III.	Site Visit Findings
		Organizational Structure and Philosophy
		Who Participates: Targeting, Recruitment, and Screening
		Providing Support and Accountability: Case Management
		What Participants Learn: Financial Education
		Issues for Future Consideration

This chapter presents in detail the findings from our first-round site visits to the five selected AFIA programs. Our findings illustrate the variety of AFIA program models that are taking shape. In describing the issues facing these early grantees, our findings also suggest the policy issues that may emerge as the IDA field evolves.

All of the programs visited were in an early operational phase. Although some of the visited programs are still refining certain aspects of their operations, they have all progressed beyond an initial startup phase. Most respondents felt that the hard work of program design and development was behind them. They could speak of approaches that had been tried and changed, and of lessons learned along the way. At each program, some participants had already attained their savings goal and made matched withdrawals. Interviewed accountholders at each site spoke eloquently of the importance of the program to them. To some observable degree, the programs are thus accomplishing what they set out to do.

The programs were doing so in very diverse ways. The crucial task for program administrators appears to be finding the right fit between the IDA program, the organization, and the clientele; that is, ensuring that the IDA program fits well with the organization's mission and strengths and with the capacities of participants.

In the remainder of this chapter, we describe our findings with respect to organizational structure and philosophy; targeting, recruitment, and screening; case management; financial education; and, finally, the ways in which our findings suggest emerging policy issues.

A. Organizational Structure and Philosophy

In many important respects, AFIA programs reflect the organizations that operate them. Each organization puts its own "stamp" on its AFIA program—on the types of individuals that it tends to attract, the financial literacy curriculum, its approach to case management, and the program requirements that it imposes. To better understand the programmatic differences among the visited AFIA programs, it is important to first examine the organizations. Following is a brief descriptive overview of their key features.

Following are our principal findings with respect to the ways in which organizational structure and philosophy shape AFIA programs.

The one visited program that is operated with very strong involvement by the financial institution was very different from those operated by social service organizations. For all visited programs, the AFIA grantee is a nonprofit organization. However, there is one program—the Pittsburgh site—in which the predominant institution is the financial partner, Dollar Bank. Among those interviewed, there was a common understanding that Dollar Bank had true "ownership" of the program, even though the AFIA grantee was the YWCA. Staff at each partner organization involved, as well as the participants themselves, called it "Dollar Bank's IDA program." This perception seems to stem from the fact that the AFIA program was largely incorporated into an IDA-like program already operated by Dollar Bank.

Dollar Bank had been operating a homeownership promotion program for low-income individuals called Mission: Homeownership. The program is targeted to individuals with incomes less than 80 percent of area median income. Upon completion of a homeownership education course and credit counseling, individuals can receive grants of up to $3,000 from Dollar Bank toward a down payment. AFIA participants now attend the same financial literacy classes and receive the same credit counseling as Mission: Homeownership clients. The only difference is that the AFIA participants receive case management through the YWCA, and their eligibility is determined by AFIA regulations. AFIA participants and all other Mission: Homeownership clients are required to apply for their mortgages through Dollar Bank.

Thus, even though Dollar Bank is not the AFIA grantee, we consider this a bank-oriented program. It differs in many respects from the other four visited programs. These differences are suggestive of the ways in which AFIA programs operated by financial institutions tend to differ from those operated by social service organizations. However, it is important to bear in mind that Dollar Bank is probably not representative of all banks. It is a local—some would claim a national—leader in community involvement; it also offers a range of products and services for low-income savers and conducts aggressive outreach to low-income communities.

Therefore, even though the Pittsburgh program is only one example, and has an unusual financial partner, it is nonetheless an informative example of how a bank-oriented AFIA program might differ from others. We see the key differences as follows:

Programs vary in their leniency or stringency, according to organizations' philosophies. A program can be lenient or stringent in several respects: (1) the minimum deposit required; (2) attitude toward participants' unrealistic aspirations; (3) tolerance for emergency withdrawals; (4) tolerance for inactive accounts, or participants who appear unlikely to attain their saving goal; and (5) how closely saving deposits are monitored. One aspect of this is the position that a program takes with respect to what may be accountholders' unrealistic aspirations. What if an individual with severe credit problems insists on aiming for homeownership? What if the amount that an individual can set aside each month is insufficient to meet his or her goal? The approach a program takes in these instances varies widely, according to the philosophy of the organization, and will no doubt affect program outcomes. The Bronx site provides a good example. Although it admits all eligible applicants, the program does gently guide certain individuals away from the homeownership goal. It does this partly because the very high cost of New York City real estate makes homeownership unattainable for most people in the AFIA-eligible income bracket. (In fact, for this reason program staff wished that the income guidelines were pegged to area median income rather than the federal poverty level.) It also discourages homeownership as a goal if an individual has credit problems so severe that they would be unlikely to qualify for a mortgage in the duration of the program. In such cases, program staff suggest that the accountholder explore the educational or business-startup goals instead. However, if such an individual insists on striving for homeownership, the program would not prohibit it.

