Asset Building News Round Up: November 21, 2014
By Paul Day on 11/21/2014 @ 11:57 AM
Five years ago, Ohio passed the most robust payday lending regulation in the country in response to the revelation that there were more payday lenders in Ohio than the three most common fast-food chains combined. The legislation was supposed to protect consumers from predatory lenders charging outrageous fees for small loans that had to be repaid in two weeks or less. Everyone cheered, except the payday lenders. So why are more than 1,000 outlets are still charging 391% interest rates? Read more here.
The Maryland Department of Housing and Community Development is rolling out a $100 million mortgage initiative in collaboration with Prince George's County that will provide qualifying residents up to $20,000 toward a down payment and closing costs. The Maryland Mortgage Program TriplePlay Initiative aims to help some 500 families buy homes in targeted parts of the county — Capitol Heights, Upper Marlboro and Lanham among them — most deeply hit by foreclosures. Read more here.
A median-income household can only afford a median-priced home in 10 of the 25 largest U.S. metropolitan areas, according to a new Interest.com report. That’s actually an improvement from last year, when the median-income household fell short in all but eight of the 25 metros. And it's not totally out of line with similar findings. Homebuilders, for example, also say home affordability is slipping. They report the national median home price increased from $214,000 in the second quarter to $221,000 in the third quarter, while average mortgage interest rates decreased from 4.44% to 4.35% in the same period. Read more here.
Saving for college is hard enough. You would think that state programs that sponsor so-called “529″ savings plans would make it easier — and cheaper — for you. Unfortunately, some of the plans are bad deals because they are layered up with fund management fees and commissions. Yet there are a handful of “direct-sold” 529 plans, that is, they don’t have a commission and charge low fees, that make the most amount of sense for college savers. Read more here.
U.S. Rep. Cathy McMorris Rodgers said that the House will vote in December on the ABLE Act, which would offer people with disabilities a new way to save. McMorris Rodgers, who is a co-sponsor of the bill, has a 7-year-old son with Down syndrome. With little time to spare, a vote will happen this year on a bill that would allow people with disabilities to save money without jeopardizing their benefits, a key member of Congress says. Read more here.
From the Assets & Opportunity Network
From The Community Loan Center of Texas: A network of nonprofit organizations are working together to jumpstart the program and raise loan capital from several sources including a CrowdFunding campaign on Indiegogo. Through grassroots efforts we hope to raise $20K through crowdfunding for our initial loan pool. These funds will help more than 150 employees borrow money at reasonable rates and save them over $500,000 in fees compared to the costs of payday or auto-title loans. We’ve now raised over $2,000 toward this goal from 40 individuals who think the Community Loan Center is an idea worth investing in. Read more here.
From Southern Bancorp Community Partners: As a Community Development Financial Institution (CDFI) seeking to provide affordable and accessible financial services to Arkansans and Mississippians, a recently released FDIC survey on unbanked and underbanked households in America caught our attention. The study breaks down the rates of unbanked and underbanked households by state as well as providing information on rates of savings account ownership and usage of prepaid debit cards and mobile financial services. Read more here.
Mega-IRAs: A Mega Tax Break for Mega Millionaires
By Ezra Levin on 11/20/2014 @ 11:00 AM
Are you looking for a way to shelter millions of dollars of wealth from federal taxes? Well I have good news for you! The Government Accountability Office (GAO) released a new report yesterday on Mega-IRAs, a retirement savings scheme (previously reported on by Forbes, Businessweek, and others) that can save you millions in taxes if you’ve got millions to stash.
I know what you’re thinking: didn’t Congress cap IRA contributions precisely to prevent folks from dodging taxes like this? You’re right! The maximum IRA contribution this year is $5,500. But Mega-IRAs allow particularly wealthy Americans to exploit loopholes in the annual contribution limit. These savers amass fortunes in their IRAs and can avoid paying all taxes on the growth of their investments.
I really do mean “fortunes.” GAO estimates that just 314 accounts have about $81 billion stashed away. That comes out to an average of about $258 million each. Wow! Supposing a 5% rate of return, it would take about 160 years of saving $5,500 annually to save up that much. Either we’re talking about a group of 314 zombie Cornelius Vanderbilts and Andrew Carnegies, or these shrewd modern-day speculators made some pretty spectacular investments, right?
Well, not exactly. Here’s one way this shameful waste of federal resources retirement savings opportunity works: you issue private stock for a new company and value the shares at a fraction of a penny each. Then you use your Roth IRA to purchase millions of those shares. Finally, you take the company public, vastly increasing the stock value. Now you’re home free! You can sell the stock and withdraw millions from your Roth IRA—no penalties and no taxes.
GAO even put together a helpful infographic on sheltering your wealth from taxes:
And if you’re a big Wall Street investor at a private equity firm or hedge fund, GAO describes even more creative ways to dodge millions of dollars of taxes through these Mega-IRAs. The opportunities are truly astounding!
It’s not just Mega-IRAs that are built for the wealthiest Americans. According to a recent CFED report, last year the highest-income 1% of Americans got more from the $128 billion in retirement tax breaks than the entire bottom 60% combined.
Is your sense of fair play offended by these giant tax breaks for millionaires? Well, GAO notes that the IRS can’t fix this problem on its own. Congress needs to step in to end the multi-billion dollar boondoggle. Sen. Wyden (D-OR), Chair of the Senate Finance Committee, shined a light on the issue back in September and sent a letter yesterday urging administrative action, but congressional tax reform efforts have stalled.
Congress needs to act to fix Mega-IRAs and the broader upside down retirement tax system. The federal government is now spending nearly $130 billion every year on retirement tax programs, but these programs mostly just expand wealth inequality. It’s time to expand retirement security by turning these upside down tax programs right-side up.
Helping More People to Save with Effective State-Sponsored Retirement Plans
By David C. John and Gary Koenig on 11/20/2014 @ 09:57 AM
More than 17 states are now considering state-sponsored retirement savings plans for private sector small business employees. These plans would help private-sector workers not covered by employer plans to build financial security. While many larger employers offer payroll deduction retirement savings plans, those with 100 employees or fewer seldom do. This especially hurts the retirement prospects for lower income workers, women, people of color and part-time workers.
.A recent Boston College Center for Retirement Research paper found that access to a workplace retirement savings plan or pension is second only to having a job as the most important factor in assisting moderate- to low-income individuals to build retirement security. Another study found that over 90% of workers at all income levels found that payroll deduction is important to their ability to save.
Millions Lack the Ability to Save at Work
In 2013, about 55 million private-sector employees did not have access to a retirement plan at work, including more than 7 million in California, 2 million in Illinois, and about 1 million each in Indiana and Maryland. Research shows that middle-earners are about 15 times more likely to save for retirement if they can use a payroll-deduction savings plan at work.
To be successful, state plans must enable workers to save safely, easily and cost-effectively. Plans must also be attractive to employers and not impose major costs.
Creating such a plan is not easy. It requires answers to a number of specific policy and technical issues. To help address these questions, AARP’s Public Policy Institute has developed a new State Retirement Savings Resource Center.
