Why ‘Breaking Through’ is Key to Housing Innovation: A Q&A with Wells Fargo’s Eileen Fitzgerald

Christi Smith
Two woman presenting during a webinar

It’s hard to imagine someone more committed to meeting the nation’s housing challenges than Eileen Fitzgerald. As head of housing affordability philanthropy at Wells Fargo, Eileen brings a long and distinguished career to her current role leading the team driving Wells Fargo’s $1 billion commitment to address the U.S. housing affordability crisis.

A keystone of that audacious commitment is the Housing Affordability Breakthrough Challenge, which Wells Fargo selected Enterprise to administer in 2019. I’ve had the privilege of working closely with Eileen on designing, launching and managing the Breakthrough Challenge. With our six challenge winners hard at work through 2022 bringing their innovations to fruition, I took the opportunity to virtually sit down with Eileen and reflect on where we’ve been and what’s ahead for the challenge.

It was a rich conversation with a passionate trailblazer in our industry, and I’m delighted to share the most interesting and insightful parts of it here with you.

Why do you think there was such a huge response to the Breakthrough Challenge with 885 applications submitted?

I think the response highlights the demand for flexible, meaningful philanthropic support on affordable housing. Also, the three pillars of the challenge – Construction, Financing and Resident Services and Support – are three big issues that lots of organizations are engaged in.  We also believe that Enterprise got the application right – enough information to thoroughly evaluate but not so much that it became burdensome for organizations to apply.  That certainly helped.

And Enterprise did a great job reaching out to its network, so lots of people and organizations knew about the Breakthrough Challenge. That was awesome and that’s exactly what we wanted.

Lastly, I’d say the response showed both the housing sector’s appetite for trying new things and the strength of our field with so many great organizations stepping up – that’s different than it was 20, 30 years ago. Collectively, we’ve done a good job of helping support, strengthen and grow organizations that are making a real difference in affordable housing.

What was the biggest surprise to you across the three rounds of the challenge?

One of the biggest surprises was the depth, quality and range of applications we received in the Resident Services and Support category.  It showed that our traditional definition of resident services may be too narrow – and a broad range or  organizations are working with residents to create opportunity. That was really eye-opening – along with the fact that it drew such a high number of applications among the three categories. It’s clearly an area where it’s challenging to get funding.

Another surprise that was significant – especially among the 45 Round 2 finalists and 15 Round 3 finalists – was the organizations’ understanding of racial equity and the importance of bringing the issue to the forefront. I was pleasantly surprised at the thoughtfulness and substantive way they captured that priority in their applications. We announced the Breakthrough Challenge weeks before the Covid outbreak, and a few months before the death of George Floyd sparked a national outcry on racial injustice, which has been needed in our country for so long. That showed me the organizations on the ground get it when it comes to racial equity – they’re living it every day and they’re committed.

And we thought more applicants would drop out of the process midway due to Covid. But Enterprise  did a fantastic job of listening and thinking through the challenges facing applicants and how best to support them as they completed their applications during the first few months of the pandemic. The ability of the 45 finalists to put so much into the next round of their application – and of the 15 finalists to create such strong pitches – was really affirming.

And Enterprise did an amazing job of pivoting to produce a virtual pitch event. The pitches were outstanding, the judges were engaged, and the technology worked great. Those two days of the pitch competition were probably one of the best experiences I’ve had over the last year.

How did Covid change your expectations of the challenge?

I think about how personally exhausted I was and how hard it was – especially at the start, because we were all processing so many different emotions – fear, worry, concern – and so many changes in our lives, while trying to work virtually in a very different way. So what all the applicants did was really just amazing.

For all of us involved, the challenge was a gift – the optimism, the willingness to tackle issues that sometimes feel intractable. Being able to have this optimistic force during COVID was for me – and for the Wells Fargo staff who served as judges – really motivational and uplifting.

All of us at Enterprise involved with the challenge’s launch were equally buoyed by that positive journey. The focus on new ideas and innovation added another level of excitement. How does Wells Fargo define innovation in the housing and community development sector?

It’s really about what can be transformative, even if it’s been tried somewhere or borrows from something that worked in another sector. So to be truly innovative, you have to ask: Can it be replicated and scaled? And there must be a sense that, yes: this is actually something that can be scaled beyond this organization or this one project or community.

I wasn’t on board at Wells Fargo when the concept for this competition was titled the Breakthrough Challenge. I will say that it is a great approach to thinking about innovation and housing – like you’re pushing through a wall! That’s exactly where we’re trying to go. So it’s not simply, this is a really cool, interesting idea – but actually, this has the potential to break through. And that’s what we’re always working toward in our philanthropy.

Looking toward 2022, what’s your greatest hope for the Breakthrough Challenge and its impact?

We hope that every one of the grantees will be able to scale their idea and proceed to a place where they are fully implemented or have real momentum.

Virtually all of the winners’ ideas are about reframing our work. POAH’s trauma-informed resident services model fundamentally has the power to transform how an entire industry thinks about how they work with their customers – their residents. Center for NYC Neighborhood’s alternative underwriting innovation has the potential to advance not just home lending but other types of lending.

Impact Justice’s Homecoming Project inspires us all to think about justice-involved people reintegrating into the community and asking the question: Do we really walk the talk in supporting people? That’s really powerful. And cdcb’s MiCASiTA challenges us to ask: Why are we stuck in this one traditional way of building a house? And why are there no systems in place for someone to try a different approach?

Together, all six innovations are really knocking down our preconceived notions – and that could be the most powerful outcome, even more than the success of any one of the individual winning projects.

Eileen, that is really powerful – and exactly right. It’s not about these six individual innovations – it’s about the bigger picture and breaking down the status quo. Related, can you speak to the importance of incorporating environmental sustainability into the challenge?

We were excited to see so many organizations working to incorporate and reflect sustainability in their applications. I think we also saw that, because the housing sector doesn’t have as long of a history in the sustainability space, sometimes that piece wasn’t as deeply integrated as we would love to see in the future.

Enterprise has been a huge leader with Enterprise Green Communities™. And when I think about something that has been transformative, that’s absolutely top of the list. So in some ways, we take that for granted because we’ve made a lot of progress. But as a sector, we haven’t done as well in thinking beyond energy efficiency – not to say that we’ve fixed the energy efficiency piece. And until we get battery storage, it’s probably going to be a challenge. Healthy building materials and design and carbon reduction are two areas that deserve significant investment and commitment to upgrade our building stock.

And as we continue to think about the impact of climate change, there are myriad issues – resilience, equity, homeownership property values, racial justice. As a sector we have to work a lot harder at not saying, climate change equals energy efficiency or green building – and we can’t  perceive carbon reduction as a luxury.

Is there anything else you would add about your hopes for the challenge and its impact? 

Because Enterprise is walking this journey with the six organizations, we will gain a better understanding of how we help and facilitate support for organizations who are pushing for transformation. And by successfully identifying those patterns, we’ll learn how to remove some of the barriers or think about how we fund differently in the future.

It’s hard to be a transformative organization. It’s hard to innovate because every one of these organizations has their day jobs, which is serving people with low incomes who really need rental or homeownership support. So how organizations create the bandwidth and space – and how their leaders manage both those streams is not easy. We don’t often have that insight when it comes to innovation, particularly in the nonprofit sector.

Most of the examples we read about with respect to innovation involve start-up organizations that had a really good idea. But our winners, for the most part, are mature organizations and they’re all very different organizations. So learning how they successfully innovate within a mature organization could be a huge learning opportunity. And I have confidence that these teams, alongside Enterprise and Wells Fargo, can pull through that knowledge as part of the Breakthrough Challenge.