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June 2008

A D M I N I S T R AT I O N F O R C H I L D R E N & F A M I L I E S

assets for independence B uildin g A ssets ∙ ∙ B uildin g S tron g er F amilies

Welcome United Way Network! Economic security is not just about income- it is also about assets. Economic assets provide families with numerous important social, and psychological benefits. People tend to think and behave differently when they are accumulating assets, and the world responds to them differently as well. Demonstrated benefits include: •

Improved household stability

Enhanced welfare of offspring

Hope for the future

Additionally, there is evidence that homeownership and asset building is associated with improved access to credit, decreased dependency on public benefit programs, social and political involvement, reduced domestic violence, marital stability, and higher educational attainment. On-going research on the impact of the Assets for Independence (AFI) IDA program in particular, shows substantial positive impacts on participants’ abilities to own economic assets and remain financially self-sufficient into the future.

The Office of Community Service applauds the efforts of many local United Ways engaged in IDA projects in their communities, often providing financial support and a framework of other supports administered by the United Ways directly or through community-based organizations. We look forward to partnering with you to build many more successful partnerships to strengthen the financial stability of all American communities.

       ASAM Record  January-March 2006 U.S. Department of Health & Human Services 200 Independence Avenue, S.W. Washington, D.C. 20201

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The Boys & Girls Club’s Assets For Independence IDA program combines social responsibility and individual accountability, Milwaukee: Partnering for Success In 2004, The Boys & Girls Clubs of Greater Milwaukee received a $1 million grant from the Assets for Independence program to start a youth IDA project. The only problem for the Boys & Girls Clubs is that the $1 million had to be matched 1:1 in non-federal dollars before the federal funds could be released. The Clubs had secured some of the funding, but were struggling to come up with the entire $1 million necessary to draw down the federal funds.

Assets for Independence

The Clubs approached the United Way of Greater Milwaukee and according to Effie Allen, Chief Operating Officer, United Way jumped at the chance. From United Way’s perspective, the IDA program was a way to double the impact of their support for the programs that reduced poverty in the Greater Milwaukee area. By collaborating with The Boys & Girls Clubs, they would leverage the funds they use to support local programs with the federal AFI dollars- and bring $2 million to the task of helping local residents build assets and escape poverty.

Assets for Independence (AFI) enables community-based nonprofits and government agencies to implement and demonstrate an assets-based approach for giving low-income families a hand up out of poverty. AFI projects help participants save earned income in special-purpose, matched savings accounts called Individual Development Accounts (IDAs). Every dollar in savings deposited into an IDA by participants is matched ( from $1 to $8 combined Federal and nonfederal funds), promoting savings and enabling participants to acquire a lasting asset. AFI project families use their IDA savings, including the matching funds, to achieve any of three objectives: acquiring a first home; capitalizing a small business; or enrolling in postsecondary education or training. All AFI projects provide basic financial management training and supportive services, such as: •

financial education on owning and managing a bank account or a credit card

credit counseling and repair

 uidance in accessing refundable tax credits, including the g Earned Income Tax Credit and the Child Tax Credit

specialized training in owning particular assets for the long term

Jenell Hackley, Manager of the IDA program for The Clubs, sees the relationship as capitalizing on the strengths of each organization. United Way of Greater Milwaukee does not provide direct service and serves as a fundraiser for The Clubs. United Way wanted to get more involved in nontraditional communities and saw this as the perfect opportunity to support The

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Clubs in an area where they could see the largest return on their investment. Utilizing the AFI Single Agency Model, the Boys & Girls Clubs administers all aspects of the program- case management, data collection, banking relationships and financial literacy classes. Recently, the club entered into a partnership with the Select Milwaukee, which is now responsible for providing the home-ownership training for the AFI IDA project participants. The Clubs had worked with Select Milwaukee managing the homeownership aspect of the program in the past and recognized the value in formalizing that relationship. Select Milwaukee has enormous expertise in the area of homeownership, so the Boys and Girls Club was eager to enable their participants to have the benefit of working with such a strong community organization. The Clubs continue to focus on postsecondary education, encouraging teen Club members to save for college or technical training. The Clubs recruit Juniors and Seniors in high school that are interested in going to college or further their training. Participants must understand that the program lasts two years and they commit to graduating from the Program in that time. The Clubs also provide employment for the participants at various Boys and Girls Clubs in Milwaukee where they serve as mentors and tutors to the younger participants.

“The Boys & Girls Club’s Assets For Independence IDA program combines social responsibility and individual accountability,” said Allen. “Private donors are motivated by the federal match of their dollars to help address the life-asset gap that exists in Milwaukee. And participants learn the importance and rewards of financial discipline, seeing their savings grow into the lifetime assets of education and home ownership.” Boys & Girls Clubs of Greater Milwaukee Jenell Hackley, IDA Program Manager Milwaukee Assets for Independence 1558 North 6th Street Milwaukee, WI 53212 414 267-8150 jenellh@boysgirlsclubs.org

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“Veronica is so happy she hasn’t been able to sleep at night. She keeps asking me, ‘Mama, is this real?’.”

