Assets for Independence (AFI): Empowering Low-Income Families to Overcome Poverty

1. Assets for Independence (AFI) A federal funding opportunity to help low-income families out of poverty Emily Appel-Newby, TA Provider, AFI Resource Center Susan Smithson, Chief Program Officer, YWCA of Metropolitan Dallas AFI Resource Center 1-866-778-6037 info@IDAresources.org

2. Assets for Independence Special federally funded 5-year grants to organizations that enable accountholders to ... • Learn about financial and consumer issues • Build financial assets

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

4. 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 4

5. Financial Education • Can be an efficient and effective support for a 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 5

6. Components of an IDA program • Financial education & asset-specific training • Savings from earned income • Purchase an asset • First home • Higher education or training • Small business • Transfer to a dependent

7. Education Example: “Glenda” Glenda wants to send her daughter, Iris, to college She takes courses in Financial Education, debt counseling and training; daughter Iris works with financial aid counselor Match rate of $4 for every $1 saved in her IDA Glenda saves $1,000 -- $41.67/month over 2 years $1,000 Savings $1,000 Glenda Saves $4,000 Matching $2,000 Federal* $2,000 Non-Fed *Maximum Federal Contribution is $2,000 per individual/$4,000 per household $5,000 for Education 7

8. Homeownership Example: “Vicky” $2,000 Vicky Saves $2000 Savings • Vicky, a single mother, dreams of owning her own home • Agency is part of an affordable housing coalition • Match rate is $2 for every $1 saved in her IDA • Vicky saves $2,000: $55/month over 3 years • Program partners provide financial counseling, financial savings classes, and special homebuyers’ clubs. • Vicky receives additional $2,500 from other local city and county resources $2,000 Federal $4000 Matching $2,000 Non-Fed $6000 IDA + Match $2,500 Local Total $8500

9. Does it work? Low-income people can and do save More than 84,000 people have saved over $66 million More than 36,000 have purchased assets Many single parent households IDA is first savings account for about half On-going research on long-term impact 9

10. Christa McMichael Owensboro, KY

11. Working with Assets for Independence

12. AFI Projects • More than 350 organizations throughout the nation • Multi-purpose non-profits • State, local, or Tribal governments • Multi-site networks of organizations • Locate a project near you: http://IDAresources.acf.hhs.gov/Map

13. Demonstration Interests OCS desires expansion of asset building to more low-income households Different approaches and different types of grantees Special focus on: Fathers and families in child support system Youth and families in foster care system Families with young children Survivors of domestic violence Persons with disabilities Native Americans 13 13

14. Key Topics for Planning an AFI Project

15. Key Points for AFI IDA Planning Organizational Fit Funding From whom How to get it How to manage Federal and nonfederal funds IDA Savings Structure Eligibility AFI thresholds Local choices Staffing & Partners Program components Outreach & recruitment Financial education Asset training Credit counseling Deposit monitoring Other participant services Grant administration/ reporting 15

16. How’s the Fit? For your organization? Does it support your mission? For your target population? What’s the need for asset building in my community or among those I plan to serve? What’s the interest? What’s the potential for some number to participate, complete the process, and purchase an asset? 16

17. 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

18. 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

19. AFI Project Accounts • Two accounts: • Project Reserve Account • One per AFI project • Owned by grantee, held at insured financial institution • IDAs • Many (one for each saver) • Set up as custodial (jointly-owned by the grantee and the saver) accounts at Federally-insured financial institution • Can be held at multiple financial institutions • Participants “earn” matching funds as they complete the program requirements (make deposits, complete training, etc.) but the matching funds are not co-mingled with their savings until payout.

20. 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.

21. 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.

22. 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 Making the Business Case: http://www.idaresources.org/IDA_Fundraising

23. Partner Roles: Beyond Funding Partnerships are critical beyond project funding Partners can provide critical support for: Recruitment Financial education Asset specific training Microenterprise business plans, cash flow analysis Housing counseling Credit counseling Holding IDAs and Project Reserve Fund Other services 23

