Will Vanguard and other companies replace lost federal funds for Philadelphia-area entrepreneurs?
Amid the transition, future federal funding for its microloans and other programs are in doubt due to changes in Washington.
President Donald Trump in a March executive order called for eliminating or reducing the Community Development Financial Institutions (CDFI) Fund, which last year granted WORC $723,000. Trump's budget proposal calls for reducing funds to programs that focus on minority borrowers, redirects 60% of small-business aid to rural areas, and urges the funds to be "self-sustaining" instead of relying on federal aid.
WORC says it lends to owners of all backgrounds, and that, besides loans, it needs money for staff that helps small businesses start and grow.
While banks, credit unions, and Congressional allies of these "community-development financial institutions" have rushed to defend the programs, and Trump's Treasury Secretary Scott Bessent has agreed they are "key" to meeting Trump's goal of helping Main Street businesses, federal funding remains uncertain.
WORC has appealed meanwhile to private donors and won its first funding from Vanguard Group's charitable arm.
Cutler's move is a semiretirement to the post of executive chairman - modeled, she says, on Firstrust Bank owner Richard Green's move to a similar part-time post.
At a party Wednesday to celebrate the transition, Cutler sought to go out on a high note, sharing with hundreds of bankers, lawyers, borrowers, and other supporters an ambitious plan to more than triple WORC's projected lending to $5 million a year by 2028. They aim to do so mostly by financing small-business real estate purchases among its other programs.
But there's a problem: WORC's largest funder is the federal government.
State and city governments nominally sponsor small-business capital, credit, and real estate assistance programs that fund WORC, but they, too, rely on federal money that's now threatened, Cutler said.
"I'm deeply concerned with the federal cuts," she said. "We don't know the full impact on WORC or on our clients, but underlying these state and city programs, it's all federal funding."
Who WORC helps
WORC has funded factories and lawn services, nail salons and skin care businesses, design and accounting firms.
As if to highlight the diversity of the founders backed by WORC, the center hired an assortment of food businesses the agency has financed over the years to feed guests at the party for Cutler.
They included Tun Win's Sushi Avenue, Dalia Soliman and Mohamed Alazzazy's Cilantro Mediterranean Cuisine, Daniel Anggrianto's Cafe Square One, Tova du Plessis' Essen Bakery, Pamela Thornton's Pound Cake Heaven, and Jeanne Hien's Le Baobab.
Cutler and leaders of another 30 Pennsylvania nonprofit "community development financial institutions" (CDFIs) that make loans too small for banks to profitably close are lobbying Congress members to maintain threatened funding for U.S. Treasury, Housing and Urban Development, Small Business Administration, and Office of Refugee Resettlement programs, which they have used to fund small businesses.
They hope business allies will prevail to keep business subsidies flowing, as Small Business Administration supporters have fought efforts to end politically popular SBA programs with some success, though Biden-era SBA initiatives have been canceled.
"We won't really know until this fall" how much funding will be lost, Cutler concluded. She's hoping Philadelphia city government will make up the shortfall as part of its neighborhood-business support initiatives.
Can the private sector fill the gap?
The crowd at Wednesday's meeting included Aldustus "A.J." Jordan, who left a senior job at national banking giant Wells Fargo's foundation at the end of 2022 to become president of the Vanguard Group foundation and head of community stewardship for the Malvern-based investment company, the nation's second-largest.
The foundation is "embarking on a new strategic philanthropic focus on financial well-being" to "improve the economic outlook for historically marginalized individuals and communities," it said in a statement. They're working "to strengthen the nonprofit financial ecosystem" in the Philadelphia area, where the company employs more than 10,000, and other "key Vanguard markets."
Jordan didn't speak at the WORC event, but his colleague Evan Cantiello, a Vanguard charitable program manager, told the crowd the company would be supporting WORC.
Cutler said Vanguard funds will pay for a sixfold expansion in WORC's client savings account programs, which provide up to $2 in matching grants for every $1 clients save for education and homeownership.
The Vanguard aid should pay program costs and expand participation to around 215 savers a year, up from the current 35, though individual grants vary, Cutler said. That would restore the program to around the size it was in the mid-2000s, before state funding dried up. WORC kept it going at a lower level with smaller grants from United Way and other donors.
Cutler said she had met Cantiello and other Vanguard officials through the Asset Funders Network, a national group uniting big financial institutions and nonprofits that focus on helping start and grow small businesses. "They saw my passion," she said.
"This is the first support we've provided to WORC" from the Vanguard foundation, spokesperson Katie Craven confirmed. Asked how much Vanguard, which invests over $10 trillion for retirees and other clients, expected to contribute to WORC, she referred to the company's charitable foundation report.
That report shows Vanguard's largest charitable gifts in recent years include $4.9 million for the Pennsylvania Partnerships for Children, which advocates for childcare; $4.6 million to Children's Hospital of Philadelphia; $3.9 million to the Reinvestment Fund, a nonprofit lender and research group; $1.7 million to the Free Library of Philadelphia.
All are based in Philadelphia. The foundation's largest contributions were typically spread over several years.
Copyright (C) 2025, Tribune Content Agency, LLC. Portions copyrighted by the respective providers.
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