Self-Employment Assistance Program Sees Major Expansion

By Katherine Lucas-Smith on 02/22/2012 @ 11:45 AM

Tags: Entrepreneurship, Federal Policy, Policy Alerts

Program receives boost; grants available

For the past two years, CFED has kept you up-to-date on an innovative proposal to expand access to entrepreneurship training through the Department of Labor’s (DOL) Self Employment Assistance (SEA) Program. Today, we have great news: Senator Ron Wyden (D-OR) included a major expansion of SEA in the recently signed legislation to extend Unemployment Insurance (UI)! As a result, thousands more unemployed workers will be able to unleash their entrepreneurial talents while they receive unemployment benefits and training to help their businesses succeed.

The nation has been struggling with an unemployment rate higher than eight percent for more than three years and nearly half of all unemployed workers have been out of work for more than six months. For some job seekers, starting a business provides a way to create their own jobs. For more than 20 years, SEA has allowed UI recipients in seven states to work full-time on starting a business while receiving unemployment benefits. SEA has been evaluated and found effective but has had limited reach because it was difficult for states to participate.

Senator Wyden’s SEA reform legislation is based on a bill he introduced in the Senate last year, with support from Senators Carper (D-DE) and Casey (D-PA). It allows a state to opt in easily, through a formal agreement between the Governor’s administration and the U.S. Department of Labor (DOL). A critical feature of the legislation is that it authorizes and appropriates $35 million in one-time funding for states; the grants are to be used to set up new SEA programs or improve existing ones, including through the development and implementation of entrepreneurship training resources for UI recipients.

Specific provisions include:

• States can extend a maximum of 26 weeks of SEA benefits to unemployed workers interested in entrepreneurship
• Limits participation to one percent of a state’s total pool of UI recipients. This will prevent the program from adding to the budget and is based on average take-up rates in the states that currently offer SEA
• Establishes reporting and evaluation requirements to track total jobs created, participants’ business income over time, and tax revenues associated with SEA
• States can provide training and resources to SEA participants through partnerships with nonprofit organizations that have expertise in business development services

We anticipate that microenterprise development organizations across the nation will have opportunities to expand their services through partnerships with state workforce agencies. CFED will keep you informed as DOL rolls out the new rules and requirements for the state grant funding. Meanwhile, if you hope to see a new or improved SEA program in your state, now is the time to contact your state workforce agency!

CFED Celebrates America Saves Week (February 19-26)

By Stephanie Halligan on 02/21/2012 @ 10:00 AM

Tags: Behavioral Economics, Financial Empowerment, Individual Development Accounts, Matched Savings

It’s officially America Saves Week! From February 19 - 26, the America Saves campaign is calling on educators, nonprofits and financial institutions to promote good savings behavior and for consumer to assess their own personal saving status.

So how are American’s financial habits faring during America Saves week? The Bureau of Economic Analysis (BEA) reported last month that the national personal savings rate is up to 4 percent (up from 3.5 percent in November); this means, on average, Americans are saving 4 cents for every dollar of disposable incomes. While that’s more encouraging than the negative rate that Americans were saving at a few years back, it’s far from ideal. Since the BEA began measuring this statistic in 1959, the savings rate has fluctuated from 8.3 percent in the early 60’s to 14.6 percent during the recession in the mid-70s (ironically, a recession usually increases the average savings rate, and a bad economy can scare folks into saving more money.

Even though our current savings rate as a country sits comfortably above a negative percentage, it certainly doesn’t mean that everyone is doing it, and it doesn’t mean that saving money has gotten any easier – after all, if savings were easy, we’d all be doing it! Using this year’s America Saves theme of “Set a Goal, Make a Plan and Save Automatically,” how can we help the average American consumer (that’s all of us!) set aside some of the money we have today for something in the future?

Set a Goal. Saving for the sake of saving is boring. Most people need inspiration or a compelling reason to set aside their hard-earned money for any period of time. First, decide on something that has personal value or meaning that may require some financial foresight and savings – a vacation, a first home, or even a rainy day. Secondly, consider opening a targeted savings account or naming an existing savings account something that will motivate you to save and remind you of your goal. What’s more compelling: setting aside $25 every month in your ABC Bank savings account or putting that money into your “My Dream Vacation with the Family” fund? Better yet, eligible individuals can open up an Individual Development Account (IDA) that helps participants save for their first home, continuing education or small business development. Visit the IDA Program Directory to find an IDA program in your area.

Make a Plan. Online savings tools like SmartyPig can help make your savings goal into a reality by helping you keep track of your savings goals and offering suggestions for how often you should be depositing money. Need more personal help in creating a plan and sticking to it? Eligible individuals can take advantage of financial services and education provided by local nonprofits. Local Initiatives Support Collaboration (LISC) Financial Opportunity Centers, for example, take a multi-faceted approach to providing individuals with one-on-one career and personal finance services and coaching. Other providers in your area may offer programs to help you create a savings plan.

Save Automatically. Let’s face it – we’re all human. If you have to consistently and consciously take money out of your paycheck or bank account every month and then put it away toward your savings goal, you are fighting an uphill battle. Creating an automatic transfer or deposit into your savings account is a critical step to achieving your savings goal. Behavioral economics theory and studies suggest that “setting and forgetting” with automatic transfers or direct deposit can have a hugely positive impact on a person’s savings rate and habits. And don’t forget to take advantage of the Earned Income Tax Credit (EITC) at tax time, where you can automatically deposit a portion of your tax refund into a savings account or U.S. Savings Bond.

Savings takes commitment, practice and the appropriate tools to make it happen. And while everybody has a different amount of disposable income to work with, everybody has the ability to save something – even a penny is a good place to begin. So why not start this week?

To find an America Saves Week organization or to join the campaign, visit http://www.americasavesweek.org/.

Policy Alert: Support Automatic IRA Legislation

By Inemesit Imoh on 02/17/2012 @ 02:00 PM

Tags: Federal Policy, Policy Alerts

Automatic IRA legislation will improve financial security for millions of workers who are facing retirement with little savings.

