Interim Report to Congress
Assets for Independence Demonstration Program
Status at the Conclusion of the Third and Fourth Years
THIS FINAL SECTION describes the characteristics of account holders and provides more details about the participants’ IDAs. The information is presented in segments that coincide with requirements of Section 412 of the Assets for Independence Act.
Number and Characteristics of Participant IDA Account Holders
The number of individuals who opened an IDA with the assistance of projects supported by the AFI Program has risen annually. As can be seen in table 3.1, by the end of the third year of the demonstration, a total of 7,813 accounts had been opened. By the end of the fourth year, this number had increased to 12,252. The largest numbers of participants were clients of organizations that started their AFI projects in 1999, the first projects to be implemented. As table 3.25 will show, the number of accounts that remained open at the end of the third year and the end of the fourth year were 6,576 and 9,028, respectively.
| Fiscal Year When Project Grant Was Awarded | Year Three (through Sep. 30, 2002) |
Year Four (through Sep. 30, 2003) |
|---|---|---|
1999 |
4,722 |
6,110 |
2000 |
1,373 |
1,955 |
2001 |
1,718 |
3,255 |
2002 |
N/A |
932 |
Total |
7,813 |
12,252 |
Number of Grants Reporting |
117 |
169 |
Characteristics of Participant IDA Account Holders
This segment examines the characteristics of participant IDA account holders as of the end of the third and fourth years. These characteristics are calculated based on cumulative accounts opened since the beginning of the AFI Program. The tabulations include information about participants whose accounts have been closed.[1]
Gender
The large majority of account holders were female. By the end of the third year, about 81 percent of accounts had been opened by women. By the end of fourth year – even with the dramatic one-year increase in all accounts ever opened – more than three fourths (78 percent) of accounts had been opened by women (see table 3.2).
| Gender | Year Three (through Sep. 30, 2002) |
Year Four (through Sep. 30, 2003) |
|---|---|---|
| Female | 81% |
78% |
| Male | 19% |
22% |
| Number of Grants Reporting | 113 |
161 |
Race/Ethnicity
Slightly less than half of all participants who had opened IDAs in the AFI Program were African American (48 percent through September 2002 and 47 percent through September 2003). About one third of participants were Caucasian. Hispanics accounted for 13 percent of account holders by the end of the third year and 14 percent by the end of the fourth year. The distribution across races was similar for both periods.
| Race/Ethnicity | Year Three (through Sep. 30, 2002) |
Year Four (through Sep. 30, 2003) |
|---|---|---|
| African American | 48% |
47% |
| Caucasian | 33% |
32% |
| Hispanic | 13% |
14% |
| Other | 7% |
7% |
| Number of Grants Reporting | 113 |
160 |
Table 3.4 shows the distribution of participants who opened IDAs by marital status. More than half of the participants were single (55 percent through the third year and 53 percent through the fourth year). Married individuals accounted for the next largest group, with just over 20 percent in both periods.[2]
| Marital Status | Year Three (through Sep. 30, 2002) |
Year Four (through Sep. 30, 2003) |
|---|---|---|
| Single | 55% |
53% |
| Married | 22% |
23% |
| Divorced | 15% |
17% |
| Separated | 7% |
6% |
| Widowed | 1% |
1% |
| Number of Grants Reporting | 113 |
158 |
Note: These calculations exclude "unknown" and "other" response categories.
Household Size
More than half of all participants who opened IDAs were in households of only one or two persons, as can be seen in table 3.5. In both reporting periods, about one fourth of all individuals who opened IDAs came from households with four or more members. Approximately 20 percent of participants who opened IDAs were from households with three members.
| Number of Persons in Household | Year Three (through Sep. 30, 2002) |
Year Four (through Sep. 30, 2003) |
|---|---|---|
1 |
28% |
26% |
2 |
27% |
28% |
3 |
20% |
21% |
4+ |
24% |
25% |
Number of Grants Reporting |
111 |
157 |
Income
Table 3.6 presents information on account holder household income. By a slim margin, individuals whose household income was between 151-200 percent of the poverty level were the largest group in both periods (36 percent and 38 percent at the end of the third year and the fourth year, respectively). Households with below-poverty-level income were a close second at the end of year three, and those with an income from 100-150 percent of the poverty level accounted for the smallest share. For the period through year four, an equal share of account holders (30 percent) had incomes within these two categories.
