 2018 Arcus Award for Achievement in Financial Services with Regions Bank, as well as be recognized with Legal Services of Eastern Missouri’s Eddie Mae Binion Community Service Award. Our efforts to combat predatory lenders through RedDough Money Center and offer residents across the region access to free financial education were just two of the many reasons our work was highlighted.

ACHIEVEMENTS AND MILESTONES

2018 HIGHLIGHTS

Our new hires (from left-to-right): Danielle Randall, Sara Middendorf, Tamika Staten, Ashley Fisher-Knox, and Gracie Aeschbacher

Financial Coach Tamika Staten outside First Bank, our partner site in East St. Louis.

Deanna Allen, RedDough Assistant Branch Manager, helping a customer complete a loan application.

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IMPACT OF FINANCIAL EDUCATION

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$705,815 1,092

72%

28%306

37

Total Loan Dollars Disbursed

Customers Ethnicities

Female Customers

Average Customer Age

Male Customers

93% Black/African American

5% Other

5% White

Number of Loans Issued

Checks Cashed Average Monthly Income for borrowers: $2,582

Ancillary Services Offered (stamps, copies,

faxes, etc.) : 222

2018PROGRAM OUTCOMES

IMPACT OF FINANCIAL SERVICES

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Two years ago, Steven had a lot of sensible ideas about managing money. He never wanted to be in debt, so he saved up for a house and paid in cash rather than taking out a mortgage. Not long after moving into his new home, a fire ignited while he was sleeping and the entire building quickly became engulfed in smoke and flames. He managed to narrowly escape before it consumed everything he owned…except his truck. After time in the hospital, Steven was released and realized that he was now homeless. He had to rely on family for a place to stay while he built his life back up.

A month later he called Prosperity Connection and set up an appointment to get started. Because Steven had not used a credit card account in the past, he hadn’t established any credit. Steven along with his financial education coach, Evette, created a plan to build his credit and pay off his outstanding bills that had not been taken care of. Steven eventually applied and had been approved for a home, but then the offer was rescinded. He was later informed that his identity had been stolen and as a result, seven credit cards had been opened in his name.

Unexpected obstacles like this would have deterred most people, but Steven was determined to keep going. He contacted Evette for help. She pointed him in the right direction and showed him exactly what he needed to do to including: notifying all associated financial institutions, placing a fraud alert on his file by contacting any of the three main credit reporting agencies and notifying the proper authorities. According to Steven, that added up to about 25 letters that he sent out. Steven shared that he felt very comfortable coming to Evette whenever he had questions or didn’t understand something. In each case, she wrote everything down, step by step.

After a lot of hard work and persistence, Steven was finally ready to go back to the bank to apply for a mortgage. Evette connected him with a contact

at Midland States Bank—one of Prosperity Connection’s trusted financial service partners—and he was approved for a loan.

Steven has moved into his own home again. The day he got he got his keys, he stopped by the 24:1 Community Excel Center to thank Evette. “She’s a guardian angel,” he said. “If I can do it, anyone can do it…I worked hard for what I have, but I wouldn’t have got as far without her help.”

Steven credits Evette with teaching him about how to build credit and budgeting for your lifestyle. “Everybody has wants and needs. I need to take care of needs first, and my wants will follow.” Steven is saving up for his ‘wants’, which include a motorcycle and a boat.

Steven, says he is happy to have a place of his own where he can spend his time, working out in the yard or hanging out and relaxing with friends and family.

CLIENT SPOTLIGHT

STEVENMany people are struggling to get by. According to the 2018 Prosperity Now Scorecard, nearly a quarter of all jobs in America are low-wage. Add to that the fact that a growing majority of renters are cost-burdened (meaning they spend more than 30% of their income on housing). Depressed wages and high living costs has led to a national situation where, according to the Federal Reserve, 40% of Americans do not have enough savings to cover a $400 emergency expense.

While many people facing dire financial situations turn to predatory payday lenders as a last resort, RedDough Money Center is changing the small-dollar loan landscape. Our borrowers are able to access loans from $100 to $1,000 and are given 4-12 months to repay rather than a few weeks. Best of all, we charge a fraction of what typical payday lenders charge. A $500 loan from RedDough, repaid over six months costs our borrowers $189 in interest while a loan from our for-profit competitors would cost $841. That’s a savings of more than $650 for the same loan. In 2018, we estimate that our borrowers saved a combined $1.4 million in interest and fees. That’s the RedDough difference.

By meeting financially underserved people where they live and work, as well as aligning with policies and interventions derived from the community, payday lenders and other predatory organizations can be diminished over time. Given enough time, continued support from funders, and wider awareness from the community; RedDough, owned and operated by Prosperity Connection, has a fighting chance to give more families throughout St. Louis the chance they need to steady their finances.

