2013 MN Coalition for the Homeless Conference Workshop: Financial Asset Building Through FAIM WELCOME!

Who are we? Minnesota’s Community Action Network Anoka County CAP Arrowhead Economic Opportunity Agency Bi County CAP Community Action Duluth CAP of Ramsey & Washington Counties CAP of Suburban Hennepin Heartland Community Action Agency Inter County Community Council Kootasca Community Action Lakes & Pines Community Action Council Lakes & Prairies CAP Mahube-Otwa CAP MN Valley Action Council Northwest Community Action Prairie Five Community Action Council Scott Carver Dakota CAP Semcac Southwestern MN Opportunity Council Three Rivers Community Action Tri -CAP Tri County Community Action Tri-Valley Opportunity Council West Central MN Communities Action Western Community Action Wright County Community Action

What is FAIM? Comprehensive program to reduce asset poverty & build financial capability Connects low income households with asset building opportunities through:  Individual Development Accounts (IDAs),  Financial education,  1:1 coaching  Access to other resources and services

Why build assets? “ Lack of Income means you don’t get by. Lack of assets means you don’t get ahead.” Ray Boshara, Federal Reserve Bank St. Louis, former New America Foundation VP “Assets are hope in concrete form” Michael Sherraden, Center for Social Development, “Assets and the Poor” (1991) launched asset building initiatives

Importance of Savings & Assets Savings & assets as foundation for economic stability:  Savings & assets as economic cushion  Savings can lower costs  Assets protect when social safety net fails  Savings encourage future thinking  Savings as gateway to self employment  Savings key to higher ed & higher income

Impact on local economies Asset purchases boost local economies: increased home ownership property taxes, newly created jobs, local small business purchases, and increased professional skills.

Asset poverty – what it looks like in MN Asset poverty: financial resources < 3 months to provide for basic needs 26% US households asset poor 21% Minnesotans asset poor MN asset poverty racial disparities: 58% African Americans, 43% Native Americans, 42% Latinos, 22% Asian Americans, 18% Whites ¼ HHs $37,741 - $59,604 asset poor

FAIM launched in s research and demo projects showed that low income people can save with the right support MN took part with FAIM with AFI grant, state appropriation, U of MN research. Success! IDAs one tool, but many are needed to help Minnesotans build assets

FAIM Partners MN Community Action Partnership MN DHS - Office of Economic Opportunity Bremer Bank & Bremer Foundation Community Action Agencies Emerge Community Development City County Federal Credit Union Leech Lake Tribal Government University of Minnesota Inver Hills Community College Rice County Youth IDA project Local partnerships

FAIM: How It works Eligible households with incomes below 200% FPL open savings accounts at local banks Can save up to 2 years to buy a home, launch a small business, or go to college Savings matched 3:1

FAIM: How It Works Participant Savings: $480 / year ($40 month) for up to 2 years Match Available: 3 to 1 Participant savings = $ Maximum Match = $2, Available funds = $3,840.00

Financial Education & Coaching 12 hours financial education +10 hours asset specific training 1:1 coaching “the invisible 4 th dollar” Other resources & supports:  Access to free tax prep/credits  Loans & grants  Work supports  Safety net services  Consumer protection

Demographics of MN FAIM Savers Gender & Income: 78% female Most at or below 145% FPL

FAIM Results Nearly $3 million in savings deposited Over 3,100 people completed 12 hours of financial education Over 3,500 people used mainstream financial services Nearly 2,700 assets purchased

FAIM Results: ASSET PURCHASES 2,654 assets purchased 606 (23%) 1170 (44%) 878 (33%)

What does FAIM success look like?

research: U of MN Humphrey School & Gustavus Adolphus College: 326 FAIM graduates interviewed Small Business Asset Findings (130):  89% still in business after 2 yrs (national avg: 44%) Home Ownership Asset Findings (81)  No foreclosures. 97% still owned home. Education Asset Findings (115):  65% completed degree + 31% in pursuit ROI Research

Impact of Financial Education and Coaching Improved Credit Reduced Debt Increased Earnings/ Savings

Next Steps Continue educating policymakers and funders about the importance of asset- building Support evolution of Asset Building Coalition Continue seeking funding to increase access Support IDA expansion, share training and technical assistance

For More Information Kate Ouverson, Statewide FAIM Coordinator West Central MN Communities Action (218) Pam Johnson Minnesota Community Action Partnership (651) x2

QUESTIONS?

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