In contrast, Dollar Bank, which has a large role in the Pittsburgh program, feels strongly that the IDA program should impose more stringent constraints. Specifically, it was concerned that a lenient program design would allow too many people to enroll who were unlikely to ever become mortgage ready. It felt that the minimum deposit ($10/month) was too low to sustain a realistic down payment in the Pittsburgh housing market. (The minimum deposit had been set in recognition of participants' low incomes, rather than down payment requirements.) It was especially concerned that, at the time of our site visit, there were approximately 17 accounts (out of 62 ever opened) showing very little activity. The bank was concerned that these inactive accounts' claim on match funds was tying up money that could be used for "productive" accounts. At the time of our visit, the bank wished to raise the minimum monthly deposit from $10 to $40 and to restrict admission to individuals that are, or could become, mortgage-ready during the time frame of the program. As a bank, it feels that it (rather than a social service agency) is best qualified to assess a person's mortgage potential, and it does not wish to tie up match money in accounts that are unlikely to "graduate" to mortgage applications. Dollar Bank had succeeded in imposing this screening criterion at the time of application. (Screened-out individuals would be referred to other Dollar Bank programs while they repair their credit, until they become "IDA-ready.") The bank also succeeded in raising the minimum monthly deposit. In the future, it will be interesting to track whether inactive accounts become a problem, especially among programs whose requirements are relatively lenient.

"Piggybacking" IDA program components onto existing program components can have mixed results. For the most part, the sites developed the components of their IDA programs specifically for the IDA programs. One site stands in contrast. The Pittsburgh site integrated IDA program elements into the pre-existing activities of the three partner organizations. Recruitment was to be conducted by the Housing Authority of the City of Pittsburgh (HACP). Case management was to be conducted by the YWCA in the context of its existing case management work for the HACP's Family Self-Sufficiency (FSS) program. Financial education and credit counseling were to be provided by Dollar Bank as part of its pre-existing homeownership program. (Details of these arrangements are provided in the respective sections of this report.) This strategy has met with mixed success. The HACP lacks the capacity to sustain a major recruitment effort, so Dollar Bank has incorporated the IDA program into its recruitment drive for its broader homeownership program. Case management appears to suffer because the FSS caseworkers are already overworked. The financial education component appears to work fairly well, largely because a smoothly-running system had already been developed. It has proven fairly straightforward to simply allow more individuals (the AFIA participants) to attend the classes. What has resulted, however, is a program that is fragmented and incohesive.

The Milwaukee site plans to include their IDA program in the Milwaukee Asset Building Collaborative, an initiative that involves partnerships with other Milwaukee organizations. This initiative is expected to start in late 2001.

In contrast, at the other organizations, developing the case management and financial education components specifically for the IDA program involved substantial startup costs, but resulted in centralized, more cohesive program elements. At least one organization, the Bronx grantee, is investigating expanding its well-regarded financial education curriculum to other programs.

The heavy administrative requirements of AFIA programs may make them difficult propositions for small organizations with a limited funding base. AFIA-specific administrative costs are not easily measured, but the anecdotal evidence suggests that such costs are extensive. This echoes the findings of other research in the IDA fiel.[8] The program costs are difficult to quantify from available information for several reasons. First, it is common for staff salaries to be covered by multiple funding sources, and staff members are typically unfamiliar with the amount derived from each source. Cross-site comparisons of administrative costs for a given type of organization (e.g. the sponsoring organization) are deceptive because tasks are split differently between organizations in different programs. For example, at one site, the financial education component may have been developed by a bank at one site, and by the social service agency at another. Financial institutions either do not track such expenses specifically, or are reluctant to share this information.

The anecdotal evidence is compelling, however. Uniformly, program staff noted that organizations must find other sources besides AFIA administrative funding. The visited sites have had to marshal a variety of funding sources to compensate. In this respect, the size and diversified nature of the sponsoring organization can be crucial, because it determines whether it is able to do so. Fortunately, most of the process study sites possessed the resources to cover startup and administrative expenses. Some have been able to subsidize their AFIA program with other internal funds. For example, at the Bronx grantee organization, a portion of the IDA manager's salary is paid by a different internal program account. The sites leveraged other external sources of funding as well. In at least one case, that of the Sacramento site, the AFIA program simply operates at a staffing level that is very low. (This organization operates five IDA programs with two part-time staff members and a VISTA volunteer.)

The challenge of covering administrative expenses was particularly acute for the organization affiliated with a multi-site grantee. The experience of WISCAP's sub-grantees is illustrative. WISCAP's administrative funding from the AFIA grant had to be divided between all the affiliated organizations, but each one had to incur all the costs (e.g. of developing the financial literacy component, purchasing MIS IDA, etc). Specifically, each sub-grantee received $3,000 in AFIA administrative funding. This barely covered the cost of purchasing the management information system, MIS IDA, much less any other administrative expenses. The necessity of purchasing the new SPSS software (to replace MIS IDA) is going to be a challenge for many sites.[9]

These five AFIA programs were little known within their communities. Our impression, confirmed by program staff and participants, is that AFIA programs are little known outside of the constituencies of the sponsoring organizations. Several reasons may account for this. First, the IDA field is nascent. Second, most AFIA programs are small in size. In some cases, organizations are actually reluctant to publicize their programs too widely for fear of being unable to accommodate potential applicants. This concern seems ill-founded, as organizations typically have difficulty filling even the few account slots that they do have.

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B. Who Participates: Targeting, Recruitment, and Screening

The participant populations of the process study sites vary dramatically. This is not surprising, as each organization targeted the clients that it felt best equipped to serve. But participants also vary in unobservable characteristics such as motivation. According to program staff, it is these unobservable characteristics, even more than income level, that affect an individual's success at saving.

Our principal findings with respect to targeting, recruitment, and screening are presented below.

AFIA programs do not "sell themselves." Substantial effort and thought are required to conduct a successful recruitment initiative. Program staff at all visited organizations noted that low-income individuals, upon learning about IDAs, tend to perceive such programs as too good to be true. This skepticism stems in part from a healthy wariness toward fraudulent-sounding "get-rich-quick" schemes. Many people are also distrusting of mainstream financial institutions, having had either no experience or bad experiences with them. These factors present considerable hurdles to outreach and recruitment.