| Income-to-Poverty Ratio | Year Three (through Sep. 30, 2002) |
Year Four (through Sep. 30, 2003) |
|---|---|---|
| Below 100% | 35% |
30% |
| 100-150% | 29% |
30% |
| 151-200% | 36% |
40% |
| Number of Grants Reporting | 104 |
150 |
About three fourths of account holders lived in urban areas (both inner-city and non-inner-city urban areas). The majority of these (53 percent through the end of the third year and 49 percent by the end of the fourth year) lived in non-inner-city urban areas, as can be seen in table 3.7. Roughly 20 percent of participants lived in rural areas. Slightly more than 10 percent of account holders lived in suburban areas.[3]
| Neighborhood Type |
Year Three (through Sep. 30, 2002) |
Year Four (through Sep. 30, 2003) |
|---|---|---|
| Inner City | 18% |
21% |
| Urban, non-inner city | 53% |
49% |
| Suburban | 11% |
11% |
| Rural | 18% |
20% |
| Number of Grants Reporting | 91 |
140 |
Education
Participant account holders varied widely in their educational backgrounds. Nearly all had at least a high school diploma (almost 90 percent across reporting periods), with many having education beyond the high school level. About a third had some college (35 percent in both reporting periods), and more than 20 percent had an Associate’s degree or higher. These figures can be seen in table 3.8.
| Educational Level Completed | Year Three (through Sep. 30, 2002) |
Year Four (through Sep. 30, 2003) |
|---|---|---|
| Did Not Complete High School | 12% |
13% |
| High School Diploma | 34% |
29% |
| Some College | 35% |
35% |
| Associate's Degree | 8% |
10% |
| Bachelor's Degree or Higher | 11% |
13% |
| Number of Grants Reporting | 113 |
157 |
Age
In both reporting periods, slightly more than a third of people who opened accounts were between 26 and 35 years of age at enrollment in an AFI Project. Account holders ages 36 to 45 were the second largest share of all, with participants over 45 accounting for the smallest share. These data are listed in table 3.9.
| Age Group | Year Three (through Sep. 30, 2002) |
Year Four (through Sep. 30, 2003) |
|---|---|---|
| 25 or Less | 19% |
21% |
| 26 to 35 | 38% |
35% |
| 36 to 45 | 30% |
29% |
| 45 or more | 14% |
15% |
| Number of Grants Reporting | 113 |
160 |
Demographic Characteristics and Agency Type
As previously shown in exhibits 2.1 and 2.2, grantees include a variety of agency types. To examine the relationship between agency type and the demographic characteristics of the participant IDA account holders, the agencies have been classified as described earlier.
Tables 3.10 and 3.11 show various demographic characteristics for the third and fourth years, respectively. These tables enable some comparisons of account holder characteristics across agencies.
Because the individual cell values are very similar in the two reporting periods, the discussion here focuses on the period ending with year four.[4]
Across all agency types, there were more female account holders than male. The values through the end of the third year (table 3.11) ranged from a low of 67 percent female (for private nonprofits) to a high of 87 percent female (for faith-based organizations). Through the end of the fourth year, this range was from 76 percent to 87 percent.
There is substantially more variation in the distribution of participant account holders among rural, suburban, and urban areas.[5] Though inner-city and non-inner-city urban areas combined accounted for the largest share of account holders for all agency types, only account holders who participate through CDCs were more likely to be inner-city residents. Overall, grantees that were United Way organizations served the most urban population – only 6 percent of their account holders were from suburban and rural areas. Grantees that were CAAs, on the other hand, had considerably more rural account holders (38 percent by the end year three and 39 percent through the end of year four) than did other grantee agency types.
Between the two years the pattern in the income-to-poverty ratio is less consistent. For grantees that were government agencies, CAAs, and other private nonprofits, the majority of participants remained in the same categories from year to year (151-200 percent, 100-150 percent, and below poverty, respectively). For grantees that were CDCs, the lowest income range dominated through the end of the third year, characterizing 51 percent of account holders. Grantees that classified themselves as Faith-based organizations and other private nonprofits had most account holders below the poverty level by the end of the fourth year; for the faith-based organizations, this was due to an increasing share of that group, but for the other private nonprofits the share of participants with below-poverty-level incomes dropped from almost 50 percent at the end of the third year to 39 percent at the end of the fourth year.
For five of the six grantee types – government agencies, CDCs, United Way agencies, faith-based organizations, and other private nonprofits – approximately half of the participants were African American in both years (ranging from 46 percent for CDCs through the end of the third year to 77 percent for faith-based organizations through the fourth year). For the remaining grantee type – CAAs – more than half of account holders were Caucasian in both years, with African American participants making up the majority of the remainder.
