Credit Building for Youth Aging out of Foster Care

September 5, 2019

1:00 – 2:30 PM ET

Welcome

Tupa HovekaProgram Associate, Field EngagementProsperity Now

Housekeeping

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Getting the Most Out of Today’s Call

▪Join from a quiet space

▪Grab a coffee or snack and settle in

▪Engage! Send us your questions and comments as you listen

▪Reflect on ways to apply what you learn today to your own work

Today's Speakers

Lauren Grayman

Assistant Director

Contra Costa and Solano Programs

First Place for Youth

Sandra Wilkie

Managing Director

Case Commons

Jason Feldhaus

Vice President

Connected Youth Initiative

Nebraska Children and

Families Foundation

Andraya Slyter

Chief Operating Officer

The Right Way Foundation

Today's Speakers

Ariel Sankar-Bergmann

Senior Program Manager

Savings and Financial Capability

Prosperity Now

Ola Wadibia

Senior Program Manager

Savings and Financial Capability

Prosperity Now

Context Setting

Ariel Sankar-BergmannSenior Program Manager

Savings and Financial Capability

Prosperity Now

Prosperity

Now’s mission

is to ensure

everyone in our

country has a

clear path to

financial stability,

wealth and

prosperity.

Our Unique Promise

We open doors to opportunity for those who have been kept

off the path to prosperity.

We help people build wealth by making sure they have

what they need to build a better future.

We enable meaningful mobility through research, policies and

solutions.

The Challenge

Credit and Poverty

1. Understand why credit building is important for youth generally, and specifically for youth who are involved in systems like foster care.

2. Hear insights from organizations that have implemented credit-building services.

3. Learn about planning tools to implement credit-building services within your organization.

4. Discover additional financial needs of youth from groups that are serving youth aging out of the foster care system.

Objectives

1. Welcome and housekeeping

2. Credit building and financial capability for youth aging out of foster care

3. Implementation lessons learned

4. Insights from the field

5. Implementation tools

6. Wrap-up

Agenda

▪ I work for an organization that provides financial capability services (for example, financial coaching, financial counseling, financial education, etc.).

▪ I work for an organization that serves youth involved in the foster care system.

▪ I work for an organization that serves other marginalized youth (homeless, justice involved, etc.).

▪ I work for an organization that focuses on credit building.

▪ I work for a funder.

▪ I work for a different type of organization. (Please share your organization’s type in the chat box).

Poll: What type of organization do you work for? (Select all that apply.)

Credit Building Overview

Ola WadibiaSenior Program Manager

Savings and Financial Capability

Prosperity Now

▪Credit building is defined as access to products or programs that help people build or rebuild credit.

▪To build credit, an individual must have at least one trade line, or credit account, on their credit report and be making payments toward it for at least six months.

▪A trade line might be opened when a person requests a loan or applies for (and is granted) a credit card. Payments or lack of payments toward the balances on the loan and credit card are reported to the three major credit bureaus.

▪On-time payment is one of several factors that influence a person’s credit score.

What is credit building and how does it work?

▪Mainstream financial products can be costly or difficult to access for people with no credit, thin credit and poor credit.

▪Several products have been designed to help people safely and affordably build their credit history. These products include: ▪Credit-builder loans

▪Secured cards

▪ Lending circles

▪Rent reporting

▪ Twin Accounts

▪These products are often paired with services like credit counseling, which helps support participants as they use these services.

What is credit building and how does it work? (Continued)

Panelist Discussion

Sandra WilkieManaging Director

Case Commons

The Importance of

Credit Building &

Financial Capability

Sandy Wilkie

September 5, 2019

22

Jim Casey Initiative

➢ ensures that young people – ages 14 to 26 –

who have experienced foster care have the

resources, relationships and opportunities

to achieve well-being and success

➢ established in 2001

The Jim Casey Youth Opportunities Initiative

Annie E. Casey Foundation

Our Focus

➢ permanent family connections

➢ stable housing

➢ educational success & economic security

➢ pregnancy prevention and parenting supports

23

Opportunity Passport®

Goal

Young people become financially capable

Components

➢Financial education, coaching & experience

➢Account at a financial institution

➢Matched savings for assets

Asset Categories

Credit building Vehicle Education Participant specific

Housing Investment Health Microenterprise

24

Financial Capability/Asset Purchases are Associated

with Better Outcomes

an education asset have 2.3x higher odds of reporting being

in school

a vehicle asset have 2.6x higher odds of reporting

adequate transportation for school and work

a housing asset have 1.3x higher odds of reporting stable

housing

a vehicle asset have 1.6x higher odds of reporting employed

Opportunity Passport® Participants

Who Purchase...