Guidance on Key Policy Questions
When a state takes up the challenge of encouraging savings it must design a plan that meets the specific needs of private-sector small business workers, addresses the concerns of business owners and recognizes the state’s political realities. Our goal is to provide resources that individual states can use to tailor a plan that works best for them. The Resource Center highlights questions that states should address along with options for answering them rather than prescribing a specific solution.
Many of these questions are addressed in brief papers specially written for the Resource Center. These include a discussion of how to structure a plan that complies with the federal ERISA law, ways to protect consumers who save in these plans, the value of pooled investments and other issues. These are not academic papers, but short briefs aimed at a nontechnical audience and written by experts in the field. More of these are on the way.
A Library of Key Policy Papers
A Library of Key Policy Papers
The Resource Center also includes a library of links to studies from both AARP and many other sources. These include studies on specific states as well as papers on general retirement saving and financial literacy. These papers cover views from across the ideological spectrum.
For instance, the site includes papers on the Automatic IRA, as well as all of the responses by industry, consumer groups and think tanks to a request for comments by the board structuring the California Secure Choice Plan. As additional state study commissions release reports or as new policy studies on more general issues are published, we will add the best of them to the site. In addition, the site’s Perspectives section will present relevant opinion pieces and papers on a range of important policy areas.
One key point—the Resource Center is not an advocacy site. While many of the papers and links have a point of view, nothing on this site is intended to support or oppose any legislative or regulatory effort. Items are selected because they contribute to policy discussions, and the presence of a paper does not imply that AARP endorses its viewpoint.
This is Just the Beginning
With more and more states looking at some variety of state-sponsored retirement savings plan, new policy questions will emerge. As they do, this Resource Center will expand with new papers, statistics and other material.
Gary Koenig is Vice President, Financial Security, and David John is Senior Policy Adviser, Financial Security in AARP’s Public Policy Institute.
CFED Launches Story Bank: Find & Share Success Stories Today!
By Paul Day on 11/18/2014 @ 05:02 PM
Today we’re excited to announce the launch of CFED’s Story Bank, highlighting success stories from across the asset-building field. The Story Bank is a searchable collection of stories from our partners that highlight their work with savers, and is a resource for people in field looking to demonstrate the impact of their work.
Some of the topics featured in CFED’s Story Bank include:
- Individual Development Accounts
Families who saved for a home, a business or higher education using an Individual Development Account (IDA)
- Manufactured Housing
Savers who purchased one of these high-quality affordable housing options
- Children’s Savings
Families who saved for college using a matched Children’s Savings Account (CSA)
Small business owners working to build stronger balance sheets
- Savings and Financial Security
Savers who used tax assistance, financial education and matched savings accounts to build financial security and get out of debt
- CFED Technical Assistance (Coming Soon!)
Testimonials about CFED’s work boosting partners and providing assistance to maximize the impact of asset-building programs
Look out for new stories each month. Visit the Story Bank page and search by topic area, location and more! Does your organization have a saver success story you would like to share? Check out the story submissions page for an opportunity to have your saver story featured.
If you are a journalist interested in featuring a saver in a story, please contact Kristin Lawton, CFED’s Director of Communications.
Getting the Ball Down the Field
By Kate Griffin on 11/18/2014 @ 10:27 AM
This blog post is the third in a three-part series from the Integration Learning Cluster supported by CFED and Bank of America Charitable Foundation. This series is about what the Learning Cluster member organizations have learned about designing an initiative that integrates financial capability into their social service delivery.
We can all see the end zone: a point in time when the people we care about aren’t crippled by debt, have “better money habits,” are able to save for a rainy day and even are able to make long-term financial plans. But the field in front of us is cluttered and confusing—with our own teammates executing plays, with burly defenders getting in the way, with cheering fans distracting us. How do we move the ball down the field in the midst of all that chaos and noise?
Roughly one year ago, CFED selected eleven organizations to participate in an Integration Learning Cluster, a learning and implementation process where each organization would incorporate a range of financial capability strategies into their existing programs. At the outset, each of these organizations had an end goal in mind—a place where they wanted to take their organizations. But for each of them, moving towards that goal has been a process of partnership development and coordination, the likes of which they weren’t completely prepared for when they started.
We recently reflected on that process with the member organizations in the Learning Cluster and each stressed the importance and the value of taking the time to get their integration strategy and tactical approach right from the beginning. The Learning Cluster members have agreed: you need clients, partners and staff all on board to make an integration strategy successful, but it takes time, patience and perseverance to get the team together and moving in formation.
Clients are often what organizations focus on first when designing a financial capability program, but the available resources for working with clients can seem overwhelming to navigate. Learning Cluster members have used the tools we implemented in the Learning Cluster to more narrowly define their clients’ needs, map out the array of community resources available and make informed choices about which resources are the right fit. Taking the time to do this thoughtful analysis means that Learning Cluster members have not rushed into community partnerships or executing programs that are not ultimately the right fit for the specific clients they serve and the unique financial challenges they face.
Partners—whether they are other community service providers, donors, board members or others—play a key role in determining and executing the financial capability integration strategy. Organizations in the Learning Cluster have convened “Financial Capability Councils” of key external stakeholders such as local banks and funders to help inform strategy and bring them into the implementation approach, as Mercy Housing Lakefront outlined. Bringing in key partners to advise on strategy and even take volunteer roles in implementation ensures they are bought in and willing to play a role in the success of the strategy.
Learning Cluster members have also convened internal staff working groups up and down the hierarchy to get people discussing financial capability, sharing tips on how to engage clients on the issue and start to standardized practice across the organization, as FEGS discussed. Staff are often reluctant to begin the money conversation, and Learning Cluster members have found ways to respect and honor that reluctance while also providing tools and resources for staff to begin to feel more comfortable. We’re excited to see some of them begin to use the Consumer Financial Protection Bureau’s Your Money, Your Goals framework for this.
Other organizations have worked hard to prove to skeptical leadership, board members or donors that financial capability is a strategy that matters for their organization. Being able to make the case, for example, that credit scores matter to a workforce development agency when bad credit prevents someone from getting a job, or that a lack of emergency savings creates a vicious, repetitive cycle for organizations providing emergency assistance like food and utilities, takes time and energy. But once clients, partners and staff have signed on to the importance of the work, the ball can start moving down the field.
Breaking the Cycle of Poverty: New Insights
By Anthony Barrows on 11/17/2014 @ 02:30 PM
- 45.3 million: The number of Americans living in poverty in 2013.
- $500 billion: The estimated cost of poverty in the United States each year, including public expenditures and lost earnings.
In response to these startling statistics, ideas42 recently launched the Poverty Interrupted initiative, a radical venture aiming to use insights from behavioral science to help break cycles of long-term poverty in America. Given that children born into the lowest income quintile are nearly five times more likely to remain in the bottom 20% than to rise out of poverty as adults, the need (and potential) for impact is massive.
