From Saver to Homeowner: IDA Success Stories Part 5
By Bank of the West on 10/02/2012 @ 11:00 AM
To help families achieve the goal of homeowner¬ship, Bank of the West has partnered with CFED to match the money that low-income individuals saving for a down payment and to support the nonprofits that provide financial education to these savers. This is the fifth story in a six-part series featuring Individual Development Account (IDA) program graduates from across the country. This story comes from the IDA program at Community HousingWorks in Escondido, CA.
As part of a third-generation family from Poway, California, Crystal Lucca dreamed of owning a home locally. After starting a family at the age of 17, owning a home “seemed impossible.” The Lucca family of five was barely making ends meet and living paycheck to paycheck. Crystal saw a picture-perfect home in her future, but didn’t know how to get there.
While living at a Community HousingWorks’ (CHW) affordable housing community, Crystal saw a flyer for the Individual Development Account (IDA) program that gave her hope. She signed up for the program, excited about the challenges and possibilities that awaited her.
The Lucca family soon began making changes and sacrifices that would bring them closer to buying a home. After attending a Financial Fitness class as part of the program, Crystal says, “We changed our lifestyle to be conscious of money and how it ties into future goals.” The family made small changes that led to big savings, such as planning meals, cutting out financial services fees, and lowering the cable bill. In addition, Crystal raised her credit score by nearly 100 points using the tools from the class.
Crystal feels that “having moral and financial support in the program gave us a step up.” An experienced CHW financial coach encouraged the Luccas to take the steps needed to achieve their homeownership goal. After saving $2,000 and receiving a match for a down payment, Crystal and her family moved into their first home in time for Thanksgiving.
After spending years dreaming of her own home, she has now realized her dreams. “Becoming a homeowner in Poway is like a dream come true,” says Crystal. “The IDA program is perfect for so many out there who are dreaming of homeownership but need that extra support to bridge the gap between a dream and reality”
Winning Strategies for State Asset Policy Change in a Time of Budget Shortfalls
By Jennifer Brooks on 10/01/2012 @ 01:15 PM
Faced with budget shortfalls and continued high unemployment, federal, state and local policymakers are focused on trimming spending and creating jobs. Anti-poverty advocates want to protect funding to address immediate needs. Assets advocates (who may also care about those same programs) want to protect spending on assets, but are also still looking for the “big win” that would require new spending on asset-building incentives.
“Winning Strategies for State Asset Policy Change in a Time of Budget Shortfalls” was an ALC session that explored three concrete strategies to win on in the current environment.
Robb Gray, from the Center on Budget and Policy Priorities, started off the session talking about how state assets coalitions can build alliances with “revenue coalitions” that have emerged in the past few years to protect spending on the poor in the face of budget shortfalls. Amy Saltzman, from The Hatcher Group, focused on the need to frame your issues in ways that policymakers and the media can “hear.” I then focused on ensuring that your policy agenda has some items that are achievable now - while teeing up bigger investments for down the road. I also shared a couple concrete policy ideas that you may want to consider for your own agenda. Our last speaker was Robin McKinney, from Maryland CASH, who shared her coalition’s recent policy successes deploying some of these strategies.
Income Taxes: Check the Box for College Savings
EDITOR'S NOTE: This post originally appeared on Washington Monthly's College Guide on Friday. To read the original story, click here.
As a federal taxpayer, you’ve no doubt noticed the $3 “check-off” for the Presidential Election Campaign Fund-and you probably skipped it. In 2011, just 6.4 percent of American taxpayers “checked the box.”
Originally created in the 1970s to support public financing for presidential campaigns, the Fund now seems increasingly anachronistic and insignificant. After the Supreme Court opened the floodgates to unlimited campaign spending in its Citizens United decision, private political spending has skyrocketed. Neither President Barack Obama nor Republican challenger Mitt Romney has opted for public financing, and this year’s presidential race is expected to cost an all-time high of $2.5 billion, says the Center for Responsive Politics.
But while the presidential campaign fund may have lost its relevance, the $3 check-off remains an effective, easy way to raise money for a dedicated purpose. It’s simple to administer. It captures people at a time when they have to interact with government anyway. And it provides taxpayers with something rare-a chance to choose where their tax money goes.
What if this money went toward something more Americans would get excited about-such as helping kids save for college?
Instead of the Presidential Election Campaign Fund, taxpayers should get the option of sending $3 to a new fund-one dedicated to providing a dollar-for-dollar match for young people saving for college. In particular, this new fund could help support special “children’s savings accounts” increasingly being created nationwide to help lower-and middle-income children save for college.
Under these programs, children typically receive an initial deposit in an account and a 1:1 match of savings they contribute, up to a specified maximum (e.g., $500). In the pioneering Kindergarten to College program in San Francisco, every kindergartener in the city gets $50 to “seed” their savings account ($100 for those on free or reduced lunches), followed by additional incentives to save. Research finds that children with savings are not only more likely to expect to go to college, they are also six times more likely to attend than kids without savings.
A college savings match fund—in which children and their families would contribute up to $500 and the $3 contribution from tax returns would generate matching funds—could ease a major source of financial anxiety for today’s families. According to Pew, 71 percent of Americans say it’s harder to pay for college today than it was a generation ago; 75 percent say college is now too expensive for most Americans to afford. Meanwhile, a global economy demands that young people go to college if they are to succeed in the middle class, let alone compete against their peers in China, India and other aggressively developing countries.
Even a relatively low participation rate in a college savings check-off could generate significant revenues. Despite last year’s low participation, the Presidential Election Campaign Fund collected nearly $40 million. If participation levels reach what they did in the early 1970s-young savers could benefit to the tune of hundreds of millions of dollars.
Without doubt, American families could use help to keep up with soaring college costs. Many states now offer 529 college savings plans, which provide an implicit savings match through tax preferred growth of savings and, in some cases, tax deductions for contributions. These accounts, however, work best for middle- and higher-income households, while a college savings match could provide equal benefit to low- and moderate-income households as well.