Although the AFIA staff uniformly agreed that initial recruitment can be quite difficult, they were also quick to note that, in the words of one program staff member, "once you get over that initial hump and get positive word of mouth, an IDA program can sell itself." There was general agreement that after some critical mass of program success has been reached, word of mouth is the most cost-effective recruitment method. In fact, a few program administrators deliberately conducted their program to ensure some early success stories—for example, by recruiting those likely to succeed or by encouraging savings goals that were relatively easy to attain—knowing that such successes would bring others into the program.

Most of the organizations drew their IDA participants primarily from the populations with which they were already working. This was true for three of the five programs studied. The Bronx grantee, for example, formally targets all eligible Bronx residents, but most accountholders are drawn from its own client base or from those referred by its partner organizations. The Pittsburgh program targets recipients of housing subsidies, specifically Section 8 tenants and public housing residents. This is the client base of the Housing Authority (HACP), which initiated the AFIA grant application and remains one of the integral partners of the program. This is a "natural" target population insofar as the grantee, YWCA, works with some of these clients through its administration of the HACP's Family Self-Sufficiency program, while the HACP refers others. As the third example, the Reno site targets families participating in its Head Start program and residents of its low-income housing properties.

Two of the organizations, however, are working with populations essentially new to them. The Milwaukee site deliberately reached out to the refugee population. It selected this target population because it had received an Office of Refugee Resettlement (ORR) grant to establish an IDA program, and it felt that there would be good synergy between the IDA programs funded by ORR and AFIA. Approximately 80 percent of its AFIA-funded IDA program participants are refugees, drawn from three major groups: Bosnian Serbs, Hmong, and Laotians. Working with this population required the hiring of staff members who were familiar with these groups, as discussed later.

The Sacramento grantee is also working with a new population —low-income residents within the general public—because poor recruitment results led it to change its original strategy. Initially, it targeted its own and its partner's client populations (residents of rental properties owned by the grantee, Mercy Housing, and clients of SVOC, its partner organization). Because this approach yielded few accounts, however, Mercy Housing has since opened the program to all local eligible residents through general advertising. The organization had to develop additional selection criteria (e.g. the date the application was received, the number of dependent children, and how well developed was the statement of personal savings) but has been very pleased with the results of the advertising effort.

Recruitment varied in difficulty. Three organizations —the Bronx, Reno, and Sacramento grantees—experienced some difficulties in recruitment. The Bronx and Reno grantees overcame initial difficulties by adopting bilingual program administrators (in reaching out to Latino households) and by relying less on "mass" recruitment methods (described below). The Sacramento grantee resolved the problem by enlarging its target population, opening the program to the general public. The other two sites, Milwaukee and Pittsburgh, did not experience major problems in recruitment.

There are no patterns that appear to explain the difficulty or ease of recruitment. One factor that undoubtedly plays a role is the size of the target population. Some target populations may be too small to sustain a critical mass of eligible, interested households. Another factor, as described below, is the appropriateness of the recruitment method for the particular target group.

There were two general approaches to recruitment, targeted and "mass" recruitment. Each one can be effective. Mass recruitment refers to the use of media aimed at large populations or the general public, as through newspaper ads, radio spots, and flyers. A targeted approach aims at a smaller, well-defined population and typically relies heavily on existing relationships —for example, by drawing on the existing client base or using partner organizations for referrals.

Three organizations started with a mass approach and gradually settled on a more targeted strategy. The Reno site, CSA, is a good example. Initially, it conducted outreach by handing out flyers and attending local community board meetings. However, because these methods produced a low response rate, it changed its strategy, now drawing almost exclusively on the internal CSA community of staff members and existing clients. It utilizes primarily word of mouth. The Sacramento and Bronx grantees also experimented with "mass" recruitment methods before settling on more targeted approaches that relies on word of mouth and other referrals. The Bronx grantee relies on referrals from its partners and also draws from its own client base (residents of its housing properties). The Milwaukee grantee conducts outreach through staff members' connections to two religious institutions, a Serbian Orthodox Church and a Buddhist temple.

Two of the organizations have had success with mass recruitment methods, however. The Sacramento grantee initially used a targeted approach—presentations and notices to residents of its housing properties—but this resulted in only 25 accounts in five months. The organization subsequently opened up the program to all local residents and placed an ad in a local newspaper. The response was tremendous—nearly 400 phone inquiries for the remaining 32 slots.[10] In the Pittsburgh program, one effective recruitment method is the mass outreach conducted by the financial partner, Dollar Bank, for its Mortgages for Mothers program. These are typically one-day, highly publicized public events targeted to low-income women for the purpose of publicizing Dollar Bank's several programs aimed at low-income savers, including the IDA program.

An interesting case is SVOC, Mercy's partner at the Sacramento site. Originally, SVOC planned to target individuals from one of its properties, Villa Jardin. SVOC also planned to fund its accounts with projected profits from Villa Jardin. The property was not profitable, however. Additionally, its residents were not responsive to the IDA program. As a result, SVOC was able to deliver only 45 percent of the matching funds originally pledged. SVOC is currently working with Mercy Housing to revise the recruitment strategy and pick a new target population for SVOC's accounts. SVOC's preference, however, is to provide the matching funds for the unfunded accounts before they resume recruiting efforts.

Certainly recruitment aimed at a "known" population, such as the organization's client base, can be better targeted. Less effort is expended in reaching those who may turn out to be ineligible. But this obviously reaches fewer people. Outreach to an "external" population casts a wider net, but many of them may be ineligible. One organization, the Bronx grantee, has developed a useful system that tracks its "hit rate" —the AFIA-eligible share of applicants attracted to the program through various recruitment methods. It has found this information very useful for program management and for making strategic decisions about recruitment methods in which to invest.

