Lutherans to Launch
Individual
Development Accounts
for Low-income Workers
in Minneapolis
Thrivent Financial and U.S. Dept. of Health and Human Services to
provide $1.4 million to promote savings for
appreciable assets in the Phillips Neighborhood
MINNEAPOLIS (Dec. 1, 2004) -
Faith in the City, a coalition of seven Twin Cities Lutheran
organizations, today announced it has received two grants totaling $1.4
million for an innovative program that will help the low-income workers in
Minneapolis' Phillips Neighborhood save for appreciable assets. The
funding includes $705,882 from Thrivent Financial for Lutherans and
$705,882 from the U.S. Department of Health and Human Services, Office of
Community Services.
Through the grants, Faith in
the City will establish "Phillips Saves," a program for Individual
Development Accounts (IDAs). IDAs are matched savings accounts for
low-to-moderate income families that enable them to save for assets that
appreciate, such as a first home, post-secondary education or financing a
business. For every dollar saved by a qualifying Phillips Saves
participant, two dollars will be matched ($1 from the federal government
and $1 from Thrivent Financial) when the participant reaches his or her
individual savings goal, subject to program limitations.
Phillips Saves will be
administered by Lutheran Social Service (LSS) of Minnesota at their 2414
Park Ave. office in Minneapolis for Faith in the City - a partnership that
includes Augsburg College, Augsburg Fortress Publishers, Central Lutheran
Church, Fairview Health Services, Luther Seminary, LSS and Thrivent
Financial. Phillips Saves will open in January 2005.
"The IDA program is an
important tool to help low-income citizens build a financial base for a
stronger future," said Wade F. Horn, Ph.D., Assistant Secretary for
Children and Families, U.S Dept. of Health and Human Services. "While
government can help, it can't do it alone. I commend Lutheran Social
Service of Minnesota and Faith in the City for their good work as well as
Thrivent Financial for putting financial resources toward making sure this
program in the Phillips neighborhood is a success."
Accompanying the matched
savings element of IDA programs are mandatory financial education classes
that help participants understand budgeting and money management, credit
card debt and earned income tax credits. They also help protect low-income
workers from predatory lenders.
The classes are a required
element of IDA programs and are considered vital in assisting program
participants in their journey toward economic self-sufficiency. This
training will be provided by a
consortium of financial experts and professional educators, and reinforced
through mentoring relationships.
"As faith-based Lutheran
organizations, the members of Faith in the City are committed to serving
as a catalyst to bring together people, resources and organizations to
benefit our community," said Jeri Nelsen, executive director of Faith in
the City. "Phillips Saves is the result of this strong collaboration."
For Thrivent Financial,
Phillips Saves also represents the first of what could grow to become
multiple Lutheran-based initiatives across the country connecting Lutheran
congregations, Lutheran social service agencies and the organization's
member volunteers in helping the working poor.
"Lutherans have a long
tradition of reaching out those in need," said Bruce Nicholson, Thrivent
Financial president and CEO. "This IDA effort marks a new way for Thrivent
Financial to engage Lutherans nationwide in helping low-income families
achieve financial stability through basic money management and savings
skills."
IDAs were first funded by the
federal government in 1999 through the Assets for Independence Act which
enjoyed broad bipartisan support in Congress. The U.S. Department of
Health and Human Service, Office of Community Service, was given the task
of administering the five-year, $125 million program.
The funding followed
evaluation of a project overseen by the Corporation for Enterprise
Development called the American Dream Demonstration Project (1997-2001).
This project proved that if given a savings incentive, low income workers
would save. The research further suggested that for each federal dollar
invested in IDAs, five dollars were returned to the national economy in
the form of new businesses, additional earnings, new and rehabilitated
homes, reduced welfare expenditures, and human capital associated with
greater educational attainment.
PROGRAM ELIGIBILITY
Phillips Saves targets individuals and families who have earned income
at or below 200 percent of federal poverty guidelines , who have a net
worth below $10,000 (excluding residence or car), and who reside in
Minneapolis' Phillips Neighborhood.
To enroll in Phillips Saves,
potential participants must meet one-on-one with program staff and
volunteer mentors to discuss eligibility guidelines, program requirements,
savings goals, ability to save, and use of savings. Final selection for
program participation will be based on factors related to the
participants' likelihood of success along with criteria such as savings
potential, credit score, orientation toward goal achievement, and place of
residency among others.
PROGRAM REQUIREMENTS
Upon acceptance into Phillips Saves, participants will be assigned a
mentor to develop a budget with the participant. The budget will determine
the participant's monthly savings goal. The mentor and participant will
also examine credit and/or debt issues and then enter into a savings plan
agreement for the duration of the program.
Phillips Saves participants
reaching their maximum savings potential will save $2,000 and be matched
$4,000 over the course of a 40-month savings period. The savings program
will be implemented in waves, beginning in January 2005 and ending Dec.
31, 2009.
PARTICIPATION
Once all of the program requirements have been met and individual
savings goals have been reached, participants will be ready to draw down
their savings and matching dollars. Faith in the City will work with the
bank to request to draw down the funds and have a check prepared to the
third-party vendor (e.g., post-secondary school, mortgage lender,
business) connected to the participant's original job training/education,
home or business development goal.
"Phillips Saves is based on
both empowerment and accountability," said Nelson. "This program isn't
about handouts; it's about offering low-income workers the opportunity to
improve their lives through resources, encouragement and discipline. It's
a sure formula for long-term success, and Faith in the City is delighted
to be working with Secretary Thompson, Mayor Rybak [of Minneapolis] and
others to bring this wonderful program to Phillips Neighborhood
residents."
About Faith in the City
Faith in the City is a partnership of seven major Lutheran institutions
in the Minneapolis-St. Paul Metropolitan area committed to improving the
quality of life of the communities in which they serve. These partners
have expertise in a wide variety of areas, including health care, social
services, education, finance, publishing and Christian service. Partners
include: Augsburg College, Augsburg Fortress Publishers, Central Lutheran
Church, Fairview Health Services, Luther Seminary, Lutheran Social Service
of Minnesota, and, Thrivent Financial for Lutherans. For more information,
visit:
www.faithinthecity.org
About Thrivent Financial
for Lutherans
Thrivent Financial for Lutherans is a not-for-profit Fortune 500
financial services organization helping nearly three million members
achieve their financial goals. Thrivent Financial and its affiliates offer
a broad range of financial products and services including life insurance,
annuities, mutual funds, disability income insurance, bank products and
more. Thrivent Financial and its affiliates have $65.9 billion (Sept. 30,
2004) in assets under management. As a not-for-profit organization,
Thrivent Financial sponsors national outreach programs and activities that
support congregations, schools, charitable organizations and needy
individuals. For more information, visit
www.thrivent.com
About Lutheran Social
Service of Minnesota
Lutheran Social Service of Minnesota offers a wide variety of human
support services relating to the basics of life-food, shelter, safety,
physical and emotional well-being. The nonprofit organization,
headquartered in St. Paul, serves more than 100,000 Minnesotans yearly
with operations in 300 Minnesota communities, and employs more than 2,300
people. LSS serves all people regardless of race, color, creed, religion,
national origin, sex, sexual orientation, handicap or age. For more
information, visit: www.lssmn.org
Securities are offered through Thrivent Investment Management Inc., 625
Fourth Ave. South, Minneapolis, MN 55415-1665, 1-800-THRIVENT
(800-847-4836) a wholly owned subsidiary of Thrivent Financial for
Lutherans. Members NASD. Member SIPC.
For additional information
about
"Phillips Saves",
click here
For additional information
about IDA's, click here
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