24. Single Agency Project vs. AFI Network Project • Administer the Federal AFI grant • Develop and manage the required nonfederal cash contribution • Manage partnership(s) with at least one financial institution • Manage the Project Reserve Fund • Report to OCS and other funders • Provide data for the AFI program evaluation AFI grantee AFI grantee provides sub-grant and training and technical assistance to • Publicize the AFI project and present orientations • Enroll participants • Provide financial training or partner with another organization that provides the training • Assist participants with opening an AFI IDA • Provide participants with case management and connect them to other asset building services • Assist participants with asset purchase • Assist participants who make emergency withdrawals or drop out of the project Individual subgrantees

25. YWCA of Metropolitan Dallas Dallas, Texas Susan Smithson, Chief Program Officer

26. About YWCA of Metropolitan Dallas • Active in Dallas since 1905 • Mission is to help women remove barriers to self-sufficiency • Programs are long-term, helping women: • Become strong mothers • Advocate for their own health • Move toward financial independence • Build successful businesses • Learn critical workplace skills • Serve almost 7,000 per year • 4,600 in Financial Empowerment • Agency Demographics • 52% Hispanic • 31% African American • 87% female • 77% ages 22-59

27. Why AFI? • Financial self-sufficiency is our mission • Launched YW Financial Empowerment in 2004 • YW known as a leader in asset-building programming • Only IDA provider in Dallas County • Operated a non-AFI funded IDA from 2004-2010 • Since 2010 (AFI funding) • Increased visibility • Increased funding • Enhanced community partnerships

28. IDAs at YWCA of Metropolitan Dallas • 256 served • 93 served this FY, 8% attrition rate (decreased from 14% in 2010-11) • Cumulative savings $268,225 • 40 asset purchases this FY • 10 business • 19 education • 11 home • AFI Award 2010 - $191,500 • AFI Award 2012 - $300,000

29. IDAs at YWCA of Metropolitan Dallas • Maximum match of $4,000 • 4:1 match for home or post-secondary education • 2:1 match for business • Requirements: • Save 6 – 24 months • Complete YW’s 12-hour financial education course • Enroll in YW financial coaching • Complete asset-specific education • Have approved savings plan • Staffing • 4 full-time coaches • Data entry staff (40% time on IDA) • Financial Education Coordinator

30. IDAs at YWCA of Metropolitan Dallas Service Partners • Outreach/Referral – housing authorities, non-profits, community colleges, libraries, domestic violence programs • Asset-specific education – home-buyer education, small business assistance centers, colleges • Banking partner Funders • Program support – financial institutions, United Way, private foundations • Non-Federal Match – financial institutions, United Way

31. Lessons Learned Benefits to YW • Unique niche as only IDA provider • Positions our financial empowerment program as pathway to attaining assets • Proven approach to asset building, aligns with funder initiatives Challenges • Raising non-federal funds • Recruiting and retaining clients, especially in early years • Sustaining infrastructure to successfully deliver IDAs

32. Lessons Learned (cont’d) How to assess if your agency is positioned to run IDA program? • Who is your target client (some stability or in-crisis)? • Do you have sustainable funding to support the IDA operations (education, data, reporting, outreach)? • Do you have a financial institution partner to hold the accounts? • Do you offer, or have partners who offer, financial education and coaching?

33. Susan Smithson, Chief Program Officer ssmithson@ywcadallas.org 214-584-2304 www.ywcadallas.org

34. Preparing a Successful AFI Application

35. Request for Proposals:AFI Grants Overview • Next Application Due Dates: • May 7, 2014 • July 14, 2014 • October 25, 2014 • Up to $1,000,000 (average $350,000) • Funding Opportunity Announcement: www.IDAresources.acf.hhs.gov/Apply

36. Application Procedures • Proposals will be reviewed by a panel of experts in IDAs and implementation • Follow instructions in the Funding Opportunity Announcement in the application packet closely • Online submission via grants.gov • New Two-File Requirement • Three general sections: • Approach • Organizational Capacity • Budget and Budget Justification

37. Staffing an IDA Project 37

38. Applicant Webinar Series For more information and to register: http://IDAresources.acf.hhs.gov/Calendar

39. Next steps: • Develop agency support and buy-in • Set up a call with the AFI Resource Center • Secure non-federal funding commitment • Establish MOUs with partner organizations • Register for DUNS/SAM

40. AFI Resource CenterContact Information Phone: 1-866-778-6037 Email: info@IDAresources.org Web: http://IDAresources.acf.hhs.govhttp://www.acf.hhs.gov/assetbuilding/ Today’s presenter: Emily Appel-Newby