Staff members who are knowledgeable about the culture of the target population can make recruitment much more effective. The Bronx grantee, which is located in a heavily Hispanic area, initially struggled in attracting and keeping IDA participants because its staff members did not speak Spanish. The situation changed markedly with the addition of an IDA manager and a coordinator who are both bilingual. (At the same time, the organization also became more sophisticated in its ability to target recruitment.) The Milwaukee site credits its recruitment success among refugees to staff members' personal credibility with the respective populations. One of the IDA coordinators was related to an elder at a Serbian Orthodox church; the other had contacts to the Hmong population through a local Buddhist temple. In both cases, the endorsement of a trusted source within the local community was essential to attracting refugees into the program.

Participant screening occurs at several levels and undoubtedly affects outcomes. Obviously, the outcomes that will be observed in AFIA programs will depend in large part on the characteristics of the individuals enrolled. Who is enrolled is determined by screening at several levels:

(1) Screening according to AFIA-mandated eligibility criteria;

(2) Self-selection (the IDA program may inherently draw some types of people more than others, resulting in an applicant pool that shares certain characteristics); and

(3) Agency selection (screening criteria imposed by the administering organization).

The first type of screening—according to AFIA-mandated eligibility requirements—is the most straightforward, and all of the process study sites complied with it. The other two types of selection are much more subtle and complex. They are under the control of programs to a large extent, and they can occur explicitly or implicitly. Anecdotal evidence suggests very strongly that self-selection definitely occurs in IDA programs, perhaps most notably with respect to motivation. Individuals who enroll in an IDA program probably already possess a relatively high level of motivation to improve their situation in life. How programs are structured can influence the degree to which participants self-select. For example, imposing a burdensome application process, lack of support services, and stringent program rules will probably result in a program comprised of individuals who are very motivated, with low subsequent dropout. In contrast, providing extensive support and lenient program requirements may allow the less motivated to enter, but with expectedly higher dropout.

The comparison between the Pittsburgh and Bronx programs is illustrative in this regard. The Pittsburgh program offers little case management and relatively few support services. It also allows only home purchase. Participants in that program are, almost by definition, individuals who had determined their goal (homeownership) in advance of joining the program and were capable of sustaining the commitment with little program support. In contrast, some of the other programs —the Bronx site, for example—appeared to attract individuals who were less focused. Extensive counseling and case management permits a more exploratory attitude, and there appears to be extensive personal support if one falters. This would tend to encourage (or rather, not discourage) individuals who might drop out of a more stringent program.

High program success rates (measured by attainment of savings goals) may be due to self- or agency selection that resulted in a "likely to succeed" participant population—or to intensive support, that allows a greater variety of individuals to succeed.

Selection of individuals who possess certain characteristics can also occur by the agency, either implicitly or explicitly. At the time of our site visit, Dollar Bank, which plays a large role in the Pittsburgh program, had just prevailed in imposing an additional selection criterion: an applicant's potential to become mortgage-ready within the timeframe of the program. This was the only example of explicit agency selection. The other four organizations do not weigh personal characteristics in selecting applicants. The staff in these programs felt that efforts to pre-screen applicants were probably not worth it, for two reasons. First, the typical application process demands so much of individuals that it automatically eliminates all but the most motivated. Second, the most important predictor of success in their view—motivation —is unobservable anyway.

Most of the organizations have an "open-door" policy in which any eligible applicant is accepted. Even so, agency selection can be implicit and very powerful—for example, in its focus on one target population over another. An example is SDC, whose selection of refugees as a target population appears to have resulted in a participant population that is highly motivated and driven to succeed. By targeting this group, SDC has implicitly selected for participants possessing those traits.

The importance of selection criteria, whether deliberate or not, whether explicit or implicit, is enormous. In determining the participant population, it affects the intensity of recruitment and case management required, the type of financial education that is most appropriate, and a host of other program parameters. It also can be expected to have a major effect on the observed participant outcomes and program impacts.

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C. Providing Support and Accountability: Case Management

Case management is a core element of many IDA programs. Activities that we consider to comprise case management include: orientation (including explanation of program rules and expectations), counseling about appropriate goals and savings strategy, account monitoring, referrals to resources in the community, support services (for example, child care during and transportation to financial education classes), and assistance with any personal issues that affect accountholder's ability to participate successfully in the program.

Traditionally the types of organizations that have operated IDA programs are social service agencies—organizations that are strongly oriented to providing case management. How they do so is as varied as the organizations themselves. In the future, other types of organizations that are not oriented to case management —such as financial institutions—may increasingly begin to operate IDA programs. How will this change the "flavor" of IDA programs? One indication is given by the example of the Pittsburgh site, in which the financial partner has a large role. How does the intensity and approach to case management affect participants' experience in an AFIA program? The examples of our process study sites offer some interesting insights.

Programs vary greatly in their emphasis on case management. Two of the visited sites, Milwaukee and Pittsburgh, offer minimal case management. Their example suggests that intensive case management may not be essential—if the program is composed of accountholders who have the wherewithal to succeed on their own. At SDC, the non-intensive nature of the case management stems at least in part from the fact that the target population, refugees, is so motivated that little case management is needed. In this program, case management consists of having a staff member available to answer participants' questions. It has little to do with the traditional support services offered by SDC. The program participants we interviewed did not feel a need for more case management.