Los Angeles: Pathways out of Poverty In partnership with its generous donors, financial institutions, communitybased organizations, and government institutions, United Way of Greater Los Angeles (UWGLA) has created Pathways Out of Poverty to provide asset building opportunities to hardworking residents of LA County. The UWGLA launched a countywide project in 2001 with the ambitious goal of opening 8,500 accounts in five years. UWGLA developed a strong service delivery model: non-profit providers, often with existing assetbuilding programs, are responsible for IDA services to clients, such as recruitment, case management, and asset acquisition. Meanwhile, UWGLA is responsible for centralized functions, such as fundraising, financial institution relations, data management, and technical assistance to project partners. UWGLA also contracts with a financial education provider to offer the same high quality financial literacy training for all of its partners.

The Keys to a Dream Teresa and Veronica Chicas were earning less than $20,000 a year when they first saw the Home Ownership Made Easy (HOME) flyer at a regional disability center Veronica was attending.

UWGLA’s program is an example of an AFI Network Project, which enables IDA providers to play to their strengths in direct services, while UWGLA takes responsibility for other parts of the program that tend to be more difficult for community-based organizations. UWGLA holds master bank accounts, and ensures that individual participant accounts are clearly identified by their respective partner agency names. UWGLA’s partners typically focus on a single asset goal within the IDA program – homeownership, microenterprise or post-secondary education or training. In recent years, UWGLA has introduced a “matrixed” structure that allows each partner to offer all three types of IDAs by drawing on the expertise of other partners. UWGLA utilizes AFI2, a program management tool that the Office of Community Services provides to all AFI grantees. The system is webbased, user-friendly, secure, and able to create on-demand reports for real-time data and enables UWGLA to monitor the work of their sub-grantees.

That was four years ago. Today, the Chicas are preparing to move into their own home after United Way of Greater Los Angeles’s Saving for the American Dream program offered them a $2 to $1 match on their hard-earned savings toward the purchase of a two-bedroom, two-bath condo in North Hills. As she talks about her new home, Teresa Chicas shrieks and claps her hands over her face. “Veronica is so happy she hasn’t been able to sleep at night. She keeps asking me, ‘Mama, is this real?’.” The key to their new home is also the key to a new future. Spiraling house costs have put homeownership beyond the reach of most families in Los Angeles County. This one transaction guarantees a new life for the Chicas, a life beyond poverty. The two women applied for the Saving for the American Dream program through HOME. At that time, they were earning $1,100 a month through Teresa’s housekeeping job and Veronica’s work at Denny’s, plus $500 in disability support from the federal government. As part of the program, Teresa and Veronica had to complete ten hours of financial literacy education (creating a budget, repairing their credit) and eight hours of homeownership training. Teresa tears up when she thinks about getting the keys to their new place. “Without United Way this would never have happened.” Veronica nods in agreement. “Thank you United Way,” she says solemnly, “for making our dream come true”.

Teresa and Veronica Chicas

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United Way of Greater Los Angeles http://www.unitedwayla.org/ 523 West Sixth Street Los Angeles, California 90014 213-630-2100 Edmund Khashadourian

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“United Way exposed me to resources that I wouldn’t have found on my own” … The AFI Resource Center

Southeast Michigan: A Regional IDA Project Through Assets for Independence (AFI) Individual Development Accounts and strategies like the Earned Income Tax Credit partnership, foreclosure forums and Money Smart Week, United Way of Southeastern Michigan is helping residents across the region access higher education, home ownership, financial literacy and other assets they can use to realize stability and to build better lives. Thanks to IDAs, more than 316 lowincome residents of Wayne, Oakland and Macomb counties will realize their dream. To date, 186 IDA participants have used their savings and the IDA matching funds they earned to help purchase 74 homes, capitalize 20 new or expanded businesses, and enter 92 courses of post-secondary education or vocational training. The IDA initiative was launched in 2001, with a $450,000 (AFI). United Way and the Detroit Youth Foundation matched the federal grant. Through 2006, the IDA program has received a total of three AFI grants collectively worth over $1.5 million.

A number of partners play a key role in supporting the IDA program. For example, a number of area banks agreed to establish savings accounts for program participants. Michigan State University’s Outreach and Engagement Extension provides training for financial literacy instructors. And several nonprofits offer ongoing counseling and case supervision, professional skill assessments, asset management training, and a variety of follow up services. United Way of Southeastern Michigan, along with five community partners, forms the Michigan IDA Partnership. United Way actsasthefiduciaryorganization,facilitating the relationship with banking partners, handling the data collection, administering the funds and qualified withdrawals, as well as the asset purchases. Meanwhile, the 12 community-based organizations are responsible for recruitment, case management, and the financial literacy and asset specific training. Sharon Davis, who oversees eleven of the sub-grantees, feels that it is essential to select partners where the IDA compliments the services they already provide.

