Neighborhood Partnerships

Individual Development Accounts (IDAs) are a matched savings program that help low and moderate-income families purchase assets such as a home, a post-secondary education, or the capital needed to start or expand a small business.  Neighborhood Partnerships brought Amy Shir—an expert asset building consultant—to present strategies to increase participant recruitment and retention to forty of Oregon’s IDA providers in June.

Ms. Shir recommended developing a recruitment strategy that maps out plans for the year including the target numbers of inquiries, applications and enrolled savers each quarter. Many of Ms. Shir’s recommended recruitment strategies are common sense approaches such as:

Reaching potential IDA savers though major employers of traditionally low wage workers such as hospitals, hotels, big-box retailers, restaurants, cleaning services, and sports and entertainment venues;

Reaching IDA savers by partnering with affordable housing programs, Small Business Centers, tribal organizations, Community Action Agencies, Head Start, vocational schools, or Refugee Resettlement Programs; and

Targeting low and moderate-income families who get their taxes prepared through Volunteer Income Tax Assistance programs, and encouraging new enrollees to save part or all of their Earned Income Tax Credit refund.

Ms. Shir also reminded those in attendance that a well planned retention strategy saves time and money for IDA providers in the long run. Ms. Shir recommended retention strategies such as:

Offering alternatives to participants physically having to go to the bank to make monthly deposits such as direct deposit, mail-in deposits, and ATM deposits;

Staying in touch with participants during the savings period through initiatives like Savers Club meetings, quarterly budgeting check-ins, electronic newsletters and Facebook groups, text message reminders to save, and sending monthly progress statements to savers;

Offering focused asset-specific resources to participants such as peer networking events for microenterprise IDA savers, campus tours and financial aid seminars for education IDA savers, and home tours for home ownership IDA savers;

Making financial education training as flexible and accessible as possible by offering perks for training attendees such as a convenient location, bus passes or other transportation support, multiple scheduling options, childcare, food, and interpreters if appropriate;

Encouraging prospective participants on waiting lists to start saving prior to enrollment since pre-savings can make it even easier for participants to reach their goals; and

Working with participants on credit repair as soon as they apply to the program to avoid unanticipated delays once the participant has met his or her savings goal.

Above all, Ms. Shir stressed flexibility, creativity and the importance of tailoring each IDA program to meet the diverse and changing needs of savers.  Click here to see Ms. Shir’s full PowerPoint from her June presentation. NP’s next IDA provider training will cover strategies for providing financial education to adult learners.  Email Haley Cloyd for more information.

Neighborhood Partnerships is proud to oversee the administration of the Oregon Individual Development Account (IDA) Initiative.  IDAs are matched savings accounts that help low and moderate income Oregonians purchase assets, such as a first home, that build economic security.  Participants can also use their IDAs to start or expand a small business, get more education, repair an aging home, or purchase equipment or technology needed to work.

We’ve contracted with the Regional Research Institute at Portland State University to do a multi-year evaluation of the IDA Initiative.  PSU’s objectives are to track and report program performance and results, capture the IDA Initiative’s impact on participants, and support ongoing program improvement.  Their preliminary research results are impressive!  Click here to see preliminary results released in June of 2009.

Graduating participants explain that participating in the IDA program has changed their lives in concrete ways:

“I have a house!”

“It helped me start my business and has brought me the most financial stability I’ve ever had.”

“I completed college and am now a teacher.”

PSU’s evaluation is also finding that IDAs change behaviors.  Graduating participants reflect:

“I am more organized and use a budget.”

“I learned to treat a savings account like a bill.”

“Taught us we can save if we put our minds to it.”

After graduating from the IDA program the percentage of participants who report being satisfied or highly satisfied with their financial status increases from 46% to 82%.  Forty-eight percent of graduates report reduced debt, and 46% report increased income.  Graduating participants are also significantly more likely to maintain emergency savings funds and track their personal finances using a budget.

PSU’s evaluation is also finding that IDA program graduates set new savings goals for themselves after purchasing their assets through the IDA program.  After completing the program graduates continue to save for emergencies, to purchase or improve a home, for family vacations, for retirement, or for education.  Encouraging participants to establish a lifelong savings habit is a program outcome we’re especially proud of!

In addition, a year after exiting the program, participants’ financial behaviors have changed:

55% often use a budget to monitor expenses.

46% maintain an emergency fund.

33% are regularly making deposits to savings.

A year after completing the program participants also report significant changes in their lives such as:

“I found it incredibly helpful.  I would have really struggled in this economy if I hadn’t worked with this program.”

“I thought this was an awesome experience.  I would love to participate again.  What I learned about budgeting I still use today.”

“Stability, my children are very happy and proud to own their home.  I feel I can do whatever I want in life.  My next goal is to go back to school and get more education.”

Full evaluation results from Portland State University will be available later this year.  We look forward to sharing those results with you in the coming months!

Learn more about the IDA Initiative!

On June 16, a rainy Wednesday in Salem Oregon, 50 people from across the state joined Neighborhood Partnerships, Oregon Housing and Community Services, JP Morgan Chase, and others in a thoughtful and provocative conversation about minority homeownership.  Victor Merced began the day by calling on all of us to look carefully at what we are doing now that works, and to think about how to do more to close the minority homeownership gap.

