Financial Stability and Independence
Empowering people to move themselves from poverty to an improved quality of life, through financial education, consumer training and access to asset-building resources and supports. Many of these initiatives will change frequently.
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Becoming bankable
Get CheckingTM
The Federal Reserve Board estimates that approximately 70 million Americans do not have an existing relationship with a mainstream financial institution, meaning that they are unable to cash a paycheck without incurring high fees, earn interest on savings or write checks for fundamental living expenses such as utility bills, etc. ChexSystemsSM, the consumer reporting agency used by most banks and credit unions, reports that over 23,300 Missouri consumers have negative information in their report that could be preventing them from obtaining a bank account.
In May 2006, United Way's Community Investment Committee approved an award in the amount of $3,000 to support Get CheckingTM. The funding is providing partial scholarships for the program for those with incomes at or below 200% of the federal poverty level, thus removing a barrier for low-income households to participate in the program.
Click to download a one-page .pdf with more about Get CheckingTM
Financial education
Citigroup Financial Education Partnership
Once taught at the elementary, high school and college level, classes in financial education were drastically reduced between 1970 and 1990. Today, many Americans lack the basic skills they need to make sound financial decisions. Lacking banking services, people turn to alternative banking services that serve the poor and economically isolated, but often charge higher fees such as payday lenders, check cashing centers, pawnshops and rent-to-own operations.
Now in its third year, more than $162,000 in United Way funding is being distributed to offer the Citigroup financial education curriculum to underserved youth and/or individuals and families in the Hispanic/Latino community.
Click to download a one-page .pdf with more about Citigroup Financial Education Partnership
Gateway Earned Income Tax Credit Community Coalition
According to the Internal Revenue Service in 2004, 189,158 low-to-moderate income households claimed EITC refunds exceeding $335 million in eight Missouri counties and eight Illinois counties comprising the Regional Chamber and Growth Association’s Metro-East Area. The average refund was $1,771. In that same tax year, it is estimated that more than $43 million in EITC refunds went unclaimed by low-to-moderate income households who were eligible, but did not claim the credit in these same counties. National estimates say that 10% to 20% of those who are eligible for the EITC do not claim it, and that the primary reason is lack of knowledge.
The United Way of Greater St. Louis is a key partner in the Gateway Earned Income Tax Credit Community Coalition, a public/private partnership working to bring an estimated $30 million in unclaimed EITC refunds into the hands of low-income individuals and families in the St. Louis region. The Coalition’s service delivery model provides free income tax preparation services and information on asset-building programs and services at both super and continuous tax preparation sites. In February 2007, United Way's Community Investment Committee approved an award of $35,000 to continue its investment in the coalition’s work. In 2007, funds will be used for the executive director’s salary, site expenses, site management, and evaluation.
Click to download a one-page .pdf with more about Gateway EITC Community Coalition
Asset building
Individual Development Accounts
In 1998, in an effort to improve the economic self-sufficiency of low-income families in the St. Louis region, the United Way of Greater St. Louis formed a collaborative of eight agencies to target asset accumulation among low-income households in St. Louis region through the use of IDAs. By 2003, the collaborative expanded to 14 agencies to meet the growing demand for accounts. Structural changes were made to the collaborative in 2006 to improve the quality of service delivery and the achievement of outcomes by program participants.
IDAs are matched savings accounts for low- to moderate-income working families, similar in concept and design to Individual Retirement Accounts (IRAs). IDAs are used to acquire assets such as purchase of a first home, post-secondary education, or small business capitalization. Those participating in an IDA do so with the assistance of nonprofit organizations which require financial education and regular saving as conditions for participation. It is believed that by empowering IDA participants with opportunity, information, and service supports, they will acquire high-return assets that will enable them—and their children—to become economically secure.
