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.
Friday Morning Plenary Live Blog: ALC 2012
By Sean Luechtefeld on 09/21/2012 @ 09:00 AM
The 1:1 Fund is launching! We haven't quite cracked the code, but it's been 12 years in the making. Visit 1to1fund.org to give us our feedback, help us figure out how to mobilize the public in the interest of children's savings.
Bob Friedman: My favorite sessions have been the ones in the hallway. None of what we do could happen if not for what you do.
Yesterday, I moderated a session about how we talk about assets, where the key takeaway is that in order for us to get support for asset building, we need to tell empowering stories. La Terra, Tiara and Jennifer are those stories, and I couldn't be more thankful for their insights today.
"Every scholarship I see, I'm applying for it."
How did you/will you cover all the expenses of college, since your savings isn't quite enough? Loans, scholarships, etc.
La Terra: Knowing that someone is thinking about your future makes all the difference. If someone else thinks about your future, it's more likely that you'll think about your future.
Kanter asks what advice La Terra, Tiara and Jennifer have for parents who want to advance their children's financial security. La Terra: build in the culture of expectation early on. Fewer than three percent of children in foster care, for example, go on to college.
La Terra makes an excellent point: it's great to tell people to manage their money well, but to actually do that, you have to have money to begin with. Financial education works better with a seed deposit and/or savings matches so that you not only get the know-how, but the practice as well.
The teacher in me loves hearing about these students' stories. I know first-hand that most people have to work incredibly hard to get into higher ed. That these young women have faced more barriers than most, and yet still see the value of a college degree, proves that with the right weapons in our arsenal, we can fight the war against low graduation rates in lower-income communities.
Our savers are La Terra (Mile High United Way, Denver, CO), who is in her second year of law school (!), and Tiara (Maya Angelou Charter High School, Washington, DC), who is now a sophomore at Trinity University and the first in her family to go to college. We're also hearing from Jennifer, who attends a KIPP DC school and plans to become a math teacher after she goes to college.
We're about to hear from savers who are living proof that the strategies Under Secretary Kanter is talking about really work.
Graduating kindergarten should be just one example of moving on to the next level. After that, there should be graduation after graduation to get children to college and with a degree for a lifetime of economic security.
Lots of folks here at the ALC are thieves! Martha Kanter, too, talking about stealing the ideas. Go steal some ideas of your own by checking out the idea chalkboard in the foyer outside Salon 1 of the Marriott Ballroom.
President Obama's initiative: make sure that we're back to #1 in college completion by 2020. Definitely doable, but what will it take?
Kanter: What evidence do we have that children's savings programs work, and how do we connect that evidence to our practice?
It's Wyoming, y'all.
Martha Kanter, Under Secretary of Education, just took the stage. She's a bit short :)
Speirn: Having a leader like Treasurer Cisneros to champion programs like K2C is a powerful symbol which will make these programs work.
In Kalamazoo, every student who graduates from high school gets waived college tuition to any Michigan university they get into. The problem is that so many lower-income students aren't getting to that finish line. Question: What do we do to change that? Answer: matched savings accounts.
Speirn: "Too many people cringe when they hear 'capitalism' because they associate it with capitalists...but CFED has democratized capitalism."
Anne Mosle just introduced Sterling Speirn! "It's hard to be sandwiched between Anne Mosle and Martha Kanter."
Mosle: Remember the power of aspiration. Sometimes, all that someone needs to go to college is the belief that they can go to college. You won't figure out how to finance it if you believe it's out of reach.
How do we think about social capital, use its power to build relationships that move families forward toward prosperity?
Anne Mosle: There are some relieving signs that progress is being made. We can take a breath, but we've got to keep going. Poverty has leveled off, but asset poverty continues to rise.
Andrea just announced the three winners of the American Dream Photo Contest! Check out their photos and stories in the Gallery Walk, located near the Registration Desk.
Cisneros: "We want to be the pilot for CSAs." Luechtefeld: "You already are! San Francisco is leading the way..."
