By Janet Byrd, Executive Director
In 2006, the New York City Office of Financial Empowerment (OFE) began to test a number of pretty radical concepts to “educate, empower, and protect individuals and families with low incomes.” This work was sparked by Mayor Bloomberg, financed in its early years by him personally, and by philanthropic and corporate partners that he recruited. He recognized that much of what he wanted to do was too “risky” for government funds, because it really moved outside the boundaries of what had been done in the past.
These innovations have made their way throughout the nation here to Oregon and we’re only just beginning to tap into their potential – particularly when it comes to philanthropic investments.
Assets focus on opportunities not vulnerabilities
I had the pleasure in mid-April to speak with Grantmakers of Oregon and Southwest Washington about work in Oregon to build financial resilience for individuals in Oregon. I was joined by Lynne McConnell of NeighborImpact in Central Oregon, and Quin Collins of College Dreams, based in Grants Pass. Lynne and Quin shared compelling stories about individuals in their communities who had new hope for the future and whose lives had been transformed because of the Oregon Individual Development Account Initiative.
A recent paper by the Assets Funders Network summarized nicely why an asset building approach is valuable:
Asset building integration shifts investment goals from remedying deficiencies to building on strengths by increasing capability, access, and opportunity. It enables foundations to integrate and expand the scope, scale, and long-term impact of their work, shifting the focus from families’ vulnerabilities to their opportunities for success.
This strength-based approach can work in any community.
The OFE is influencing Oregon
The OFE was founded with the idea that by adjusting incentives and creating habits, long-term behavior change was possible. They tackled several key growth areas such as:
- Cash transfers to create incentives for behavior;
- Common standards and easy-to-use tools for service providers to support financial education and skill building;
- Access to safe and secure financial products (bank accounts with no risk of overdraft, low fees, tools to build access to safe and low-cost emergency reserves or credit).
The OFE’s influence has been widespread and has certainly changed the way we approach our work here in Oregon.
They pioneered the development of common performance standards for providers, which has led to financial education standards and development of the CFPB Your Money Your Goals Toolkit.
They set a bar for other jurisdictions – and have since been joined by other cities to create the Cities for Financial Empowerment.
And, they evaluated their work and demonstrated the efficacy of some approaches, including the combination of cash incentives plus coaching and support.
The roadmap is there. We just need the energy and the resources to move these innovations to scale.
Philanthropy’s role is key
Philanthropy is playing a huge role in growing the expertise and capacity of organizations to work with individuals and households to make real change in their future prospects, with tools like the Individual Development Account. Most importantly, philanthropy is supporting innovation, and allowing the testing of new approaches.
After I shared my thoughts with the Grantmakers group about where I see a role for philanthropy, I was excited to see, a few short weeks later, that the Asset Funders Network offered similar advice. Here’s what they said:
Foundations are uniquely positioned to serve as catalysts for asset building; connecting and leveraging the resources of stakeholders who strive to increase family health, well-being, and advancement…Integrating asset building into the portfolios and missions of foundations can produce sustainable and scalable results. Philanthropic investments can have a tremendous impact on advancing and sustaining greater economic security and upward mobility. By supporting asset-building integration, innovation and inclusion, foundations enable families and communities to move from surviving to thriving, from vulnerability to opportunity, and from insecurity to long-term well-being.
Assets building initiatives like IDAs have been shown to:
- Increase retirement security
- Empower families
- Advance financial and career opportunities
- Improve health
- Buffer against economic shocks
- Expand development and education opportunities for children
Oregon has an opportunity to expand on the lessons we’ve learned from the OFE and years of assets building initiatives by encouraging the integration of services across systems, supporting innovation, promoting equity, and evaluating impacts.