Asset Building
In order to achieve economic stability and take full advantage of economic opportunities, families need the means to build and protect their assets. Living Cities provides its members with a platform to align their activities and to advance policies and programs in order to make these means available to as many low-income families as possible.
There has been a great deal of creativity and innovation in the asset-building field. However, even “successful” products and services are reaching too few consumers to make a material difference in the market. A new approach is required to mainstream asset-building.
Living Cities’ current strategy toward this end focuses on:
- Driving dialogue in the field on what it means to take asset-building opportunities to scale and how that objective can be accomplished;
- Exploring and testing the use of distribution platforms, including public service agencies and information technology, as pathways to scale the delivery of asset-building products and services; and
- Building the field’s knowledge base of practices and policies that can advance asset-building at greater scale.
Current Investments and Initiatives
The Corporation for Enterprise Development (CFED)
With a $185,000 grant from Living Cities, CFED is developing a set of “integration guides” to help practitioners, policy makers and advocates identify ways that human services agencies can integrate asset-building products and services into their existing work.
Data and Policy Tool to Help Cities Build Wealth: CFED Final Report
AssetPlatform.org aggregates best-in-class financial information, products and services provided for low-income people by community-based organizations throughout the country in one online destination. The site was developed as a result of Living Cities’ 2008 “Mashup” RFP, which sought to stimulate new ways of connecting customers, products and services across the nonprofit sector. The RFP challenged nonprofits who were either in the business of providing financial information and services to low-income people or matching their customers to these services to come up with a better way of working together. Through this RFP, the Aspen Institute won a grant award of $500,000 from Living Cities to develop AssetPlatform.
In a little over a year since its launch, AssetPlatform has reached more than 6,500 practitioners representing over 4,000 organizations. The site has facilitated access to high-quality, practical products and services, including savings accounts, tools to help clients navigate and pay off their debts, and ways to locate nearby credit unions and other services. Organizations that work with clients on asset-building continually provide content and drive users to the site. For example, NeighborWorks, a national network of more than 240 community development and affordable housing organizations, provided its E-Foreclosure Basics to the platform. The Aspen Institute is working to expand AssetPlatform.org to include additional training, tools, products and services in the areas that users have identified, including alternatives to payday loans, lower cost check cashing and remittances, and access to fairly priced vehicles, car loans and car insurance.
Past Investments and Initiatives
The Corporation for Enterprise Development
In December 2008, Living Cities provide the Corporation for Enterprise Development (CFED), a national asset-building intermediary, with a grant of $300,000 to undertake a rigorous scan of local data sources that could be used by stakeholders to gauge the financial security of residents. In September 2009, Living Cities awarded CFED $24,000 to support the development of a Living Cities Blueprint on municipal asset policy, which catalogs and documents the range of local financial education, empowerment and protection.policies and programs. This work has helped CFED to strengthen the knowledge base for asset-building practitioners and policy makers across the country.
Expanding Municipal Innovation in Asset Building
In 2008, Living Cities made a series of grants to strengthen Cities for Financial Empowerment (www.cfecoalition.org), a coalition of cities seeking to use their power and positions to strengthen innovative financial empowerment initiatives, and to support the implementation of such initiatives in five cities: Boston, New York, San Antonio, San Francisco, and Seattle. The below example illustrates this work in greater detail.
Led by the Office of Financial Empowerment at the New York City Department of Consumer Affairs, $aveNYC offered a 50 percent match to New Yorkers with very low incomes if they deposited part of their tax refund into a “SaveNYC Account” and maintained the initial deposit for one year. This decision to redirect a portion of their refund, combined with limited access to the account and a 50 percent match, helped individuals generate short-term savings and begin a long-term savings program to build greater financial stability. Living Cities funds were used to evaluate the program and prove its impact.
In the three-years that it has been in operation, more than 2,300 people have opened $aveNYC accounts. Impact research is ongoing, but the program provides strong evidence that people in households with very low incomes can and will save when given the appropriate incentives and facilitated opportunity. The average annual income of participants was $17,000. Nearly eight of 10 account-holders from 2008 and 2009 successfully saved for the full year and received their match. Many people continue to save long after the match; 55 percent of accounts funded in 2008 are still open and have an average balance of $800.
With this data in hand, New York Mayor Bloomberg’s Center for Economic Opportunity (CEO) included $aveNYC as one of four transformative programs in its successful application to the Corporation for National and Community Service’s Social Innovation Fund. This important award will take $aveNYC tested approach to three new cities, helping establish a new normal in the savings and asset-building field.