Families have deposited over $120,000 since the launch of the Kindergarten to College program two years ago. Wow!
What does the ideal Children's Savings Account product look like? It needs to begin early, be universally accessible, include seed deposits, offer incentives and be linked to financial education (ideally in school, like what's now happening in San Francisco).
Andrea has just taken the stage after a touching video called A Foot in the Video. You can get a free copy of the video at www.afootinthedoor.info.
How Self-Employment Becomes Cooperative Employment
By Blair Benjamin, Guest Contributor on 09/21/2012 @ 08:45 AM
The session titled “Innovations in Entrepreneurship” introduced attendees to various approaches to building assets through entrepreneurship assistance, which is a topic close to my heart (it’s the core of my own Assets for Artists program). We learned about national work by Noel Poyo’s National Association of Latino Community Asset Builders and Elizabeth Isele’s Senior Entrepreneurship Works program, and examples of local initiatives including WAGES in Oakland, CA, and work in San Francisco’s Mission District by Luis Granados’ Mission Economic Development Agency, which I blogged about yesterday after attending the “Tax, Savings & Entrepreneurship Institute.”
What struck me the most after the session was the model pioneered by WAGES. Alex Armeta discussed how they build worker-owned green cleaning businesses that generate healthy dignified jobs for low-income women. Most of the co-op members have been sole proprietors in the past, and have chosen to pursue their work in the more mutually supportive environment of the worker-owned co-op.
Alex made a strong case for how asset-building in a worker-owned co-op is still very much asset-building. Members automatically accumulate savings in the form of retained earnings. Median retained earnings of their less mature co-ops are $3,422, and members have the opportunity to take emergency no-interest loans from the co-op, which effectively removes them from the predatory lending world. The co-ops also develop human capital assets. Most recently, WAGES has begun developing partnerships that can help the members put some of their profit distributions into appropriate financial products and providing customized financial education and coaching to assist with savings, credit building, etc.
I had heard of WAGES before, but this session got me thinking that even as we champion the stories of the self-employed and seek to help them as solo entrepreneurs, there are some entrepreneurs who succeed better in this hybrid world of worker-owned co-ops. However, there seem to be very few models of support for the difficult challenge of establishing successful worker-owned co-ops. Alex noted that they’re interested in looking at other industries where they can work with partners who have industry knowledge that can be matched up with WAGES‘ knowledge about developing and supporting worker-owned co-ops.
I’ll be thinking more about how the industry I work in (serving self-employed artists and artisans) might present some opportunities to explore co-operative business development in a more rigorously supportive way. I can think of many overwhelmed sole proprietors who might thrive in a co-operative business, if the right supports were in place. Yet another idea to further research back home.
Today in Democracy: The Homeowners No One Thinks Of
By Sean Luechtefeld on 09/20/2012 @ 08:45 PM
In yesterday’s newsletter, we mentioned that the Fall 2012 edition of Democracy: A Journal of Ideas, includes a symposium on asset building titled “The Forgotten Forty Percent.” Today, we’d like to suggest another important read for the 1,200+ participants of the Assets Learning Conference working to advance America’s assets agenda.
“Manufactured Housing: The Homeowners No One Thinks Of” examines the importance of resident ownership of manufactured home communities. The essay’s authors, Paul Bradley of ROC USA® and George McCarthy of the Ford Foundation, point out that owners of manufactured homes tend to go unnoticed, thanks largely to a culture that tends to forget the value these homes offer as important sources of assets. Yet, when the value of manufactured homes as affordable sources of income is realized, the asset-building potential for millions of owners of these homes is immense. To maximize this potential, promoting resident-owned cooperatives for manufactured home communities can keep lot prices stable while ensuring any dividends on the appreciating value of these lots is returned to the owners for use in other asset-building activity.
Bradley & McCarthy paint a vivid picture of the fascinating and complex field of affordable housing and the role manufactured homes can play. To read their analysis, check out “The Forgotten Forty Percent” in your Conference bag today.