In terms of education, approximately 35 percent of participants in most types of grantee organizations reported having some college education. Completion of high school was the second most common level of education, representing about one third of all account holders.
Account Holder Banking Relationships
Prior ownership of checking or savings accounts
The IDA accounts were the first checking or savings accounts ever owned by many participants. As can be seen in table 3.12, less than two thirds of all participants who opened IDA accounts had ever used a checking account before they enrolled in the program (39 percent as of the end of the third year and 36 percent at the end of the fourth year). Table 3.13 shows that only about half of the participants had ever had a savings account before enrolling in the program.
| Fiscal Year When Project Grant Was Awarded | Year Three (through Sep. 30, 2002) |
Year Four (through Sep. 30, 2003) |
|---|---|---|
1999 |
66% |
62% |
2000 |
49% |
63% |
2001 |
57% |
67% |
2002 |
--- |
67% |
Overall |
61% |
64% |
| Number of Grants Reporting | 79 |
129 |
| Fiscal Year When Project Grant Was Awarded | Year Three (through Sep. 30, 2002) |
Year Four (through Sep. 30, 2003) |
|---|---|---|
1999 |
52% |
46% |
2000 |
47% |
45% |
2001 |
43% |
53% |
2002 |
--- |
45% |
Overall |
49% |
48% |
| Number of Grants Reporting | 79 |
128 |
Use of Direct Deposit for Paychecks
Few IDA account holders used direct deposit mechanisms for allocating income to their accounts. As is shown in table 3.14, only 13 percent used direct deposit in both time periods. Notably, however, it was not possible to limit the analysis to only those individuals who held jobs working for an employer; furthermore, not all employers offer direct deposit. Thus, this calculation might underestimate the percentage of employees for whom this is an option to use direct deposit. This was one of the variables that many grantees did not track.
| Fiscal Year When Project Grant Was Awarded | Year Three (through Sep. 30, 2002) |
Year Four (through Sep. 30, 2003) |
|---|---|---|
1999 |
9% |
13% |
2000 |
12% |
13% |
2001 |
22% |
13% |
2002 |
--- |
12% |
Overall |
13% |
13% |
| Number of Grants Reporting | 64 |
95 |
Use of Automatic Allotment/Deposit Procedures
Very few participants used automatic procedures (such as automatic transfers from other bank accounts or deposit of part of their paychecks directly into their IDA accounts) to make deposits into their accounts. Only about 5 percent of account holders took advantage of such procedures, a number that stayed relatively consistent across grant years (see table 3.15).
| Fiscal Year When Project Grant Was Awarded | Year Three (through Sep. 30, 2002) |
Year Four (through Sep. 30, 2003) |
|---|---|---|
1999 |
5% |
4% |
2000 |
6% |
7% |
2001 |
5% |
8% |
2002 |
--- |
5% |
Overall |
5% |
6% |
| Number of Grants Reporting | 70 |
104 |
Amounts in Project Reserve Accounts
Federal Amounts Drawn Down
As of the end of the third year, 118 grantees reported that they drew down a total of $10,860,260. This represents 40 percent of the amount granted to them. By the end of the fourth year, 171 grantees drew down a total of $16,720,197 of their federal amount. This represents 43 percent of the total federal grant amount. (See table 3.16). The percentage of federal grant funds drawn down varied by grantee. Table 3.17 shows that by the end of the third year, the federal drawdown was 75 percent or more for 32 percent of grants. At the other extreme, nearly one fourth (22 percent) of grantees had not drawn down any federal grant funds. By the end of the fourth year, 35 percent of grantees drew down 75 percent or more of their federal grant, while nearly one fourth (23 percent) reported that they had not drawn down any federal funds.
| Fiscal Year When Project Grant Was Awarded | Year Three (through Sep. 30, 2002) |
Year Four (through Sep. 30, 2003) |
||
|---|---|---|---|---|
| Amount | Number of Grants Reporting | Amount | Number of Grants Reporting | |
1999 |
$4,629,299 |
32 |
$5,340,677 |
32 |
2000 |
$2,491,396 |
21 |
$2,937,916 |
21 |
2001 |
$3,739,565 |
65 |
$6,203,421 |
64 |
2002 |
--- |
-- |
$2,238,183 |
54 |
Total |
$10,860,260 |
118 |
$16,720,197 |
171 |
| Percentage of Federal Grant Draw Down | Year Three (through Sep. 30, 2002) |
Year Four (through Sep. 30, 2003) |
|---|---|---|
| 0% | 22% |
23% |
| 0% to 24.9% | 17% |
14% |
| 25% to 49.9% | 14% |
15% |
| 50% to 74.9% | 15% |
13% |
| 75% to 100% | 30% |
34% |
| More than 100% | 2% |
1% |
| Total | 100% |
100% |
| Number of Grants Reporting | 118 |
171 |
As table 3.18 shows, grantees have made progress toward drawing down their federal grant over time. Through September 2002 (their third year of operation), the 1999 grantees drew down 60 percent, and through September 2003 (their fourth year) they drew down 69 percent.