Inadequate savings for retirement present a serious threat to the future of American prosperity. Even before the recession, half of all households headed by someone aged 55-59 had less than $13,000 in retirement savings. This anemic level of savings threatens to leave retirees struggling with financial insecurity throughout their elder years. Social Security benefits, of course, fill part of the gap, but in 2011, the average benefit paid to retired workers was a meager $1,177 a month (just over $14,000 per year). Despite a difficult legislative environment, the case for addressing retirement security is gaining steam.

Congressman Richard Neal of Massachusetts, following the lead of New Mexico’s Jeff Bingaman in the Senate (S. 1557) and the Obama Administration’s proposal in the FY 2013 Budget Request, has introduced legislation to address this problem: the Automatic IRA Act (H.R. 4049) will make employer-sponsored retirement savings accounts available to many of the 78 million employees who currently do not have access.

Today, households rely heavily on personal assets, pensions and 401(k) accounts to help them make ends meet, even before both spouses retire. However, according to the 2012 Assets & Opportunity Scorecard, only 44.9% of Americans participate in their employer-sponsored retirement plan and almost 50% of the American workforce currently does not have access to a work-based plan at all.

Why is that so critical? Because employer-sponsored retirement plans are one of the main ways Americans are able to save for retirement. However, many small businesses and lower wage industries do not offer retirement plans to their employees. For those that do have the option to enroll, many are discouraged from ever doing so due to complex rules and investment options.

To make financial security for older Americans a reality, policymakers need to make sure that families have the tools they need to save for their later years today. Congressman Neal (D-MA) recognizes this fact and has reintroduced the Automatic IRA Act (H.R. 4049), which he says “provide common-sense reforms that will help Americans prepare for a financially secure retirement.”

The bill would enable nearly all employees who work for a private business with more than 10 workers to contribute to retirement savings through payroll deductions into an IRA. In addition, the bill provides employers with a tax credit to cover the administrative costs of setting up the IRA. Automatic IRA is a low-cost and effective way to reach millions of Americans struggling to build a nest egg for themselves.

This legislation is one of the few proposals that could break the gridlock in Congress. Despite the strong partisan differences between the parties, proposals for Automatic IRA have had bipartisan support in the past. Nods from the AARP, Brookings Institute, Aspen Institute for Financial Security and Heritage Foundation all support Automatic IRA policies similar to what is included in H.R. 4049.

CFED will track this bill and similar legislation as it moves through Congress. Despite the challenging political environment and the upcoming elections, we hope that this sensible and employer-friendly legislation will find broad support among lawmakers.

Assets & Opportunity Profile Release: Dallas

By Sean Luechtefeld on 02/17/2012 @ 10:45 AM

Tags: Assets & Opportunity Initiative, Financial Empowerment, Local Policy

Yesterday, CFED’s Vice President for Policy & Research, Ida Rademacher, joined Communities Foundation of Texas (CFT) in Dallas for the release of the city’s Assets & Opportunity profile, published by CFED and commissioned by CFT and the Thomson Family Foundation.

The report, which you can read about here, reveals that two out of every five households (39%) in Dallas live in asset poverty, or roughly twice the number of families (19%) who live in income poverty. To find out how Dallas compares with the rest of Texas and with the nation, visit the 2012 Assets & Opportunity Scorecard.

Yesterday’s release event featured a press conference and legislative briefing which were attended by a full slate of city officials and nearly 300 nonprofit leaders from the Dallas region, including Assets & Opportunity Network lead local organization YWCA of Metropolitan Dallas and lead state organization RAISE Texas. Here at CFED, we’re especially excited about how the data has been received; the Assets & Opportunity profile and its release have been covered in, among other venues, the Dallas Morning News and the Dallas Observer. This high-profile coverage illustrates the potential asset poverty has to become part of a robust dialogue, not only in Dallas, but nationally as well.

We hope you’ll take the time to view the report for Dallas and join us in thanking CFT for coordinating this important event.

Register Today! Fundraising Strategies for IDA Programs

By Johanna Barrero on 02/16/2012 @ 10:30 AM

Tags: Events, Individual Development Accounts

An Upcoming Webinar from the Assets for Independence (AFI) Resource Center

Tuesday, February 21, 2012
12:30 – 1:30 p.m. PST / 3:30 – 4:30 p.m. EST

Is your program struggling to raise the non-federal match funds for your AFI grant? Are you well into your grant period and haven’t met your fundraising goals? Join us and hear from organizations that have successfully raised their non-federal match funds. Learn from seasoned practitioners about strategies they’ve used to approach funders and secure financial resources for their IDA programs.

In this hour-long webinar you will learn about:

• Developing relationships with funders and donors
• Exploring the range of funding options – public, private, and philanthropic
• Creative strategies for a down economy
• Considerations for working with individual donors

Presenters:

• Tad Oyler, Grants Coordinator, EARN
• Devin J. Thompson, Development Director, Capital Area Asset Builders (CAAB)
• Leigh Tivol, AFI Resource Center (moderator)

Visit https://www1.gotomeeting.com/register/610029281 to register now!

The webinar is free to all interested participants. In advance of the webinar, please send any questions you would like our panelists to address during the session to Johanna Barrero at johanna.barrero@idaresources.org, or call 202-207-0117.

Aspen Institute Names Levere Ascend Fellow

By Sean Luechtefeld on 02/15/2012 @ 01:00 PM

Tags: Children's Savings Accounts

Below is the Press Release sent by The Aspen Institute this morning announcing that CFED President Andrea Levere has been named an Ascend Fellow. Please join me in congratulating Andrea on this important accomplishment!

The Aspen Institute today announced that Andrea Levere of Washington, D.C., will be in the inaugural class of its Ascend Fellowship program, one of a select group of 20 leaders from across the country who are pioneering two-generation approaches to move families beyond poverty.

Levere is the president of the Corporation for Enterprise Development (CFED), a Washington D.C.-based national nonprofit. As the president of CFED, one of the leading asset-building organizations in the country, Andrea has pioneered research, policies and products that promote expanding economic opportunity for families with low incomes. She has been on the forefront of efforts to expand matched savings for children and adults to help them save towards the purchase of a lifelong asset, such as a home, a business or tuition for college.

Ascend was launched in 2011 with support from national foundations and women philanthropists, and is a hub for breakthrough ideas and proven strategies that move parents and children—two generations—toward economic security together. Educational success is central to its work.