At the Pittsburgh site, the paucity of case management is a perhaps-unintended effect of the way in which the program is structured. In neither case does it appear—based on the early anecdotal evidence— that the absence of case management is hindering participants' progress toward their savings goals. One caveat to this might be the 17 inactive accounts at the Pittsburgh site. Some may argue, as the financial partner does, that these participants were ill-suited for the program at the outset. Others may argue that these participants experienced difficulty because they did not receive adequate support.

Finally, there is the example of the Sacramento site, which also provides little case management. This is due primarily to staffing shortfalls. There are only two part-time staff members and a VISTA volunteer to manage 225 accounts in five different IDA programs. (The two part-time staffers have most of the client contact; the VISTA volunteer works primarily on larger institution-wide issues, such as expanding IDA availability to other company locations.) In this program, the interviewed participants mentioned minimal case management as a shortcoming. They noted the need for more peer support, more information about other local resources to help them attain their goals, and more in-person asset-specific training.

In conclusion, the record is mixed with respect to the need for case management. It appears to depend primarily on the characteristics of the participant population. It is too early to gauge the effect that case management may have on participant outcomes. From this early experience, however, it appears that case management may not be essential if the participant population is already highly motivated and "self-sustaining." If the participant population is needier, failure to provide correspondingly intense case management can result in individuals who do not progress in the program, or else "silently" drop out. This should serve as a caution to organizations as they consider whether to institute or expand AFIA programs. Many organizations, excited at the ways in which IDAs can help their constituencies, might be tempted to institute AFIA programs without first assuring that case management resources are adequate for the needs of their target population. Similarly, it can be a mistake to attempt to expand IDA programs at a pace that outstrips the organization's realistic ability to serve all participants.

Intense, personalized case management can make a difference for individuals "at the margin." Case management can have a significant, if indirect, effect on the type of individuals who stay, and succeed, in an AFIA program. Minimal case management can weed out individuals who need support, perhaps resulting in a participant population quite different than what was intended. Intensive case management can make the crucial difference for some individuals at the margins.

An illustrative example is the Bronx site. This program offers perhaps the most intensive case management of the visited sites. A bilingual IDA coordinator helps applicants complete the application, provides the orientation, often walks enrollees to the credit union and accompanies them while they open up the account, and checks in by telephone monthly to see how participants are doing. Orientation sessions are offered at night if that is most convenient for applicants. Dinner and childcare are provided at the financial literacy classes. Accountholders are also warmly encouraged to drop by with questions or concerns, or just to say hello. If someone anticipates an upcoming cash need, the AFIA coordinator helps him or her to brainstorm ways to resolve it without imperiling their savings plan. The atmosphere this creates is personal and nurturing. Indeed, program participants at this site uniformly commented that they feel well cared for and supported. "I never feel lost or that I'm falling through the cracks. The staff really cares about me," said one.

Such an approach seems particularly appropriate for IDA populations composed of many individuals "at the margin"— that is, those for whom strong program support may well determine whether they develop and maintain a pattern of regular saving. However, it is clearly time intensive. Offering such personal service, at a given staff size, would constrain the number of AFIA accounts that an organization could manage. Offering such support may serve fewer clients, but may permit the program to serve a needier segment of the community. In contrast, a program that offers little case management can support a larger caseload, but one comprised primarily of people who are 'self-starters' and might have done equally well without the program. In short, both approaches can achieve results—but the affected populations are likely to be quite different in size and description. Whether a program aspires to serve a needier population is an important strategic decision that should be made after a thoughtful assessment of the fit between the associated requirements for case management and the support that a program can realistically offer.

Attrition can be very high in the initial stages of entering an AFIA program, and intensive program support is accordingly especially important at the beginning of an individual's participation. Programs were surprisingly uniform in their estimation of the share of potential participants that drop out at each key juncture. In their experience, approximately one-half of interested individuals drop out at each of the initial steps of the program. That is, of those who inquire about an AFIA program, roughly one-half actually apply. Of those who apply, one-half come in for orientation. Of those who attend an orientation session, approximately one-half open an account or attend financial education classes. Of these, approximately one-half complete the classes and actually make any regular deposits. These estimates do not even include the subsequent "staying power" of participants over the duration of the program.

Program staff strongly felt that the need for intensive case management is greatest at the beginning of an individual's participation. Many programs have found that "hand-holding" is worth the effort. Staff members at Dollar Bank (affiliated with the Pittsburgh program), the Reno site, and the Bronx site often physically accompany accepted applicants to the financial institution to open their AFIA accounts. All began doing this when they observed that long lags—often of months—occurred between the time applicants were accepted into the program, and when they made their first deposit; some never did so, effectively dropping out of the program before even making the first deposit. The extra time required to help participants open bank accounts, program staff felt, paid off in terms of getting them started quickly on their savings.

"Piggybacking" IDA case management onto existing case management services can create difficult tradeoffs. In principle, "piggybacking" of support services can conserve resources and create synergy between the various programs offered by an organization. It can also create a situation, however, in which IDA case management is no one's priority, and where IDA case management effectively falls through the cracks.

The example of the Pittsburgh site is illustrative. In this three-organization partnership, AFIA case management was assigned to the grantee organization, the YWCA, which was already providing case management for the Family Self-Sufficiency (FSS) program. Case management for AFIA accountholders was added to the job responsibilities of caseworkers working with FSS participants. Problems arose in several respects, however. First, the FSS caseworkers' caseloads were already so high that they are often unable to meet with their FSS clients more often than quarterly. Second, many AFIA accountholders are not FSS participants; therefore the relationship is a superficial one, typically not extending to more than a brief mandatory orientation session. Finally, the AFIA program is perceived to belong to Dollar Bank, rather than the YWCA, leaving some AFIA participants confused as to why the YWCA caseworkers are involved at all. Clearly, combining AFIA case management onto a pre-existing program structure demands that sufficient additional resources be allocated for the task, and that it be accorded equal priority with other case management activities.

