To Fight Poverty, Build Assets and Break the Cycle

This commentary is part of a series highlighting the work of the 2012 Ideas for Action Award winners, sponsored by The Northwest Area Foundation, University of Minnesota, and University of Washington. This award recognizes organizations that take practical and innovative approaches to helping low-income individuals.

No perception is more confounding or defeating to poverty advocates than the widespread feeling that poverty is intractablethat those who fall into poverty can never get out, and that any efforts to fight poverty cannot make a difference.

I recently helped organize the Ideas for Action awards, funded by the Northwest Area Foundation and sponsored by the Humphrey School of Public Affairs at the University of Minnesota and the Evans School of Public Affairs at the University of Washington, which honored four efforts that demonstrate the possibility for real progress against poverty.

Despite feelings of intractability, people get out and stay out of poverty by the thousands every single day.   At the individual level, commitment and intensity of effort are capable of victory. Dedicated and innovative anti-poverty organizations help low-income individuals achieve economic security and truly make better lives for themselves.

Our winning organizations were bold at their conception and have since proven successful. They each sought greater scale every year of their operation, and their organizers are committed to finding new partners and devising inventive ways to continually upgrade performance. Just as important, their experiences can provide useful tools to other organizations experiencing intractability.

In a series of upcoming Spotlight on Poverty and Opportunity commentaries, these award winners will examine what they have learned, and make their own arguments for the essential strategies and tactics of poverty battling.

Overall, the four winners exemplify two distinct approaches to helping people get out and stay out of poverty.

The first approach is financial asset building. Families need much more than a well-paying job to make their way out of poverty. They also need financial assets that will allow them to achieve economic security in the long run. Too many anti-poverty programs have failed to take this into account.

Since 2009, the number of households without bank accounts has increased to ten million. That۪s nearly 1 in 12 households that do not have the ability to save for retirement, for their children۪s educations, or for unforeseen emergencies.

Two of our winning initiatives have committed to significantly increasing financial and asset-building services for low-income populations.

The Financial Clinic of New York City works with non-profit organizations and government agencies to make financial services and asset-building assistance more accessible to low-income populations. The Clinic embeds these services in places such as homeless shelters or literacy and skills training programs to ensure they reach more individuals.   

The Iowa Credit Union Foundation used the Individual Development Account (IDA) model to provide families with needed assets. IDAs are matched savings accounts that allow low-income populations to create a steady base of savings. The Foundation built a network of credit unions and other partners to line up matching funds, thereby avoiding the red tape and administrative costs that often plague IDAs.

The second successful approach our winners demonstrated was breaking poverty۪s cyclical nature. Staying out of poverty in the long run is a different challenge than simply making it above the poverty line. Government assistance programs rarely take this difference into account. Instead, individuals are placed in a series of low-wage jobs that never allow them to build the resources they need to permanently achieve financial security.  

Our award winning programs use support and training to break this cycle.
The Arkansas Career Pathways Initiative (CPI) is a partnership between the Arkansas Department of Higher Education and the Arkansas Department of Workforce Services. CPI indentifies high-demand jobs and then helps community college students 90 percent of who are women gain the skills and training needed to fill those positions. 

The Crittenton Women۪s Union of Boston assists low-income women who are single mothers or face threats of domestic violence. The program specializes in designing five-year plans and creating permanent and successful routes out of poverty that involve training and education. 

Each of our awardees has already proven themselves to be innovative and highly successful. With such impressive outcomes already achieved, we are excited to see what they will accomplish in the future.

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David Harrison is a senior lecturer at the University of Washington۪s Evans School of Public Affairs.

The views expressed in this commentary are those of the author or authors alone, and not those of Spotlight. Spotlight is a non-partisan initiative, and Spotlight۪s commentary section includes diverse perspectives on poverty. If you have a question about a commentary, please don۪t hesitate to contact us at info@spotlightonpoverty.org.