“Ascend Fellows are exceptional leaders from government, philanthropy, research, nonprofits, the media and private sector,” said Anne Mosle, Ascend executive director. “Each one will pursue cutting-edge work that illustrates two-generation strategies in their various fields.”

“Andrea Levere’s work on the Partnership for College Completion and child savings accounts are great examples of breakthrough thinking,” Mosle continued. “I am honored that Andrea will be a part of the Ascend network of leaders in two-generation strategies to build a legacy of educational success and economic security.”

The Ascend Fellows will work to break the cycle of intergenerational poverty through public, private, and nonprofit sector innovation and collaboration; state-of-the-art research; public engagement; and different market-based and philanthropic models.

Fellows will receive scholarships to support participation and execute action plans to pursue two-generation approaches. They will be eligible to apply for grants from an Innovation Fund that Ascend is developing to support such work.

The announcement of the fellowship program coincides with the release of an Aspen Institute report, “Two Generations, One Future.” The report makes the case for focusing on educational success for parents and their children together as a promising way to move families out of poverty.

“A two-generation approach can be a game-changer for families with low incomes,” Mosle said. “We are seeing promising results from programs and policies around the country that promote education and skills for parents and provide quality early-learning opportunities for their children. We believe a focus on education, economic supports and social capital, the core components of the two-generation approach, can lead to economic security for families.”

The full list of Ascend Fellows:

Ms. Katie Albright
San Francisco Child Abuse Prevention Center, Executive Director

Ms. Cara Aley
American MoJo, President and COO

Mr. Reggie Bicha
Colorado Department of Human Services, Executive Director

Ms. Mia Birdsong
Family Independence Initiative, Vice President

Dr. Lindsay Chase-Lansdale
Northwestern University, School of Education, Institute for Policy Research, Professor of Human Development & Social Policy and Social Policy Faculty Fellow

Ms. Karla Davis
Tennessee Department of Labor and Workforce Development, Commissioner

Mr. Steven Dow
Community Action Project, Executive Director

Dr. Chris King
University of Texas at Austin, Lyndon B. Johnson School of Public Affairs, Ray Marshall Center, Director

Ms. Andrea Levere
CFED, President

Mr. Steve Liss
AmericanPoverty.org, Director/photographer

Dr. Meera Mani
The David and Lucile Packard Foundation, Children, Families and Communities Program, Director

Dr. C. Nicole Mason
NYU Wagner Women of Color Policy Network, Executive Director, Assistant Research Professor

Ms. Margaret McKenna
Lesley University, President Emeritus and Professor of Leadership

Mr. Wes Moore
Author, Host

Reverend Vivian Nixon
College & Community Fellowship, Executive Director

Dr. Eduardo Padrón
Miami Dade College, President

Ms. Gloria Perez
Jeremiah Program, President and CEO

Dr. Mario Small
University of Chicago, Chair and Professor of Sociology

Mr. Henry Wilde
Acelero Learning, Senior Vice President of Operations

Dr. Richard Wylie
Endicott College, President

###

The Aspen Institute’s Ascend program is a hub for breakthrough ideas and proven strategies that more parents, especially women, and their children beyond poverty towards educational success and economic security. For more information, please visit www.aspeninstitute.org/policy-work/ascend.

The Aspen Institute mission is twofold: to foster values-based leadership, encouraging individuals to reflect on the ideals and ideas that define a good society, and to provide a neutral and balanced venue for discussing and acting on critical issues. The Aspen Institute does this primarily in four ways: seminars, young-leader fellowships around the globe, policy programs, and public conferences and events. The Institute is based in Washington, D.C.; Aspen, Colorado; and on the Wye River on Maryland's Eastern Shore. It also has offices in New York City and an international network of partners. For more information, please visit www.aspeninstitute.org.

President’s 2013 Budget Supports Investments in Working Families’ Financial Security and Asset-Building Opportunities

By Inemesit Imoh and Katherine Lucas-Smith on 02/14/2012 @ 02:10 PM

Tags: Federal Policy, Policy Alerts

Proposal is a strong start but reduces support for some critical programs

Yesterday, the Administration rolled out its budget proposal for Fiscal Year (FY) 2013 (October 1, 2012 to September 20, 3013). The President delivered this budget request to Congress, which must now decide on and vote to approve funding levels for each agency. His accompanying letter to Congress portrays a relentlessly-squeezed American middle class which faces a tipping point: “For many Americans, the basic bargain at the heart of the American Dream has eroded.”

In response, the President’s FY 2013 budget proposal aims to ensure that America will continue to be “a country where working people can earn enough to raise a family, build modest savings, own a home and secure their retirement.” In essence, the Administration sees this budget as a blueprint for advancing financial security and asset-building opportunities for American households. But to what extent does it achieve this objective?

One major limiting factor is that billions of dollars in budget cuts are, under laws passed in 2011, set to take effect in FY 2013. Under deals struck between House Republicans and the Obama Administration, the cuts will focus on discretionary domestic programs—specifically, the 18% of the federal budget that remains after accounting for national security spending and entitlement programs such as Medicare, Medicaid and Social Security. For FY 2012, the President proposed a total of $458 billion in discretionary domestic spending; this year’s request is just $410 billion. This means that nearly every agency faces some reduction in total funding, including cuts to many programs that support low-income families who are working hard to make ends meet, save and invest in their futures. On the other hand, the budget proposal emphasizes investments in infrastructure and education, support for the housing sector and incentives to spur job creation—including entrepreneurship. In short, it’s a mixed bag for asset builders and the families we serve.

Highlights:

Tax Policy: The President asks Congress to take several concrete steps on tax policy and establishes principles to guide future work on comprehensive tax reform. He rejects today’s upside down policies that benefit “the people who have done fantastically well over the last few decades” but neglected “the middle class [and] those fighting to get into the middle class.” The budget includes several tax incentives that would provide significant support to low- and moderate-income families that are making tough choices today to build wealth and invest in their futures.

Specifically the budget:

• Makes permanent the American Opportunity Tax Credit, a partially refundable credit that helps families pay for their students’ higher education.
• Extends tax preferences that reward small businesses for hiring new workers and spur those businesses to make capital investments.