Similarly, through September 2002 (their second year), the 2000 grantees drew down 61 percent, and by September 2003 (their third year), they drew down 72 percent of their federal grants overall. The 2000 grantees are drawing down funds more quickly than the 1999 grantees. By the end of their third year of operations, they had already drawn down a higher proportion of their grants (72 percent) than the 1999 grantees drew down at the end of their fourth year (69 percent).
The 2001 grantees drew down 25 percent by the end of September 2002 and 43 percent by September 2003. The 2002 grantees drew down 18 percent of their federal grant funds by the end of their first year, September 2003.
| Fiscal Year When Project Grant Was Awarded | Year Three (through Sep. 30, 2002) |
Year Four (through Sep. 30, 2003) |
|---|---|---|
1999 |
60% |
69% |
2000 |
61% |
72% |
2001 |
25% |
43% |
2002 |
--- |
18% |
All |
40% |
43% |
| Number of Grants Reporting | 118 |
171 |
Nonfederal Amounts
Table 3.19 shows that through the end of the third year, the grantees deposited $13,048,894 of nonfederal funds into their Project Reserve Accounts. By the end of the fourth year, the amount had grown to $19,944,380.
Grantees have succeeded at leveraging the federal grants to obtain additional funds, beyond the requirement that nonfederal funds must equal the federal grant amount. As can be seen by comparing tables 3.16 and 3.19, the nonfederal deposits into the project reserve accounts have well exceeded the amount of federal funds drawn down. Through the end of the third year the nonfederal deposits to the reserve account were about 20 percent higher than the federal funds drawn down. By the end of the fourth year, the nonfederal deposits in the reserve accounts were nearly 38 percent higher than the federal funds drawn down.
| Fiscal Year When Project Grant Was Awarded | Year Three (through Sep. 30, 2002) |
Year Four (through Sep. 30, 2003) |
||
|---|---|---|---|---|
| Amount | Number of Grants Reporting | Amount | Number of Grants Reporting | |
1999 |
$5,739,964 |
32 |
$6,483,196 |
32 |
2000 |
$2,807,466 |
21 |
$3,248,745 |
21 |
2001 |
$4,501,464 |
65 |
$7,100,748 |
64 |
2002 |
--- |
-- |
$3,111,691 |
55 |
Total |
$13,048,894 |
118 |
$19,944,380 |
172 |
Amounts Deposited in Participant IDAs
Through the end of the third year, participants had opened 7,813 IDA accounts and a total of $3,972,055 had been deposited into these accounts. The average balance was $508 (see table 3.20).[6] Nearly half (47 percent) of the grants had average balances of less than $400 per account. However, for about one fourth of grants (27 percent), the average balance was over $600, including 13 percent in which the average amount deposited was over $800 (see table 3.21).
By the end of the fourth year of the program, participants had opened 12,252 accounts, with a total of $7,227,605 deposited. The average balance increased substantially (by 17 percent) to $592 per account. By the end of the fourth year, 41 percent of projects showed an average cumulative deposit of under $400, while more than one third (34 percent) had deposits averaging over $600, including nearly a quarter (23 percent) in which the average deposit was more than $800.