Michael and Shedricka McCrary

Since the program’s inception, IDAs have served as the springboard to opportunity for hundreds people in metro Detroit. The program has the capacity to assist nearly 200 low-income clients secure a home, business or education. Consider the following (as of May 9, 2008): •

Currently, there are 94 Homeownership Accounts, 102 Education Accounts, and 25 Business Accounts

These savings have been matched with a total of $822,566

IDA account holders have leveraged more than $8 million in total mortgage loans

IDA program graduates report better control over spending, credit and overall finances. In addition, most individuals continue to put away money on a regular basis. As a result, our graduates feel positive about their financial futures.

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We help people help themselves Michael and Shedricka McCrary For most Americans, owning a home is the first step toward establishing stable financial footing. Michael and Shedricka McCrary were able to pick up the keys to their first home last fall, thanks to United Way of Southeastern Michigan’s Individual Development Account initiative. “United Way exposed me to resources that I wouldn’t have found on my own,” says Michael McCrary, of Detroit.

Participants have saved a total of $162,066

Homeownership

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Through the IDA program, the McCrarys received financial literacy and home ownership counseling, along with $4,000 in matching funds, after reaching their $1,000 saving goal. The couple and their four children now have a valuable asset on which to build a future.

The AFI Resource Center provides you with all the resources you need to design your AFI IDA Project! Groups that are considering applying for an AFI grant, as well as AFI grantees, can access free technical assistance from the Resource Center and participate in conference calls and other events that build knowledge, increase confidence, and inspire innovation! As an AFI grantee, you will be part of an important national demonstration – you will never be alone. The AFI Resource Center provides training and technical assistance to organizations at all stages of the AFI IDA Project process, including: •

Application kits to interested organizations, that include detailed instructions on designing an AFI IDA Project

Webinars that provide tips on writing successful AFI IDA grant applications

Individual technical assistance

The AFI Listserv keeps grantees and others up to date with program-related information. To subscribe, just send your name and email address to: afiprogram@acf.hhs.gov,

The AFI Support for Emerging Grantees The AFI Resource Center sponsors multiday orientation workshops for groups that are interested in learning more about the program and developing an IDA project for their community. Just this year, the Center coordinated with the United Way of Kern County to offer a two-day workshop in Bakersfield, California. The session drew a cross section of organizations that commonly participate in AFI IDA programs, including: non-profits, local, state, and federal government agencies, and financial institutions. The topics covered during this workshop included:

via telephone and email •

on promising practices, information of serving people with disabilities, location of all existing AFI grantees… and more!

Workshops for organizations interested in learning more about AFI

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An Introduction to AFI IDAs

Introductions to similar organizations

Building Blocks for Successful IDA Programs

administering AFI IDA Projects •

Advice on partnership development

Resources through Partnerships

with community groups •

Making the Most of Your

AFI Project Academies – two day intensive “IDA Effective Practices Training” events for AFI Project teams and their partners

Please check out the AFI website at www.acf.hhs.gov/assetbuilding where you will find a calendar of events, articles

Fundraising Tips for Your AFI IDA Program

Local AFI IDA practitioners spoke about their experiences and answered questions during a panel discussion that showed IDAs in action. The workshop also included breakout

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sessions that allowed organizations to meet with potential partners and discuss how an AFI IDA program might work in their communities. One such breakout session enabled United Way of Kern County to discuss the IDA concept with potential partners – including their local community action agency, Catholic Charities and Goodwill – and move forward with their project design. United Way and its partners concluded that an AFI IDA program would be an ideal response to the current wave of foreclosures in Kern county by preparing individuals and families to be successful homeowners, not just home buyers. As a result, United Way of Kern County assembled commitments of $152,900 in nonfederal funding for this program and, in March 2008, submitted an application to double this funding with a federal AFI grant for another $152,900. Let us know how we can assist your United Way organization design their AFI IDA Project!

United Way for Southeastern Michigan http://www.uwsem.org/ Serving Macomb, Oakland, and Wayne counties. 1212 Griswold, Detroit, MI 48226 / Phone: 313-226-9200 Community Investment and Partnerships Dona Ponepinto, Vice President313-226-9320 Sharon Davis, IDA Program Manager

United Way AFI Grantees Across the Nation United Way of Central Alabama Birmingham, Alabama United Way of Greater Los Angeles Los Angeles, California United Way of Greater St. Louis St. Louis, Missouri Mile High United Way Denver, Colorado United Way for Southeastern Michigan Detroit, Michigan United Way of Central Alabama, Inc. Birmingham, Alabama United Way of Forsyth County Winston-Salem, North Carolina United Way of King County Seattle, Washington United Way of Lancaster County Lancaster, PA United Way of Massachusetts Bay, Inc. Boston, Massachusetts United Way of Metropolitan Atlanta Atlanta, Georgia United Way of Palm Beach County, Inc. Boynton Beach, Florida United Way of Southeastern Pennsylvania Philadelphia, Pennsylvania United Way of Southern Cameron County Brownsville, Texas United Way of the Texas Gulf Coast Houston, Texas United Way of Treasure Valley Boise, Idaho

AFI Resource Center c/o Office of Community Services 370 L’Enfant Promenade, S.W. Washington, DC 20447 Telephone: 202/401-4262 Email: afiprograms@acf.hhs.gov Web: www.acf.hhs.gov/assetbuilding

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AFI Newsletter