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

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

2. 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

3. 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

4. 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

5. 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

6. 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.

7. 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

8. FAIM launched in 1999 • 1990s research and demo projects showed that low income people can save with the right support • MN took part with FAIM 1999- 2004 with AFI grant, state appropriation, U of MN research. Success! • IDAs one tool, but many are needed to help Minnesotans build assets

9. 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

10. 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

11. FAIM: How It Works • Participant Savings: • $480 / year ($40 month) for up to 2 years • Match Available: • 3 to 1 • Participant savings = $ 960.00 • Maximum Match = $2,880.00 • Available funds = $3,840.00

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

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

14. 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

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

16. What does FAIM success look like? • http://minnesotafaim.com/

17. ROI Research • 2012-13 research: U of MN Humphrey School & GustavusAdolphus 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

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

19. 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

20. For More Information • Kate Ouverson, Statewide FAIM Coordinator • West Central MN Communities Action • (218) 685-4486 • kateo@wcmca.org • Pam Johnson • Minnesota Community Action Partnership • (651) 645-7425 x2 • pamjohnson@minncap.org

21. QUESTIONS?

22. FOR ALL YOU DO!