Get Ready for Capitol Hill Visits
By Sean Luechtefeld on 09/20/2012 @ 07:30 PM
Capitol Hill Visits kick off tomorrow at 2, when you’ll board buses outside the 24th Street entrance of the hotel. There are two important steps to make sure you’re ready to advocate. First, make sure you’ve picked up the Capitol Hill Visit packet prepared especially for you by CFED’s Government Affairs Team. If you haven’t already received the packet, stop by the Registration Desk. Second, be sure to attend the special Capitol Hill Visit Training during Concurrent Sessions II. The Training will be held from 11 am – 12:15 pm today in Washington I, located on the lower level.
If you have any questions, don’t hesitate to stop by the Information Desk next to Registration.
Tomorrow @ ALC
By Sean Luechtefeld on 09/20/2012 @ 06:30 PM
I hope today’s busy schedule left you feeling excited about the potential new directions for your work (if not a little tired, too). Here’s what tomorrow has in store for you.
The morning kicks off with breakfast at 7 am in the Marriott Ballroom. You’ll want to make sure you’re downstairs and ready to go, as we’ll have a special film screening at 7:30 while people finish their meals. Then, we’ll jump right into our Conversation with Accountholders, moderated by Under Secretary for Education Martha Kanter.
After the morning Plenary, we’ll have two more blocks of Concurrent Sessions. At 9:30, consider checking out “Building Credit as an Asset: The Power of Rent” in Virginia B, brought to you by our friends at Credit Builders Alliance. At 11 in Maryland B, the W. K. Kellogg Foundation will present “Piggy Banks and the Public Sector,” which will explore effective partnerships to promote children’s savings.
Perhaps the saddest news of the day is that like all good things, the ALC must come to an end. To conclude this year’s Conference, our Closing Plenary will offer a Call to Action and mark the official launch of the Assets & Opportunity Network. If you didn’t sign up for the Network when you registered, note that it’s not too late!
After the Closing Plenary, buses depart for Capitol Hill Visits outside the 24th Street Entrance of the Hotel. If you’re not attending the Hill Visits, we’ve got something for you, too. At 2 pm, the second national Poverty Summit kicks off with a Poverty Simulation in the Thurgood Marshall Ballroom.
We hope the last day of your Conference is enjoyable, and that you’ll let us know how we did by dropping off a Conference Evaluation on your way out!
Behavioral Economics 101
By Elvis Guzman on 09/20/2012 @ 06:20 PM
With the help of the Citi Foundation, today some ALC attendees took part in a Behavioral Economics 101 session. One of the major challenges asset-building organizations face is how to ensure people follow through on intentions. Many in the assets field work hard to provide families with opportunities, yet families often continue to fall short of their goals. Why is this? Why would people choose not to better themselves by investing in their future? The fact is that every day all of us make financial decisions that may or may not be to our best interest. Could it be that some of us are more "financially savvy" than others? Financial education is certainly a piece of the puzzle, but the speakers in this session emphasized the need to think beyond financial education - families need to build financial capability.
How do we build financial capability? Behavioral economics can help us understand the process of decision-making. People think in a certain way due to their life circumstances. In fact, there are many influences to decision-making and actions. A person experiencing extreme poverty thinks and acts differently than a middle-class individual who faces fewer financial challenges. Behavioral economics has made significant strides in the past few years to help the assets field understand problems and find appropriate solutions.
Unfortunately, not all solutions work for every situation. This makes it difficult for practitioners trying to help people make the right decisions. Some possible solutions which the behavioral economics field has found successful are reminders, incentives, and commitments from both practitioners and program participants. These strategies may not be successful in every circumstance but they are a good starting point in helping people stay the course and better themselves and their families.
The behavioral economics session was a great success with an eager and active audience. CFED would like to thank our guest speakers and the ALC attendees who helped make it into an informative and fun meeting.