Poverty Interrupted is focused on parents with young children, and is built around an approach that addresses the needs of parents and children simultaneously, as well as striving to meet all of a family’s complex needs in a holistic way, rather than provide a separate service for each.
In a recently published working paper, we present an initial look at what behavioral economics can offer in the poverty alleviation space. The paper points us toward the design and deployment of effective interventions in partnership with key service providers across the United States. We’ll publish a more in-depth paper in early 2015 exploring the intersections between poverty alleviation and behavioral economics and propose specific program and policy solutions in early 2015.
By applying behavioral insights and rigorously evaluating our interventions, we hope that Poverty Interrupted will make an important contribution to efforts to reduce the number of families living in poverty and poverty’s price tag for society. With an informed understanding of scarcity, its effects on our “mental bandwidth,” and its tendency to amplify other behavioral barriers, our work can help give millions of hardworking families a better chance of escaping poverty.
For more information about this landmark initiative or to get involved in the fight to interrupt poverty for good, please contact ideas42 Vice President Anthony Barrows at firstname.lastname@example.org.
Asset Building News Round Up: November 14, 2014
By Paul Day on 11/14/2014 @ 11:00 AM
Webinar: If you build it, will they save? : Lessons from the Canadian Education Savings Program
November 18, 2014
Please join New America’s Asset Building Program and the Assets and Education Initiative at the University of Kansas for a webinar exploring the lessons of Canada’s venture into the promising arena of national investment in children’s' savings and evaluate how it is working—and ways it could work better.
Defining Opportunity and Prosperity Beyond Economic Growth
Tuesday, November 18, 2014, The Brookings Institution, Washington, DC
America has long prided itself on being the nation of opportunity. The “American Dream” is characterized as the ability to work hard and get ahead no matter your background. But what if the opportunity to get ahead in life is no longer accessible to all? Is the American Dream just that—a dream—with no grounding in reality? What does opportunity look like in the U.S. today?
In the aftermath of 2008, a pall has been cast on home ownership. And justifiably so — Americans lost trillions in wealth. Now rentals are the new hot thing. Yet the truth remains that we don’t have a system that can adequately house the population, especially those of modest means, in either the owner-occupied or rental markets. It’s time to consider a third way, a middle ground between renting and home ownership. It’s commonly known as “shared equity” housing and here’s an example of how it works. Read more here.
In “Location, Location, Location: The Role Neighborhoods Play in Family Wealth and Well-Being”, the Institute on Assets and Social Policy examines the disparities in neighborhood opportunity. This brief delineates between high opportunity and low opportunity neighborhoods, explains the disparities in neighborhood opportunity and reveals the reasons why families are sorted by race and class into different quality neighborhoods.
Wealth inequality in the US is at near record levels according to a new study by academics. Over the past three decades, the share of household wealth owned by the top 0.1% has increased from 7% to 22%. For the bottom 90% of families, a combination of rising debt, the collapse of the value of their assets during the financial crisis and stagnant real wages have led to the erosion of wealth. Read more here.
Parents have big dreams of paying the bill for their children's college years, but many are finding it difficult to make those dreams come true. More than half of parents haven't started saving for their child's college education at all, according to a new survey from Country Financial. And those aren't just the younger parents, either. Some 52 percent of parents aged 40 to 49, and 47 percent of those aged 50 to 64, haven't saved any money for the college years. Read more here.
Marissa Austin Tobin has lived most of her 37 years without a bank account. "I was irresponsible," said Austin Tobin, who lives in Louisville, Kentucky. "I would pay my bills, but I would just spend the rest of my money." She needed to establish a financial history to qualify for a loan to start a catering business, so Austin Tobin opened accounts this year under a "Fresh Start" banking program that aims to help those who had mismanaged finances. Her savings, while still limited at about $500, are growing. Read more here.
Technical Assistance Fund: WORC Explores New Business Options
By Lynne Cutler and Leigh Tivol on 11/13/2014 @ 08:00 AM
“The times, they are a-changin’,” Bob Dylan told the nation in 1964, and it’s advice still worth heeding for organizations of all stripes—at least, those that want to stay relevant, mission-focused and financially healthy. Of course, change simply for the sake of change isn’t a wise approach, but on the other hand, it’s a rare organization that can stick to the same set of activities year after year and still find success in a constantly evolving environment. Savvy organizations are proactive about observing, assessing and acting on new strategies to achieve their goals.
It’s that drive toward innovation and thoughtful change that led the Women’s Opportunities Resource Center (WORC) to ask CFED, the Assets & Opportunity Network and JPMorgan Chase for support through the JPMorgan Chase Technical Assistance Fund (TA Fund). WORC has long been a mainstay of the asset-building landscape in the metropolitan Philadelphia area, promoting social and economic self-sufficiency primarily for economically disadvantaged women and their families through training, microbusiness support, Individual Development Accounts, job placement, and access to business and financial resources. WORC was preparing to embark on its annual goal-setting process, and was eager for help in identifying new asset-building strategies to add to its portfolio that could help drive future growth and carve out a service delivery niche for the organization. In particular, WORC was eager to uncover ideas that had the potential for revenue generation and could be self-sustaining.
CFED held a series of conversations with a large group of WORC’s internal and external stakeholders, with the goal of better understanding the current marketplace of asset-building and financial capability services in the Philadelphia area, how stakeholders were—or weren’t—collaborating (and why), and where these players saw potential for WORC to grow. CFED then distilled these conversations and other research down to a set of six recommendations for new business opportunities for WORC to consider.
CFED’s recommendations fell into two main areas: small business services (to provide an array of supports beyond loans to existing and emerging entrepreneurs) and integrated financial capability services (working with public- and/or private-sector entities to embed financial capability strategies into their existing systems and programmatic offerings). WORC already offers loans, technical assistance and referrals to low-income and underserved entrepreneurs in the Philadelphia area; while there are other groups in the region that help get small businesses up and running, we saw an opportunity to expand the scope and reach of services to emerging and/or existing entrepreneurs. Similarly, WORC already provides a range of financial capability services, and is engaged with the City of Philadelphia to help deliver financial counseling as one of the city’s Financial Empowerment Centers. But, there could be an opportunity to expand that work with the City and/or with social service providers or private employers to help more Philadelphians access a comprehensive array of financial capability tools and products.
WORC’s senior staff and board have been energized and excited by these ideas. The next step is to filter through the recommendations, identify those of highest interest and/or priority, and begin to explore those ideas more deeply to determine whether they merit further pursuit.
WORC’s request to the TA Fund reflects a growing trend among organizations interested in branching out into program offerings that can generate new income streams. This process was helpful in illustrating the challenges that nonprofit service providers are likely to encounter as they seek to think outside the box in an increasingly competitive fiscal environment. It’s gotten all of us thinking about whether it might be helpful to develop a set of guiding questions that nonprofit organizations can use to help jump-start their thinking around potential areas of programmatic expansion. For instance, how well are the needs of the target population really understood? What problem(s) are we seeking to solve? Might those problems be addressed via a partnership with others who already offer solutions, or is there a market need for new or additional services? Similarly, this process has driven home the message that there could be value in offering nonprofits access to more guidance on exploring income-generating ventures, which require an approach markedly different than grant-funded work.