Click to download a one-page .pdf with more about IDAs
IDA pilot program for youth aging out of foster care
According to the U.S. Department of Health and Human Services, there are approximately 500,000 children in the nation’s foster care system. Each year, approximately 20,000 children leave the system and attempt to live independently. For many of these youth who "age out" of the foster care system between 18 and 21 years-of-age, the transition to adulthood is filled with additional challenges which often require these same youth to overcome extremely difficult circumstances. Nationally, four years after leaving foster care, 46% lack a high school diploma, 62% have not maintained employment for one year, 38% have been diagnosed with emotional problems, and 42% have become parents.
In 2006, United Way and four agencies serving youth aging out of the foster care system implemented a Youth IDA pilot project designed to provide financial education and a matched savings incentive to ease the transition to independent living for foster care youth. A total of 40 youth, ages 16-21, are participating in the 18-month pilot project. Participating youth may save up to $1,000 of their own earned income and receive a 2:1 match for a total of $3,000, which may used to purchase assets relevant to their special needs such as a car, pay for college or vocational school, independent living expenses, computer, transportation costs, school and extra-curricular expenses, and microenterprise development. Youth also receive financial education and credit counseling.
Click to download a one-page .pdf with more about the IDA pilot for youth
Micro-lending and micro-enterprise development
Immigrants and refugees often lack the certifications, licenses or language skills required to find professional jobs for which they may be qualified. Self-employment is one way to earn extra income to supplement the low wages typical of the current job market open to them. Starting a business is often preferable to minimum wage labor.
In 2007, United Way approved a $25,000 award to provide staff support for a program called Business Links, directed by the International Institute, a United Way agency. The program serves primarily refugees from Bosnia, Somalia, Afghanistan, Nigeria, Congo, Colombia, the Middle East and Vietnam. To date, more than 400 business clients have received services, resulting in over 200 business starts, stabilizations or expansions. The businesses have demonstrated an impressive 85 percent survival rate after two years, client revenue has reached $24 million and the agency’s business clients have had an economic impact of $50 million in the region.
Click to download a one-page .pdf with more about micro-lending and micro-enterprise
Predatory lending prevention and intervention
Don't Borrow Trouble Anti-Predatory Lending Campaign
For American families, 71% of their wealth is located in home equity. For those who can afford it, homeownership can be the ultimate dream. However, for many low- to moderate-income Americans, the American dream has another side. Too often, select lenders manipulate potential homeowners’ hopes and lack of education to prey upon them with high-risk loans. Those loans often include exorbitant interest rates, excessive fees, and unethical pressuring tactics.
Don’t Borrow Trouble staff works with individuals and families providing housing counseling, answering inquiries, and making referrals for legal services. As of June 30, 2007, Don't Borrow Trouble has trained 1,098 individuals, conducted 78 early intervention counseling sessions and produced a videotape in Spanish and English with educational information.
In 2006 and 2007, the United Way approved awards towards staffing and coordination for Don’t Borrow Trouble. Funding is being used to support the project coordinator’s full-time salary and benefits, enabling Beyond Housing to meet the ever-increasing need for individual counseling, community education, and expanded services targeted to the Hispanic/Latino community.
Click to download a one-page .pdf with more about Don't Borrow Trouble
Housing foreclosure prevention and intervention
Foreclosures have risen dramatically, both locally and nationally, in the last eight years. Since 1998, the number of foreclosures has increased 213% in four of the five most populated counties in Missouri. Missouri had 17,699 foreclosures in 2006, with an astonishing 1 in 138 households facing foreclosure, representing a 53% increase over 2005.
In addition to other services, Beyond Housing provides counseling through the Metro St. Louis Foreclosure Intervention Task Force. In 2006, the initiative trained or educated more than 2,500 people in money management, predatory lending, refinancing and post-purchase knowledge. Additionally, Beyond Housing and the task force prevented eight foreclosures. The United Way is supporting the intervention program as its staffing needs rises.
Click to download a one-page .pdf with more about the Foreclosure Intervention Task Force