25

➢Financial capability/asset purchasing is associated with improved

outcomes

➢Building and/or repairing credit is a critical component of financial

capability

➢Building financial capability of young people who have experienced

foster care is a path to economic security

➢Potential to reduce income and wealth gaps for youth of color who are

disproportionately represented in child welfare system

What We Have Learned About the Importance of

Credit Building and Financial Capability

Lessons Learned from Organizations

Serving Transition Age Youth

Ola WadibiaSenior Program Manager

Savings and Financial Capability

Prosperity Now

▪Prosperity Now provided eleven months of intensive technical assistance to the following organizations:

▪First Place for Youth (Oakland, CA)

▪Nebraska Children and Families Foundation (Omaha, Nebraska)

▪The Right Way Foundation (Los Angeles, CA)

▪Children’s Home Society of Florida (Fort Lauderdale, FL)

▪DePelchin Children’s Center (Houston, TX)

▪The technical assistance focused on helping the sites to integrate credit-building services into existing programs serving youth aging out of the foster care system.

Project Background

▪Why? To develop an effective and responsive program that can sustain participant engagement.

▪When? During planning, design and ongoing after implementation

▪Strategies

▪One-on-one interviews

▪Focus groups

▪Surveys

▪Concept testing

▪Youth as program advocates and liaisons

Lesson 1: Center Youth Voices in the Design Process

▪Why? Increase the competence of staff so they can leverage critical moments in time and connect young people to the appropriate resources.

▪When? Pre-implementation

▪Strategies:

▪Financial capability training, especially focused on credit building

▪Racial economic inequality education

Lesson 2: Build the Capacity of Staff to Provide Resources to Clients with Credit and Debt Goals or Challenges

▪Why? To manage staff capacity, build relationships with local community providers and bridge youth’s negative associations with the financial system.

▪When? During design and throughout implementation

▪Strategies:

▪Community service provider inventory and assessment tools

▪Partnership plan

▪Referral plan

▪Credit building primer

Lesson 3: Identify Partners and Build Relationships to Deliver Services

▪Why? To be responsive to competing obligations and capitalize on existing, trusted relationships.

▪When? Implementation (once product vetting and a partnership plan have been established)

▪Strategies:

▪Participant journey mapping

▪Partnership plan

▪Referral plan

Lesson 4: Bring the Products and Services to Youth

▪Why? To achieve the intended outcomes without causing harm.

▪When? During planning, design and ongoing after implementation

▪Strategies:

▪Credit building primer

▪Concept testing

▪Partnership plan

▪Referral plan

▪ Institutional and systems change (i.e., policy advocacy)

Lesson 5: Incorporate Support and Safety Measures into Products and Services

Audience Q & A

What questions do you have?

Share them in theQuestions box!

Case Study: First Place for Youth

Lauren GraymanAssistant DirectorContra Costa and Solano ProgramsFirst Place for Youth

▪We wanted to find out:

• What credit-building services will most help our clients?

• Who will deliver the identified services to our clients?

• How will operations change for integration?

• How do we convince stakeholders to support this work?

▪Our Goals:

• Youth feel confident in managing a checking and savings account.

• Youth open savings and/or checking account.

• Youth can articulate how credit impacts them.

• Youth know credit score and whether it is subprime or prime.

• Youth access credit coaching.

• Youth contribute to savings account.

How did you approach the credit building integration process?

▪ Financial Capability Assessment

• Client needs assessment

• Monitor and measure

• Referral component and tracking

▪Credit Education

• Sessions on site

▪Credit Counseling

• One on one financial coach

▪Secured Credit Card

▪Youth Voice and Choice

• Early youth survey

• Tested forms and assessments

• Youth focus groups

What services did you ultimately decide to provide and how have young people reacted to them?

▪Youth voice and choice is engrained in our services and philosophy. From the services we provide, assessments and surveys we complete, to employing our youth, they are always at the center. This project was no different.