There’s exciting new energy around the infusion of ideas that this process has catalyzed and the potential expanded opportunity the ideas could bring for WORC and its clients. WORC is eager to take the next steps in continued partnership with organizations like CFED and JPMorgan Chase.
Previous TA Fund Posts
Learning Community as a Strategy for Building and Improving Financial Capability Practice
By Keren Abina-Sotomayor and Sabeen Pirani on 11/11/2014 @ 02:30 PM
This blog post is the second in a three-part series from the Integration Learning Cluster supported by CFED and Bank of America Charitable Foundation. This series is about what the Learning Cluster member organizations have learned about designing an initiative that integrates financial capability into their social service delivery.
At FEGS Health & Human Services, our mission is to help people achieve economic self-sufficiency. Last year, we participated in CFED’s first Integration Learning Cluster to prepare job retention counselors to refer our clients in the welfare-to-work program to financial empowerment services in the city. Integrating financial capability worked well in that program, so we decided to expand it to five more of our workforce development programs during this Learning Cluster.
To make our vision a reality, we used the second Learning Cluster to convene a Financial Capability Learning Community, which is an internal working group of staff from FEGS’ Workforce, Education and Youth Services departments. Together, these programs serve over 22,000 people each year, including adult recipients of public assistance, residents of public housing projects in the Bronx, and young people receiving academic or workforce development services. The Financial Capability Learning Community started by reviewing the current state of financial capability services in the division. Then, we worked to identify the kinds of services our clients would benefit from, the outcomes that would be most significant in their lives, and the training that our staff would need to meet these outcomes.
Financial Capability Learning Community participants self-selected into the group, choosing to participate because they are already invested in financial empowerment work. We chose this approach because, in our previous experience working with learning communities, we have found that staff who are more passionate about the topic tend to be more engaged. This has been the case with this Learning Community—staff in the Financial Capability Learning Community have been able to share best practices with each other and have gained new skills and knowledge from each other and from the technical assistance provided by CFED. These staff members have become financial capability champions and thought leaders across the division. Together, our efforts have resulted in a solidified strategic direction within the division which is exemplified by increased training in this area and a commitment to specific financial capability outcomes.
Steps for Success
Here are a few tips for other organizations that are just getting started with financial capability integration:
- Identify people who are passionate and interested in the topic. Self-selection is a key aspect of this process.
- Support and buy-in from leadership is key when it comes to making the community’s plan a reality, particularly when it comes to scaling up from a few programs to the whole division.
- Outline time commitment from the beginning to establish expectations for Learning Community participants.
- End each Learning Community meeting with specific tasks that will be discussed during the next meeting to keep the momentum going.
- Challenge each other to make behavioral changes in your own financial lives.
- Ask the group to think beyond current services and outcomes and consider new approaches. Our discussion about the financial capability evidence base has helped staff identify more innovative strategies.
For more information about how the Learning Cluster members are designing financial capability programs, check out this blog post that Mercy Housing Lakefront published last week, and stay tuned next week for the third and final post in this series!
Out of the Classroom: Five Ways to Improve Financial Capability Ideas
By Chris Bernal on 11/10/2014 @ 03:25 PM
Our recent “Out of the Classroom” contest, made possible thanks to the generosity of MetLife Foundation, gave us the chance to read through hundreds of fresh ideas for financial capability. Innovative organizations from around the country submitted proposals, and we were unfortunately unable to highlight all of them. As much as this project has been about celebrating our finalists, we also wanted to use the contest to identify ways for all programs to improve their programs. Toward these ends, we’re sharing the five most common pitfalls we found facing “Out of the Classroom” applicants, as these made the difference between great and outstanding applications, and may prove to be helpful insights for those programs applying for funding in the future.
- Financial coaching is essential, but it is not an innovation. Most funders wish they had more funding to make implementation of financial coaching available to more organizations. But, simply offering financial coaching is no longer an innovation in the field, and financial coaching programs require special characteristics to help them stand out for those reviewing grant applications. If you’re looking to integrate financial coaching into your existing programs, we recommend some resources from the recent 2014 Assets Learning Conference Financial Coaching Intensive, as well as some of the research that shows that financial coaching can have significant impact. And, if you’d like to make financial coaching easier to implement across the country, be sure to read CFED’s recent financial coaching federal policy proposal. Similarly, there may be promising programs that you want to start at your organization that are new to your community, but not so new to the financial capability field. Is there a new spin that you can bring to your program to make it truly innovative, while still meeting needs in your community? If so, funders will see the value your approach brings to the table.
- Make the case that the people in your organization are the right ones to innovate. Make it clear how and why your team is positioned to become a leader in the field and push forward your innovation during the application process. Don’t just offer your idea; share your vision and explain why you’re the right one for the task. Often, organizations will oversell their idea and undersell their team, leading to an imbalance that weighs negatively on a grant application.
- Be realistic with the scope of your work, and what the grant would allow you to do. While we appreciate and encourage great ideas that tackle the great challenges your clients face on a regular basis, we found ourselves turning down ideas that go beyond the scope of the project. Having a more realistic plan that matches the grant award amount allows us to better evaluate the feasibility of an innovation, and to better decide which organizations can honestly achieve their goals within the grant opportunity.
- Proofread your application! It should go without saying, but spelling and grammatical errors are distracting! It is harder to appropriately assess your application if the funder has a hard time following it. Working through hundreds of submissions, the clearer and easier your proposal is to read, the more likely the funder is to understand your vision and move you to the next round.
- Research potential partners and models. Which other organizations are doing something similar? What can you learn from partners that have launched initiatives similar to yours in the past? How can you strengthen your current model by approaching partners around the country? An application that (briefly) mentions the existing knowledge base and partners they can approach will stand out and be better positioned to drive an innovation forward. Knowing contacts can also prepare you for the hardest part of the grant: developing your innovation once the funds have been awarded.
Some handy resources to get a feel for what other organizations are doing include the Assets & Opportunity Network, the IDA listserv and the CSA network. Those discussion spaces can also serve as a good stress-test for your ideas before you submit your application.
Good luck! We wish you the best in seeking funding for your innovation.
Asset Building News Round Up - November 7, 2014
By Paul Day on 11/07/2014 @ 03:00 PM
HUD Native Asset Building Summit
November 12 – 13, 2014, St. Paul, Minnesota, Crowne Plaza St. Paul Riverfront Hotel
The purpose of the HUD – ONAP “Asset-Building: A Pathway to Economic Self-Determination Summit" is to provide a forum to exchange ideas about asset-building in Indian Country and present strategies that will support residents as they move on their path toward self-sufficiency.
Dialogue on Tax Reform 2014
Friday, November 14, 2014, Washington, DC, Capitol Hill Club
Hear the latest on what the tax writing professional staffers believe are the opportunities and challenges ahead for one of the most important issues facing both this Congress and taxpayers in 2015.
