Assets For Independence:
First Interim Report to Congress FY1999
I. |
Introduction |
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| Assets for Independence (AFI) Demonstration Program | |||
| Purpose and Scope of Report | |||
| Data Sources | |||
Assets for Independence (AFI) Demonstration Program
In October 1998, Congress authorized the Assets for Independence (AFI) Demonstration Program under Title IV of the Community Opportunities, Accountability, and Training and Educational Services Act of 1998 (P.L. 105-285). The purpose of the AFI Demonstration as stated in Sec. 403 of the statute is:
“…to provide for the establishment of demonstration projects designed to determine--
(1) the social, civic, psychological, and economic effects of providing to individuals and families with limited means an incentive to accumulate assets by saving a portion of their earned income;
(2) the extent to which an asset-based policy that promotes saving for post-secondary education, homeownership, and microenterprise development may be used to enable individuals and families with limited means to increase their economic self-sufficiency; and
(3) the extent to which an asset-based policy stabilizes and improves families and the community in which the families live.”
The Assets for Independence Demonstration Program is the first
federal program established to test the efficacy of Individual
Development Accounts (IDAs) as a poverty reduction strategy. It
can best be described as a directed, matched, savings program
for low-income working households. The Office of Community Services
(OCS) within the Administration for Children and Families (ACF)
awards AFI grants to agencies in order to establish IDA projects.
In IDA projects, one or more community-based organizations, and
at least one financial institution, collaborate for the purpose
of offering matched savings accounts to low-income families in
order to assist low-income families in acquiring appreciable assets.
Often in collaboration with other local organizations, grantee
agencies seek to recruit eligible low-income account holders to
enroll in the project. Account holders enter into a Savings Plan
Agreement with the project grantee to establish a savings goal
and a schedule of deposits. Account holders then open a matched
savings account - an “IDA” - at the partnering financial
institution and make deposits from earned income that are matched
at an agreed upon rate. These may range from one dollar to eight
dollars for each dollar saved. Matching contributions are made
by the grantee at least quarterly from equal parts of federal
grant funds and non-federal share contributions to the project.
Matched savings may be expended for either (1) the purchase of
a principal residence by a first-time home buyer, (2) the capitalization
of a business, (3) qualified expenses related to post-secondary
education, or (4) transfer to the IDA of another eligible individual.
The AFI Demonstration Program is one of four primary programs operated by the Office of Community Service’s Demonstrations and Special Projects Division.
Purpose and Scope of Report
This Report to Congress is the first report submitted pursuant to the requirements set forth by Section 414(d)(1) of the AFI statute, and it is to be distributed annually. This report provides data for the AFI projects of the forty 40 entities that received fiscal year (FY) 1999 grants under the Assets for Independence Demonstration Program. This report includes both program and participant information and will provide the following information as required by Section 412 of the AFI statute:
- The number and characteristics of individuals making deposits into Individual Development Accounts;
- The amounts in the Reserve Fund held by grantees;
- The amounts deposited into the Individual Development Accounts by program account holders;
- The amounts withdrawn from the Individual Development Accounts and the purposes for which such amounts were withdrawn;
- The balances in the Individual Development Accounts;
- The savings account characteristics (such as threshold amounts and match rates) required to stimulate participation in the demonstration project, and how such characteristics may vary among different populations or communities;
- What service configurations of the qualified entity (such as configurations relating to peer support, structured planning exercises, mentoring, and case management) increased the rate and consistency of participation in the demonstration project and how such configurations varied among different populations or communities; and,
- Such other information as the Secretary may require to evaluate the demonstration project.
Data Sources
The forty FY1999 grantees submitted an Annual Report on their progress in implementing the demonstration project. The self-reported data contained in these annual reports and the information contained in the grantees’ original applications for funding are the two primary sources of data for this report to Congress. The Annual Report form is displayed in its entirety in Appendix I.