A review of available data shows us that we need to create 30,000 or more new homeowners from communities of color to close Oregon’s homeownership gap.  This task will require the hard work of all existing partners, and some creative work to improve our impact, increase the tools we have at our disposal, and increase the resources available to us.

The good news, though, is that partners now hard at work in Oregon know how to accomplish this.  We heard from several speakers about the barriers that we need to overcome in various communities across the state, and reviewed materials gathered from the City of Portland’s Operation Home efforts.  Then, we heard from a diverse panel about a sampling of the successful efforts now underway.  Strategies shared included a tribal-sponsored down payment initiative, maintaining a multi-cultural staff, focus groups and homebuyer clubs, and land trusts to increase affordability.  Creative partnerships, efficient use of resources, and genuine commitment to reaching people in their communities were evident in all the examples shared by the panel and participants.  And we know we just scratched the surface and did not have time to acknowledge all of the expertise in the room.

Regrettably we couldn’t hear from everyone, and we only touched on key strategies. But our goal was to highlight possibility and commit to taking the next steps together to increase resources and political will to close the gap.

Several next steps were identified.

Best practices sharing through practitioner networks. Oregon Opportunity Network will discuss possible next steps for peer learning and sharing.

State funding decisions for use of the document recording fee. Roberto Franco shared timelines for the five program areas to be funded through the document recording fee. Neighborhood Partnerships will track these timelines and processes and facilitate comments on priorities and processes.

Our Oregon plans to continue discussing legislation that would tie financial education to some loan products. Neighborhood Partnerships will track development and facilitate Housing Alliance consideration of proposals.

There was lots of interest in improving our data—on historical trends in homeownership rates, on the impacts of foreclosures, and on lending practices. Neighborhood Partnerships will follow up on these ideas in the coming months.

Email Janet with your thoughts, or let us know what you’d like to be part of in the comments section of the blog!

With the help of Oregon’s Individual Development Account (IDA) Initiative, low income Oregonians are given the tools to build their financial security through financial education classes and matched savings incentives.  With the money saved, IDA participants purchase a major asset such as a home, post-secondary education, a small business, or assistive technology that helps them secure employment. These assets help build economic stability and put money back into Oregon’s economy.

William Sherfield is one such Oregonian. He enrolled in Umpqua CDC’s Dream$avers program two years ago. Due to his medical issues, William needs his wheelchair most of the time. William expressed to the Dream$avers staff his desire to get back to work and be out among people. In order to accomplish this goal, he needed a vehicle that could accommodate his wheelchair.

Before the Dream$avers program, if William wanted to get around he had to have someone with him to set up a makeshift ramp so he could maneuver his electric wheelchair in and out of their vehicle.  While William was participating in the Dream$avers program, his brother purchased a septic tank cleaning business, and wanted William to be the one to take care of the books.  The one barrier was that the business didn’t have a vehicle that could transport William.

Thanks to the Dream$avers IDA Program, William was able to save for and purchase a handicap accessible van.  “This allows me to go and work and be independent,” says William.  “My brother just bought a business and is going to hire me to do his books, so this is going to help me and my brother, isn’t that great!” William is now totally self-sufficient, employed and enjoying his new-found independence.

“I would like to thank everyone for what this has done for me and everyone I know.  So thank you very much.” William’s story is a great example of how the IDA program can help Oregonians achieve their goals!

Over the past year, Neighborhood Partnerships has worked with Oregonians for Working Families and Oregon Thrives to encourage Oregon legislators to expand our state’s Earned Income Tax Credit (EITC). We want to expand the tax credit because it has a track record of successfully helping families who are struggling to make ends meet. In 2009 the EITC lifted over six million people in the United States out of poverty including more than three million children. It lifted more children out of poverty than any other single program or category of programs. The EITC is widely seen as one of the largest and most effective wage support programs for low and moderate income families.

In spite of its importance for low and moderate income workers, millions of eligible workers miss out on the EITC each year because they do not know they qualify, do not know how to claim the credit or do not know where to find free tax filing assistance. Your outreach efforts can ensure that eligible workers receive the tax credits they’ve earned. As tax season is upon us, please help spread the word about Oregon’s free tax preparation sites.

What is the EITC?

The EITC is a tax credit for low and moderate income working people. It is designed to supplement the earnings of low and moderate income workers by reducing their tax burden. In addition, the EITC is refundable, which means if the credit is greater than the amount of taxes owed the taxpayer receives a refund. Because the credit has a track record of successfully combating poverty, 24 states—including Oregon—have established state EITCs to enhance the federal credit.

A recent study found that nearly half of all families with children will receive the EITC at some point. In addition to reducing poverty, the EITC is an immediate economic stimulus. Research shows that families use the EITC to pay for necessities, repair homes, maintain vehicles needed to commute to work, and in some cases, pursue additional education or training to boost their earning power.

The amount of the credit depends on both the amount of earned income and the number of qualifying children in the household. For tax year 2009, the EITC can be as much as $5,657 for households with three qualifying children; phasing out at roughly $48,000 AGI (Annual Gross Income).  The IRS website has a tool that allows you to determine whether or not you are eligible for the EITC

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