It compensates for the cost of these measures by curtailing some tax preferences that only benefit the affluent:

• Institutes new taxes on the largest financial institutions and households earning more than $1 million per year.
• Eliminates several corporate tax loopholes and the Bush tax cuts for families earning more than $250,000.

Retirement Security: The budget once again supports Automatic Individual Retirement Accounts (Auto IRA), a policy that would require businesses with more than 10 employees who do not currently sponsor retirement plans to enable their employees contribute to IRAs through payroll direct-deposit. The vast majority of these employers already use payroll systems that support direct deposit into IRAs, and the Administration’s proposal includes a tax credit to offset the cost of upgrading for those businesses that need to. This will make retirement savings accounts available to as many as 40 million of the 78 million American workers who currently do not have access to a retirement plan at work. Employees would be automatically enrolled at a low contribution rate but could opt out at any time. They would also retain the right to change their savings levels, and reallocate their investment portfolios. The Administration proposal echoes legislation introduced by Senator Bingaman (D-NM).

Assets for Independence (AFI): AFI, the primary source of federal funding for Individual Development Accounts, provides savings opportunities and incentives for low-income families who are saving to purchase homes, go to college and start businesses. The FY 2013 request of $19.9 million increases funds for program evaluation; it would also fund an estimated 47 AFI grantees and strengthen ongoing program administration and support. The Administration requests that HHS be granted authority to recapture funds that grantees have not used after three years, and that they be able to reallocate those funds to new grantees in order to expand the program’s reach with its existing budget.

Furthermore, the AFI funding request indicates the Administration’s support for program reauthorization and improvements, similar to those that have been proposed by Congressman John Lewis (D-GA) in the Stephanie Tubbs Jones AFI Reauthorization Act.

Funding Levels for Specific Agency and Department Programs

Of course, the devil is in the details. While the big-picture view of the budget is largely positive, some specific programs that support asset-building opportunities for low-income families are targeted for cuts. Funding levels for a variety of these programs are below:

Department of Agriculture:

• RD 502 Direct Loans (Rural Housing): $653 million, down from $900 million in funding for FY 2012.
• Rural Business Enterprise Grants: $30 million, an increase of $6 million from last year’s enacted level.

Department of Education:

• Race to the Top: $850 million, up from the FY 2012 funding level of $550 million.
• Promise Neighborhoods: $100 million, a $40 million increase above FY 2012 funding.

Health and Human Services:

• Assets for Independence: $19.9 million, level with the funding authorized for FY 2012.
• Community Services Block Grant maintains funding levels of $350 million from the FY 2012 Budget request, but is a cut of more than 50% of the $714 million that was enacted for FY 2012.
• Low Income Home Energy Assistance Program (LIHEAP): $3.02 billion, down $450 million from FY 2012.

Department of Housing and Urban Development:

• Family Self-Sufficiency program: $60 million, equal to FY 2012 funding.
• Housing Counseling: $55 million, $10 million above FY 2012.
• Community Development Block Grants maintained funding at $3 billion.
• Resident Opportunities for Self-Sufficiency maintained its FY 2012 funding at $50 million.

Small Business Administration:

• Microloan loans: $18 million, a 28% reduction from the FY 2012 level of $25 million.
• Microloan technical assistance: $19.8 million, slightly below the FY 2012 enacted level of $20 million.
• The Administration again targeted the Program for Investment in Micro-Entrepreneurs (PRIME) was again targeted for elimination. In FY 2012 PRIME is funded at $3.5 million.
• The Administration proposes a new training and technical assistance program for disadvantaged entrepreneurs, focused exclusively on veterans, to be funded at $7 million.

U.S. Treasury:

• Community Development Financial Institutions (CDFI) Fund: $221 million, level with FY 2012 funding.
• Bank On USA would be funded through the CDFI Fund, authorized at up to $20 million.

Narrated PowerPoints about A&O Scorecard

By Ethan Geiling on 02/14/2012 @ 10:15 AM

Tags: Assets & Opportunity Initiative

On January 31 CFED released the Assets & Opportunity Scorecard – the most comprehensive source of data on household financial security and policy solutions. The 2012 Scorecard assesses states across 101 outcome and policy measures in five areas to determine the ability of residents to achieve financial security. By many of those measures, Americans are struggling. It’s clear that the recession and its aftermath have left unprecedented numbers of families barely able to make ends meet.

During a webinar on January 31, speakers explained the Scorecard data and what it means. The PowerPoint from the webinar is available to download online. We’ve also created two short narrated presentations about the Scorecard:

• Key Data Findings from the Assets & Opportunity Scorecard (7 minutes) – Kasey Wiedrich, Senior Program Manager for Applied Research, explains some of the key national data points, including the differences between income poverty, asset poverty and liquid asset poverty.
• The Critical Role for State Policy in Creating Financial Security and Opportunity (8 minutes)– Jennifer Brooks, Director of State and Local Policy, explains how policy shapes opportunity and the strength of states’ policies to build and protect assets.

The Economic State of America's Higher Education System

By Peter Kim, Guest Contributor on 02/13/2012 @ 03:30 PM

Tags: Education, Jobs, Recommended Reading

For years it was the dream of many Americans to send their children to college. However, it has turned into a fiscal nightmare for parents as tuition costs rise while the number of available jobs has not. Students and their families have taken huge sums of debt on the assumption that their college degree will be an instant ticket to a high-paying job, but those jobs are nowhere to be found in the current market. This spring, college graduates are entering a labor market with fewer jobs that require a college education. On top of that, a Yale School of Management study suggests college students who graduate in a recession can earn 40% less than students who graduate in better times. Higher education is turning into a bubble.

According to a 2010 report in Money magazine, the cost of college tuition has gone up 439% since 1982. Another study saw the rate of tuition growth increase four times the rate of inflation and twice as much as health care since 1978. While federal aid has offset some tuition for eligible students, their inability to find jobs has put a strain on their ability to pay back student loan payments. Some columnists blame the government for interfering with the market, arguing that federal aid encourages students to take on debt they may not be able to pay back.