Known primarily as number crunchers and tax collectors, treasurers for state and local governments traditionally were limited to activities like processing payrolls, managing budgets, safeguarding pensions and being the target of accountant jokes. But in recent years, some of these workaday officials have taken on a role as public visionaries, pushing through experimental policies aimed at lifting the fortunes of low- and moderate-income families. Read more here.
Trailer parks. Long the butt of suburban jokes and eschewed by snobs as shoddy and unsightly. But home prices are climbing, even as lower-income wage workers' incomes remain stagnant, making it harder for many people to own a house. At the same time, rents have shot up over the last several years, too. According to 2013 data from the Harvard Joint Center for Housing Studies, 50 percent of renters in the U.S. spent more than 30 percent of gross income on rent. This is up 12 percent points since 2000. Read more here.
The actual number of Americans who are "unbanked" (meaning they have no relationship with a financial institution) or who are "underbanked" (who have a limited relationship with a financial institution) is hard to pin down. Studies by the Federal Deposit Insurance Corp., KPMG and the University of Virginia Darden School of Business estimate that there are between 68 million and 88 million unbanked and underbanked Americans. Read more here.
An analysis conducted by RealtyTrac showed the debt consumers carry into the home buying process was a bigger obstacle to getting a mortgage that can be sold on the secondary market than coming up with the down payment. The real estate data firm said it analyzed price data from 522 U.S. counties with a collective population of 235 million to see what would happen if the down payments for conventional mortgages moved from 20% to 3%. Read more here.
From the Assets & Opportunity Network
From United Way of Greater Houston: After deciding to save part of her tax refund, Sharon Jones only expected to receive a $25 gift card offered at her VITA site through the OpportunityTexas Tax-Time Savings Project (TSP). A few weeks later, smiling for cameras in Austin City Hall, she held a giant $25,000 check from D2D’s “SaveYourRefund” campaign and remembered back to the moment she learned of the promotion and decided to save. For the single mother of two, the TSP incentive nudged her to save for a home and her education. Read more here.
What Does Success Look Like?
By Bob Friedman on 11/05/2014 @ 10:00 AM
As CFED embarks on the journey of developing our next strategic plan, we’re not just looking to the next three years. Instead, we seek think both short-term and long-term, and thus to determine our strategic direction for the next 10 years. As we do, the threshold question seems to be, “What does success look like?” This question is critical not just for us, but for the movement we seek to be a part of and to help nurture. Indeed, having an overarching and inclusive goal is essential if we are to inspire and unify the diverse and important elements of this field, to insure that there is need and room for everyone, to encourage collaboration, direct competition away from each other and toward the barriers we seek to take down.
It is not so easy to define success in a meaningful and helpful way. Our first temptation is to define success in terms of macro change in the outcome trends which define and limit economic opportunity and mobility: reducing the 44.5% of Americans (and super majorities of African-Americans, Latinos, Native Americans and other groups cast to the sidelines of the mainstream economy, like people with disabilities, foster kids, the old, the young) experiencing liquid asset poverty. Or, we could reverse the metric and emphasize the positive—the percentage of Americans with sufficient assets and opportunity to maintain an economically secure lifestyle. In an ultimate way, these are the right measures—the ultimate test of whether all our efforts have made a difference. But these statistics will not change quickly, as millions of people will have to change their economic status for these numbers to change. This can only be the result of significant policy and market changes (changes in community practice and innovation will not likely register). So, focusing on such outcomes will mask progress in the forces, policies, market changes, community practice energy and innovation which will lead to those macro-outcome changes.
I would suggest that instead, we focus on the number—not the percentage—of people (currently low-income and asset-poor people, especially people of color and other traditionally and disproportionately economically disenfranchised communities) possessing a few thousand (or, for kids, a few hundred) dollars of liquid wealth—“hope in concrete form.” Let us measure, for example, the thousands or tens of thousands of kids covered by children’s savings programs each year, wherein they are provided fifty to a few hundred dollars in incentives and savings, or the thousands of adults provided Individual Development Accounts or similar asset accounts.
Yes, I do focus on money. I realize there are a lot of non-monetary measures of financial empowerment and inclusion. I realize also that one of the consistent findings of recent years is that even very small incentives make a difference. At the same time, our fundamental finding, articulated by Michael Sherraden 25 years ago, is that assets—and particularly liquid assets—matter. They matter economically, psychologically, socially and politically. Here, even small amounts matter, and money is countable, tangible and pregnant with possibility.
As an intermediary variable, I would also suggest we measure the breadth, strength and vitality of the asset-building field/movement—the number of organizations and people involved, the financial support base for those organizations, the number of significant innovations and so on. As I gazed out upon the 1,231 participants at the 2014 Assets Learning Conference, I could not help but pick up the electricity in the room—the energy, optimism and effectiveness of each participant, each of whom is an agent of change. To meet any member of that audience was to come face-to-face with accomplishment and potential. Each participant too represented 10-100 colleagues back home. New constituencies—civil rights organizations, the women’s movement, education reformers, housing advocates, business advocates, funders, researchers—are increasingly seeing a common agenda which embraces economic justice and opportunity, and knows that wealth is at the center. I cannot help but believe that as long as this field is filled with the diversity of energy, vision, commitment and talent so palpable in that room, the movement will continue to grow, and with it, the number of Americans with a minimum of investable assets underwriting entrepreneurship, education, homeownership, economic expansion and growth.
Let us have faith in each other, and measure the number of people and organizations working toward the outcomes we seek. In doing so, let’s use Gloria Steinem’s inclusive movement principles as our watchword:
All together, we are changing from a society whose or- ganizing principle is the pyramid or hierarchy to one whose image is the circle. Humans are linked, not ranked. Humans and the environment are linked, not ranked.
And remember, the end doesn’t justify the means; the means are the ends. If we want dancing and laughter and friendship and kindness in the future, we must have dancing and laughter and friendship and kindness along the way. That is the small and the big of it.
At my age, in this still hierarchical time, people often ask me if I’m “passing the torch.” I explain that I’m keep- ing my torch, thank you very much—and I’m using it to light the torches of others. Because only if each of us has a torch will there be enough light.”
- Gloria Steinem, “Our Revolution Has Just Begun,” Ms. Magazine, Winter/Spring 2014. p. 31. From her National Press Club Address on the eve of receiving the Presidential Medal of Freedom, the highest civilian honor conferred by the US.
A Holistic Approach to Implementing Financial Capability
By Kimberly Steele on 11/04/2014 @ 04:20 PM
This blog post is the first in a three-part series from the Integration Learning Cluster supported by CFED and Bank of America Charitable Foundation. This series is about what the Learning Cluster member organizations have learned about designing an initiative that integrates financial capability into their social service delivery.
We’ve done Financial Literacy before. We’ve done Financial Education. We’ve had workshops, trainings, seminars, lunch and learns, etc. You name it, we’ve done it.
What we haven’t done, however, is successfully implement a thoughtfully planned and strategically executed program that not only informs and engages our residents, but empowers them as well. Until now. We knew that we needed to do it differently this time, but CFED has helped us to understand why it needs to be different and how it can be different.
