Pulling yourself up by your bootstraps and a “hard work” ethic are the hallmarks of America’s definition of success. To achieve success and the economic mobility of the American Dream, however, requires not only the ability to generate income, but also the ability to translate such income into assets. While income may measure whether or not a person has enough to get by, assets measure whether or not a person has enough to get ahead
– “An Assets Agenda for the States,” New America Foundation
At the December meeting of the JFCS Advisory Council, the topic was asset building. Mary Cleary, grants and information manager at JFCS, gave an overview of asset building and explained how it relates to some very exciting partnerships with Assets For Independence (AFI), Norton Healthcare and Trilogy Health Services.
“We are really committed to asset building,” said Judy Freundlich Tiell, executive director of JFCS. “We’re planning to be a part of the financial empowerment explosion in the Louisville area.”
For those who are not familiar with the term “asset building,” it refers to long-term saving and investment behavior which helps to build household wealth and increase economic independence. The idea is to empower individuals to make choices about their finances that will help them move past a paycheck-to-paycheck lifestyle and into a more stable financial position.
With economic stability, individuals and families become more oriented toward the future and their stake in society increases. As more households build assets, their neighborhoods and communities stabilize and thrive. Evidence shows that asset building yields some diverse benefits, such as lower divorce rates, increased property values, improved health and greater civic involvement.
Individual Development Accounts
Our new partnerships involve employer-sponsored Individual Development Accounts (IDAs), which are special savings accounts that provide matching funds for individuals with low to moderate income. Both of our partners plan to offer IDAs as benefits to their qualifying employees. Cleary said, “Both have major commitments to helping their frontline non-healthcare workers build skills and move into skilled healthcare professions.” The goal is to help low-wage employees train for positions with higher pay and more advancement potential.
The Norton Healthcare program encompasses both home ownership and education; employees are eligible for $7,000 in matching funds toward buying a home and $5,000 in educational assistance, and they only have to save $500 of their own funds toward each goal to receive the match. The Trilogy Health Services plan focuses on educational funds, with a $4,000 match to employees who save $500 in their IDAs.
Many employers offer education and housing benefits to their employees, but sometimes the funds the companies can afford to commit are not enough to meet individual needs. The IDA program is unique because it combines employer funds with a federal matching grant from AFI. “Norton Healthcare never was able to fill the number of slots they had available for housing assistance,” said Cleary. “The extra federal match may be enough to help some participants take advantage of the program.”
Beth Kuhn, a workforce development consultant with Kentucky’s Workforce Investment Cabinet, explained that educational reimbursement plans are not ideal for low-wage workers because they usually have to save hundreds or thousands of dollars to pay tuition and then wait for repayment after they complete a course. The IDA disbursement is more user-friendly because it will pay for educational expenses up front with a smaller commitment of employee funds.
Connecting with Participants
JFCS projects that there will be 100 participants per employer, and those will be spread across facilities in five different states. JFCS staff members will provide education and support to all program participants, so the agency needs to find a way to serve all of the individuals without actually traveling to more than 80 different locations.
“Both employers are offering computer access to employees on their shifts,” explained Cleary. “Both also have infrastructure in place online to offer training to participants.”
Some of our Advisory Committee members have created or worked with online teaching resources, and they suggested several programs that have been successful for distance education. Others referred us to organizations which have a history of managing education campaigns with a wide reach, such as United Way and local educational institutions.
Suhas Kulkarni, director of Louisville’s Office for Globalization, emphasized the need for widespread education in terms of financial literacy and asset building. “Our country’s savings are much lower than the rest of the world,” he said. “We need education to help people know about the programs that are available.” Our healthcare partners agree that education is the key to asset building; they have asked that our courses be made available for all employees, regardless of whether they qualify for the IDA benefit.
Terry Singer, dean of Kent School of Social Work at University of Louisville, suggested using online technology to connect the participants not just to the program, but to one another. He explained that creating a cohort (a group who share an experience at the same time) will help foster a community where individuals will “encourage one another to be successful.”
Expanding the Program
In many ways, the Norton Healthcare and Trilogy Health Services partnerships are pilots for additional employer-sponsored IDA programs. If the program is successful with these employers, JFCS may reach out to additional companies who could benefit from this service.
“We hope that it is successful so other employers will see it as a method of retention and recruitment,” said Tiell. Several Advisory Council members agreed that employers would be more willing to sign on if the data shows that the IDA program increases employee retention rates.
Dr. Howard Bracco, psychologist and former director of Seven Counties, recommended looking for “natural alignments” in additional industries. He explained that the real estate and education sectors would make good partners for housing and educational savings.
Community volunteer Madeline Abramson shared that there are 10 million unfilled positions in manufacturing worldwide due to a shortage of skilled workers. She recommended approaching trade organizations to help connect with employers within their industries.
Through partnerships with AFI and private employers, JFCS can increase the impact it has in our community and can extend the reach of its services to other states. In closing, Tiell explained, “Online training at multiple sites is something that hasn’t been done through AFI before. This is a very new and innovative way to look at things.” Everyone at JFCS is very excited about this program and the positive changes it can bring.
For more information on asset building and individual development accounts, you can view Mary Cleary’s presentation below.
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