As a result of the stagnant economy and continued high unemployment, college graduates are being forced to take low-paying jobs, sometimes multiple jobs, to pay bills. Graduates who took artistic disciplines have relied on freelance work to help make ends meet, but this is not enough. Others have chosen to do public service; in 2009 at the height of economic malaise, AmeriCorps reported a 42% increase in applications, of which 70% were college graduates. Still, others have decided to stay in school and go to graduate school.

Regardless, the lack of opportunities for capable graduates has forced many to return to graduate programs instead of contributing their skills to society. As a result, increased enrollment in college has resulted in the cost of higher education rising. Upon graduation, 65% of students graduate with debt, with the average student owing $24,000 in 2009. Facing unsustainable borrowing costs and a lackluster economy, graduates are finding it increasingly difficult to pay back their loans. Today, the higher education bubble is bursting at the seams as 10.8% of students at public institutions defaulting on their loans within three years of graduation (default rates at for-profit schools are double!). Today, understanding the long-term costs and benefits of attending a college will be more important than ever before. Digging deep to find grants, scholarships, and using all the resources available to you will be a great way for you to ensure a debt-free future.

For more information, watch this motion graphic created by Education News.

Created By: Education News

With a passion for education and technology, Guest Contributor Peter Kim is getting involved in hopes to help innovate the way information is presented and received. Follow Peter on Twitter.

Congressional Hearing on Implementation of the Manufactured Housing Improvement Act of 2000

By Lauren Williams on 02/10/2012 @ 12:17 PM

Tags: Federal Policy, Housing and Homeownership

Congressional hearings are typically information-gathering sessions where expert witnesses take the hot seat to provide oral testimony and respond to Congress members’ questions. On Wednesday, February 1, the House Financial Service Committee’s Subcommittee on Housing, Insurance and Community Opportunity held a hearing regarding the “Implementation of the Manufactured Housing Improvement Act of 2000.” This time, they may have left with more questions than new information. Though this was only the third hearing I’ve attended on the Hill, it was easily the most interesting I’ve seen so far—it was well attended by both majority and minority representatives, the issues presented by the witnesses were controversial to say the least, and the representatives were moved to ask thoughtful, probing questions of the witnesses.

The Manufactured Housing Improvement Act of 2000 provided for a method of oversight for the HUD safety standard approval process that involves a Manufactured Housing Consensus Committee made up of industry, consumer, and general public interest representatives. It also established standards for adoption at the state level that govern manufactured home installation, installer licensing, and dispute resolution between industry, installers and consumers. Industry representatives voiced concerns that the Act has not been implemented as it was intended and that certain functions—primarily the Manufactured Housing Consensus Committee—are not operating as they should.

The majority Representatives called the hearing to further investigate these issues, so the witnesses included mostly industry representatives providing testimony corroborating those concerns.

• Mr. John Bostick, Chair, Manufactured Housing Association for Regulatory Reform
• Mr. Edward Hussey, Immediate-Past Chair, Manufactured Housing Association for Regulatory Reform
• Mr. Dana Roberts, Past Chair, Manufactured Housing Consensus Committee
• Mr. Manuel Santana, Director of Engineering, Cavco Industries, Inc., on behalf of the Manufactured Housing Institute

The Acting Deputy Administrator for Manufactured Housing Programs at HUD, Henry Czauski, testified on behalf of the agency. Ishbel Dickens, Executive Director of the Manufactured Home Owners Association of America (MHOAA), was the only witness representing consumers of manufactured homes. CFED submitted a statement for the record that can be found here.

While industry representatives testified about their problems with the MHIA of 2000, with HUD, and with the Consensus Committee, Ishbel Dickens testified about both the value of the MHCC and other problems facing owners of manufactured homes. She reminded the representatives of the importance of the MHCC and its function as the only public arena in which owners of manufactured homes can exercise their voices to ensure the integrity of their homes’ construction as it is codified by HUD regulations. She reminded the representatives of the perils that owners of manufactured homes in communities often face—insecure land tenure, unfair and unscrupulous landlords, economic eviction, and more. She reminded them that although manufactured homes often start out as an affordable homeownership option for millions of Americans, archaic industry systems governing sale, financing, and placement of manufactured homes can quickly turn homebuyers into “prisoners in their own homes.”

The representatives had even more questions about details regarding the MHIA of 2000’s implementation, how other existing entities like the MHCC operate and how the Act really affects innovation in the manufactured housing industry. More importantly, however, the representatives—both on the minority and majority sides—wanted to know what could be done about the unique set of problems faced by owners of manufactured homes. They want to know how these homes are financed and how a secondary market can be created to facilitate a safer financing market for manufactured homes. They had so many questions, in fact, that they suggested holding another hearing in the future to keep the conversation going.

Given the wealth of questions raised by the testimonies given at this hearing, one of the representatives mentioned that there may be sufficient need for an additional hearing to gather even more information. We would encourage future sessions to focus even more attention on topics like the health of the manufactured home lending industry and how it can be improved to better serve both homeowners and lenders.

SaveUSA Program Saves Low-income Families Nearly $1 Million

By Sean Luechtefeld on 02/09/2012 @ 10:30 AM

Tags: Asset Poverty, Assets Opportunity Initiative, Economic Inclusion, Financial Empowerment, Matched Savings

New York City Mayor Bloomberg, Consumer Affairs Commissioner (and longtime CFED friend) Mintz, and Center for Economic Opportunity Director White announced last week that SaveUSA, an innovative program designed to help low-income individuals save for their financial futures, helped participants save nearly $1 million!

The program, based on the NYC’s $aveNYC program, was rolled out in three other cities in 2011 – Tulsa, Newark and San Antonio – as part of the City’s Social Innovation Fund project. Across the four cities, 1,662 accounts were opened. In NYC alone, residents with an average annual income of $16,000 saved about $250,000. Recognizing the importance of the tax preparation moment as a gateway to savings, the SaveUSA program offered accounts at 69 VITA sites throughout the five boroughs to workers who agreed to set aside at least $200 of their tax refunds.

This innovative program couldn’t have come to fruition at a more opportune time. According to data in our 2012 Assets & Opportunity Scorecard, New York ranks 27th overall in the financial stability of its residents. When it comes at Financial Assets & Income, which includes asset poverty measures that gauge New Yorkers’ financial security, the state earns a ‘C’. In fact, fully one in three (35.5%) in the Empire State lives in asset poverty, making the need for programs like SaveUSA more dire than ever before.