THE REDDOUGH DIFFERENCE

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ASSETS

Cash on hand and in banks:

Unrestricted - Interest-earning $ 600,471

Restricted:

Interest-earning $ 150,607

Non-interest-earning $ 484,637

Total cash on hand and in banks $ 1,235,715

Loan Receivable:

Loan receivable $ 383,742

Allowance for possible loan losses $ (75,234)

Loan receivable, net of allowance for possible loan losses $ 308,508

Property and equipment, net $ 234,175

TOTAL ASSETS $ 1,778,398

LIABILITIES & NET ASSETS

Liabilities:

Accrued expenses and other liabilities $ 40,702

Notes payable $ 1,022,320

Total liabilities $ 1,063,022

Net Assets:

Unrestricted $ 600,471

Temporarily restricted $ 114,905

Total net assets $ 715,376

TOTAL LIABILITIES & NET ASSETS $ 1,778,398

STATEMENT OF FINANCIAL CONDITION FOR FISCAL YEAR ENDING

DECEMBER 31, 2018

Through the generous support of our funders, Prosperity Connection was able to impact the lives of thousands of low-to-moderate-income families throughout the St. Louisregion. Our fi nancial coaches and RedDough Money Center team would not have been able to provide clients and customers with access to free fi nancial education, coaching, and affordable fi nancial services without them. Prosperity Connection would like to thank all our funders for their contributions.

We are especially grateful to the above presented organizationsthat provided support of $2,000 or higher.

SOURCES OF FUNDING

Affi nity Program

$22,281 Stifel

Foundation Inc.

$15,000

Midland StatesBank

$14,000

PNCFoundation

$10,000

EquifaxFoundation

$130,000

US BankFoundation

$40,000

St. Louis CountyOffi ce of

CommunityDevelopment

$34,576

Carrollton Bank

$32,000

TheBANK ofEdwardsville

$5,100

Trio Foundationof St. Louis

$5,000

Enterprise Holdings Foundation

$5,000

EnterpriseBank & Trust

$5,000

Duff & PhelpsCharitableFoundation

$3,000

Cardinals Care

$3,000Reliance Bank

$2,200Parkside Financial

Bank & Trust

$2,000

CommunityImpact Network

$469,514

St. Louis Community Credit Union

$213,971

CommerceBancsharesFoundation

$7,550

St. Louis CityCommunity

DevelopmentAdministration

$23,750

3651 Forest Park Ave, St. Louis, MO 63108www.prosperityconnection.org

BOARD OF DIRECTORSSusan Katzman, Chairperson, STL Public Schools – Retired

Suzanne Hough, Vice Chairperson, Carrollton Bank

Tom Sullivan, Treasurer, Mathews-Dickey Boys & Girls Club

John Windom, Secretary, STL Public Schools – Retired

Felicia Pulliam, Create Community PLC

Tony P. Janssen, US Bancorp

Tom Boyle, Enterprise Car Sales

Finance CommitteeTom Sullivan, Chair, Mathews-Dickey Boys & Girls Club

Tony P. Janssen, US Bancorp

Joyce Kampwerth, Parkside Financial Bank & Trust

Development CommitteeLoura Gilbert, Commerce Bank

Felicia Pulliam, Create Community PLC

Kathy Reeves, Enterprise Holdings

Kathy Siddens, US Bancorp

Charlotte Slankard, Retired

STAFF ADMINISTRATIONPaul Woodruff, Executive Director(314) 256-3946 · pwoodruff@prosperityconnection.org

Jaison K.D. McCall, Director – Education & Financial Capability

Gracie Aeschbacher, Director – Operations(314) 534-7610 x2229 · gaeschbacher@prosperityconnection.org

Treina Lind, President – RedDough Money Center(314) 276-4670 · tlind@reddough.com

Torrey Park, Director – Development (314) 534-7610 x2234 · tpark@prosperityconnection.org

Tamika Wicker, Operations Manager – RedDough Money Center(314) 371-6278 · twicker@reddough.com

Thomas O’Farrell, Accountanttofarrell@prosperityconnection.org

Danielle Randall, Marketing Operations Associate(314) 502-8316 · drandall@prosperityconnection.org

FINANCIAL COACHESEvette Baker

Alnita Smiley

Robert Nelson

Sara Middendorf

Ashley Fisher Knox

Tamika Staten

REDDOUGH MONEY CENTERJessica Fredrick-Houston

Deanna Allen

Kaylyn Williams

SoJourner Wade-Clark

EDUCATION

SUCCESS

INDEPENDENCE

COACHING