Informal peer support can provide mutual support and accountability as compelling as formal case management. The example of the Reno site is instructive in this respect. The intensity of formal case management at this site falls somewhere in between the extremes noted earlier. The many IDA participants who participate in the grantee's other programs also receive program-specific case management from those other caseworkers. The role of the IDA coordinator is to conduct orientation sessions and to contact accountholders if she notices a lapse in deposits. Client contact is more sporadic and less personal than at the Bronx site.

What is notable about this site is the strong informal element of accountability and support. This can be as compelling, or even more so, than the formal case management. Because most AFIA accountholders are already clients (or staff members) of the grantee's other services, they see each other regularly and offer each other informal support and encouragement—as well as demanding accountability if someone is tempted to lapse in his or her savings plan. Quarterly sessions at which outside speakers make asset-specific presentations also provide a forum for peer interaction and support. (For example, during our site visit we attended a presentation by a local bank and a small business development center on starting a business.) Accountholders noted that they were energized by these sessions and welcomed the chance to exchange tips with fellow participants.

For the most part, such peer support did not occur at the other visited sites. Although some programs are considering ways to add a peer support component, it did not yet exist formally or informally at any of the other sites. It is clear, however, that such a network might prove useful. Many of the program participants that we interviewed used the occasion of our group interview to share experiences, tips, and moral support. At one group interview, respondents traded tips on choosing a home contractor. Many were pleasantly surprised to discover that others' experiences were so similar to their own. ("I thought I was the only one going through that!" was a common remark.) Everywhere, newcomers to the AFIA program were inspired and energized by those who were close to attaining their goal.

An informal support network is more likely to occur in programs that are composed of groups internal to an organization (such as existing clients of the Reno grantee or fellow church- and temple-goers at the Milwaukee site), rather than those composed of less cohesive groups of individuals. The tradeoff, of course, is that the program is less accessible to those who are not part of the internal community in the first place.

The tone and apparent effectiveness of case management hinges on interpersonal relationships. Organizations should be very careful about whom they assign to the critical "front-line" positions that involve direct contact with AFIA participants. Where the target population includes those of different cultures (such as the Hispanic community in the Bronx or the Serbian and Southeast Asian refugee community in Milwaukee), cultural sensitivity is of paramount importance.

Both the Bronx and Milwaukee sites attributed a large part of their success to having identified staff persons who were credible with the respective target groups. The importance of this factor for recruitment has been discussed previously. It applies equally strongly with respect to keeping participants engaged after enrollment. For example, the Bronx site's IDA coordinator, who has most of the direct client contact, is a VISTA volunteer who, like many of the enrollees, is a Latino workfare recipient. The organization has found that participants are more likely to discuss problems or concerns with someone who literally and figuratively speaks their language.

Even beyond cultural issues, however, it is clear that the effectiveness of functions that require client contact is personality-driven. At Pittsburgh's Dollar Bank, for example, attrition rates varied widely between two financial trainers delivering the same curriculum. Close attention to staffing the front-line positions in an AFIA program is particularly important in view of the skepticism with which many individuals approach IDA programs in the first place.

The staff-client interpersonal dynamics of AFIA programs makes institutionalizing them difficult. The challenge of developing programs that endure beyond any one individual is not unique to AFIA programs. Rather, it is characteristic of many non-profit organizations. With high turnover and strained resources, such organizations often find programs are strongly affected by the strengths and weaknesses of the individual staff members operating them. Even in organizations that are large and stable (as were all of our process study sites), specific programs such as AFIA programs can be small and therefore quite fragile. Because departures of key staff members may well affect program quality at any of the sites, we view our findings from these site visits as preliminary. Only time will tell if program strengths survive the individuals who developed them.

Functions where personality especially seems to matter are those that involve direct contact with participants, such as recruitment, case management, and the delivery of financial education. With respect to case management specifically, the personality of the case managers may be particularly important for programs that are structured to provide high levels of one-on-one support. In contrast, a relatively impersonal program may be easier to institutionalize, but it will tend to attract individuals who can do well with minimal support.

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D. What Participants Learn: Financial Education

The type of financial education received by AFIA participants differs widely across programs. In general, there are three components to financial education: financial literacy, credit counseling, and asset-specific education. All the sites offered these components to some degree. These are discussed separately below.

Program staff and participants alike, at every single site, remarked that the most important step is to help convince participants that they can succeed. Many individuals remarked on the profound transformation that occurs when someone who did not believe he or she could ever attain an asset, begins to realize that it is within their reach. Some individuals enter AFIA programs already possessed of this attitude. For many others, however, the first task is to help participants attain this self-confidence.

The financial literacy component varied greatly in length, approach, and content. Each site has a "core" financial literacy component. Typically (with one exception, described below) this is classroom-based. Content and approach varies dramatically as well, ranging from a generalized, life skills approach (the Bronx site) to strictly technical information (the Pittsburgh site). Most sites had developed the financial literacy component in-house; only one site (Pittsburgh) utilizes a curriculum developed by an outside organization—the homeownership training curriculum developed by the Fannie Mae Foundation. Sometimes it is delivered by program staff, other times by staff of the financial institution. Each site's financial education component is described briefly below.