While two-thirds of parents are actively saving for college, a survey by Fidelity Investments finds most parents are also far behind in their ability to save enough to meet costs. According to Fidelity, the typical family is on track to meet just 30 percent of the expected cost of college.
Helping students save for college could also reduce the growing burden of student debt. The Federal Reserve Bank of New York says the average student debt burden in the first quarter of 2012 was $24,301, while the overall balance owed by students was a whopping $902 billion. Indeed, a survey by the think-tank Demos found that 13 percent of households whose credit card balances included college costs reported leaving school to address these debts.
Perhaps most importantly, letting taxpayers check the box for college savings would bypass the partisan paralysis that has stalled Washington’s efforts to help students and their families. Instead of watching Congress squabble over support college students deserve, let Americans act on their own. Many states already do this by sponsoring check-off programs on state tax returns to benefit veterans or seniors or to fund disease research.
While a match for college savings can’t erase the growing burden of college costs and debt, it can help put children on the path toward saving earlier, saving more, and raising their college-going aspirations. With the help of this new fund, every child in America might someday have a savings account to help ensure a brighter future-and all for just $3 per taxpayer.
Anne Kim and Carl Rist collaborated on this piece. Kim is a senior policy strategist at CFED, a Washington-DC based non-profit, and senior fellow at the Progressive Policy Institute. Rist is the executive director of the 1:1 Fund, an organization that promotes savings and educational opportunities for low-income students.
Taking Risks and Advancing Innovation
By Jason Zahorchak, Guest Contributor on 09/28/2012 @ 03:00 PM
The session, “Asset Funders Network Dialog with Funders: Taking Risks and Advancing Innovation,” moderated by Amanda Feinstein of the Walter and Elise Haas Fund and featuring Brandee McHale of the Citi Foundation, K. Sujata of the Chicago Foundation for Women, and Tamitha Walker-McKinnis of the Kresge Foundation, promised to offer a “candid dialog” about learnings from both successes and failures.
The conversation did not disappoint. At one point, it shifted to a discussion of the right role for funders to play in order to encourage innovation but also select for and cultivate those ideas that will actually have impact. Ms. McHale was quick to offer that she was well aware that foundations can – and do – inhibit innovation. If I were an innovator, she said, I think I would be saying “get out of the way, funders!” on a regular basis. She stressed that Citi Foundation prides itself on its ‘No Micromanagement’ mantra, and the other funders on the panel agreed that their foundations take strong steps to ensure that they strike the right balance of guidance and autonomy.
I get the sense, however, that the funders seated in the front of the room for this session are those at the forefront of best practices in their industry. I have worked at several nonprofit organizations in more traditional fields in which funders expected us to take a very carefully predefined path, and grew very suspicious when we came back to them requesting the ability to change our game plan because of new avenues we had identified along the way that were likely to be more fruitful. I wonder how many organizations in the very experimental asset-building space face even stronger constraints from traditional funders not willing to let an experiment play out and shift along the way, or not willing to find a better blend of risk and reward in their portfolios that would allow them to select truly innovative projects in the first place. I worry that the best aspect of being a smaller, more innovative research organization – the ability to be nimble and let the question evolve along the way – is being taken away by large, traditional funders used to doing things in a certain manner and under ever increasing pressure to drive results.
There is no easy solution. But we have a warning sign to heed: the analogous situation that has already been occurring in the scientific research community for a number of years. RO1 grants, the largest rewarded for research funding from the National Institutes of Health, are getting harder and harder to win for the smaller labs seeking answers to less “safe” questions (see here, here and here). As a result, labs with more conservative research agendas – and especially the means to produce preliminary data to prove they are already on track to find a concrete answer – have an easier time continuing to answer questions much like the ones before, rather than the potentially transformational questions that might take our knowledge to the next level. My hope is that all of the important funders in the asset-building field have recognized their responsibility to identify the right risk appetite and touch to make sure we are truly exploring the transformational possibilities.
Recapping the Applied Research Forum
By Lebaron Sims on 09/28/2012 @ 11:00 AM
The Applied Research Forum started with a bang Thursday morning as conference attendees gathered in Washington 4 for the Research Forum Kickoff. Ida Rademacher, Chief Program Officer at CFED, led off with a brief overview of the Forum’s origin and history, introducing the Forum’s sponsors and setting the stage for the presentations to come. The Forum’s purpose, as stated by Ida: to “combine stories and data to move policy practice forward.”
Following the introduction, Keith Ernst (FDIC) briefly presented the most salient findings from the FDIC’s National Survey of Unbanked and Underbanked Households, released just last week. According to the survey data, 8.2% of American households remain unbanked, while 20% of households are underbanked. Three in ten households lack access to savings accounts. The data also show a significant disparity based on race and ethnicity, with 21.4% of African-American and 20.1% of Hispanic households identified as unbanked. The data also show that 30% of all unbanked households are family households headed by single women.
Following Mr. Ernst’s presentation, the panel discussion began, with Sarah Rosen Wartell (President, Urban Institute) serving as moderator and asking probing and engaging questions of our three panelists. Ray Boshara (Federal Reserve Bank of St. Louis) gave a thorough rundown of the household balance sheet, and its effect on net wealth and the wealth gap. One intriguing statistic: $1 of income typically creates $5 in wealth for White families, while the same $1 of income creates only $0.70 in wealth for Black families. As Mr. Boshara stated, “Financial access is the sine qua non of the...balance sheet,” and in order to ensure increased social mobility, the access issue must first be addressed. Cliff Rosenthal (CFPB) then broke down the CFPB’s research agenda for the coming years, which will address many of the questions regarding access that have been plaguing researchers and practitioners in the asset building field. Mr. Rosenthal also highlighted five primary themes driving the CFPB’s work in the asset building field:
- Innovation – not just promising and safe, but affordable as well
- Data (or: “Data, data, data!” – his words) – what do we know, and what’s working
- Collaboration – add value to field by working with other federal agencies
- Access – what are patterns, problems, and paths for at-risk individuals
- Scale – what is and what can be brought to scale?