Immigrants' Access to Financial Products and Services
By Jimmy Crowell on 09/20/2012 @ 06:15 PM
Often times, immigrant communities across the U.S. are not part of the financial mainstream and lack the knowledge and resources to achieve financial inclusion. New York City's Office of Financial Empowerment (OFE) and the National Council of La Raza (NCLR) have undertaken extensive studies to identify the main barriers to financial inclusion for immigrant communities in the U.S. and what missed market opportunities exist.
OFE is the first local government initiative in the U.S. with a mission to educate, empower and protect low income New Yorkers so they can build assets and make the most of financial resources. With this mission in mind, OFE undertook the monumental task of surveying 1,324 New Yorkers in the Chinese, Mexican and Ecuadorian communities on their financial behaviors and relationships with financial institutions. The main findings of the survey were that structural and non-structural barriers to financial institutions exist, respondents were more likely to have long term savings aspirations like starting a business or saving for education and that savings behavior was prevalent, with savings rates higher among banked respondents.
NCLR undertook a similar survey of 1,038 Hispanics in California that attempted to identify pathways and barriers to financial inclusion for Hispanic immigrants. Of the 1,038 respondents, 20% were unbanked with the main reasons being concerns about immigration status and fears of identity theft. A main takeaway from NCLR's survey was that there is a great need for fundamental financial education to foster trust and understanding of financial institutions among the Hispanic community.
Both of these surveys offer great insights into the relationships immigrant communities have with financial institutions and what blocks them from financial inclusion. With these takeaways, financial products and services can be designed to address the structural barriers that dissuade immigrant communities from engaging financial institutions.
Which Assets Matter?
By Kate Griffin on 09/20/2012 @ 05:45 PM
I just attended the Applied Research Forum’s “Which Assets Matter” session, so I could really understand the role that assets play in moving people out of poverty – and hopefully use that knowledge to think through the right sequence of products and services a low-income household needs to sustainably move out of poverty and into self-sufficiency.
Here are some interesting thoughts from the session:
- Emergency savings matter. Many low income households are unprepared for crisis – they are at greater risk of falling deeper into poverty when a shock occurs. We all know it’s hard to build that emergency savings pool. But can having an emergency savings pool affect economic mobility? Leah Gjertson (Center for Financial Security at the University of Wisconsin-Madison) found that (1) those who have an emergency pool are more likely to be savings for retirement, an auto, or education, and are less likely to experience economic hardship; and (2) those without an emergency pool are more likely to experience a hardship such as not being able to pay for medicines or having a utility disconnected. But that leaves us with further questions – what makes someone more or less likely to create an emergency savings pool? What did that savings pool look like – how often was it dipped into and restored, and for what uses? Many are already working on these issues.
Another compelling question: How do we ensure that when families are no longer asset poor, they remain that way? Tammy Leonard at the University of Texas at Dallas worked with Wenhua Di at the Federal Reserve Bank of Dallas to explore this question.
- Tammy explored first whether there is a threshold beyond which households won’t build assets because they are focused on daily survival. (We wonder whether there is a relationship to WOW’s Economic Self-Sufficiency Framework) She did find some evidence that accumulating assets greater than or equal to 75 percent of the income poverty line leads to less re-entry into asset poverty. Frank DeGiovanni of Ford Foundation, who moderated the session, points out that achieving this level of asset ownership (roughly $15,000 in assets for a family of four) would basically mean home ownership for low-income households – a goal we all care about, and know how difficult homeownership for all would be to achieve.
- People are less likely to fall back into asset poverty when (among other things): they are older and more educated, they have cars and homes, and they exhibit asset building behaviors after re-entering asset poverty, including by paying down debt.
- Higher debt ratios are associated with falling back into asset poverty.
- Asset diversification is unrelated to re-entering asset poverty.
Note that there is some caution in using this data – it only looked at households in two-year intervals, so the researchers did not see any movements in or out of asset poverty between those points in time.