Mercy Housing Lakefront (MHL) is a nonprofit affordable housing developer in Chicago that provides housing for working families, formerly homeless adults and seniors. We are currently working on a project to integrate financial capability into our service offerings. We understand that it can’t just be a matter of throwing information at our residents and hoping some of it sticks. We know that in order for this program to be successful, we have to look at the whole picture and work to change the attitudes and behaviors of all that are involved. What this means for us is that integration will involve Residents, Staff, the Organization and the Community if we want to ensure measurable and sustainable results.
Using CFED tools to examine our various segments really helped us to refine our understanding of whom we intend to serve with financial capability programs. We then had to develop a set of conditions to target in order to represent advancement in financial capability for each targeted segment. In completing the target population analysis and having a visual of the breakdown of our target segments, we realized that we couldn’t attempt to implement this program the same way that we had in the past. We needed new insights and fresh ideas in order for this to work.
Focusing on Residents, Staff, Organization and Community led us to adapt a four-pronged approach. MHL has partnered with banks and agencies across Chicagoland to form a Financial Capability Council. This group of external stakeholders has been crucial in advising and assisting us with the implementation of our new program. We also created an internal planning committee that consists of staff from different departments and sites within MHL so that we could not only have input throughout this process, but a team in place to evaluate the program going forward.
This approach has been invaluable to us because:
- Through conducting a target population analysis, we became aware of the large number of residents receiving income from benefits and learned that we couldn’t target this population and build capacity with the same strategies we used for those earning income through employment.
- It led to the realization that because we have 23 sites across Chicago, we could conceivably have 23 different strategies in place to implement financial capability with both our staff and our residents.
- The knowledge that our Financial Capability Council brings to the table affords us with new ideas and strategies that we may not have otherwise had.
- Our partnership with the Council gives us access to financial staff and invaluable resources to assist us with training and running our program.
- The creation of our internal planning committee helps us to increase buy-in from staff.
- We recognize the importance of tracking measurable outcomes and validating what our residents have accomplished through our financial strategies, in order to determine whether we have achieved long-term success.
One tip for other organizations that are just getting started with financial capability would be to ask for help. There is so much information out there and truly understanding and measuring capacity to manage financial resources and use financial services in a way that best suits individual needs is a daunting task. Organize both a group of internal and external stakeholders in order to develop a plan, implement a strategy and evaluate the results.
Stay tuned over the next 2 weeks for 2 more posts about how the Learning Cluster members are designing financial capability programs!
Asset Building News Round Up - October 31, 2014
By Paul Day on 10/31/2014 @ 03:00 PM
Affirmatively Furthering Fair Housing
November 3 – 4th, 2014, New Orleans, LA, Hilton New Orleans/St. Charles Avenue
In this FREE two-day training, community development practitioners, housing professionals and local government officials will learn about Affirmatively Furthering Fair Housing (AFFH) requirements and regulations that spell out the fair housing obligations of states, cities and towns across America.
Explaining Student Loans to Borrowers
Thursday, November 6, 2014
In this webinar, Reyna Gobel, M.B.A. and M.J., will explain repayment plans for federal (and some private) student loans, including actual demonstrations of repayment plan calculators that educators, counselors and consumers can use to determine the best repayment option.
Wealth inequality in the US has followed a U-shaped evolution over the last century – there was a substantial democratisation of wealth from the Great Depression to the late 1970s, followed by a sharp rise in wealth inequality. This column discusses new evidence on the concentration of wealth in the US. Growing wealth disparity is fuelled by increases in both income and saving rate inequalities between the haves and the have nots.
The number of unbanked households in Greater Washington declined slightly to 4.3 percent in 2013 from 4.6 in 2011, but nearly one in five households here now use a mix of traditional and nontraditional financial services, up from just below 17 percent three years ago. Read more here.
In the last 20 years, homeownership has fallen less for young people than for any other age group under 64. Today's historically low homeownership rate isn't the result of the cheapest generation abandoning the housing market. It's their older cousins, Generation-X, who are really running for the exits. Read more here.
People in the affordable housing field have grown increasingly interested in talking about healthcare. Concepts like “housing as a platform” for health outcomes have become part of our professional lexicon and panel topics at our conferences. Read more here.
From the Assets & Opportunity Network
From the Assets & Opportunity Network
From Southern Bancorp Community Partners: This is National Save for Retirement Week, a national effort to increase personal financial literacy and raise public awareness about the importance of saving for retirement. This week provides an opportunity for employees to reflect on their personal retirement goals and determine if they are on target to reach those goals. Read more here.
From the Illinois Asset Building Group: At the end of September the Department of Defense (DOD) announced proposed changes to the Military Lending Act (MLA) that, if implemented, will expand financial protections for servicemembers and their families. Since its enactment in 2006, the MLA has protected servicemembers and their dependents from ultra high interest rates of over 36 percent on short-term, small dollar loans. Read more here.
And the innovators are...
By Melissa Grober-Morrow on 10/30/2014 @ 03:00 PM
CFED is pleased to announce the winners of the “Out of the Classroom: Fresh Ideas for Financial Capability” contest. More than 8,000 votes were cast and the following winners emerged from your votes:
- Alternatives Federal Credit Union (Ithaca, NY)
- Center for Financial Empowerment (Irwindale, CA)
- City of Lansing (Lansing, MI)
- District 7 Human Resources Development Council (Billings, MT)
- Economic Awareness Council (Chicago, IL)
- Family Housing Advisory Services, Inc. (Omaha, NE)
- Neighborhood Economic Development Agency (St. Paul, MN)
- Neighborhood Housing Services of Greater Cleveland (Cleveland, OH)
- Prepare + Prosper (St. Paul, MN)
- Pullias Center for Higher Education (Los Angeles, CA)
These 10 organizations were selected from among 180 applicants for their innovative approaches to expanding financial capability. A few of them are experimenting with intergenerational learning and experiential learning approaches; some are tweaking their Volunteer Income Tax Assistance (VITA) models; still others are focused on credit building and savings innovations. We hope the financial capability and asset-building field will benefit by learning about these organizations’ approaches and findings.
Join us in congratulating these 10 outstanding organizations, and be on the lookout for blog posts from them in the coming months as they share their innovations and practices with the field. Thank you for voting!
CFED extends its gratitude to MetLife Foundation for making the Out of the Classroom contest possible.
Rising Student Debt Undermines Academic Success and Financial Security
By Alexander Scarlis on 10/29/2014 @ 03:00 PM
All parents want a college education for their children and for good reason: it offers the best chance at reaching the middle class and beyond. But as college costs continue to rise and a record one in five households carry outstanding student loans, postsecondary education debt threatens to undermine the asset-building potential of America’s households.
Soaring college costs limit students’ academic opportunities by narrowing their choice of schools and even leading some to rethink going to college. In fact, two-thirds of families have eliminated some college choices due to cost, says Sallie Mae in its 2014 survey of college students and their parents.