| Fiscal Year When Project Grant Was Awarded | Year Three (through Sep. 30, 2002) |
Year Four (through Sep. 30, 2003) |
||||
|---|---|---|---|---|---|---|
| Number of Accounts | Dollars Deposited | Average Balance | Number of Accounts | Dollars Deposited | Average Balance | |
1999 |
4,722 |
$2,728,905 |
$578 |
6,110 |
$4,302,168 |
$704 |
2000 |
1,373 |
$624,282 |
$455 |
1,955 |
$1,081,745 |
$553 |
2001 |
1,718 |
$618,869 |
$360 |
3,255 |
$1,603,255 |
$493 |
2002 |
-- |
--- |
--- |
932 |
$240,437 |
$271 |
Total |
7,813 |
$3,972,055 |
$508 |
12,252 |
$7,227,605 |
$592 |
Number of Grants Reporting |
117 |
110 |
92 |
169 |
156 |
139 |
| Fiscal Year When Project Grant Was Awarded | Year Three (through Sep. 30, 2002) |
Year Four (through Sep. 30, 2003) |
|---|---|---|
| $0 - $199 | 18% |
17% |
| $200 - $399 | 29% |
24% |
| $400 - $599 | 25% |
24% |
| $600 - $799 | 14% |
11% |
| $800 or more | 13% |
23% |
| Number of Grants Reporting | 92 |
139 |
As shown in table 3.22, by the end of the third year of the program, the 1999 grantees appeared to be well on their way to achieving their target number of accounts. Eighty-four percent of the accounts had been opened by that time, and 102 percent by the end of the following year. We cannot tell precisely how close grantees are to achieving their goal in terms of number of accounts because over time we expect grantees to enroll more participants than their funded number of slots. There are several possible reasons for this phenomenon. First, as people drop out of a program, grantees may recruit other participants to achieve their target number of open IDAs. Second, if participants graduate from the program and use less than the full match assumed, the grantee has remaining funds that can be used to serve additional participants. Thus, we can expect the cumulative number of participants over time to exceed the planned or target number of accounts.[7] The average IDA balance in projects managed by 1999 grantees rose by 22 percent from $578 at the end of the third year to $704 by the end of the following year. (See table 3.20 above.
| Fiscal Year When Project Grant Was Awarded | Year Three (through Sep. 30, 2002) |
Year Four (through Sep. 30, 2003) |
|---|---|---|
1999 |
84% |
102% |
2000 |
51% |
73% |
2001 |
18% |
33% |
2002 |
--- |
15% |
| Number of Grants Reporting | 114 |
171 |
The organizations that received a grant in 2000 were on track for opening their planned number of accounts. By September 2002 (the end of their second year), they had opened 51 percent of the planned accounts, with an average deposit of $455, and by the end of September 2003 (the end of their third year), they had opened 73 percent of the target number. The average cumulate deposit for this group also rose by 22 percent to $553.
The 2001 grantees reported that they are progressing somewhat more slowly. Through September 2002 (their first year), they had opened 18 percent of the planned number of accounts. By the following year (their second year), 33 percent had been opened. In contrast, as noted above, the 2001 grantees had opened half the planned number of accounts by the end of their second year. However, the average cumulative deposit for the 2001 grantees increased substantially (by 37 percent) from $360 through September 2002 to $493 by September 2003.
By September 30, 2003, the 2002 grantees had opened 15 percent of their overall target number of accounts with an average deposit of $271.
[1] The average cumulative amount deposited cannot be calculated directly by dividing the cumulative deposits by cumulative accounts opened because of the different number of grants reporting for each amount.
Amounts and Purposes for IDA Withdrawals
Withdrawals at the End of the Third Year
Through the end of the third year of the AFI program, participants had made 2,499 withdrawals, totaling $1,289,778 from their IDAs. The average withdrawal was $524. (See table 3.23.) Participants withdrew savings for a range of qualified and nonqualified purposes. About 67 percent of the withdrawals were for qualified purposes, including home purchases, small business expenses, postsecondary education or training, and transfers to dependants. Withdrawals for home purchases were the most common and were the largest in dollar value. Projects reported that 566 individuals withdrew funds for this purpose and their withdrawals averaged $933. For 41 percent of the grants that reported withdrawals for home purchase, the average amount was between $1,000 and $1,499. For 30 percent of these grants, the average withdrawal was under $1,000, and for 25 percent, the average withdrawal was over $1,500 (see table 3.24).
Withdrawals for small business expenses averaged $518 per withdrawal for the 528 individuals who withdrew funds for this purpose through the end of the third year. For 42 percent of all grants that had withdrawals for this purpose through that year, the average withdrawal was between $500 and $999. A quarter of the average withdrawals for small businesses were under $500, and a third of the withdrawals were over $1,000.
Program participants made a total of 557 withdrawals for postsecondary education or training through the end of the third year, with an average of $395 per withdrawal. The average withdrawal was under $200 for over one quarter (27 percent) of grants that had withdrawals for this purpose.
While withdrawals for home purchase are typically one-time events for any account holder, individuals who use their accounts for small business development or postsecondary education or training typically make multiple withdrawals from their accounts (for example, withdrawals for tuition each semester).