All of this generated intense discussion in the room. Some thoughts that arose:
- Do families segment their thinking about financial stability (where emergency savings lives) from economic mobility (where asset building lives) – and is that why you don’t see the correlations between the two so strongly?
- We are promoting asset building – but to do that requires incurring huge amounts of debt, both to boost your credit score and to acquire said assets. Isn’t that too much of a disparity?
- Could we do research around pairing of emergency savings (perhaps with a match) that can be combined with a secured credit card to help people move from short-term needs to long-term needs. Will that improve economic mobility? Can we use credit union data to help with this?
How to Talk about Assets
By Sean Luechtefeld on 09/20/2012 @ 05:30 PM
This afternoon, I had the pleasure of moderating a session called “How to Talk about Assets: What Works with Policymakers and Allies.” The session included Wendy Yaross of Hattaway Communications, who presented compelling research commissioned by the Ford Foundation, and Janet Byrd of Neighborhood Partnerships in Oregon, who discussed how assets messaging research can make a difference in how we approach on-the-ground asset-building strategies.
I was excited to moderate this session because as a communications professional in our field, there are constantly issues with which we must grapple. Part of this comes from the fact that our field is diverse, both in terms of the viewpoints it promotes and the perspectives it encompasses. It’s clear, for example, that the perspectives of policymakers and the perspectives of practitioners aren’t necessarily alike. How, then, do we package the right message for the right audience that persuasively makes the case for asset-building approaches that create financial security?
“How to Talk about Assets” made great headway in answering this question. To share just some of the insights, I compiled my top takeaways from the session to share with those of you who weren’t able to attend the session.
- Some themes compel, regardless of audience. Hattaway’s research that Wendy presented finds that tangible and personal benefits, financial independence, opportunity and the protection of social security are all themes that resonate well, regardless of whether you’re talking to a policymaker, a funder/advocate or members of the public at large.
- Stories empower, and empowering stories are critical. We often hear about the need to “put a face on asset building” by personifying those who benefit from programs that create financial opportunity. Both Wendy and Janet spoke to the power of creating a narrative of empowerment and aspiration.
- Messages need to present the problem, appeal to values and present solutions. As Janet noted during the session, audiences can’t be moved to act (regardless of the “ask”) if they don’t see the problem with the status quo. Likewise, assets advocates need to make the case for their audiences for why they should care, and they need to be ultra-clear on the solution. Why, for example, does the solution address the problem and create a vision for long-term financial stability?
Did you attend “How to Talk about Assets?” Use the Comments below to leave your top takeaways and share your own stories about messaging the work of the assets field!
Getting Ready for Capitol Hill
By Blair Benjamin, Guest Contributor on 09/20/2012 @ 05:15 PM
Thanks to a session with several government policy staff from CFED and a couple of guest experts, I now feel armed to speak with my Senators tomorrow afternoon.
I was interested to hear the opinion of Jeff Hammond of Van Scoyoc Associates that with the changes that have swept our political system the last few years, it may be that our best chance to achieve major improvements in asset-building policy will come from approaching it through entitlement reform rather than tax policy. Four years we were talking about tax policy as the big issue that could open doors for asset-building policy, but we may need to shift our emphasis.
I was also glad to learn more about what it means to seek re-authorization of the Assets for Independence (AFI) program, a campaign which was raised by CFED in 2009 but failed. CFED is now looking to bring it up again in 2013 if any Republicans will co-sponsor the legislation. I was puzzled why we even still have AFI if it failed to be re-authorized in 2009. What I learned is that while a typical federal program can be funded and continued year after year without re-authorization as long as funds are appropriated in the annual budget, it’s the process of re-authorization that helps to cement the federal support in place over a longer period (it would be much more difficult to take funds away from a newly re-authorized program), and re-authorization allows policy-makers to make improvements to the program. In the case of AFI, such re-authorization improvements might include adding new asset goals, increasing the income eligibility guidelines, and better addressing the asset limits of the program.