For more about NYCgov’s unique approach to encouraging saving among low-income residents, read last week’s press release here.

Thank You for Making Asset Poverty Part of the National Dialogue

By Lauren Stebbins on 02/08/2012 @ 04:30 PM

Tags: Assets Opportunity Initiative, Federal Policy, Local Policy

Thanks to a tremendous collaborative effort between CFED and leaders in the Assets & Opportunity Network, last Tuesday’s launch of the 2012 Assets & Opportunity Scorecard has raised up the concept of asset poverty in the national conversation about the financial security of American families.

More than 200 articles cited the data on the 127.5 million families who are living one crisis away from poverty. This coverage has raised awareness and is helping us make the case for why local, state and federal policies must take steps to combat asset poverty and rebuild prosperity in the United States

Coverage can be seen in:

• National media outlets like the Huffington Post, the New York Times and Marketplace
• Local media outlets in 47 states, including television network news affiliates and local newspapers
• Online, among bloggers and journalists committed to promoting financial security
  
  
  

Through our collective efforts, policymakers, opinion leaders and the general public better understand the concerns of the 43% of families who are liquid asset poor. We look forward to working with you to build on this momentum to further spread awareness about the financial security and opportunities for American families.

For the latest coverage on the Scorecard visit the newsroom.

Managing Finances with That Special Someone

Posted on 02/07/2012 @ 10:00 AM

Tags: Financial Empowerment, Just For Fun

Financial Management Doesn't Need to Strain Your Relationship

Today's Guest Contributor is Alexandra Chaikin. Alexandra is a passionate supporter of community development. She volunteers as a Money Management 101 instructor for Capital Area Asset Builders in Washington, D.C. and she writes about her thoughts and experiences here at achaikin.blogspot.com. Ms. Chaikin holds an M.B.A. from the George Washington University and a B.A. from Vassar College.

With Valentine’s Day around the corner, I’m taking the opportunity to discuss one of the least sexy aspects of being in a relationship: finances. Chocolate and flowers may be nice, but romance is unsustainable without some kind of mutual understanding about money.

In a recent blog post, Bill Varettoni, financial planner and founder of the financial service organization Community Ladders, espoused the many virtues of open communication about household economics. I fully support all the solutions Bill proposes, and would like to add a few reflections of my own.

First, showing affection doesn’t need to break the bank. This is seems obvious, but flies in the face of the logic used in the majority Valentine’s Day ads. Diamond commercials, in my opinion, are among the worst offenders because they show an altered reality in which buying expensive jewelry is the best (and maybe the only) way to prove your love. I’ve often found myself yelling at the hypothetical male audience: “Just do the dishes!” The key is to find a way to show your partner you love and honor them, and there are numerous ways to do this. Some are free – like doing exactly what you said you’d do – and some can just cost moderate amounts of money, like taking your significant other to a restaurant they adore or a show they’ve been wanting to see (even if it’s not your favorite).

Second, changing financial behaviors might require an adjustment period. Bill Varettoni talks in his post about specific solutions like allowing slush funds for each party and setting clear expectations about how to manage finances. As with many things, this is easier to talk about in theory than to implement. Actually cutting back on your own spending or saving more each month can be quite difficult. It’s really not too different from going on a diet; companies like Dave Ramsey’s exist precisely because sticking to the plan isn’t easy. Don’t beat yourself up if there is a little awkwardness in the early stages. Keep at it and remind yourselves of the bigger goal: a happy, honest relationship.

A Win-Win Program: IRS' Voluntary Compliance

By Lauren Williams on 02/06/2012 @ 09:15 AM

Tags: Entrepreneurship, Federal Policy

A Win-Win Program: IRS Voluntary Compliance Program Provides a Fresh Start to Employers and their Misclassified Employees

Small businesses need to be honest about those they employ versus those they enter into contracts with as independent contractors, and the IRS’s new program—the Voluntary Classification Settlement Program (VCSP)—is designed to motivate more small business owners to do so. The VCSP allows eligible employers to voluntarily notify the IRS that they have erroneously treated their workers as nonemployees or contractors and obtain substantial relief from federal payroll taxes and penalties they would owe for having done so. Employers accepted into the program get a huge break: they will be required to pay an amount equaling nearly 1% of the wages paid to the reclassified workers for the past year, without interest or penalties.

Why does this matter? The Self-Employment Tax Initiative (SETI) is a small business development strategy that takes advantage of the tax code to help low-income, self-employed individuals formalize and grow their businesses, create jobs and access tax-based asset-building opportunities. The target population for the SETI local partners is self-employed individuals who are operating small businesses. The “self-employed” taxpayer, however, may also be an independent contractor whose income is reported on a 1099 MISC by the entity that entered into a contract with them to provide some good or service. When independent contractors earn income, they are treated as self-employed individuals for tax purposes—as such, they pay 15.3% of their income to satisfy Social Security and Medicare taxes while employees only pay 7.65%.

Each year, our local partners—community-based organizations that provide free tax assistance to low- and moderate-income self-employed taxpayers—tell us stories about the misclassified employees they serve at their tax sites. Most are actually employees dealing with unscrupulous employers who have deliberately classified their employees as independent contractors in order to avoid paying the employer share of payroll taxes. This means that when they file, they are responsible for both the employer and employee share of Social Security and Medicare taxes. These filers, when informed of their “self-employed” status, are often confused and financially unprepared to bear the full load of both employer and employee portions of Social Security and Medicare contributions.

Many of the partners we work with will help misclassified employees by walking them through a series of questions to determine whether they are, in fact, employees or independent contractors. These programs educate misclassified taxpayers about their tax liability going forward and inform them of their options for recourse. Although the IRS has designed a process for misclassified employees to report their employers, that’s often a risk many low- and moderate-income employees cannot take. Misclassified employees—often the most vulnerable employees—get trapped in a catch-22: they can’t bear the burden of paying the tax rate required of independent contractors, but they can’t risk losing their employment by reporting their employers.

This new IRS program, however, could become a win-win for both the unscrupulous employer and the misclassified employee in some cases. While the program is a huge win for business owners who are classifying their employees as independent contractors rather than W-2 employees and are willing to classify them properly, it may be an even bigger win for low- and moderate-income employees who get reclassified, minimize their tax liabilities and keep their jobs.