At the Bronx site, financial education component consists of 8 weekly sessions, delivered by the grantee's own staff. The original intent was to have the financial partner, a credit union, develop and deliver the financial literacy component. However, the grantee's staff felt that it was not rigorous enough. They redesigned the curriculum, culling the best from a variety of financial literacy curricula obtained by their own research. The result is a two-month intensive curriculum. It is focused primarily on life skills, beginning with an examination of what money means to each person and progressing to money management, investment basics, defining wealth (net worth and personal finance), credit counseling, financial tools (stocks, bonds), setting up financial goals, and adopting healthy financial habits. Dinner and childcare are offered during the sessions. The program staff continually reassesses and refines the curriculum after each round is completed.

Participants had nothing but praise for this course. Many spoke of how the course compensated for the financial basics that they had never learned while growing up. Further, its holistic approach seems to have catalyzed many participants to reflect not just on their spending patterns but also on their life priorities. One participant spoke for others in describing that the course prompted her to reassess how she spends her time, her relationships, her diet, and a number of other quality of life issues.

At the Sacramento site, the financial education component consists of six monthly sessions on basic money management. The IDA coordinator developed and conducts the classes. The class currently covers assets, money management skills, credit and debt, financial planning, and the distribution of wealth. The interviewed participants generally enjoyed it, but wished that it could be longer and more in-depth, and cover more topics, such as retirement and investing in the stock market and mutual funds.

At the Reno site, the financial literacy component consists of a bilingual (Spanish/English) curriculum designed by Wells Fargo Bank for the IDA program. Unlike the other financial literacy courses, this one has no clear-cut start and finish. The classes cycle perpetually, allowing participants to enter and exit the training course as they wish until they complete all the classes. Classes are conducted on a rotating basis by the three financial institutions. The schedule has been changed to a less intensive one. (Originally the 2-hour classes were held three times a week every week of the month, for a total of 24 hours per month. Bank staff was unable to keep up with that demanding schedule, however, so the course was stretched out to 8 class hours per month, consisting of classes offered twice a week for two weeks out of every month.) In July 2001 one of the banks dropped out of the rotating teaching arrangement because of staffing shortfalls, leaving that task to the remaining two banks. This arrangement offers flexibility, but with some lack of cohesion (because the course has no fixed start and end) and the potential for redundancy (as material previously covered is repeated for the benefit of class members who did not attend earlier classes).

At the Pittsburgh site, the financial education consists of five weekly homeownership training sessions conducted by Dollar Bank. The course is open to participants in all of Dollar Bank's low-income homeownership promotion programs. Each class of approximately 50 thus includes some non-IDA participants. Although all attendees share a common goal—homeownership—the course is not IDA-specific. The bank uses a curriculum developed by the Fannie Mae Foundation, which is quite technical. It focuses on how to purchase a home rather than on life skills. Participants at the class we attended seemed engaged and energized, and the interviewed participants who had completed the course spoke highly of it.

The Milwaukee grantee tends to customize its financial literacy component more than the other groups. The organization felt this was necessary because of refugees' different levels of knowledge and English proficiency. (Some participants require a translator.) The training is normally delivered in small groups, but sometimes on an individual basis rather than classroom-style. Instead of emphasizing concepts like money management—most participants already have such skills—the program focuses on providing information about how the U.S. financial system works. If participants need more intensive financial literacy training, they are referred to the "Get Checking" program, a four-session financial literacy course aimed at helping participants become eligible for checking accounts. The course is conducted by a coalition of 13 local organizations, including the grantee, banks, and educational institutions. Grantee staff delivers the financial literacy component.

Credit counseling is a component of all five AFIA programs, but the intensity varies widely. Credit counseling would appear to be an essential part of an IDA program. After all, without a good credit record, at least two of the allowed asset purchases, homeownership and business capitalization, are virtually impossible. The range of credit counseling offered includes: a one-hour examination of one's credit report with the IDA coordinator (the Bronx site); an 8-hour credit counseling session with the Consumer Credit Counseling Service, a national HUD-certified organization (the Reno site); and a comprehensive credit counseling program with a bank credit counselor that can last as long as two years (the Pittsburgh site).

By far the most rigorous credit counseling program is the Dollar Bank program at the Pittsburgh site. It consists of monthly meetings with a bank credit counselor, who also provides the financial literacy training; thus, a relationship develops between the clients and the counselor/trainer. The program is part of Dollar Bank's commitment to all participants in its various homeownership programs that successful completion of their savings and credit repair plans will result in a Dollar Bank mortgage.

Among the other sites, the Sacramento grantee conducts a brief credit check in-house and refers participants who need it to Consumer Credit Counseling Service for a more in-depth assessment. In Milwaukee, the issue for most of the refugee population is establishing credit, rather than credit repair. Accordingly, staff assists the clients to apply for (and wisely use) credit cards, establish bank accounts, or obtain car loans.

It is too early to know the extent to which these approaches are adequately addressing the need for credit repair. Simply becoming aware of one's credit history can be a powerful insight for people who were unaware of its importance. But the insight alone may not be enough unless credit is actually successfully repaired. It is an open question whether the brevity of some of the credit counseling provided can do more than provide a basic awareness. Although all the visited programs at a minimum provide referrals to credit counseling resources, it remains to be seen whether participants follow up on these. An interesting question in future years will be to examine whether poor credit impedes some otherwise-successful IDA participants from attaining their goals.