Lastly, J. Michael Collins (Center for Financial Security, UW - Madison) focused on the challenges facing researchers specifically. Because the field has limited revenue or funding streams for applied research, the challenge is finding projects that move multiple funders across sectors and disciplines to action. Mr. Collins also stressed the need to make research accessible, answering tomorrow’s questions rather than yesterday’s. As Mr. Collins stated, the “struggle for researchers is to figure out the ‘So what?’.... The ‘So what?’ test is important.”
With such a great panel and an audience of engaged practitioners and researchers, it was almost a guarantee the session would go well, but the Kickoff exceeded expectations. A big thank you to Sarah Rosen Wartell, Ray Boshara, Cliff Rosenthal and J. Michael Collins for sharing their time and insight!
From Saver to Homeowner: IDA Success Stories Part 4
By Bank of the West on 09/27/2012 @ 12:45 PM
To help families achieve the goal of homeowner¬ship, Bank of the West has partnered with CFED to match the money that low-income individuals saving for a down payment and to support the nonprofits that provide financial education to these savers. This is the fourth story in a six-part series featuring Individual Development Account (IDA) program graduates from across the country. This story comes from ECDC African Community Center in Las Vegas, NV.
The Perez-Zafra Family’s Story
The Perez-Zafra family is experiencing the American dream. Political refugees from Cuba, Maria and Julio came to the United States on April 13, 2010 with their children Melani and Arnol.
Julio, a college graduate with an engineering degree, soon found a job at a hotel and casino in Las Vegas as a utility porter. Maria worked as a housekeeper and Julio was promoted in January 2011 to Equipment Maintenance Manager. Despite success in their jobs, Maria and Julio were challenged by lack of financial knowledge and bank accounts. They discovered the Individual Development Account (IDA) program at the African Community Center.
With the information they received and help from the IDA staff, the family opened a bank account. While they saved to purchase their home, Maria and Julio received financial literacy instruction and training on managing a home mortgage. The family learned that their income had become too high for eligibility for home subsidy programs, but that did not stop them from saving. With IDA funds matching their personal savings, Maria and Julio had a total of $8,000 to put down on their new home. After the IDA program, Maria and Julio started saving for retirement, and they continue to budget for vacation, emergency funds and their daughter’s college education.
Opening the door to his home, Julio proclaimed with excitement and joy, “I am an American!” Julio added, “We achieved this in less than two years’ time, can you believe it? Only in America,” says Julio, “can such a thing be true.”
The Confluence of the Anti-Poverty and Asset-Building Fields
By Sean Luechtefeld on 09/27/2012 @ 11:00 AM
One thing that has always troubled me working in the asset-building field is the apparent disconnect between people working in asset building versus those working in the “anti-poverty” field.
To be sure, the anti-poverty field is broader than asset building, and it includes a great deal of innovative work that stretches beyond the promotion and expansion of economic opportunity. Professionals in the anti-poverty field, for example, are leading the charge against hunger and homelessness for children and families. This work is a critical component of our work to end poverty in America within our lifetime.
However, since last week’s Poverty Summit, I’ve been reflecting on how that field and our field interact. It turns out, as the Society for St. Vincent de Paul points out, “we’re all in this together.” Indeed, if we are to believe the argument that asset building is the “supervitamin” that makes anti-poverty programs work more effectively, then “anti-poverty” and “asset building” are different sides of the same coin.
This recognition, though not uniquely mine, is important because it points us to the need to build stronger partnerships across this artificially created bridge.
Enter the second national Poverty Summit. Leveraging the power of the Assets Learning Conference, the Poverty Summit convened 200+ leaders in the anti-poverty field to sound the call for an expanded and more intense dialogue about how we can combat poverty. The Poverty Summit featured a number of programs, like the Neighborhood Revitalization Initiative, that are founded on the belief that partnerships between diverse organizations in both the public and nonprofit sectors are key to combatting poverty.
In many ways, the Poverty Summit served as just the beginning of what will be an ongoing conversation. I’m sure that in the coming weeks and months, participants will be asking themselves the same question that has taken me in the days since: what are the critical components needed for a plan to end poverty? This isn’t just a question for the anti-poverty field; it’s a question for all of us.
What I Stole at the ALC
By Blair Benjamin, Guest Contributor on 09/26/2012 @ 02:00 PM
There’s much I could say about the presentations I heard in the Financial Education Best Practices session at the Assets Learning Conference.
Tina Gray of Creighton University’s Financial Hope Collaborative and Syble Solomon from LifeWise Strategies are both clearly terrific trainers who make financial education fun and substantive. They have their own unique tricks and techniques for creating the ideal atmosphere, the conditions that will allow people to open their hearts and minds to the prospect of financial capability. There’s no simple recipe for it. You have to experiment and constantly work at creating those conditions to build trust and break down barriers.
As Cory Booker said in his keynote on Thursday, “Good politicians borrow, but great politicians steal” (a paraphrase of a famous line which he or someone in politics stole from T.S Eliot or Picasso or maybe Igor Stravinsky -- I’ve heard it attributed to all three -- about distinguishing good artists from great artists).
So here’s one more little thing I know I’ll bring home from the ALC, having shamelessly stolen it from Tina Gray: when her students start looking at their own credit reports, and the room is filled with the dread and anxiety of that painful exercise, she suddenly plays the theme from Jaws and much of that negative energy in the room disappears. What a brilliant touch. Next time one of my artist groups is about to open the envelopes with their credit reports, you can bet I’ll be ready to hit play on the Jaws theme, just as if I had thought of it myself.
I now realize this could be the mantra for what the ALC makes possible: Good asset builders borrow, and great asset builders steal.