Want to Come Clean? The program is new, but it’s already accepted over 200 businesses and is ready to accept more. Frequently Asked Questions are answered on the IRS website, and program eligibility is described here. Although this program will help relieve participating small business owners’ potential federal tax liability, the program has only been adopted at the state level in Minnesota; there’s still work to be done in other states to implement similar pilots.

Innovative Projects Integrate Asset Building into Affordable Housing

By Rick Haughey on 02/03/2012 @ 10:00 AM

Tags: Housing and Homeownership

EDITOR'S NOTE: This story ran in CFED's February Newsletter, which was sent out yesterday. If you missed the Newsletter, make sure you're signed up for our mailing list at cfed.org/signup.

There is growing interest across the country from innovative affordable housing providers in integrating asset building and other financial services into their affordable housing programs. As a pioneer and leader in asset building, CFED is being tapped to help structure financial programs and services in affordable housing programs that encourage low-income families to increase their level of financial literacy, improve their access to financial services and build assets.

CFED has long been engaged in one particular niche in the affordable housing marketplace – helping owners of manufactured housing take advantage of factory-built housing’s affordability, while also accessing the opportunity to build wealth in a way that more closely resembles the experience of owners of site-built housing. CFED began broadening its engagement in the housing field in 2011 through outreach and discussion with a number of housing organizations, including several innovative public housing authorities, a HUD Choice Neighborhoods Implementation Grant Awardee and the largest community development intermediary in the U.S.:

• The Cambridge Housing Authority in Massachusetts and the Tacoma Housing Authority in Washington State are both Moving to Work (MTW) participants and national leaders in affordable housing innovation. MTW gives unprecedented flexibility to public housing authorities to innovate. In 2012, CFED will be assisting both organizations with their efforts to integrate financial security programs within their housing programs. Exciting new ideas include efforts to get public housing residents banked, as well as the creation of a student Individual Development Account (IDA) – a special savings account that allows young residents to earn deposits by achieving personal and/or academic goals.
• The Boston-based organization – Preservation of Affordable Housing (POAH) – recently was granted a HUD Choice Neighborhoods Implementation grant for their work in the Woodlawn public housing development in Chicago. CFED is currently exploring numerous ways to assist POAH as they seek to fulfill the promise of the Choice Neighborhoods Initiative. Building on HOPE VI, Choice Neighborhoods seeks to provide support for the preservation and rehabilitation of public and HUD-assisted housing within the context of a broader approach to concentrated poverty that addresses basic services, schools, public assets, transportation and access to jobs.
• CFED continues our engagement with Enterprise Community Partners and is exploring new areas of partnership. Through a recent contract with HUD, Enterprise is working with a wide range of housing authorities on troubled projects, institutions and initiatives. CFED looks forward to working with Enterprise on embedding asset building as part of proposed turnaround strategies.

CFED believes that using housing as a platform for delivering financial security programs and systems has the power to change the trajectory of the lives of low-income families and children. We’re excited about working with such innovative partners in 2012 and are encouraged by the growing acceptance of a more holistic and integrated approach that has implications for a variety of platforms beyond housing.

To learn more about CFED's affordable housing initiatives, click here.

2012 Scorecard by the Numbers

By Sean Luechtefeld on 02/02/2012 @ 02:00 PM

Tags: Assets Opportunity Initiative

For the past couple days, we’ve been offering an in-depth look at the different products we released on Tuesday, including the Assets & Opportunity Network homepage and the special report, A Portrait of Financial Insecurity and Policies to Rebuild Financial Security in America.

Today, I want to walk you through the Scorecard data on the Assets & Opportunity website. As we’ve mentioned, the data has been collected for all 50 states and the District of Columbia and measures state performance across 101 measures in five different issue areas. That’s a lot of data, but luckily the Policy and Research teams have been hard at work to deliver this data in the most easy-to-use format possible.

When you first navigate to scorecard.cfed.org, you’ll see a map of the United States (above). Each state (and let’s not forget DC) is shaded, with darker orange colors indicating residents doing well in terms of financial security and grey colors indicating high levels of work needing to be done to combat asset poverty. You can click on any of these states to retrieve data. Since it’s Groundhog Day, let’s pick Pennsylvania as an example to honor Punxsutawney Phil.

When you click on PA, you’ll see their grade in each of the five major areas. So, you can see that the Keystone State earns an ‘A’ in health care, a ‘C’ in education and so forth. From there, you can also click on ‘View All State Data.’ That will take you to a screen that looks like this:

At the top of the page, you’ll notice some policy recommendations that the State of Pennsylvania should consider to help improve their scores across the five major issue areas. Most of these are relatively low-cost, both financially and politically, but would make a significant difference in the lives of Pennsylvanians. Then, below those recommendations, you’ll find six different tabs. The first five are for state-level data and the different measures within each; this is the highly specific information that helps paint a robust picture of how well PA is fighting asset poverty. Each of those measures is also clickable. So, if you click on ‘Asset Poverty by Gender,’ for example, you can see how Pennsylvania compares to the other states.

Finally, clicking on the right-hand tab on the page above will take you to a screen where you can create a customized PDF of the data found on the Scorecard website. Let’s imagine you had to testify in front of the state legislature in support of microenterprise development. You could select the data you want and create a handout that could accompany your testimony. There are literally thousands of different data combinations you can create with this tool, so I hope you’ll use it to promote the assets agenda in your community.

In all, we’ve put a lot of time into making the Scorecard data as useful as possible to maximize its impact in the assets and opportunity field. So, I hope you’ll play around with it when you’ve got the chance and use the Comments below to leave your feedback.

Exploring the New Assets & Opportunity Initiative Website

By Sean Luechtefeld on 02/01/2012 @ 09:00 AM

Tags: Assets Opportunity Initiative

Yesterday we unveiled the brand-new Assets & Opportunity Initiative website, including the online home for comprehensive 2012 Scorecard data and the newly-established Assets & Opportunity Network. Both of these can be accessed by visiting www.assetsandopportunity.org.