CFED’s new Fact File, “Rising student debt undermines academic success and financial security ,” highlights how high-levels of student debt impact the financial security of households.
Here are some more shocking statistics:
FACT: Of the students who make it all the way through to earn their degree, almost 2 in 3 take on student loan debt, a decision fraught with potentially serious financial consequences.
FACT: Almost half of 18-34 year-olds without degrees say they aren’t in college because they can’t afford it.
FACT: Almost one-third of those who drop out of college in their first year report leaving for financial reasons.
FACT: Student debt equals almost one quarter of income for households earning less than $21, 044 (those in the bottom fifth of earners), a higher share than any other income group.
To learn more check out our latest Fact File on how student debt threatens young people’s financial futures.
Reflections on the Field Part III: Issues to Figure Out Together
By Jennifer Brooks on 10/28/2014 @ 05:00 PM
Part I of this blog series focused on the results of a field survey conducted prior to the Assets Learning Conference. Part II focused on how the Assets & Opportunity Network and “CFED proper” planned to respond to a few clear mandates that came from the survey results. This final blog post focuses on some of the survey results that are more challenging. We need to figure out how to respond together.
Survey result: Increase resources in the field
“Everything is about funding.”
Is everything about funding? I think yes and no. Cash keeps the doors open, but less tangible resources—like hands-on tools, connection to peers, capacity-building opportunities—increase our effectiveness. Arguing the importance of one over the other doesn’t feel like a particularly useful exercise. Both are critical.
Certainly, there are things that the field is already doing that we should do more of to make resources go farther. For example, we should continue the trend of working “smarter” through collaboration with other nonprofits. Making government-funded anti-poverty programs more effective through integrated service delivery is another must. But how can we increase philanthropic support for these strategies and engage private sector employers in delivering services?
The Assets & Opportunity Network and “CFED proper” commit to continuing to expand capacity-building resources and to working with all of you to find creative ways to increase the dollars available to deliver services, advocate and build networks. I don’t think there are any silver bullets, but here are three things I think we should try:
- Educate funders nationally about asset-building and make direct connections to local groups.
- Build Network Member capacity to be more effective fundraisers.
- Think creatively about ways to leverage the national funding we have to attract additional local and regional resources.
What are your ideas?
Survey result: Lift up and engage those who are living in asset-poverty
“The more success we have at the very grassroots level—the people most in need—the more potential there is to turn this into a local, then statewide and then national movement.”
The Assets & Opportunity Network (and the larger assets field) is diverse—we have researchers, financial institutions, funders, governments, advocates and direct service providers, among others in our ranks. But that diversity, by and large, does not include people who directly experience asset poverty.
Most Network Members are at least one step removed from financial insecurity and asset poverty, and some are many more steps removed than that. The Network includes a preponderance of service providers, and very few community organizers. There is nothing wrong with that per se, and in fact, I think we ought to embrace that identity. However, the dangers are that we end up speaking for people living in asset poverty rather than with them, our strategies can be disconnected from the reality of their lives, and we miss opportunities to raise awareness when the New York Times calls and we haven’t engaged community spokespeople who want to tell their stories.
What do we do about this? I have three ideas.
- Expand partnerships with Network Allies. At the Assets Learning Conference, we announced a new way to partner with the A&O Network: national organizations with affiliate networks can now sign on as Network Allies. Many of the initial Allies—including NAACP and NCLR—have local affiliates focused on communities of color, who are often the very people living in asset poverty. The intention of these partnerships is to align efforts and bring the voice of underrepresented groups into the assets movement.
- Prepare community members become leaders. During the open mic part of the ALC closing plenary, one speaker lifted up an idea that seems to be in the zeitgeist: Could we design a national leadership development program to increase the direct participation of people who are living in asset poverty? I like the idea, along with variants that are more local and/or less time intensive. What are your reactions?
- Encourage service providers to embrace their role as advocates. What if we did more to empower service providers (and those who participate in their programs) to engage in systems-change work? In addition to the amazing work that providers do day to day, how could we help them also focus “up stream”? Stories of service providers—who can share their experiences of working with dozens of individuals—can be incredibly powerful with policymakers. Thoughts on how we do this?
Survey result: The top service sought in the past year was affordable housing
“People are living paycheck to paycheck often utilizing payday lenders to make ends meet.”
Although individual responses to the ALC survey highlighted different aspects of the problem of affordable housing—from homelessness, to low rental vacancy rates and high cost of living, to great distances from jobs in rural areas—it is clearly a big issue for service providers. It makes perfect sense that you’re not going to get someone to focus on financial education (let alone on saving for retirement), until their more urgent needs are met. So, what do we—as the “assets field”—do?
The obvious move is to build more alliances with those in the affordable housing field—both nationally and in communities. The I’M HOME network, which CFED coordinates, is working on building bridges in the context of our manufactured housing. But, there are many more untapped relationships we should explore.
However, more fundamentally, to address affordable housing issues and to create a unified voice loud enough to make systemic change, we need to step up our commitment to working shoulder to shoulder with other advocates. That includes advocates for affordable housing, but also for living wage jobs, for an education system that works for all, for racial equity, for investment in public programs and for all of the other facets of economic justice.
How do we do that? To quote Gloria Steinem (who I am still so sad couldn’t make it to the ALC), “It’s not rocket science. We need to worry less about doing what is most important, and more about doing whatever we can. And remember, the end doesn’t justify the means; the means are the ends.”
Asset Building News Round Up: October 24, 2014
By Paul Day on 10/24/2014 @ 12:15 PM
Raising the Bar: Transforming Communities with Capital and Leadership
November 4 - 6, 2014, Marriott Marquis, Dallas, TX
This is a first of its kind training opportunity designed for nonprofit practitioners who work to build financial capacity and community assets in low and moderate income Latino and immigrant communities.
New research from the real estate website Trulia finds that homeownership is less expensive than renting in all of the country’s 100 largest metropolitan areas. The advantage narrows considerably, however, when the home buyer uses a low-down-payment loan insured by the Federal Housing Administration. Read more here.
A new survey of college savings plans known as 529 plans rated Nevada’s at the top of the heap, along with plans available to residents of Alaska, Maryland and Utah. The survey said those four states offer plans with the best potential investment options — and analysts singled out Nevada’s plan because its size helps reduce consumer fees through economies of scale. Read more here.
Middle-class people in the USA have a median of $20,000 saved for retirement, far short of the $250,000 they think they'll need during that time of their lives, a new survey shows. A third (34%) of working middle-class adults aren't contributing anything to a 401(k), IRA or other retirement savings plan, according to the survey of 1,001 adults, ages 25 to 75, with a median household income of $63,000. The survey was conducted by Harris Poll for Wells Fargo (WFC). Read more here.
A new report from the Consumer Financial Protection Bureau (CFPB) summarizes complaints from private student loan borrowers about difficulties faced when working with a lender or servicer to avoid default. They also have steps you can take to get valuable information on repayment options to reduce your monthly payment or to temporarily postpone making payments. Read more here.