Withdrawals of an individual’s contributions to his or her IDA are allowed if they are made with permission. Emergency withdrawals are allowed for such emergencies as medical expenses, preventing eviction, or meeting expenses following loss of employment. Emergency funds withdrawn must be repaid within 12 months to keep match money and remain in the demonstration. No match funds are paid out at the time of withdrawal. Through the end of the third year, participants made a total of 339 withdrawals, averaging $315 for emergency purposes.
Nonqualified withdrawals are withdrawals that are made for a purpose other than those specifically allowed by the authorizing legislation or an emergency purpose. Participants who make nonqualified withdrawals may be suspended or removed from the project. No match is paid out at the time of a nonqualified withdrawal. Through the end of year three, a total of 493 withdrawals, averaging $339, were made for nonqualified purposes.
By the end of the fourth year, 5,237 individuals had made IDA withdrawals. This represents more than twice the number who had made withdrawals at the end of the third year. The average withdrawal, $548, was slightly higher (5 percent) compared with the prior year average of $524. The share of withdrawals made for qualified purposes was similar, at 67 percent. Similar to the statistic at the end of the prior year (at the end of year four) withdrawals for home purchases were the largest in dollar value averaging $1107 per withdrawal for the 1,182 individuals who withdrew funds for this purpose. At 1,195, the number of withdrawals for small business capitalization or start-up slightly exceeded the number of withdrawals for home purchase. Withdrawals for small business expenses averaged $550 per withdrawal. A total of 1,082 individuals had withdrawn funds for postsecondary education and training purposes, with an average withdrawal of $457.
In addition, by the end of year four, 785 individuals had withdrawn funds for emergency purposes, with an average withdrawal of $291, and 963 individuals had withdrawn funds for nonqualified purposes, with an average withdrawal of $306.
Table 3.23.1. Types of Withdrawals from IDAs
Part 1: Qualified Withdrawals
Table 3.23.2. Types of Withdrawals from IDAs
Part 2: Emergency and Nonqualified
Withdrawals
| Average Withdrawal | Year Three (through Sep. 30, 2002) |
Year Four (through Sep. 30, 2003) |
|---|---|---|
| Home Purchase | ||
| <$500 | 11% |
8% |
| $500 - $999 | 23% |
25% |
| $1,000 - $1,499 | 41% |
32% |
| $1,500 - $1,999 | 11% |
20% |
| $2,000+ | 14% |
15% |
| Number of Grants Reporting | 44 |
65 |
| Small Business | ||
| <$200 | 15% |
13% |
| $200 - $499 | 9% |
18% |
| $500 - $999 | 42% |
35% |
| $1,000+ | 33% |
35% |
| Number of Grants Reporting | 33 |
55 |
| Postsecondary Education | ||
| <$200 | 27% |
13% |
| $200 - $499 | 15% |
28% |
| $500 - $999 | 42% |
33% |
| $1,000+ | 15% |
26% |
| Number of Grants Reporting | 33 |
54 |
Balances Remaining in Participant IDAs
By the end of the third year of the program, grantees reported that 6,576 IDA accounts remained open, with balances totaling $2,987,648 (see table 3.25). The average balance for open accounts was $454.[8] Slightly over half the projects (54 percent) had average balances less than $400, including 22 percent with balances under $200. At the upper limit, slightly over one fourth (26 percent) of projects had average balances of more than $600, including 13 percent with average balances above $800. (See table 3.26.
| Fiscal Year When Project Grant Was Awarded | Year Three (through Sep. 30, 2002) |
Year Four (through Sep. 30, 2003) |
||||
|---|---|---|---|---|---|---|
| Accounts Open | Balance in Open Accounts | Average Balance | Accounts Open | Balance in Open Accounts | Average Balance | |
1999 |
3,696 |
$1,966,618 |
$532 |
3,838 |
$2,293,831 |
$598 |
2000 |
1,280 |
$475,937 |
$372 |
1,457 |
$626,956 |
$430 |
2001 |
1,600 |
$545,093 |
$341 |
2,830 |
$1,230,965 |
$435 |
2002 |
-- |
--- |
--- |
903 |
$259,678 |
$288 |
Total |
6,576 |
$2,987,648 |
$454 |
9,028 |
$4,411,430 |
$489 |
Number of Grants Reporting |
109 |
112 |
92 |
157 |
152 |
137 |
At the end of the fourth year, participants had 9,028 open IDA accounts, with a balance of $4,411,430. The average balance was $489 per account. Just under half the projects (49 percent) had average balances below $400; at the upper end, 16 percent had average balances above $800 (see table 3.26).