More information about AFI re-authorization is available here on the CFED website.
Highlights from "Integrated Service Delivery"
By Kate Griffin on 09/20/2012 @ 04:00 PM
Bank of America (BoA) sponsored a great conversation with Erica Lowitz from Local Initiatives Support Coalition (LISC) and Carolyn Seward of Better Family Life that boiled down the essential elements of integrating social services into one delivery mechanism for low-income families.
Invoking the likes of Tim Tebow and Robert Griffin III, moderator Wynne Lum from BoA helped us understand how picking up supplies and groceries for your football tailgating party has dramatically changed over the years – and now we only have to go to one store for everything we need. That is the definition of integrated service delivery.
Erica Lowitz from LISC highlighted their innovative Financial Opportunity Center (FOC) model – based on the Annie E. Casey Foundation Center for Working Families model – which helps families find a better job, identify and apply for public benefits, and act on financial counseling. The metrics they are tracking are increases in net income, increases in credit scores, and increases in net wealth.
Carolyn Seward discussed the MET Center – a Center for Working Families in the St. Louis area. Through their integrated work, she has found that bundling leads to longer-term engagement with households, and the effectiveness of services increased as a result. Therefore, they have better customer retention, and saw an increase in participant’s wages due to this approach.
Things I think are essential to take away from this discussion are:
- Sequencing is important – you have to meet households where they are. If they walk in the door and expenses exceed incomes, it’s inappropriate to start the conversation with why they should start saving money. They have a different crisis to solve for first.
- You have to understand everything that affects the success of the low-income person – for example, if they come into the door looking for a job, you have to look at their credit score and repair that if there is a problem – or it will affect their ability to get a job when an employer looks at the credit score.
- Metrics are so important to integrated service delivery – everyone involved in the service delivery has to agree on the metrics that matter, and how they will be measured. Performance-based contracts need to be used. And, there needs to be one data system collecting all the data. Then, everyone is acting from the same foundation and with the same information and incentives.
- Integrated service delivery is about adding on services – but in order to do that well, you have to recognize that people walked in the door for one reason (e.g., to get a job). In order to give them the suite or bundle of services you want, you have to do it before the person gets what they came for, and make it mandatory. Once they get what they came for, you’re unlikely to see them again. Moreover, you should bundle services when someone is coming for a patient service (one that takes time to deliver, like workforce training or getting a job) rather than transactional (such as emergency cash assistance). But, if you make the mandatory services good – people will come back. Seventy percent of participants come back from more after the first financial counseling session, even if that wasn’t what they walked in the door to do.
Recap: Measuring and Understanding the Racial Wealth Gap
By Elvis Guzman on 09/20/2012 @ 02:15 PM
Today the 2012 ALC hosted a concurrent session sponsored by the Ford Foundation, "Measuring and Understanding the Racial Wealth Gap." Kilolo Kijakazi from The Ford Foundation moderated this jam-packed session with a widely diverse audience. The speakers engaged the attendees with a vast array of wealth and income data which show a clear discrepancy between non-Hispanic Whites and other racial minorities. These include the fact that White households have 18 times more wealth than Hispanics and 20 times more than African-Americans. Ms. Kijakasi emphasized that the current gap is a structural problem and not just a product of individual factors. There are a number of institutional practices and flawed policies which have permeated throughout the system since the Great Depression.
Speakers in this session included Rebecca Tippet, University of Virginia, and Derrick Hamilton, The New School, which highlighted the importance of building and maintaining financial wealth. Buying a home or getting a post-secondary education are some of the most important factors which can expand the economic opportunities of all Americans. Unfortunately, African-Americans and Hispanics continue to stand at a disadvantage. Mariko Chang, another speaker and an Independent Contractor, chimed into the conversation by including the continued struggles of women in accumulating wealth. Single women, and African-American women in particular, have less access to the “wealth escalator” than their male counterparts.