Thanks to all the ALC participants who once again came with pockets full, ready to let others steal. Now go home and re-fill those pockets over the next two years. I’ll be robbing you again in 2014.
From Saver to Homeowner: IDA Success Stories Part 3
By Bank of the West on 09/26/2012 @ 10:30 AM
To help families achieve the goal of homeowner¬ship, Bank of the West has partnered with CFED to match the money that low-income individuals save for a down payment and support the nonprofits that provide important financial education. This is the third story in a six-part series featuring Individual Development Account (IDA) program graduates from across the country. This story comes from the IDA program at NAYA Family Center in Portland, OR.
When Natalie became a single mom in December 2010, she decided that homeownership would help her make a stable life for her three boys.
Natalie came to the NAYA Family Center’s Pathways Home homebuyer education program and began individual homeownership coaching. She talked with a lender who told her she needed about a year of renting on her own in order to create a rental history for herself and demonstrate that she could meet her financial obligations.
Natalie continued her work with NAYA Family Center and attended financial wellness workshops. Then she heard about the center’s Individual Development Account (IDA) Program. After a few months of working with her homeownership counselor and attending the financial wellness workshops, she felt ready to start saving. Natalie opened an IDA in May 2011.
Natalie continued her work with NAYA Family Center and attended financial wellness workshops in early 2011. At the same time, Natalie had heard about the center’s Individual Development Account (IDA) Program. After a few months of working with her homeownership counselor and attending the financial wellness workshops, she felt ready to start saving, and Natalie opened up an IDA in May 2011.
While building savings, she learned about the NAYA Family Center’s partnership with Proud Ground, an affordable homeownership organization. Proud Ground’s Community Land Trust model meant that the nonprofit owns the land and would lease it for a nominal fee to Natalie, who could make any modifications she wanted to her new house. In the future if Natalie chose to sell her home, she would sell it at a similarly affordable price to the next buyer, making the home affordable for generations to come.
After enrolling with Proud Ground, Natalie continued to save in her IDA for a year and worked with her financial wellness coach. She cleaned up errors on her credit report, paid off her debt and rented a home near her work to solidify her credit and rental history.
In January 2012, a year after she started the programs, Natalie started looking for a home and made an offer in February on the perfect house and location for her family. It was around the corner from her parents, who would help watch the boys after school, and there was plenty of room for her three boys—ages 16, 14, and 12—and their two dogs and five cats. By purchasing her home through Proud Ground, Natalie could access additional monies for home renovations. She moved into a beautiful home with a new roof, new exterior paint, some new windows and new appliances.
Natalie’s advice to other first-time homebuyers: “Be patient and organized. Keep all your financial documents together so it’s easy to access. Ask questions so that you understand what’s happening, and don’t be afraid to say that you don’t understand.”
Highlights from IDA Research Session
By Blair Benjamin, Guest Contributor on 09/25/2012 @ 10:45 AM
For an IDA wonk like me, no ALC would be complete without a deep dive into the latest academic research on participant outcomes in IDA programs. My friend and colleague Margaret Miley of The Midas Collaborative in Massachusetts moderated a fascinating panel, bringing a nice practitioner and policy angle to the discussion. The session was titled IDA Research: Recent Findings and Future Directions.
Michal Grinstein-Weiss of Washington University in St. Louis led off by taking us through her long-term research on the American Dream Demonstration IDA study that took place from 1998 to 2003. I had heard about the early results of that study, but I hadn’t heard of “Wave 4,” in which the researchers re-interviewed both the treatment group members (IDA account holders who had been randomly selected to receive an IDA from out of a larger pool of eligible applicants) and the control group members who were not selected for the IDA from the pool of those eligible and interested.
The bottom line was that the majority of these motivated people (both IDA savers and the control group) made big improvements over 10 years, even though the Wave 4 interviews were taking place in the wake of our severe financial crisis. In several areas (business ownership rates, educational attainment, retirement savings), the IDA treatment group did not statistically out-perform the control group, and one could hypothesize that since the control group members were a pretty motivated bunch, they might have found other supports for their aspirations even though the IDA account was not made available to them. However, there were indeed statistically significant improvements in home ownership rates and retention over 10 years for the IDA treatment group relative to the control group, and the researchers also observed a result that intrigued me: male participants in the IDA treatment group did experience large improvements in their educational attainment relative to male participants in the control group. The researchers did not have an explanation for that, but it was possible that the IDA intervention was particularly valuable for males pursuing post-secondary education. I’d love to understand more about gender differences in the context of IDA outcomes.
Cäzilia Loibl of Ohio State University discussed a study that explored IDA program strategies aimed at increasing savings rates and participant retention. They found strong positive results from explicitly increasing the expectation about the frequency of deposits by account holders (from once a month to twice a month), which tended to increase the total monthly amount saved, and they found that reminder calls once each month a few days before the monthly due date for deposits was quite effective. This latter result shouldn’t come as a surprise to practitioners, but I was interested in the observation about frequency of deposits.
They also found some positive results on the regularity of deposits from introducing a lottery component each month (those making deposits in a particular month would be entered in a lottery to potentially win a much larger match in addition to their normal match).
The third presenter, Greg Mills of the Urban Institute, provided an overview of the upcoming randomized control study of savers participating in an Assets for Independence IDA program. It will be exciting to see if the results mirror what was observed in the studies of the American Dream Demonstration or if the maturing of the IDA field might lead to different outcomes this time around. I’ll have to look for Greg’s presentation at the next ALC in 2014 to see what the study is beginning to reveal.