| Fiscal Year When Project Grant Was Awarded | Year Three (through Sep. 30, 2002) |
Year Four (through Sep. 30, 2003) |
|---|---|---|
| $0 - $199 | 22% |
25% |
| $200 - $399 | 32% |
24% |
| $400 - $599 | 21% |
22% |
| $600 - $799 | 13% |
13% |
| $800 or more | 13% |
16% |
| Number of Grants Reporting | 80 |
137 |
Across each of the grantee groups, the average balance at the end of September 2003 was higher than the balance at the end of September 2002. For the 1999 grantees, the average balance increased from $532 to $598. Similarly, for the organizations that received grants in 2000, the average balance increased from $372 to $430, and for those that received grants in 2001 the average grew from $341 to $435. (See table 3.25 above).
Account Characteristics — Match Rates
Program grantees may choose to offer any match rate between 1:1 and 8:1 for qualified withdrawals. (These rates include both federal and nonfederal matching funds.) Most grantees offered one match rate for each withdrawal purpose, but 19 of the organizations that received an AFI grant in 2002 and 23 grantees that received a grant in 2003 offered varying match rates depending on the asset goal.
The most common match rate across all three withdrawal purposes and both reporting years was 2:1. In only one case in each reporting period did a grantee offer the maximum 8:1 match. Grantees with multiple sites and different match rates across sites are listed as having “varied” match rates (see table 3.27).
| Match Rate | Year Three (through Sep. 30, 2002) |
Year Four (through Sep. 30, 2003) |
||||
|---|---|---|---|---|---|---|
| Home Purchase 2002 | Small Business Capital- ization 2002 |
Post- Secondary Education 2002 |
Home Purchase 2003 | Small Business Capital- ization 2003 |
Post- Secondary Education 2003 |
|
1:1 |
11% |
13% |
17% |
9% |
11% |
14% |
2:1 |
51% |
58% |
54% |
53% |
60% |
56% |
2.5:1 |
1% |
2% |
1% |
1% |
2% |
1% |
3:1 |
22% |
16% |
15% |
20% |
15% |
14% |
4:1 |
11% |
6% |
7% |
11% |
8% |
7% |
5:1 |
0% |
0% |
0% |
1% |
1% |
1% |
8:1 |
0% |
0% |
1% |
0% |
0% |
1% |
Other Rates |
0% |
0% |
0% |
1% |
1% |
0% |
Varied Rates |
3% |
4% |
6% |
3% |
3% |
4% |
Number of Grants Reporting |
107 |
98 |
103 |
159 |
144 |
154 |
Project Staffing
At the end of the third year of the program, more than one fourth of the projects reported not having any full-time staff assigned to their AFI projects. Roughly 57 percent of the grantees reported having one or two full-time employees working on these projects, though these employees did not necessarily spend all of their time on these projects. Similar staffing numbers were seen at the end of the fourth year.
Some grantees also reported assigning AmeriCorps workers and volunteers to their AFI Project. At the end of the third year, 20 grantees reported having at least one AmeriCorps staff member, and 23 reported having at least one volunteer staff member. By the following year, 30 grantees reported having at least one AmeriCorps staff member, and 42 reported having at least one volunteer on their staff focused on asset building generally and the AFI-funded project in particular.
Support Services Offered to Participants
This subsection describes the financial education, asset-specific training, and other support services provided by the grantees.
Financial Education
Provision of basic financial education for all account holders is one of the most important components of the projects. Financial education classes are critical to help ensure that participants will succeed in their efforts to achieve their long-term goal and acquire an economic asset. Some grantees develop their own financial curriculum, while others use curricula developed by other organizations. Most basic financial literacy courses cover topics such as budgeting, responsible credit use, savings, investments, and taxes.
Grantees reported that by the end of both the program’s third and fourth years, project participants were required to attend an average of 19 hours of basic financial education before they used their IDA balance to purchase an asset.
The average length of the financial education sessions varied greatly by grantee. At the end of the third year, the grantees reported that the length of the basic financial literacy education courses they offered ranged from 1 hour to 10 hours, averaging 2.4 hours per session. These numbers increased slightly by the following year. At that time, the grantees reported that the length of their basic financial education courses ranged from 1 to 10 hours, averaging 2.5 hours per session.