On the Scorecard side of the website, you’ll find comprehensive data for over 100 measures of how well states are protecting their residents’ finances and fighting rising rates of asset poverty. These measures are broken down according to five issue areas – including Financial Assets & Income, Businesses & Jobs, Housing & Homeownership, Health Care and Education – within which each state and the District of Columbia are rated and ranked. Tomorrow, we’ll examine some of this data in more depth.

On the Network side of the website, you’ll find the perfect way to interact with the 51 state and local members of the Assets & Opportunity Network, a movement-oriented group of advocates working to expand the reach and deepen the impact of asset-based strategies. You’ll find updates from the Lead State & Local Organizations, links to download resources including policy briefs and resource guides, and the ability to search for a coalition member in your area.

The resources located at www.assetsandopportunity.org have been developed with the aim of helping advocates make asset poverty a thing of the past. I hope you’ll find them to be helpful in your efforts.

Oh, and in case you missed it…

…the Scorecard was all over the news yesterday! Here are just a few of the stories that ran yesterday and this morning:

• The Huffington Post featured the Scorecard in its lead article yesterday, which received nearly 10,000 comments!
• Those listening to New Hampshire Public Radio heard about the Scorecard yesterday afternoon, and you can listen to the clip online.
• The Scorecard was also featured in the Chicago Tribune. You can read the spotlight piece here.

For more coverage of the 2012 Assets & Opportunity Scorecard data, visit the Scorecard Newsroom!

The 2012 Assets & Opportunity Scorecard Launches Today!

By Sean Luechtefeld on 01/31/2012 @ 08:00 AM

Tags: Assets Opportunity Initiative

Today marks the official launch of the 2012 Assets & Opportunity Scorecard! We’re releasing a number of exciting resources today on the brand-new Assets & Opportunity website, including:

• Comprehensive data for all 50 states and the District of Columbia to assess how well they are doing in the fight against asset poverty
• The online home for the Assets & Opportunity Network, which features microsites for Lead State & Local Organizations and helpful resources for those working to promote the economic well-being of all Americans
• A Portrait of Financial Insecurity and Policies to Rebuild Prosperity in America, a downloadable special report aggregating the Scorecard data to explore what states can do to promote the well-being of their residents

Each of these will be explored today from noon to 1 pm (Eastern) in a webinar, which you can sign up for here. Speakers during the webinar will include President Andrea Levere, State & Local Policy Director Jennifer Brooks, and Senior Program Manager for Applied Research Kasey Wiedrich.

Looking for More Information?

• Members of the Press should contact Kristin Lawton at 202.207.0137
• Those experiencing difficulty registering for the webinar should email gotowebinar@cfed.org
• General inquiries should be sent to cfednews@cfed.org

Follow along with the latest Scorecard news on Twitter using #cfedscorecard.

Recap: EITC Awareness Day

By Kim Pate on 01/30/2012 @ 04:30 PM

Tags: EITC, Events

The Earned Income Tax Credit (EITC) is one of the nation's most effective anti-poverty programs. The EITC is a refundable tax credit primarily for individuals and families who have low or moderate incomes. Greater tax credit is given to those who also have qualifying children. EITC can be a major financial boost for working people, particularly those suffering in a recovering economy. But, many hard-hit families do not even know that this vital credit exists. In fact, millions of workers will qualify for the EITC for the first time this year.

Because roughly one in five taxpayers who qualify for EITC doesn’t claim it, the National Community Tax Coalition (NCTC) organized EITC Awareness Day for last Friday, January 27. This national grassroots effort spotlighted the transformative power of the tax credit. NCTC believes that with the right tools, 100% of EITC-eligible individuals will claim the tax credit and boost their own financial security.

In conjunction with EITC Awareness Day, CFED joined about a dozen national partners to host a policy briefing on Capitol Hill. Held on Thursday, the briefing brought together several key speakers who recognize the importance of tax time in helping low- and moderate-income families save. One statistic that really stuck out to me during the briefing was that in 2010, the EITC kept 6.6 million people out of poverty, half of whom are children. According to the IRS, last year over 26 million workers received nearly $59 billion from EITC refunds – which helped with paying the rent, buying groceries, covering utility bills, and handling other pressing needs.

Given how successful the EITC has been in helping keep families out of poverty since its inception in 1975, I can only imagine how many more families would benefit were the program to be expanded and if all eligible families took advantage of this important tax credit.

National Release of the 2012 Assets & Opportunity Scorecard on Tuesday

By Lauren Stebbins on 01/27/2012 @ 10:00 AM

Tags: Assets Opportunity Initiative

CFED will release the 2012 Assets & Opportunity Scorecard in a national webinar on January 31 at noon EST (11 a.m. CST / 10 a.m. MST / 9 a.m. PST). The webinar, The 2012 Assets & Opportunity Scorecard: How Financially Secure are Families?, will highlight key national and state findings, including the latest asset poverty rates and other measures of financial security and opportunity. Register today to find out how your state fares in helping its residents achieve financial security.

By any measure, poverty in the United States is increasing. In 2011, the country saw the poverty rate rise to 15.1%, the highest level in nearly two decades. However, the official poverty rate released annually by the Census Bureau highlights just one aspect of household finances, namely the percentage of people with insufficient income to cover their day-to-day expenses. It does not account for the resources a family has to meet emergencies or longer-term needs. The Scorecard will offer critical new data on the growing number of Americans who are “asset poor,” meaning they lack the savings or other assets to cover basic expenses for just three months if a layoff or other emergency leads to loss of income. The latest findings will show significant increases in “asset poverty” since the release of the previous Assets & Opportunity Scorecard in 2009.

The webinar will feature three speakers:

• Andrea Levere, President, CFED
• Jennifer Brooks, Director of State & Local Policy, CFED
• Kasey Wiedrich, Senior Program Manager, Applied Research, CFED

The Assets & Opportunity Scorecard offers the most comprehensive look available at Americans’ financial security today and their opportunities to create a more prosperous future. The Scorecard explores how well residents are faring in the 50 states and the District of Columbia and assesses policies that are helping residents build and protect assets along five issue areas: Financial Assets & Income, Businesses & Jobs, Housing & Homeownership, Health Care and Education. The 2012 Scorecard assesses states across 100 outcome and policy measures in these five areas to determine the ability of residents to achieve financial security.