Featured image is that of Exodus Lending staff: Anika Riewe, Kaitlyn Szabo, Anna Li and Sara Nelson-Pallmeyer.
One of the rewards that comes from partnering with a grantee organization for an extended period of time is being able to look at the differences between its first and third grant applications. Comparing the two provides a unique peek into the organization’s growth, journey and accomplishments. A good example is that of Exodus Lending, which has provided Minnesotans trapped in payday loans with a just pathway back to financial stability since its founding in 2015. When we first partnered with Exodus Lending in 2016, 80 people were participating in its refinancing program and 6 had “graduated” from it. Currently, there are 339 participants, with 128 graduates! As fun as it is to compare numbers, however, numbers alone don’t show how this amazing growth occurred, nor how it got started.
Exodus Lending was founded in Minneapolis when community members began to notice payday lenders moving into their neighborhood and ensnaring residents in seemingly-hopeless cycles of debt. The cycle starts when a borrower takes out a small-dollar loan, typically under $1,000, to be repaid when the borrower receives their next paycheck. However, borrowers often have to spend this paycheck on necessities such as food or rent instead of paying back the loan. When they fail to pay, they are then penalized with a costly fee and forced to take out another loan. The cycle could go on for months as more and more debt accumulated, leading to not only a huge financial burden but feelings of hopelessness and decreased self-worth as well.
Exodus Lending interrupts this cycle through its refinancing program, which pays off up to $1,000 of a participant’s payday loan debt and sets up a repayment schedule at 0% interest over the next 12 months. They also connect participants with financial counseling and assist those interested in starting a savings account, and, as of recently, begun to send credit reports to major credit bureaus. Exodus Lending respects the personal expertise and insight that participants have into predatory lending, so they listen to them closely in order to best chart their course.
As for Mary’s Pence’s input, Exodus Lending used our grants to develop as an organization. Kaitlyn Szabo, Administration and Development Associate, told us that “in our first year of funding, we spent most of our grant building our internal capacity” and gaining legal nonprofit status. This “solid foundation,” she said, “allowed us to dedicate our second and third-year funding to outreach efforts.” In their second year, for example, Exodus Lending was able to increase their services by hiring new staff for a total of 4 full-time employees. Also during this time, they expanded from serving only Minneapolis to encompass the Twin Cities Metro as a whole, as well as places outside of it, such as Mankato and Duluth.
However, our relationship hasn’t only been about the grants. According to Kaitlyn, “a partnership with Mary’s Pence can be valuable beyond the grant itself.” In particular, she said that Exodus Lending is “grateful for the continuous opportunities offered by Mary’s Pence to gather, learn, and grow as a small nonprofit with other like-minded organizations.”
For our part, it’s been a pleasure to work with the new, first-of-its-kind model that Exodus Lending is using to end the payday debt cycle. We’re proud to support such innovations, especially when we can trust so completely in the values of our grantee partners.