The number of basic financial education sessions offered varied greatly by grantee. As of the end of the program’s third year, the grantees reported that the number of financial literacy sessions offered ranged from 1 to 28 sessions. At the end of the fourth year of the program, the grantees reported that the number of sessions offered ranged from 1 to 31 sessions. The average number of financial literacy sessions offered in both periods was 8 per grantee (see table 3.28).
| Requirement | Year Three (through Sep. 30, 2002) |
Year Four (through Sep. 30, 2003) |
|---|---|---|
| Average Length of Individual Training Sessions | 2.4 Hours |
2.5 Hours |
| Average Number of Training Sessions Offered | 8 sessions |
8 sessions |
| Average Training Requirement | 19 Hours |
19 Hours |
| Number of Grants Reporting | 115 |
165 |
Asset-Specific Training
Asset-specific training is an important component of all projects. Its purpose is to ensure that participants receive training on the resources needed to purchase specific assets and on how to maintain the assets after their purchase. Grantees were asked to report whether they provided any of the following asset-specific training courses to their project participants: home purchase and ownership, small business creation and management, postsecondary education, and specialized or advanced financial education. If grantees offered such training, they were asked to explain whether they provided it directly themselves or through a partner organization. This information is presented in table 3.29.
Home purchase and ownership training was widely offered by grantees in both reporting periods. At the end of the third year of the program, roughly 90 percent of the grantees offered home purchase and ownership training. Of the grantees who offer this training to their participants, 68 percent provided the training themselves. At the end of year four, 91 percent offered home purchase and ownership training, with about 74 percent providing the training themselves.
A large proportion of grantees also offered training in microenterprise development. At the end of year three of the program, 79 percent of the grantees offered training in small business creation and management, with 66 percent of those offering the training directly. At the end of year four, 82 percent of the grantees offered microenterprise training, with 74 percent offering the training through their own organization.
About three fourths of the grantees offered postsecondary education training to their project participants. At the end of the third year of the program, 74 percent of the grantees offered training in postsecondary education, with only 57 percent offering the training directly. This changed only slightly the following year, when 72 percent offered training in postsecondary education, with only 59 percent offering the training directly.
More than half of the grantees also offered specialized or advanced financial education training. As of the end of the third year of the program, 55 percent offered specialized or advanced financial education training, with 67 percent offering it directly (through their own organizations). This was consistent with the data the following year, in which 53 percent of the grantees offered specialized or advanced financial education, with three quarters offering the training themselves.
| Training | Year Three (through Sep. 30, 2002) |
Year Four (through Sep. 30, 2003) |
|---|---|---|
| Home Purchase and Ownership | 90% |
91% |
| Small Business Creation and Management | 79% |
82% |
| Postsecondary Education | 74% |
72% |
| Number of Grants Reporting | 111 |
158 |
| Specialized or Advanced Financial Education | 55% |
53% |
| Number of Grants Reporting | 88 |
126 |
Other Support Services
Many grantees are community-based organizations that provide other support services to all their clients, including participants in their AFI asset-building projects. Some of these services are financial in nature, such as financial counseling, credit repair, loans, and cash outright grants. Other support services often provided to asset-building project participants are more general in nature, such as employment support, child care, transportation, medical care, crisis management, structured planning exercises, mentoring, and peer support.
As shown in table 3.30, of the financial intervention services, most of the grantees provided counseling (86 percent) and credit repair services (84 percent) as of the end of the third year of the program. The proportion of grantees providing counseling increased to 89 percent the following year, and the proportion offering credit repair stayed the same at 84 percent. A lower proportion of grantees offered services such as loans or cash outright to project participants.
Many grantees were also able to provide more general support to the participants. As shown in table 3.30, at the end of both the third and fourth years, about two thirds of the grantees offered employment support, crisis management, peer support, child care, and structured planning exercises. For both reporting periods, about a third of the grantees offered transportation services to their participants, and about a fifth offered medical (treatment) services.
| Service | Year Three (through Sep. 30, 2002) |
Year Four (through Sep. 30, 2003) |
|---|---|---|
| Financial | ||
| Counseling | 86% |
89% |
| Credit Repair | 84% |
84% |
| Loans | 38% |
36% |
| Cash Outright | 17% |
15% |
| General Support | ||
| Employment Support | 71% |
66% |
| Crisis Management | 66% |
68% |
| Peer Support | 61% |
63% |
| Child Care | 64% |
62% |
| Structured Planning Excersises | 61% |
63% |
| Transportation | 39% |
37% |
| Medical (treatment) | 21% |
18% |
| Mentoring | 51% |
54% |
| Number of Grants Reporting | 109 |
158 |
Grants to States
The Assets for Independence Act authorizes OCS to award grants to support state-run programs that were in existence prior to the Act taking effect. Two states with pre-existing statewide asset-building IDA programs, Indiana and Pennsylvania, were “grandfathered” into the de