On-the-Ground Lessons from a Landmark Anti-Poverty Initiative in New York City, By Barbara Dwyer Gunn, President and CEO, Seedco

Launched in 2007, Opportunity NYCFamily Rewards is the first conditional cash-transfer program in the United States.The New York City initiative provides cash payments to reward low-income families who take positive steps to improve their lives, with the goal of reducing both immediate and long-term poverty.

A preliminary evaluation of Family Rewards was recently released by MDRC, the national research and evaluation nonprofit.The evaluation prompted some to suggest the program was failing, but this assessment mischaracterizes the early findings, which stress that it is too early to draw firm conclusions about the full potential of Family Rewards.

Overall, the evaluation showed significant progress toward the short-term goal of reducing current poverty and economic hardship, and also found some modest successes in achieving the desired long-term outcomes of improving children۪s education, families۪ preventative health care and parents۪ employment.

But the program is still operating, and much more will be known with the release of additional evaluation reports that will eventually cover all three years of program operations plus two years after the incentives are no longer offered.

Seedco, the national nonprofit with a long track record implementing large-scale anti-poverty initiatives and of which I am now CEO, has led the implementation of the program.  The MDRC study shows that, despite an extraordinarily rapid start-up and the early challenges inherent in ramping up such a complex initiative, Seedco and its partners were operating the program largely as intended by its second year. In fact, the evaluation confirmed that such a large-scale incentives program is feasible, though it requires complex systems for marketing, verifying and paying out rewards.  

The process of implementing a large initiative like this is naturally one of continuous learning.  However, Family Rewards is yielding significant lessons that have the potential to help the nonprofit community and the public sector in a range of poverty-fighting initiatives.

A New Approach

Family Rewards is an ambitious project that builds on similar efforts in Mexico and other countries. Focused on New York communities with high rates of inter-generational poverty, this privately funded initiative provides cash rewards to participating families who take positive steps in several areas, whether it۪s entering a workforce training program or taking a child to a doctor۪s visit.

Family Rewards was launched by the NYC Center for Economic Opportunity, which was established by Mayor Michael R. Bloomberg to implement innovative ways to reduce poverty. Seedco has overseen implementation and program operations, partnering closely with MDRC.  Together with six community-based organizations (CBOs), Seedco worked to enroll participating families and educate them about the incentives.  Seedco also built a claims-processing system to manage the incentive payments going to 2,400 households and a “customer service” system to support families.  A multi-media marketing strategy was also developed to educate families about the incentive offer and motivate them to take part.

The preliminary evaluation showed that nearly all participating families earned rewards, with payments averaging more than $6,000 during the first two program years combined.  In fact, 98 percent of families earned at least some rewards in both program years, which is a remarkable achievement for a new effort like this. Overall, Seedco processed more than $14 million in payments to families in the first two years.

The interim evaluation found that the program had achieved modest, positive effects on the lives of participants when compared to a control group of other families in the targeted neighborhoods. Of particular note is that it successfully achieved the desired short-term goal of reducing current poverty rates, food insecurity and some housing and healthcare hardships. 

Family Rewards also had less obvious yet important results. For example, it linked many low-income families to mainstream banking accounts for the first time.  Seedco and its CBO partners also helped eligible families learn about and gain access to critical supports and benefits such as after-school and subsidized health programs.

Lessons Learned

While Family Rewards is scheduled to conclude later this year, Seedco continues to learn valuable lessons that can help inform other large-scale anti-poverty programs.  While these lessons stem from a conditional cash-transfer program, they have value for those undertaking a variety of efforts.  Some key lessons are listed here:

• Program rules should be as straight forward as possible.  That means simplifying the descriptions of rewards and the process for receiving them and conveying the message that getting help is easy.  In the Family Rewards initiative, designers pared back the list of incentives to simplify the process for participants.

 

• Programs should focus on engaging, multi-pronged marketing strategies to get information out and pull participants in.  This includes targeted calling campaigns and automated call blasts, social events, informational workshops, and a comprehensive website, in addition to print marketing like postcards, newsletters and fliers.  These approaches are particularly important when a program does not provide comprehensive case management, or to supplement a program۪s efforts to motivate clients and inform them about what۪s being offered. 

 

• It۪s important to use creative strategies to streamline processes for both clients and providers. For example, Seedco developed coupon books customized to match a family۪s composition as a convenient way to verify activities and process payments, and used pre-paid envelopes for families to send in their coupons and documentation.  Such approaches, which allowed the program to process incentive payments more quickly and helped families incorporate the program into their daily lives, could be used to streamline the application process for public benefits and other programs. 

 

• Distributing incentives or any financial product requires an upfront investment in infrastructure.  An organization must devote resources to the planning and testing of systems prior to launch, and set up a verification and payment system that is straight forward for participants but also protects against abuse.

 

• Some participants might benefit from ongoing support.  CBO partners worked to ensure that families received valuable information about the incentives and the resources available to them, but it۪s not clear that incentive programs can rely on money and information alone to help families reach their longstanding goals.  Harder-to-serve families, for example, may need more coaching and direct services to meet their needs.

 

• Participants need financial education.  Help setting up an appropriate bank account is an important first step. And families might benefit from ongoing support and education to maintain an account and take steps that preserve the money they are earning.

The bottom line is that although Family Rewards is a work in progress, many of the preliminary findings are encouraging, and more will be known as the program concludes and final evaluations are done.  In the meantime, Family Rewards is providing a good roadmap for moving ahead with other large-scale anti-poverty initiatives.

Barbara Dwyer Gunn is the President and Chief Executive of Seedco, the Structured Employment and Economic Development Corporation, a national nonprofit organization that helps low-income people and communities move toward economic prosperity.