In the midst of an economic downturn, research has increasingly highlighted the financial hardship families currently face, particularly black and Hispanic families. A recent report from the Pew Research Center reports that, between 2005 and 2009, the median wealth of Hispanic households fell by 66% and by 53% in black households. Facing the largest wealth gaps ever recorded, the financial distress of minority families is complex and requires more than cash assistance, safety-net programs or job creation. Instead, families and communities need access to resources and strategies promote building assets, such as savings accounts, which are instrumental in establishing financial health and well-being. Much research, including a report from the Corporation for Enterprise Development (CFED), suggests that asset-building initiatives require access to financial education, quality financial services, responsible lending practices, consumer protections and incentives that encourage investment savings.
Community-based asset-building initiatives, such as community-based financial institutions and financial literacy programs, are critical resources that can promote the economic well-being and help to lift families out of poverty. In New York, for example, some community banks and financial literacy centers offer the SaveUSA program, allowing low-income individuals to open matched savings accounts. Similarly, with the aim of building strong financial practices within communities, CSSP's Making Connections sites have implemented “asset pathways” that link residents with quality financial services. Several communities, for example, offer free tax preparation programs, allowing families to file returns, learn about basic banking practices and receive financial coaching. In Indianapolis, an Asset Building Coalition representing banks, financial educations and community organizations regularly reviews and addresses community issues affecting the financial health and well-being of residents. Approaching financial health and asset-building from a community-based perspective can trigger resident engagement and help to alleviate the enormous wealth gaps facing communities, particularly low-income black and Hispanic families.
In order to lift families out of poverty, communities must have access to stable credit, savings accounts and financial literacy programs, which provide families with the resources necessary to build durable assets, such as homes or investments. The following are various asset-building and financial resources available to communities and residents.
- Federal Deposit Insurance Corporation’s (FDIC) Money Smart program. Since 2001, this program has provided comprehensive financial education to more than 2.5 million people. Designed to meet the needs of low-income individuals, this program outlines important skills and practices that lead to financial health. Instructor-led curricula are available on CD-ROM and Podcasts in several languages.
- The Family Self-Sufficiency Program, administered by the Department of Housing and Urban Development (HUD), promotes economic independence and self-sufficiency through services such as homeownership counseling, job training, and education for families receiving housing vouchers. Interested individuals/families should contact their local Public Housing Authority for details on how to participate.
- The Financial Literacy Education Commission has created a website with various tools and resources dedicated to teaching all Americans the basics about financial education.
- National Council for Community and Education Partnerships (NCCEP) and the National Endowment for Financial Education (NEFE) Financial Literacy Curriculum. A free interactive website that provides financial literacy to youth. Curricula are specifically designed for middle school, high school and college-age youth.
- AssetPlatform.org. A partnership between CSSP and the Aspen Institute, this website offers webinars, access to trainings and provides various tools that can help communities establish asset-building initiatives.
- The Assets for Independence Program, administered by the Department of Health and Human Services (HHS), aims to build the financial assets of low-income individuals by providing Individual Development Accounts (matched savings accounts), as well as financial education on specific financial subjects, such as budgeting and debt. The Assets for Independence Program grants are awarded to local nonprofits, governments and certain community development financial institutions. First round grant applications for fiscal year 2012 are due by January 25th, 2012. The full announcement can be found here.
- Strong Cities, Strong Communities, which recently launched in six pilot cities, bridges Federal and local stakeholders to spark economic development in cities. By focusing on local community issues, such as job-training or transportation, this program leverages funding to build thriving communities that can meet the needs of its residents.
- Pathways to Responsible Fatherhood Grants are awarded to organizations that help low-income fathers establish long-lasting relationships with their children and overcome barriers to economic self-sufficiency. Grants are administered by the Department of Health and Human Services and are expected to be available throughout the next 3 years.
- Assets and Opportunity Scorecard. Developed by the Corporation for Enterprise Development, this tool provides a state-by-state description of the wealth, poverty and financial security of families. In addition, the scorecard suggests policies and practices that communities can advocate for in effort to improve the economic well-being of families.
- Building Economic Security in America’s Cities: New Municipal Strategies for Asset Building and Financial Empowerment, Corporation for Enterprise Development
- From Piggy Banks to Prosperity: A Guide to Implementing Children’s Savings Accounts,Corporation for Enterprise Development
- Finding Funding: A Guide to Federal Sources for Asset-Building Initiatives, The Finance Project
- The Significance of Financial Literacy, PolicyforResults.org