ALC 2012 in the Twitterverse
By Aimee Chambers, Guest Contributor on 09/24/2012 @ 04:30 PM
I am so pleased to have attended the 2012 ALC. It was truly rejuvenating to attend now that I am working in an asset-building field. I now have my own point of reference for when people make that recurring comment - "I didn't even know this was a THING!" I am blessed to have come into my job knowing asset building is a "thing," but I sometimes find it difficult to convince others around me to see, and truly understand, the bigger picture. I am thankful to CFED for providing me with that foundation for my post-graduate career. It was just two short years ago that I was on the other side of the registration table. Congrats to my CFED family on another successful Conference. I can attest first-hand to the tireless effort and intense thought that is put into every aspect of the ALC experience.
One of the things that particularly strikes me as awesome at any CFED event is the ability to capture the event via social media. The Communications Team makes magic – and inspires others to partake! I, for one, do not use Twitter. However, at CFED events I find myself inspired and engaged. In addition to each of the other details to which CFED’s event planners pay close attention, CFED utilizes Twitter, live blogging and each of its social media outlets to create an additional layer, another community, a virtual life at its events. Meanwhile, the larger CFED community buys in in such a way that it is always useful, relevant and, most importantly, fun.
Those taking notes, live blogging and tweeting managed to capture the event in a completely different way than simply recording sessions. Here are just some of my Tweets, and my favorite Tweets from others.
- @ideasaction: 49 different #FICOscores and a 4th big #creditbureau emerging?!?!! #whoknew #creditbuilding is #assetbuilding, #alc2012
- @ideasaction: Challenging questions about #jobcreation: does data reflect how much we need to recover or show the new norm? #alc2012
- @LebaronSims: No offense to any of the other presenters, & I'ma let you finish, but #PrepaidCards was the best session of the past 2 days. #ALC2012
- @mwgrote: Only three more hours to figure out identity of @assetpony.
- @assetpony: @CoryBooker makes me want to pick up and move my pony stall to Newark. Anyone else? #alc2012
- @assetpony: "There is way more capacity in this country than there is opportunity." - Bob Friedman, CFED Founder & nicest man on earth #alc2012
If you did not participate in the ALC "twitterverse" this time around, I hope to see you logged on and tuned in at ALC 2014 - that's likely when I'll be happily making a virtual comeback. To CFED, thank you again for having me, it’s been really great to reflect on experiencing the conference from the role of planner, participant and virtual attendee. I'm looking forward to the challenge of figuring out a new role next time around!
The Winners of the American Dream Photo Challenge
By Veronica Weis on 09/24/2012 @ 11:30 AM
Last Friday, at the 2012 Assets Learning Conference, we finally announced the winners of the American Dream Photo Challenge. Simon Bowler, a father saving for his daughter's music lessons, won the grand prize of $500 toward his goal. Lakota Solar Enterprises and Lava Buckley each won $100 as a contribution to their savings goal. All of the finalists were displayed in a gallery during the conference. For those of you who missed them, here are the winning entries:
I participated in a CFED savings program in Los Angeles and have found the organization an invaluable help to reaching my goals. I have opened a savings account for my daughter, Nikita, who is 11 and is an avid piano player. It is my hope that with the savings I get from the CFED account I will be able to get her a teacher who can take her to the next musical level and on towards her dream of becoming a musician. Thank you CFED for helping this dream slowly become a reality.
We are Lakota Solar Enterprises, a Tribal Renewable Energy company! Our van’s transmission is in need of repairs. We rely on our van to carry out our projects, bringing solar air heaters to Native American families in need. The functionality of our van is vital to our work. $500 will be a huge help for us to safely transport systems to homes! Our solar heaters provide affordable heat sources to families living at life-or-death poverty rates, and help to reduce the dependency on polluting and destructive sources of energy. Make a difference; choose Lakota Solar Enterprises!
Lakota Solar Enterprises
I received a Bachelors in Business with hopes of running my own business. Over ten years later, I still work for other people. Although I am grateful for my work experience since it has taught me various aspects of running a business, but it is time for me to finally start my own company! I would love to have an embroidery jewelry design business to create jobs and art. I have the foundation to create embroidered necklace pieces but have been saving to launch my business full time. Fingers crossed that the dream will become reality!
Congratulations to the winners and a sincere thank you to everyone who participated in the photo contest and shared their wonderful entries. We hope you keep saving for your financial future!
Winding Down: Second National Poverty Summit
By Sean Luechtefeld on 09/22/2012 @ 03:45 PM
EDITOR'S NOTE: We're bringing you one more blog post, live from the Closing Plenary of the Second National Poverty Summit. We'll have more highlights and recaps of sessions from both the Assets Learning Conference and the Poverty Summit next week, so be sure to check back often and let us know if you want to use The Inclusive Economy to share your thoughts and ideas with our readers.
After four days of incredible sessions at the Assets Learning Conference and the Poverty Summit, we're winding down with yet another fantastic presentation from Washington Post columnist E. J. Dionne.
Dionne is probing the audience to think about the role that the Church and other faith-based organizations play in advancing the anti-poverty mission. The Church, Dionne argues, does fantastic work in connecting hard-working, lower-income Americans with the services that they need and that make a lasting impact on our communities. Yet, this important function isn't widely enough known; we need to do a better job of singing the praises of the work of every person in this room.
This idea is one that has reverberated throughout today's programming. One important priority in the anti-poverty field is to change the dialogue about the approaches we take to improve service delivery. The fact of the matter, Dionne notes, is that we're doing good work. At no other time in the history of our field have we been so innovative in our approach to expanding the bounds of the mainstream economy. This needs to be known publicly, and this dialogue needs to reflect that.
On another note, Dionne is talking about the way the anti-poverty dialogue depicts lower-income Americans. The problem isn't that poorer families are irresponsible as popular discourse would suggest. Instead, these people are drowning in responsibility, responsibility that higher-income individuals don't have. This is another essential part of how we need to reshape the dialogue about poverty - support for anti-poverty programs won't succeed without the recognition that lower-income people are lower-income because of current inadequacies in anti-poverty programs. Clearly, it's the people in this room who will continue to heed Dionne's call and lead the charge to reshape the anti-poverty dialogue in America.