▪We administered a financial empowerment survey to assess behaviors, thoughts and needs.

▪We employed youth and participants in our “Young Adult Leaders Program” who reviewed and tested all forms and assessments.

▪We conducted youth focus groups.

▪Youth were very clear they wanted external experts providing the services.

Tell us about your approach to developing partnerships.

▪MyPath, is a national nonprofit based in San Francisco that provides technical assistance and consulting services to organizations interested in building financial capability pathways for youth. MyPathprovided financial education and financial coaching via its Savings Model and Credit Model.

▪ Pacific Service Credit Union, FPFY leveraged an existing relationship, to provide banking services for youth. Another benefit to the partnership with Pacific Service Credit Union was its technological capability. A Pacific Service Credit Union representative could sign clients up for accounts remotely from a branch and during joint MyPath sessions.

Tell us about your approach to developing partnerships (cont.)

▪You must think about staff impact, both intended and unintended:

▪We were clear that staff’s roles were big enough, that they were not content experts and that our youth didn’t want them to provide services.

▪It was essential for staff to understand client's financial lives and understand the services being offered by partners so that they could make referrals and champion the work.

▪Staff were trained on the financial assessment form, which we incorporated into assessment dates, so that staff could capture clients’ baseline information and regularly monitor progress.

▪Frontline staff were invited to attend the financial education workshops, so that they can learn about their services and receive financial help themselves.

What’s one piece of advice you have for other groups that are considering offering credit-building services?

Case Study: Nebraska Children and Families Foundation

Jason Feldhaus,Vice PresidentConnected Youth Initiative Nebraska Children and Families Foundation

▪ The Connected Youth Initiative (CYI) is a network, supported by multiple agencies and organizations, that focuses on youth ages 14-25 who are “unconnected” from family and social supports due to involvement in systems such as foster care, juvenile justice, and/or are experiencing homelessness or at-risk of being homeless.

▪CYI uses a youth-centered approach to help unconnected youth reach positive outcomes by increasing their protective and promotive factors so that they can thrive.

▪ This is done through coaching, youth leadership, emergency support funds, and asset matching programs; which are set within community-based prevention collaborative systems that align efforts of multiple organizational partners.

Describe the role that your organization plays in Nebraska and how you serve youth aging out of foster care.

▪All foster youth in Nebraska are eligible for the Opportunity Passport™ program which offers several credit repair interventions:

▪ Low Interest Loan for vehicle or debt reduction

▪Purchase a Certificate of Deposit (CD) through match asset purchase – take out loan in the amount of CD

▪Secure Credit Card usages

Tell us about the process for deciding which services to provide.

▪We utilize a youth advisory board that provides guidance and direction for all of the work that the Connected Youth Initiative does but for credit repair in particular.

▪We train youth to be trainers for the Consumer Financial Protection Bureau's financial tool kit, Your Money Your Goals™.

▪We created a youth peer-to-peer financial mentoring through the work that we do with Opportunity Passport™ - including youth teaching some of the Key to Your Financial Future curriculum or asset specific classes (vehicles, education, housing, etc.).

Tell us about how you have engaged young people in the service delivery process.

▪ There is a need to be extremely flexible in the approach and products to help youth address their credit in order to account for income volatility and debt management.

What’s one piece of advice you have for other groups that are considering offering credit-building services?

Case Study: The Right Way Foundation

Andraya SlyterChief Operating OfficerThe Right Way Foundation

▪RWF serves transition-age foster and crossover youth, ages 18-24.

▪ Financial Goals: Create and adhere to a monthly budget, save money, buy a car, and build credit.

▪ Financial Challenges: Limited financial literacy due to their experience in foster care-many youth did not have financial mentoring or receive supportive services that focused on financial capability; trauma impacts the way youth view finances as well how they spend.

Tell us about the young people you serve and some of their financial challenges and goals.

▪We distributed surveys, conducted focus groups, and asked young people during therapy and case management sessions to determine what they needed and what credit-building product would be most beneficial for them.

▪ From this process, we learned that they were most interested in a credit-building loan.

How did the project help you determine what young people’s credit needs were, and which products or services could support them in achieving their credit goals?

