Financial Capability Partnership One Year In

Joining Forces: The Financial Capability Partnership One Year In

By Tanya Ladha

FCPI March 2014 Convening (2)Last September, with the generous support of the Kresge Foundation, the National Federation of Community Development Credit Unions (CDCU) and CFSI selected and funded three nonprofit and CDCU partnerships to pilot an ambitious, three-year integration project. Partnerships were selected to participate in the project in order SLCCU-MicroBranch-FCPI-March-2014-Convening.jpgto foster greater financial health within the footprints they serve. Plans were made and maps were drawn on strategies to best connect credit union products and social services in order to address the needs of underserved individuals. Now, one year into the project we take a look at the victories, surprises, and challenges these partnerships have undertaken as they look at beginning year two of this journey.

The partnerships of this story include of a diverse set of players. In Chicago, a Work First Community housing property is partnering with a small, local credit union to offer financial products and coaching to all of its tenants. In St. Louis, a community-based organization serving youth through seniors is building on the success of the credit union micro branch within its location. And in San Francisco, three different organizations have joined forces to provide financial coaching and credit building tools to low-income, transitional young adults aged 18-24, participating in a nationally recognized workforce development program. While the projects and participants range in scope and size, this cohort of pilot partnerships has experienced similar lessons and successes. Let’s take a look.

The Participants

New Relationships Take Time

We’ve heard it echoed by each partnership, “After a year, we are beginning to feel like we’ve hit our stride”. Convincing individuals to acknowledge, discuss, or address their financial instability is a daunting task for any organization. Couple that challenge with clientele who are focused on dealing with their own, often very immediate needs, and it may feel downright impossible to accomplish your goals. To further complicate matters, we are asking two (in the case of San Francisco, three) organizations to join forces to address this challenge. Added together, these partnerships face a challenge that can’t be solved with quick fixes. Data systems must be merged and clients need time to understand and trust the partnership, while mapping roles and responsibilities out rarely works the first few times around. Additionally, word-of-mouth, often the most effective kind of marketing in these kinds of partnerships, can take months to gain momentum and help build a steady client flow. Silo is a Four Letter Word

At the heart of this initiative is the fundamental belief that financial services are inherently interconnected to the social services many of these consumers seek. Engagement, penetration, and continued product use require the integration of financial coaching and product distribution at critical moments within the client experience. In St. Louis, Kingdom House members can choose financial stability as their primary membership goal in their annual enrollment meeting with their social workers. Kingdom House staff then work, in tandem with credit union coaches and counselors, to understand the individual challenges their members face. The Community Builders in Chicago now advertise the partnership as an additional amenity to living on site and invite credit union staff on location when rental payments are accepted, connecting with the client during a time when money is actively on their mind. And in San Francisco, offering financial coaching and credit building products to first time employees has proven a successful model.

Incentives Work

Who wouldn’t want to go to a financial counseling class any night of the week? Saturday evening? Even better! Okay, maybe not quite. Partnerships struggled to fill seats in their financial coaching sessions during the first months of the project. It became particularly frustrating as sites began to realize that once seats were filled, people were engaged, asked meaningful questions and committed to taking action – the sites just needed to figure out how to get folks to show up. A number of different incentive programs helped drive traffic, including non-monetary incentives such as dinner and free childcare and raffles to guess the number of cheese balls in a large container (that one was a hit!). The key here is that once individuals are present, they become engaged. Partnerships immediately asked questions about what the group wanted to learn and where they were feeling the most financially stressed, modifying session topics, and responding to the real time needs of their clients.

Quantity and Quality

As the partnerships learn and evolve, it’s increasingly clear that the ability to engage and impact financial capability outcomes in one-on-one coaching is so much greater than in group financial literacy classes. However, getting clients to counseling appointments is no easy task –in St. Louis, credit union counselors typically made about three scheduled appointments with an individual before they showed up. Counselors and social workers have to appreciate and respect the many variables their clients are juggling and remain persistent. However, it was those individuals who received personal financial coaching that told their friends and family about the program, and explored credit union products that might be right for them.

Remote Account Opening

For San Francisco and Chicago locations that do not benefit from the incredible advantages of co-location, the inability for staff to open accounts outside of the credit union has presented a formidable challenge. Chicago is exploring ways to deputize the Economic Opportunity Coach onsite at The Community Builders property to open accounts, but have run into challenges in the liability issues associated with handling funds on behalf of the credit union. As a work around the Chicago team has placed a credit union representative on site during rent collection and at the financial literacy workshops to open accounts during that time. In San Francisco, technological and contractual challenges with vendors have delayed the roll out of their remote account opening platform. As a stop-gap solution, the MyPath financial coach now hand delivers account documents and loan applications from the Year Up site to the credit union, which may give him plenty of exercise,, but has certainly required a lot more staff time than originally anticipated.

Now that year one of this three-year initiative has concluded, the partnerships are building on these lessons to grow and become stronger in 2015 and even greater in 2016. CFSI and the National Federation of Community Development Credit Unions will continue to share updates from the field as well as a more in-depth publication on implementation findings to ensure that lessons from this Initiative also advance the broader financial capability and credit union fields.

The Financial Capability Partnership Initiative is managed by the National Federation of Community Development Credit Unions together with CFSI and is generously supported by the Kresge Foundation.

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