The session ended with a very passionate Q&A portion in which audience members asked what the field could do to remedy these problems. Speakers cited the need to advocate their policymakers and work together to address the gap. Overall, this session spoke to many of the participants. The racial wealth gap continues to affect our daily work and it is an issue we must face head-on to advance the future of all Americans.
Copy of Luncheon Plenary Live Blog: ALC 2012
By Sean Luechtefeld on 09/20/2012 @ 01:30 PM
Sean Luechtefeld (10:33 pm): You know, this was a lot of fun! So much fun, in fact, that we should do it again. We'll see you back here next Thursday, October 11 at 9 pm EDT for the first and only Vice Presidential Debate. Meanwhile, continue the conversation on our Facebook page and via Twitter, and remember that you don't get to complain about the outcome of the November 6 election if you don't get out and vote!
Kim Pate (10:32 pm): One role of government is to provide ladders of opportunity, create jobs by supporting the self-employed, small businesses and community revitalization.
Sean Luechtefeld (10:31 pm): Governor Romney: "What kind of America do you want to have for yourself and your children?" That really is the question, isn't it?
Anne Kim (10:30 pm): With only a few minutes left to go, the ultimate "winners" of this debate (and the election) are supposed to be the American people. This debate notwithstanding, let's hope that's the case come November 7.
Sean Luechtefeld (10:28 pm): President Obama: We need to let go of some of what the most extreme parts of our parties want us to do and do what we know is right. Yes! Whether Democrat or Republican, there's real work to be done - to expand economic opportunity and more. But, we need to work together. In today's political climate, we can't put party over people.
Sean Luechtefeld (10:25 pm): C-SPAN (where I'm watching the debate) will be taking calls from the public at 10:30. I'm tempted to call in...what should I ask?
Jeremie Greer (10:22 pm): Glad we are talking about student loans; they could be the next major debt crisis (after foreclosure crisis, which we still haven't talked about...).
Lauren Williams (10:18 pm): Both candidates indicate that too many college grads are in too much debt. Here's the reality: college isn't accessible. But, it doesn't have to be that way. Children's Savings Accounts help close the aspiration gap, and can put higher ed within reach.
Sean Luechtefeld (10:17 pm): So many commenters! Thanks for sticking with us, folks.
Kasey Wiedrich (10:10 pm): Consequesnces of medical debt: 39% of people did not go see a doctor when they had a medical condition (New Demos research presented at the Assets Learning Conference in the Applied Research Forum. View the full presentation here).
Sean Luechtefeld (10:07 pm): Governor Romney: "we need private markets to solve the problem." Yup, but we also need public policy. And, while we're at it, community practice, too!
Sean Luechtefeld (10:04 pm): Finally, someone is talking about the struggles for the self-employed. Entrepreneurship isn't just good for the economy; for a lot of folks, it's the surest way out of asset poverty and into the mainstream.
Kristin Lawton (10:01 pm): Sean, the health care issue is an assets issue. People without health care are financially vulnerable - they could be one medical emergency away from losing it all.
Anne Kim (9:58 pm): If there is any silver lining to the financial crisis, it is the creation of the Consumer Financial Protection Bureau. No other agency is better poised to protect Americans' wealth. (EDITOR'S NOTE: Check out CFPB Director Richard Cordray at the ALC!)
Sean Luechtefeld (9:57 pm): Now we're moving onto health care. I think it's an important topic, but it makes me worry that we won't circle back to those who are financially vulnerable.
Sean Luechtefeld (9:52 pm): Is this debate changing anyone's mind?
Anne Kim (9:51 pm): Why do all debates around health care devolve into a contest over "Medi-scare"? No question health care is fundamental to economic security (check out CFED's Scorecard on this topic), but policy makers need to realize that Americans know there's no free lunch. We can handle an honest debate over the trade-offs we're all facing.
Lauren Williams (9:46 pm): Don't forget candidates for the ponies! Ponies need help building assets, too. Just ask @assetpony.
