Transcript Building Family Income and Wealth

Building Family Income
and Wealth
Coming Home: A Rural Seminar in Visalia
June 13, 2012
Katrin Kärk (moderator)
Program Officer, Family Income & Wealth Building
[email protected]
202-739-9270
Beatrice Shelby
Boys, Girls, Adults Community Development Center, Inc.
[email protected]
870-829-3274
Doug Rauthe
Community Action Partnership of Northwest Montana
[email protected]
406-752-6565
Elena Kaye-Schiess
VISTA Volunteer, NeighborWorks Rural Initiative
[email protected]
617-585-5046
Katrin Kärk (moderator)
Program Officer, Family Income & Wealth
Building
[email protected]
202-739-9270
Increasing Family Income and Wealth
Family Goals
Sufficient family income
Transferable job skills
Manageable expenses
Smart debt
Post-secondary education plan
Real opportunity for retirement
@ 65
Jones Family in Baltimore, MD
Income
Wage
Child Support
Interest Income from Savings (avg. $1500 at 1.5%)
Total Income
Expenses
Housing/Utilities
Child Care
Food
Transportation
Health Care
Miscellaneous
Total Household Expenses
Check-cashing
Furniture Finance Charges (valued at $2000)
Emergency Loans (or pay-day)
Total Finance Charges
Earned Income Tax Credit (federal)
Child Care Tax Credit
Child Tax Credit
Total Expenses
Net Income
Before
Workforce
Development
$ 19,008
$ 2,436
$21,444
$
$
$
$
$
$
$
$
8,808
8,988
4,752
3,444
3,108
2,880
$31,980
$
380
$ 1,809
$
596
$ 2,785
Accessing
Affordable
Financial
Services
Access to
Benefits
$
25,344 $
2,436 $
27,780 $
25,344 $
2,436 $
27,780 $
25,344
2,436
23
27,803
$
$
$
$
$
$
$
$
$
$
$
8,808
8,988
4,752
3,444
3,108
2,880
31,980
507
1,809
596
2,912
7,603
5,842
4,752
3,444
1,942
2,880
26,463
507
1,809
596
2,912
(518)
(960)
(2,000)
25,897
1,883
7,603
5,842
4,752
3,444
1,942
2,880
26,463
60
70
85
215
(518)
(960)
(2,000
23,200
4,602
$ 34,765 $
$ (13,321) $
$
$
$
$
$
$
$
$
$
$
$
$
$
$
34,892 $
(7,112) $
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
Outcomes
 Net income
 All income- all expenses (monthly)
 Positive changes in monthly cash flow
 Credit report & credit score improvement
 Employment placement & retention
 3, 6, 12 & 24 month
 Career/wage advancement
 Net worth
 Assets – Liabilities
 Annual Measures
Beatrice Shelby
Boys, Girls, Adults Community
Development Center, Inc.
[email protected]
870-829-3274
BGACDC
18 - 39
YOUTH & FAMILIES
EMPOWERMENT
PROJECT
PARENTAL INVOLVEMENT
• Parent training entails giving young
parents and would be parents skills to be
good parents by presenting them with a
collection of discussions and exercises,
which evoke thoughts, opinions and
actions, based upon defining what is the
role and responsibility of a parent in
relationship to the expectations of the
community.
CIVIC ENGAGEMENT
• Civic engagement requires individuals to
become leaders by becoming involved in the
community issues that affect their local
community.
• Civic engagement requires that we educate
and inform parents of the processes and
procedures needed to participate in;
– Concerned Citizen Meetings
– City Council and Quorum Court Meetings
– School Board Meetings
– School Parenting Meetings and Seminars
LIFELONG LEARNING
• Learning and career preparation never
stops; therefore, lifelong learning is a
process of meeting individuals where they
are in the educational and career
continuum by placing men and women,
ages eighteen to thirty-nine in volunteer,
service learning or, part-time paid
positions at BGACDC and providing
educational and career preparation
training to them.
Doug Rauthe
Community Action Partnership of
Northwest Montana
[email protected]
406-752-6565
Free To Choo$e
Financial Literacy Education
AN INITIATIVE OF COMMUNITY ACTION
PARTNERSHIP OF NORTHWEST MONTANA
IN PARTNERSHIP WITH PARK SIDE FEDERAL CREDIT
UNION
Program Overview
• 12-weeks of financial literacy focused on education of
the family using a 3-pronged approach:
– Education
– Support
– Access to credit
• After completion the participant has the opportunity
to:
– Work with a financial mentor for a year
– Open checking and savings accounts with Park
Side Federal Credit Union
– Open a $300 line of credit with Park Side Federal
Credit Union
Education
• Youth Education: NCUF’s Biz Kids
Curriculum
– Play money reinforces good behavior
– Opportunities to “shop” are provided
– Park Side Federal Credit Union helps them open a
savings account.
Education
Adult Class: FDIC’s Money Smart Curriculum
•
•
•
•
•
•
Bank On It
Borrowing Basics
Check It Out
Money Matters
Pay Yourself First
Keep It Safe
•
•
•
•
•
•
To Your Credit
Charge It Right
Loan To Own
Budgeting Night
Insurance Night
Your Own Home
Education: Logistics
• Weekly co-pay provides participants with a
stake in the class
• Sessions are low-barrier for participants to
easily attend:
– Child care is provided
– Dinner is provided
– Youth class is offered (no extra charge for youth
participants)
– Make-up sessions are offered
Tools beyond Education
Mentor Program
• A Year of Support
• Develops and
builds banking
relationships
Line Of Credit
• Helps participants
who might
otherwise not be
able to get a loan
begin to rebuild
credit.
