Welcome! Asset Building & AFI Program Overview AFI Resource Center Presenter: Rita Bowen

The ASSET Initiative Collaboration across ACF Programs to bring asset building tools & practice to ACF grantees and families they serve Incorporates lessons learned from Assets for Independence Demonstration Program and related research Families move past paycheck to paycheck existence, toward financial stability

What are Assets? Savings (3-6 month nest egg) to protect against loss of income Matched Savings (AFI Individual Development Accounts) –Higher education and training –Develop or expand small business –First home Property, equipment, land Good credit report and score, access to credit Human capital (who you know)

4 Financial Assets Matter Enhanced Self-Esteem Long-term Thinking and Planning Hope for the Future Move Past Paycheck-to- Paycheck  Toward Long-term Financial Stability Stronger, Healthier Families More Community Involvement

5 Asset Building Tools Financial education Savings and Individual Development Accounts Getting banked Managing credit and debt Tax credits and filing assistance Accessing Federal and State benefits

For Youth… Asset building services provide much-needed financial skill building for youth transitioning to adulthood IDAs provide cash to secure essential things for a young adult, esp. those without a permanent adult connection Establishes connections to critical community resources –Financial Institutions –Community Organizations

For Parents/Adults Find that budgeting and credit counseling improve overall household financial management Build new habits for family to share and to model for children Use savings and match to purchase an asset that has potential wealth building effects for generations Financial stability yields positive social- psychological benefits for the whole family

The Promise of Financial Ed Financial literacy has been positively related to self-beneficial financial behavior. –2001 survey—HS based financial education led to increased rate of savings in middle age. –HS seniors who never bounced a check showed substantially greater financial literacy scores than others with checking accounts. (Jumpstart, 2009). 8

Financial Education… Can be an efficient and effective support for a young person’s financial well being: –Decision making/problem solving –Effective use of skills and tools/products –Improved financial conditions Is made more effective when connected with a concrete financial activity (Mandell, 2006) IDAs are such a concrete activity 9

10 IDAs: Assets for Independence Special federally funded 5-year grants to organizations that enable accountholders to... Learn about financial and consumer issues Save in Individual Development Accounts to – Become more self-sufficient and plan for the future – Access higher education or training – Start or support a small business – Acquire a first home – Save to transfer to an eligible dependent

11 Does it work? Low-income people can and do save Nearly 80,000 people have saved $66.4 million More than 29,000 have purchased assets Many single parent households IDA is first savings account for about half On-going research on long-term impact 11

AFI Projects More than 350 organizations throughout the nation Target youth, adults, urban, rural, and other diverse populations Multi-purpose non-profits State, local, or Tribal governments Multi-site networks of organizations Locate a project near you:

AFI IDAs Targeting Youth Penquis Community Action, Maine District 7 Human Resources Council, Montana Mile High United Way, Colorado Others?

How AFI Works

15 Education Example: “Serena” Serena wants to get certified as a Medical Assistant to get a job. She takes courses in Financial Education, debt counseling and training and works with a financial aid counselor Match rate of $4 for every $1 saved in her IDA Serena saves $ $21/month over 2 years $500 Savings $2,000 Matching $2,500 for Education $500 Serena Saves $1,000 Federal* $1,000 Non-Fed * Maximum Federal Contribution is $2,000 per individual/$4,000 per household 15

Small Business Example: “Vicky” Vicky dreams of owning her own business and loves fashion design. Agency partners with youth entrepreneurship program Match rate is $2 for every $1 saved in her IDA Vicky saves $1,000: $42/month over 2 years Program partners provide small business training, one- on-one coaching and financial education. Vicky uses IDA and match to start a small business that provides cash to supplement her part-time job. $1000 Savings $1,000 Vicky Saves $2000 Matching $3000 IDA + Match $1,000 Federal $1,000 Non-Fed 16

Tailoring to RHY… Likely best targeted for Basic Center and transitional living programs IDAs for parents reuniting with youth supports goals that contribute to stabilization Young parents (in transitional living) often have greatest rates of participation Minimum of 6 months for saving Savings targets must be within realistic range for youth—can be low

18 Two Sides of AFI Operations Management/Administration Project budgets (5 yrs) Financial oversight Account management Policies and Procedures –Eligibility –Withdrawal activity Partnerships Staffing Grant administration/ reporting Program Activities/Services Outreach & recruitment Financial education Asset training Credit counseling Deposit monitoring Other participant services 18

19 Funding Five-year project grants Must have firm commitments of cash support from nonfederal sources. The commitments must be equal to or greater than the Federal grant amount requested.

Sources of Non-Federal Funds Financial institutions and their foundations State and local governments Tribal governments United Way Foundations (local, regional) State/Local tax credits Special needs funding opportunities (Mental Health, Youth Programs, Disability Programs, and other nonfederal funding streams that target specific populations) Locally-based corporations/employers Places of worship Individuals/online donations Sponsoring organization funds Federal Home Loan Banks Community Development Block Grants* Native American Funds* *Specified allowable in their rules 20 Making the Business Case:

Uses of AFI Project Funds All AFI Project funds are held in a Project Reserve Fund. At least 85% set aside to match participant IDA savings A total of 15% can be spent on program operation costs. –7.5% for overall administration and program specific activities. –5.5% to cover costs of case management and trainings. –Another 2% set aside for costs associated with data collection and reporting. Select Next to continue. 21

22 IDA Matching Structure IDA Savings Match Rates can range from – $1 match for $1 earned income saved to – $8 match for $1 earned income saved Maximum amount participant can save and be matched may vary by asset goal Maximum Federal Contribution – $2,000 per individual – $4,000 per household

Reporting Requirements Every 6 months: –Narrative report on progress –Financial report (one page) Annual data report on program: –Free database provided with technical support by AFI –Available immediately and provides reporting data at the click of a button –Includes all needed program forms and input options for full operation

24 Participant Eligibility TANF eligible OR EITC eligible or annual household income less than twice poverty (about $44,700 for family of four) AND Net worth less than $10,000, excluding value of a residence and one motor vehicle per household. Administering agencies may have additional requirements. Need earned income for savings deposits

Earned Income means… Any form of wages, tips or salaries the youth receive as a result of work they do for someone else –Full-time or part-time –Informal employment –Formal employment *This could include internships or allowances. *Jobs as Peer Outreach workers would count. Reasonable forms of documentation are acceptable

26 Partner Roles: Beyond Funding Partnerships are critical beyond project funding Partners can provide critical support for: –Recruitment –Financial education & asset training Microenterprise business plans, cash flow analysis Credit counseling Housing counseling –Holding IDAs and Project Reserve Fund –Other services 26

Upcoming Webinars AFI Program Overview and Grant Application Process Thursday, December 1st, 2 p.m. EST Thursday, December 15th 2 p.m. EST For more information and to register: 27

AFI Resource Center Phone: Web:AFI Resource Center ( How to Apply Project Planning Tools AFI Program ( 28