Sean Luechtefeld (9:45 pm): We keep hearing about the $716 billion. What would happen if we put that money into something other than Medicare? Like, something that created longer-term financial stability for the "forgotten 40 percent?"
Katherine Lucas McKay (9:42 pm): Social Security and Medicare, great. But what about investing in opportunity for today's children and their future, not just today's retirees? (by the way...CSAs work!)
Kim Pate (9:41 pm via Twitter): Taxes are important to both #candidates in this #debate, follow @cfednews for ways tax reform can support lower and middle income Americans.
Jeremie Greer (9:39 pm): Forty minutes into the debate and no talk about the foreclosure crisis? Huh?!?
Sean Luechtefeld (9:37 pm): Obama says governors are creative, but not so creative to overhaul public programs in a productive way. We'd disagree, and in fact, some of the most innovative work to create financial security are happening at the state and local levels. Anyone see Cory Booker at the ALC?
Anne Kim (9:33 pm): The red versus blue ties are a nice touch. Although we're not yet hearing much new, the contrast between the candidates' visions couldn't be more clear than the contrast between their neckwear!
Jeremie Greer (9:32 pm): There are a ton of ways to cut the deficit. Cutting programs that support the most vulnernable populations is not the way to do it.
Katherine Lucas McKay (9:30 pm): When talking about deficit reduction, the crucial question we need to ask is whether the program is so critical that we can't live without it? You can't answer that question without thinking about the people the programs are intended to serve. Neither candidate has addressed economic vulnerability yet tonight.
Sean Luechtefeld (9:27 pm): Psst...Jim! No need to move on. The economy is a topic we care about, and I'm pretty sure we aren't alone.
Ida Rademacher (9:25 pm): Neither candidate is using this opportuinty to appeal to the American people; they are in policy wonk-ville. Tons of data, but no effort to be accessible to the public.
Sean Luechtefeld (9:24 pm): "Math, common sense and our history all prove..." ZING! from President Obama.
Jeremie Greer (9:23 pm): It's refreshing to hear a balanced approach to deficit reduction that inlcudes revenue and spending.
Anne Kim (9:21 pm): Both candidates are focusing their appeals on what they would do for America's middle class, and each has named his litany of the principal hurdles to future middle class success.
But conspicuously missing so far is any mention of the 40 percent loss in wealth by all Americans as a result of the recession. Regardless of who wins in November, our work is cut out for us: we need to elevate household financial security to the top of the next Administration's agenda.
Sean Luechtefeld (9:19 pm): We absolutely agree that there needs to be deficit reduction. But, to be clear, there are a ton of things we can do to create a more inclusive economy that don't cost much and are both moveable (politically) and manageable (administratively). Read our recommendations in our Federal Stroke-of-a-Pen guide.
Sean Luechtefeld (9:17 pm): Neither candidate seems to be answering questions directly. Or, in the case of Romney, the opportunity to ask a question goes missed. Let's step it up, gents.
Kristin Lawton (9:15 pm): Romney wants to lower tax burdens for the middle class. Us too! So, how?
Jeremie Greer (9:13 pm): Both candidates are highlighting education as the linchpin for economic recovery.
Katherine Lucas McKay (9:12 pm): Governor Romney is right that new businesses are starting at rates that are a generational low. Big question: How can policies do more to support people who take the plunge and start business?
Sean Luechtefeld (9:07 pm): Both candidates talk about how the "top down" approach doesn't work. More importantly, we believe the "upside down" approach doesn't work. As is, of America's $400 billion in asset-building programs (most of which are delivered through the tax code), the majority of benefits go to those in the highest socioeconomic brackets. In fact, for those in the lowest 60% when it comes to income, the average federal benefit is only $5 per year. For more about how we fix these policies to make them "rightside-up," download Upside Down.
Sean Luechtefeld (9:05 pm): The candidates, along with moderator Jim Lehrer, have taken the stage. Remember, no noisy distractions allowed!
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