Still with us at the Poverty Summit? Use the Comments below to share your thoughts and feedback about this exciting keynote speech, and about the other great sessions we've brought you over the past two days.
Asset Funders Network Presents a Dialogue with Funders
By Devin Thompson on 09/21/2012 @ 03:00 PM
This standing-room-only session held immediately following the State of the Field Plenary was a candid and open dialogue between funders, direct service providers and thought leaders. Each presenter opened with a short summary of their organization and some key examples of grants and loose guiding rules their organizations have made towards innovative programs and organizations.
Chicago Foundation for Women and the Eleanor Network
- The Law Project uses housing vouchers to allow low income women to make payments against their 30 year fixed rate mortgage.
- The Idea Program is an employer located financial literacy and credit repair model targeting low- to moderate-income women in such places as head start organizations and childcare centers.
- “All roads lead to asset building outcomes [for Citi Foundation],” said Brandee McHale, when she underlined Citi’s outcomes based funding and evaluation approach.
- Citi Foundation strategically shifted their giving 2 years ago to funding scalable innovations that incorporate either public policy work or public/private partnerships. One example of this is deploying asset building into education programs, such as Citi’s partnership with KIPP Public Charter Schools.
- The Foundation has focused more on developing improved efficiency or effectiveness of programs and models already deployed in the field; most recently this has been through the addition of Behavioral Economics into financial capability training and savings programs.
- “We backed into asset building because we saw that it worked,” when financial education or training alone wasn’t enough, said Tamitha, giving the reasoning behind Kresge Foundation’s move to fund integrated service delivery at multi-service organizations.
- Kresge funds in order to prove efficacy and impact of new programs. The funding is intended to make evidence that can then be used for scaling and replicating the program.
- In the past few years the foundation has increased its focus on scaling the innovations that they have seen work effectively.
With funding innovation comes the risk that the investment won’t work out as planned. When asked about this, each partner stressed the importance of midcourse correction that can only be achieved by open and honest communication between the foundation and its grantee. As one example of this sort of midcourse program correction Brandee brought up the Citi Foundation’s support of the Partnership for College Completion, a multi-partner program including CFED, United Negro College Fund and Kipp Public Charter schools. Although the best players were brought together by the funder to implement this vision, the internal infrastructure for the new tasks involved hadn’t been fully prepared, leading to a slower startup time than originally anticipated. Underestimating the planning period for new, innovative, programs is frequently a pitfall in the process.
Innovative programs are often hard to assess during the proposal process. When asked about what guiding lights are used to illuminate the potential for an innovative grant to be successful Amanda Feinstein said that she looks at:
- Defining and determining the capacity of key stakeholders in the project
- Identifying Champions, both internal and external, for the project
- How attractive the program may be to other funders. By bringing additional funders to an early innovation, all giving less than their maximum grant size, the program has additional vested funders to help bring it to scale.
Brandee said that the Citi Foundation is especially attuned to the business model of the innovation. If it isn’t sustainable once the seed capital goes away, it might not see funding. If a business plan can be built for the program, or if an innovative long term funding source can be determined, then it increases its chance of being funded.
An example of Citi funding innovation in that way is a program for a VITA tax site that began doing in-person financial aid applications. While exceptionally costly to do each application and screening by hand, the initiative proved the demand for the service at the tax sites while spending additional resources to develop software to do the screening and application preparation automatically at the sites in the future, reducing its long term cost to a sustainable level.
One of the more hotly contested questions was if a foundation is capable of driving innovation. The funders split on this issue with Brandee, speaking for herself and not in her capacity at the foundation, feeling that innovation has to come from the field, where the demand solutions and direct knowledge of the work can lead breakthrough ideas and from whom funders can learn and help improve and iterate. Sujata summarized the opposing view that, with their large breadth of contacts and knowledge funders are able to create effective models for change and use these logic models to build and fund the deployment of effective and innovative programs.
They closed answering a question on how to make a good impression with funders:
- “Get us interested; make us want to ask questions.”
- Funders want to be partners, come with a strong concept, but not a program that is set in stone.
Closing Plenary Live Blog: ALC 2012
By Sean Luechtefeld on 09/21/2012 @ 01:30 PM
Okay, maybe not "forever," but longer would be okay. Luckily we've got the Poverty Summit! We'll see you as soon as we can.
Andrea has taken the stage to give the final goodbye. There's something about the end of the ALC that always makes me so sad. So many great people here and so many months of planning to make it great makes me wish it could go on forever.
Alright...it's time to join! On your table, you've got a postcard. Fill out the info and turn in your card on your way out. Then, go to Capitol Hill. If you didn't sign up, it's not too late.
Jose Quinonez, Executive Director of Mission Asset Fund, has been named the chair of the Consumer Advisory Board. He's also married to Jenn, which makes their child care needs difficult, since DC and San Francisco are somewhat far apart.
Jeremie Greer, CFED's Director of Government Affairs since six weeks ago, is talking about the how, what and why of federal policy change. Luckily, we all know how - those 130 people going to Capitol Hill in 30 minutes can tell you. Give them a hand!
Lucy Gorham is talking about what the Network can do and where it will go. The goal: sustainable impact using assets-based approaches. This will include time-limited, self-selected Intensive Learning Clusters.
The Assets & Opportunity Network will bring together advocates from across the country. It's comprised of a Steering Committee (11 permanent members) and 61 Lead State & Local Organizations. So far, we've also got over 500 General Members, and everyone else at the Conference will join by the time they go home.
Brooks: I'm in awe over how far we've come. Along the way, CFED and the field have changed, learned, adapted. As E. Robinson said, we need to change the policies that define the rules of the game.
What is a social movement? It's mission-oriented, flexible and fluid, and learns from outside the movement. It can't just be a couple organizations, it must be uninstitutionalized, and it should be willing to make mistakes and learn along the way.