From the Assets & Opportunity Network
From the Financial Stability Partnership of Northern Nevada: More than 70,000 Nevada public school kindergarten and 1st grade students now have a college savings account thanks to the continuation of the Nevada College Kick Start Program. Starting in 2013, the College Kick Start Program has deposited $50 into an account in the name of each Nevada public school 2013-15 kindergarten student to help them save for college. Read more here.
From Southern Bancorp Community Partners: As a Community Development Financial Institution (CDFI), Southern seeks to support efforts focused on housing availability and accessibility for low- and moderate-income families in both Arkansas and Mississippi. We do so because of our belief that affordable housing is paramount to financial stability and strongly correlated to an individual’s ability to save money and achieve economic independence. Read more here.
Building the Connecticut Asset Building Collaborative
By Fran Rosebush and Roger Senserrich on 10/23/2014 @ 11:00 AM
Last year, the Connecticut Association for Human Services (CAHS) and a group of service providers, advocates and state agencies decided to launch the Connecticut Asset Building Collaborative (CABC) in order to collectively focus our energy and ideas to bring efforts in Connecticut to the next level. There were already several promising initiatives focused on financial education, budget coaching and asset building in the state, and we believed forming a collaborative would allow us to better align our efforts.
The group of organizations involved in the launch of the Connecticut Asset Building Collaborative chose to apply to the Assets & Opportunity Network Technical Assistance (TA) Fund for guidance on creating a vision and strategic plan for the collaborative. Thanks to the support through the TA Fund, the CABC was able to conduct a focused, inclusive strategic planning process, translating the energy and enthusiasm from groups at the table into a clear, well-defined theory of change with a vision statement, defined goals, and activities that we believe will allow us to achieve those goals. Our coalition-building efforts are much more intentional and focused than they would have been without the assistance. The CABC is stronger, and more effective, thanks to the work of our many partners over the course of these past few months.
Developing a Theory of Change for a Stronger Connecticut Asset Building Collaborative
After the initial group of service provider, advocates and state agencies decided to launch the CABC last year, we decided to take a first step and coordinate the first-ever Connecticut asset-building convening. The event was extraordinarily well attended, with more than 100 participants, and served as the true launch pad for our CABC efforts.
Of course, the road wasn’t always smooth when we first launched. The first bump we faced was the need to set a vision for the future of the Collaborative and identify the big picture goals of what we wanted to achieve together. What we knew was that we had a group of interested organizations, we had great energy, and there was a clear need from groups to both develop new programs and improve existing efforts. If we wanted to build on this energy, while successfully advocating for asset-building programs and policies, it was time to develop a plan. To do so, we applied to the Assets & Opportunity Network Technical Assistance Fund, supported by JPMorgan Chase, in order to tap CFED’s expertise in convening partnerships that drive asset-building initiatives forward.
CFED staff worked with CABC steering committee members to define a broad strategic plan. Using our current work as a starting point, it helped us map a path forward with collaboratively identified vision, goals and activities for CABC. CFED’s staff connected with all member organizations of the still-informal CABC steering committee individually, as well as the group as a whole, to discuss our objectives and expectations regarding the CABC. They worked closely with the CABC leaders to evaluate the needs and gaps and assess what competencies we should seek to build into the group as a whole.
After these extensive preliminary discussions and research, CFED’s staff came to Hartford, Connecticut, for a day-long workshop with the CABC steering committee. The main items on the agenda were drafting a theory of change and, from there, defining which activities and strategies CABC would need to advance the change we theorized. In addition, the group discussed how to organize the CABC, including forming a formal steering committee and workgroups, defining membership arrangements and drafting a membership plan. The session was conducted in a collaborative, organic way, with members proposing objectives, goals and tasks while CFED’s team facilitated the discussion and built a framework for the theory of change as they guided the group.
After the meeting, CFED’s staff produced a more fleshed-out theory of change, which contains a vision statement, goals/outcomes, and the activities the collaborative believes will help achieve those outcomes. They proactively gathered feedback on their proposals, keeping a fluid dialogue with all CABC partners in a dynamic, inclusive process.
Thanks to the support from the Technical Assistance Fund, the CABC was able to conduct a focused, inclusive strategic planning process, translating the energy and enthusiasm into a clear, well-defined theory of change. Our coalition-building efforts were much more intentional than they would have been without the CFED’s assistance. The CABC is stronger, and more effective, thanks to the work of our many partners over the course of these past few months.
Technical assistance from CFED to the Connecticut Asset Building Collaborative was made possible thanks to generous support from JPMorgan Chase for the Assets & Opportunity Network Technical Assistance Fund.
Also in this Series
An Asset Advocate’s Guide to the Exciting World of Tax Reform
By Ezra Levin on 10/22/2014 @ 02:00 PM
Last month, CFED released its report on wealth inequality and the upside-down tax code. In case 45 pages of tax policy analysis doesn’t excite you as much as it does me, I want to point you to our 3-page Federal Policy Brief, which summarizes the key points from that report. We want this guide to be useful to advocates on the ground, because reforming these asset-building tax programs is an enormous opportunity for the asset-building field.
If you’re an advocate who works on housing for low-income communities, how many times have you heard from policymakers that there’s just not enough money to expand this lending program or that down payment assistance program? Well, the federal government is spending nearly $100 billion on just two homeownership tax programs every year—and the low- and moderate-income clients and communities you serve are getting little or no support.
Or maybe you work on higher education? Or retirement security? Or savings and financial security more broadly? The story is the same for your issues too. All told, the federal government spent $542 billion last year on asset-building tax programs. The vast majority of this spending goes to those at the very top of the income spectrum.
It’s worth pausing on that number for a minute: $542 billion. When you think of the big “welfare” programs, what do you think of? Medicaid? About $265 billion last year. Food Stamps (SNAP)? That cost $76 billion. Section 8 vouchers? $18 billion. TANF? $17 billion. Bottom line: traditional social service spending pales in comparison to spending on asset-building tax programs.
If the thought of tax policy makes your eyes glaze over, don’t think of it as tax policy. Think of it as asset-building policy, because that’s what it is. The way the federal government boost assets is, as a rule, not through grant programs like Assets for Independence (AFI), which cost about $19 million last year. Laudable though these asset-building grant programs are, they are microscopic in comparison to asset-building tax programs. Multiply AFI by 28,000 and you approach what we spend on asset-building tax programs. In short, when the federal government wants to boost assets for Americans, it does so through the tax code; and it does so primarily for the wealthiest Americans. That’s Upside Down.
So if you’re looking for big federal policy reforms to get more low- and moderate-income folks into homes, look at making the tax programs more equitable. If you want to get more students into higher education, check the tax programs. If you want to expand retirement security, reform the tax programs. Or if you simply want to expand savings and wealth more broadly for low- and moderate-income Americans, take a look at the tax programs. That’s what this Federal Policy Brief and the full report do. The asset-building programs and funding are there, but they’re just not serving the families and communities who need it the most. Let’s change that.
Currently reading page 1 of 64.