▪Case managers have become certified financial coaches, which is easily incorporated into RightWay’s model because case managers provide a majority of the direct services youth receive.

▪Pacific Asian Consortium on Employment (PACE) provides credit education workshops.

▪USC Credit Union facilitates financial literacy workshops during Operation Emancipation.

Tell us about the roles that staff, and partners play in delivering services.

▪Youth involvement/voice is important in each step of planning and implementation.

What’s one piece of advice you have for other groups that are considering offering credit-building services?

Audience Q & A

What questions do you have?

Share them in theQuestions box!

Tools for Integrating Credit-Building

Ariel Sankar-BergmannSenior Program Manager

Savings and Financial CapabilityProsperity Now

Ola WadibiaSenior Program Manager

Savings and Financial CapabilityProsperity Now

Overview of Credit-Building Tools

https://prosperitynow.org/tools-integrating-credit-building-services

Credit-Building Primer

Credit Education

Credit Report Pulling

Credit Counseling

Credit Building Loans

Lending Circles

Rent Reporting

Secured Cards

Twin Accounts

▪ Captures some core credit

building starter products.

▪ Includes:

▪ General descriptions of

products

▪ Examples of providers

and products

▪ Core considerations

and questions

▪ Can be used as a tool to

determine whether a

product or service is a good

fit for your organization or

clients.

Credit-Building Primer Example

▪What types of credit products are young people using, if any (e.g. revolving credit line or installment loan)?

▪Are they able to make their credit/debt payments on time?

▪What are they using these products for (e.g., to pay for basic needs/wants or to leverage assets)?

▪Are they carrying a debt load? ▪ What are the typical sources of that debt?

▪ If they carry a balance on revolving credit accounts, is it more or less than 30% of their outstanding credit limit most of the time? What is the average amount?

▪ On average, how much do young people spend on servicing their debt (interest, fees and payment)?

How Your Clients Manage Now

▪How are they balancing debt payments with other bills and expenses?

▪What credit products might be useful for them now or in the future?

▪What are their biggest challenges with respect to accessing and using credit resources?

▪Have they been a victim of identity theft? What knowledge do they have to combat it and/or prevent future occurrences?

▪Do the young people have thin credit reports or no credit reports?

▪Do the young people have a mix of trade lines?

▪What are young people’s biggest questions around credit?

▪Do the young people have accounts in collections?

How Your Clients Manage Now Cont.

▪Client Fit▪ For example: What eligibility criteria do clients need to meet to receive this

service/product (e.g., income level, geography, age, credit score)?

▪Client Access▪ For example: Is there a cost to access and use the service/product? If so,

what is it?

▪Product Safety▪ For example: What is the interest rate on this product? Is it fixed or variable?

Assessment of Community Partners

▪Additional considerations:

Assessment of Community Partners

Today's Speakers

Lauren Grayman

Assistant Director

Contra Costa and Solano Programs

First Place for Youth

Sandra Wilkie

Managing Director

Case Commons

Jason Feldhaus

Vice President

Connected Youth Initiative

Nebraska Children and

Families Foundation

Andraya Slyter

Chief Operating Officer

The Right Way Foundation

Resources & Next Steps

▪Starting Strong: Credit Building for Youth Transitioning from Foster Care▪ https://prosperitynow.org/resources/starting-strong-credit-building-youth-

transitioning-foster-care

▪ Tools for Integrating Credit-Building Services▪ https://prosperitynow.org/resources/tools-integrating-credit-building-services

▪We want your feedback! Please take our survey.

Resources and Next Steps

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KEYS to your Financial Future − newly revised curriculum with sections on credit significantly enhanced!

https://www.aecf.org/series/keys-to-your-financial-future/

Resource

Expand Your Networks with theProsperity Now Community

◼ Racial Wealth Equity Network

◼ Adult Matched Savings Network

◼ Affordable Homeownership Network

◼ Financial Coaching Network

◼ Taxpayer Opportunity Network (VITA/community tax prep)

◼ Campaign for Every Kids Future — Children’s Savings Accounts

◼ Health and Wealth Network

◼ Innovations in Manufactured Housing (I’M HOME) Network

Visit any of the networks above at prosperitynow.org/get-involved to get started.

Sign up for listservs and working groups, volunteer to facilitate

peer discussions, serve in a leadership role and more!

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