Katcher: "There are academics who spend their lives trying to understand social movements." Sean: "Guilty."
Robin is talking about the importance of networks in social movements. My professional and academic worlds are colliding!
Jenn Brooks is introducing Robin Katcher, Founding Director of Management Assistance Group.
Eugene's call to action: listen to the other speakers on the ALC stage, and then swarm Capitol Hill!
Eugene Robinson predicts that President Obama will win re-election. I'm obviously unbiased, but I'd be okay with that. Seems like the 1,000+ people in this room agree.
Robinson: "Those of us who yak on television should do a better job. We have collective Attention Deficit Disorder and need to get better." Perhaps, but I think that folks like Eugene Robinson do a good job. Sure, talking heads don't always get it right, but they do much to frame, shape and inform the national dialogue.
Let's come up with a list of what shouldn't determine your economic mobility: race, the ZIP code into which you were born, gender, ethnicity, religion, color of your skin, regressive policy...
In this election, both candidates are dwelling on who said what ten years ago. Rather than talking about that, let's talk about economic mobility. Let's add assets and opportunity to the discussion, and then we can get back to figuring out what happened a decade or two ago.
Robinson: "I called my parents and told them they had lived to see the election of the first African-American President of the United States." I don't know why, but I still get chills thinking about that symbolic moment.
I believe that what's at stake [in this election] is nothing less than the American Dream.
Robinson: Thank you for giving me an afternoon off from the presidential election from Hell. And for giving me the afternoon off from my colleagues at MSNBC!
Jenn is introducing Eugene Robinson!
Jennifer Brooks, Director of State & Local Policy for CFED, has just taken the stage. We're ready to officially launch the national Assets & Opportunity Network!
Experimenting with Credit-Building Products
By Blair Benjamin, Guest Contributor on 09/21/2012 @ 01:20 PM
Daria Sheehan of Citi Foundation moderated a terrific session on the practice of introducing secured credit card products as a credit-building tool. Despite a somewhat unwieldy title for the session (Promoting Financial Capability by Improving Access to Financial Products: A Winning Strategy for Building Consumer Credit), this was actually the most tightly organized session I attended today. The threads connecting the work of Vikki Frank at Credit Builders Alliance with the credit-building program led by Sheri Flanagan-Vasquez of Justine Petersen (an oddly named but impressive organization) and with Joyce Klein’s Aspen Institute FIELD Program were very clear. We got a glimpse into an exciting program strategy from various angles - including the roles of a national network builder, a practitioner, and a funder and policy maker.
I have to admit: I’ve always worried about the risks of encouraging the use of a credit card product as an explicit credit-building tool. The theory made sense, but the practice seemed open to all sorts of problems.
It was great to see how a carefully designed program can minimize those risks. These credit-building programs have carefully chosen their product, a Banamex USA Secured Credit Card, to fit the needs of a vulnerable target population. And they’ve built a robust counseling and coaching structure around that product, which all of the panelists agreed would be essential for successful credit-building. They’re also doing rigorous data collection and analysis to see what really works and tweak the model as they go forward.
There’s a pretty steep learning curve. The credit-building rationale for a secured credit card is foreign to most of the target market and even many of the staff who would be selling the product. Sheri emphasized that a product approach to credit-building requires salesmanship that not all asset-building practitioners are comfortable with, so selecting and training staff for successful roll-out of this kind of product is critical. Staff have to accept the possibility that some clients will make mistakes and end up with “derogatories” on their credit report, but even that can be a teaching moment and potentially lead to a great understanding of how credit works down the road.
I’m excited to learn more about how a program like this achieves scale. Product-oriented asset-building certainly offers opportunities for scaling, but this hybrid model (with a lot of embedded financial coaching) is far from an inexpensive proposition for most organizations. This session didn’t dwell on the resource development strategy for product-based credit-building, but I suspect that will be an important focus of the next phase of this pilot programming.
Protecting and Rebuilding Communities
By Elvis Guzman on 09/21/2012 @ 01:15 PM
Home equity is the primary source of wealth accumulation for millions of Americans. Buying and maintaining a home has a significant influence on family well-being and for the generations that follow. Unfortunately, the recent burst of the housing bubble has proven devastating for millions of Americans. Since 2007, 9 million households have lost their homes due to foreclosure and the net-worth of the medium household has dropped by 39 percent. These statistics are even greater in communities of color which have historically struggled due to systemic barriers.
Today, local, state and national leaders in the housing field came together in one of the ALC sessions and explored what we can do to help the those families who are losing the homes they worked so hard to own. The speakers spoke of the need to mobilize grassroots networks and coalitions comprised of consumer groups, service providers and researchers. Advocacy at the local and state level may prove successful in limiting foreclosures through regulations, such as eliminating dual tracking. Mediation programs are also important because they bring financial institutions to the table to work with consumers towards a mutually beneficial solution.
It must be stressed that while localities and states are important for small changes, big change will need to come from the federal government. Therefore we must all come together to advocate for better housing policies with reasonable foreclosure practices to help rebuild our nation's communities.
Six Must-Knows for Capitol Hill Visits
By Tianja Grant, Guest Contributor on 09/21/2012 @ 01:00 PM
As a nonprofessional advocate, I appreciated hearing from two people who have around 30 years of combined experience on the Hill. Jeff Hammond and Bill Zavarello spent a session telling us novices what works and what doesn't when it comes to advocating with Congresspeople. To help ease the knocking knees and pounding hearts, here is their best advice for a successful meeting:
- Be prepared. Frame what you are describing In the context of where you're going. Tailor your message with how what you're asking for benefits their constituents. Relate your message to what's going on in that person's district. Advocacy is "fundamental salesmanship."
- Be confident. The role advocates play in the decision-making process is huge. Legislators don't know everything; it's up to us to educate them. You are the expert, so speak authoritatively about the work you represent and the federal programs that help you do it. The person you're speaking to may not even know that these programs exist. Describe the people affected, the people who live in the communities they're elected to represent. Be specific on what you are asking the legislator to do (co-sponsor, vote, support).