• Develops and
builds banking
Measuring Outcomes
• Pre- and Post-tests
• Self and Mentor assessments
• Tri-merge credit report pulled on one year
anniversary after graduation.
What’s Next?
• Sanders County
• Lincoln County
• Lake County
Partnerships
• Park Side Federal Credit Union
– Offers lines of credit at market rates with normal
payment plans
– Secures 2/3 of the risk on the lines of credit and
accounts to Free To Choo$e graduating participants
– Provides staff and support through out the 12-week
class
– Provides many of our mentors
• Faith Free Lutheran Church
– Provides access to its beautiful facility for Free To
Choo$e to hold classes
Elena Kaye-Schiess
VISTA Volunteer, NeighborWorks Rural
Initiative
[email protected]
617-585-5046
Gateways to Wealth Creation:
Individual Development Accounts &
Volunteer Income Tax Assistance Sites
IDA
VITA
Gateways to Wealth Creation
NeighborWorks
Rural Initiative:
A network of 91
NeighborWorks
organizations that
serve rural areas
VITA Sites:
Where trained
volunteers help
individuals
correctly file their
taxes and access
special tax
credits
IDAs:
A matched
savings account
to help
individuals of little
means save
towards a lifelong
asset
Strategic Partners & National Awareness
CFED: A multifaceted
organization
working at the state,
local and federal
levels to create
economic
opportunity that
alleviates poverty.
CFED was an early
leader in the
creation and growth
of IDAs as a
practice, and later
as a federal and
state policy strategy
for economic
security.
2012 Assets
Learning
Conference, Sept.
9-21 in Washington,
DC
Gateways to Homeownership
CFED’s 2008 survey of 27 IDA programs (1,212 savers) found:
The majority of IDA savers are minorities earning less
than $24,000. They are members of the communities
most at risk for getting a subprime mortgage.
97% in two-thirds of the programs were able to get a
conventional, fixed-rate mortgage.
There were only three defaults and four foreclosures for
savers who purchased a home in the preceding five years.
http://cfed.org/assets/pdfs/ida_program_survey_homeown_foreclose.pdf
Gateways to Asset Opportunities
EITC is the largest
federal program to
support low-income
working families.
1 in 5 eligible
taxpayers
don’t claim
the EITC.
In 2012, nine
NWOs hosted
VITA sites
serving rural
communities.
Annually, the EITC
helps lift 6.6 million
people out of
poverty; half of
these are children.
Local Models + National Support
=Scalable Solutions
Pathfinder Community Connections
Pathfinder’s IDA program serves 15 northeast Indiana counties and is the
3rd largest IDA program in the state.
Indiana’s state tax credit for IDAs: donors receive a 50% state tax credit
and Pathfinder receives 100% of funds for additional IDA accounts.
Pathfinder’s VITA site serves all of Huntington, IN. In the first two years
of operation 1,060 returns were prepared with $1.2M in refunds and
$350,000 in EITC accessed.
http://www.pathfinderservices.org/community-connections
NeighborWorks Umpqua
& Dream$avers
Dream$avers is a network of 10 partner agencies and 10 school districts
that provide IDAs to low-income individuals in 14 of Oregon’s rural
counties.
As of March 2012, the program had served 1,094 people, 398 of whom
had made their asset purchase.
In addition to the three primary asset goals, Dream$avers extended their
IDA program to include savings for home repair and assistive technology
for employment.
Dream$avers video:
http://www.youtube.com/watch?v=KM5ScPurnds&feature=player_embedded
Midwest Minnesota CDC
With a strong commitment to the White Earth Indian Reservation, MMCDC
operates 2 VITA sites and a matched savings program for car and home
purchase.
For the 2012 tax season, MMCDC helped 441 workers file their taxes, including
39 online self-prep returns for reservation residents. Refunds included more
than $900,000 with 161 workers receiving $340,902 in EITC.
MMCDC currently works with a charter school to provide a financial education
program to sixth graders along with a $500 trust account, available upon
graduation.
http://www.mmcdc.com/
Where do we go from here?
Successful Gateways to Homeownership
CFED’s 2010 study of six IDA programs– that included 831
homeowners who purchased homes in 17 states from 19992007– found that:
Only 1.5% had high interest rate loans and only
3.1% had entered foreclosure by April 2009.
The IDA foreclosure rate was less than one-half to
one-third of the foreclosure rate from HMDA data
samples.
93% of IDA homebuyers retained their home with no
evidence of problems paying their mortgage as of April
2009.
Katrin Kärk (moderator)
Program Officer, Family Income & Wealth Building
[email protected]
202-739-9270
Beatrice Shelby
Boys, Girls, Adults Community Development Center, Inc.
[email protected]
870-829-3274
Doug Rauthe
Community Action Partnership of Northwest Montana
[email protected]
406-752-6565
Elena Kaye-Schiess
VISTA Volunteer, NeighborWorks Rural Initiative
[email protected]
617-585-5046