With just three weeks to go until the 2019 Net Impact Conference kicks off, we're inviting you in to understand how some of this year's sponsors make a difference for people and our planet at scale. Here, Connie Wright, Senior Vice President and Assistant Director of Housing Philanthropy and Customer and Community Programs at Wells Fargo, talks about how her company is Widening the Lens to tackle one of America's toughest issues.
Every month, more than one-third of U.S. households spend more than 30% of their income on housing. Of this group, around 18 million spend 50% of their income to stay in their home. Just think about that. The cost burden of housing impacts so many people in our communities, maybe even you.
To help address housing affordability, the Wells Fargo Foundation recently announced a $1 billion commitment through 2025 to focus on the spectrum of housing needs, from homelessness and transitional housing to rental inventory and homeownership. This housing commitment, though, comes out of a new approach to investing philanthropic capital in communities across the country.
Many people don’t realize that Wells Fargo is one of the largest corporate foundations in the U.S, contributing more than $444 million in 2018 to nearly 11,000 community organizations. Historically, we supported a little bit of everything, which didn’t really allow for maximum impact. Starting in 2019, the company will target 2% of after-tax profits to philanthropy, ensuring that community support grows along with the company. In fact, it was this long–term vision for our philanthropy that prompted us to ask if we had the right strategy in place to deliver scale and impact against those sizeable financial resources. We arrived at the conclusion that we were spreading the resources too thin and missing an opportunity to better connect our funding with our business expertise for greater impact. So in June, we narrowed our focus areas to three pressing issues affecting underserved communities: housing affordability, financial health, and small business growth.
In this strategic evolution, we are starting with housing first because a safe place to live is stability we all need. Housing prices have been steadily increasing since 2012. High housing costs force Americans to make trade-offs with other basic needs like food, healthcare, and education. Every major metropolitan area in the U.S. has a shortage of affordable and available rental homes. Today, the U.S. needs 7 million affordable housing units to meet the demand.
The daunting question is: how do you begin to take on such a complex community challenge? The answer: You can’t do it alone. You collaborate. You invite as many people into the conversation who want to participate. You seek out diverse viewpoints and experiences to help create a more equitable solution. You listen and learn from each other. But most importantly, you adopt a problem-solving mindset. To us, that means more than writing checks. It means combining our philanthropic resources with our business expertise and then partnering with experts and residents to find new ideas, or effective ideas that we can scale.
Innovation is a key driver behind our new strategy because we can’t close the gap with more of the same. At a practical level, it means inviting community innovators to come forward and empowering their creativity. For example, this fall, we are launching a $20 million Housing Affordability Breakthrough Challenge with Enterprise Community Partners to discover fresh thinking around housing construction, financing and support services. As we build out our approach for financial health and small business, uncovering new ideas will also be at the core of those pillars.
For the challenge you want to take on, what voices do you need to add to the conversation? How can you inspire bold thinking? How can you combine your resources and expertise?