- Don't think that meeting with staff instead of the actual congressperson is bad. Yes, Congress is on its way to recess and an election, but staff is not. The legislative staff speaks directly into legislators' ears and this is the best time to set the agenda for the next session. They are most open to considering new ideas now. However, make sure you don't end up with just any junior staffer. Make sure you get to speak to someone senior with who is responsible for the subject area about which you're speaking. If someone critical can't be present at your meeting, leave behind information for them with their colleague.
- No matter how tempting, do not give political advice. Just be straight about the policy's impact and substance. Don't try to spin it.
- Follow up. Advocacy is not a one-off. Make sure you get the business cards of the people with whom you're meeting and get the contact information for the district representative on the issue on which you're working. Cultivate those contacts by staying in touch with them. Don't forget to visit your legislators when they return to their home states.
- Report back to the CFED Policy Team how the visits went, so that they can stay on top of the legislative climate. Your feedback matters. Please email Katherine Lucas-Smith at firstname.lastname@example.org
Impactful Investing: Leveraging the Full Range of Philanthropic Resources
By Devin Thompson on 09/21/2012 @ 12:45 PM
This session covered the ‘other 95%’ of a foundation’s financial resources and how they can be unlocked to drive social impact. Impact Investing was defined for the session as an investment with social benefit that also returned the invested principal and an additional yield. Impact Investing is a growing opportunity to connect investors with underserved communities in a way that serves the needs of both groups. Over time this transaction can be a powerful way to build mutual respect between two constituencies that otherwise may not interact.
Lisa Hall, President and CEO of Calvert Foundation, served as the moderator for the sessions. Dan Letendre, CFED Board member, is the CDFI Lending & Investing Executive for Bank of America. Tony Berkley is Director of Mission-Driven Investing at W.K. Kellogg Foundation.
Impact Investing is separated into two major categories. Market Rate Investments including Socially Responsible Investing:
- Started as Negative Screening, moving funding out of investments that had direct negative social consequences, such as the disinvestment from South Africa by US agencies in the mid 1980s.
- More recently this includes Affirmative Screening, specifically choosing to invest in opportunities due to positive reasons that may include organizations that pay a living wage to their employees, diverse or client-centric board representation, and socially conscious board governance rules.
Below Market Rate Investments make up another major category where the investor opts to take an opportunity cost in order to have an increased social impact with their funds. Of interest, none of the speakers at the session actively pursue funding investments of this sort.
Impact Investing can include many different asset classes, ranging from local government bonds with a specific community development use to private equity shares in a firm designed to have social benefit.
Lisa thinks that the next stage in mainstreaming Impact Investing is to increase the uptake of 401(k)s by linking the investment with the community’s improvement, greatly increasing the amount if liquidity used for impact while also giving a good return and further incenting retirement savings.
Impact Investing generally asks for a tradeoff between return and impact. Each individual investor needs to decide to focus on one of three variables: Impact, Return, or Risk. Bank of America specifically works to limit Risk in its loans to CDFIs, forgoing the level of the yield for a guaranteed return of their principal. Dan Letendre gave a wonderful example of this balancing act, “nobody has the emotional equanimity to balance greed, fear and desire at the same time.” To resolve this problem he creates a synthetic investor, matching Bank of America with an additional funder with differing goals for their investments. This mixed demand on the funded organization he believes helps maximize the use of both partner’s funds.
The current $86 Million Mission Driven Investment portfolio at the W.K. Kellogg Foundation had a 6% return in 2011 and led to 25,321 vulnerable youth receiving additional services, ranging from improved lunch programs in schools to real time assessment of individual student learning in the classroom.
During a lightning Q&A the attendees requested additional information.
Who else is practicing this sort of investing?
F.B. Heron Foundation was the early adopter and paved the way for many of the current practitioners. Omidiyar Network is a for-profit model giving equity capital to social ventures.
Is it worthwhile for someone to start a hybrid entity (L3C) to try to go after Impact Investing?
Tony mentioned that Kellogg does fund hybrids, but that they do not fund start ups. Lisa followed up saying that she sees the demand for startup capital in the market but that very few Impact Investors are looking to be the supply as equity funding is only being bridged by a couple of sources.
How are Social Impact Bonds looked at by Impact Investors?
Both Bank of America and the W.K. Kellogg foundation see significant potential in returning equity for outcomes but as of yet none of the speakers have actively funded this innovative model and are watching for early outcomes out of the recent New York City Bond.
Building Emergency Savings
By Blair Benjamin, Guest Contributor on 09/21/2012 @ 10:30 AM
I was interested in the session on “Building Emergency Savings” because I find myself talking a lot about how important it is to not overlook emergency savings, but I feel like I haven’t had a concrete programming strategy to encourage it.
With my personal bias toward matched savings as a particularly effective programmatic tool, I was drawn to the Start2Save program launched by an organization I greatly admire, Opportunity Fund, based in San Jose, CA.
What I love about this program is how it’s founded on the idea that savings itself can be an asset. Low-income families need liquidity to deal with unexpected costs, and we practitioners talk about empowerment and responsibility but (in my opinion) our traditional asset-building programs sometimes over-monitor and over-prescribe how savings can be used. The Start2Save accounts still offer the match incentive, but they allow much more flexibility and autonomy to the saver, and they’re intended to be a mainstream savings product with regular account features (ATM cards, etc.) rather than a special custodial or escrow account. Opportunity Fund is finding that this autonomy doesn’t lead to people somehow gaming the system and not using the funds in ways that “we” would like to see them use those funds. It’s a refreshing and important experiment in the possibilities of the matched savings account.
I strong recommend checking out this article on the Citi blog (Citi is the financial institution partner for these accounts), which also contains a nice video, under three minutes long, introducing the program.
Currently reading page 16 of 53.