Asset-specific training is less well-defined than other financial education components. For most of the organizations, asset-specific training consists of referrals to partner agencies. The exception is the Reno grantee. As previously discussed in the context of case management (peer support), the Reno grantee, CSA, provides asset-specific seminars on a quarterly basis to keep participants engaged. At the Pittsburgh program, because homeownership is the only allowed use, the core financial education component is itself asset-specific. At the visited sites, program staff were the least well versed about this aspect financial education, perhaps because most participants are not yet far enough along in their programs for it to be relevant. It may be that the question of asset-specific training becomes more pressing as more participants approach asset purchase.

Anecdotal evidence suggests that the quality of the financial literacy training varies. At the remaining three sites, there are indications that the financial education could be improved. Participants at one site, for example, felt that the financial education was "shallow" and needed to cover more topics, in more depth. The Reno site's arrangement of rotating the delivery of financial education between three banks was seen as being fragmented and incohesive. As with case management, perceptions of quality had much to do with the personalities of individual trainers. This reinforces the point that IDA programs need to hire carefully the individuals who will have direct client contact.

There is no single optimal approach to financial education. The type of financial education that is most appropriate depends on the type of participant population. Participant populations vary enormously across programs, and this affects the types of financial education that is most appropriate. At one extreme, for example, is the Milwaukee grantee's refugee population. For the most part, these individuals are extraordinarily motivated and driven. It is not unusual for participants to take on two jobs to help save toward their goal. The average deposit per participant is approximately $200 per month. Further, many of them had been solidly middle class in their home countries and already possess a mindset oriented to asset accumulation. The task, therefore, is not so much to "sell" them on the idea of saving, or to teach the basics of money management, but rather to provide practical information on how the American financial system works. Their needs are not so much for credit repair as for information on how to establish credit in the first place.

These findings are consistent with emerging evidence that the IDA savings behavior of refugee populations is quite different from that of other low-income populations. For example, the Iowa-based Institute for Social and Economic Development (also a fiscal year 1999 AFIA grantee) notes that its refugee IDA participants save an average of nearly $80 per month (in contrast to a monthly average of approximately $25 for IDA programs which are part of the American Dream demonstration). As with SDC, ISED and other organizations receiving IDA grants for refugees through ORR have found that "IDAs for refugees are less about developing savings behavior and more about helping them mainstream into the local economy."[11]

For more traditional types of low-income groups, program staff felt that financial education should not only provide practical information about how to attain specific assets, but also promote awareness of the importance of saving, money management, and a sound credit record. Participants themselves often commented that they had simply never been taught these things when they were growing up, but that these issues are taken for granted in middle class households. Thus, for certain types of AFIA participants, the paramount task of financial education is to create an asset-building attitude, if it did not exist before, and then to provide the practical information.

Participants at two sites—the Bronx and Pittsburgh—uniformly praised the financial education they had received. Interestingly, these represent two very different approaches—one generalized and oriented to enhancing life skills (Bronx), the other narrowly defined and technical (Pittsburgh). Perhaps the most significant factor is that in each case, the financial education was tailored to the constituent population, and was consistent with other aspects of the IDA program. The Bronx grantee's program is intensely supportive and personalized—the model of IDAs as a "program." It is not surprising that the financial education would emphasize an exploration of life values and the development of general financial skills. The Pittsburgh program, in contrast, appears to be designed for focused individuals who have already defined their goal and merely seek assistance in attaining it—the model of IDAs as a "product." Here, the curriculum is about how to navigate successfully the process of home purchase.

The testimony of satisfied participants leaves no doubt that strong financial education produces many benefits. It can help some individuals attain their goal and become informed consumers —but does weak financial education hinder them? At this early stage in the programs, it is impossible to tell. As with case management, the answer appears to depend on the nature of a program's client population.

Several elements appear to be essential for successful asset accumulation by the poor: strong financial incentives and accurate information (the "tools") and the belief that the goal is attainable (the "mindset"). Some participants enter AFIA programs already possessed of the mindset, and resourceful enough to obtain the information from other means. But where they do not, financial education can have a role to play in both respects. Conducted well, it empowers individuals to believe they can succeed and arms them with the information they need to navigate the financial system successfully. It can also, as we have seen, promote introspection about one's life priorities, which can effect personal transformations that go far beyond the financial realm. We look to later examinations, when AFIA programs have accumulated more experience, to allow us to better assess the significance of financial education in helping achieve asset accumulation for large numbers of people.

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E. Issues for Future Consideration

The first-year site visits reported here have provided many insights into the issues that are affecting grantees' development of AFIA programs. The site visits were also provocative in suggesting the key policy issues that may emerge as programs mature and as the IDA field expands. These include:

We look to future rounds of site visits to help answer some of these questions.

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Notes

[8] See, for instance, Gregory Mills, et al., Evaluation of Asset Accumulation Initiatives: Final Report, Abt Associates Inc., Cambridge, Mass., February 2000. [Return to Text]

[9] The inability to cover the administrative costs may be having a detrimental effect on some AFIA programs. Although it was beyond the scope of our study to examine other WISCAP sub-grantee sites, it appears that some are struggling to establish and maintain their AFIA programs, with inadequate administrative funding as a possible complicating factor. [Return to Text]

[10] SVOC, Mercy's partner at the Sacramento site, originally planned to target individuals from one of its properties, Villa Jardin. SVOC also planned to fund its accounts with projected profits from Villa Jardin. The property was not profitable, however. Additionally, its residents were not responsive to the IDA program. As a result, SVOC was able to deliver only 45 percent of the matching funds originally pledged. SVOC then worked with Mercy Housing to revise the recruitment strategy and pick a new target population for SVOC's accounts. [Return to Text]

[11] Information provided via email dated July 18, 2001 by Jason Friedman, Institute for Social and Economic Development, on the IDA listserve, idanetwork@cfed.org. [Return to Text]