Illinois Department of Human Services

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Illinois Department of Human Services

• Supportive Programs for Low-Income People
• Financial Links for Low-Income Families
• Tax Assistance and Counseling Programs

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IDHS Mission

• IDHS helps people achieve self-sufficiency,
  independence, and health to the maximum extent
  possible
• IDHS improves quality of life through financial
  support, employment and training, child care, and
  other family services

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Employment
Housing
Health
Customer
Substance Use
Mental Health
Transportation
Child Care
Education
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The Missing Piece
Taking Care of Business
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Need for Financial Education

• Many low-and moderate-income families
• Are at risk of financial crisis
• Resort to high cost fringe services such as
  payday and title loans, currency exchanges
• Do not protect their assets or take advantage of
  employee benefits

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Need for Financial Education

• Skills are needed to make sound financial
  decisions, build savings, establish good credit
  and achieve goals such as owning a home, a car, a
  small business, or pursuing education
• Many families leaving TANF are at risk of
  returning to public assistance because they lack
  these skills

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Need for Financial Education

• Many low-and moderate-income families
• Do not know the benefits of or how to open a bank
  account
• Have no credit history or poor credit record

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Financial Mgt

• DHS provides funding for financial programs that
  support working families through the Sargent
  Shriver Center, the Center for Economic Progress,
  and the Tax Assistance Center
• These providers offer programs such as free tax
  preparation services, financial literacy courses,
  and access to available resources

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FLLIP

• DHS in partnership with FLLIP have created
  innovative financial education and asset building
  programs
• FLLIP participants learn money management skills
  and access to work supports

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FLLIP Coalition

• A statewide coalition of banks, credit unions,
  advocates, government agencies, bank regulators,
  adult educators, private industry, and sponsors
  of Individual Development Account (IDA) Programs

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FLLIPs Mission

• Expand financial education and asset building
  opportunities for low and moderate income people
  in Illinois
• Promote partnerships among FLLIP members and
  others
• Support policies that promote financial education
  and asset building

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Goals of the FLLIP Program

• Expand access to financial education,
  asset-building opportunities, and mainstream
  financial services
• Increase individuals financial knowledge,
  skills, savings, and assets
• Promote greater investments in, and financial
  services for, underserved communities
• Protect consumers from unfair, deceptive,
  predatory, and discriminatory practices

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The Beginning

• IDHS provided initial funding and staff to
• Develop curriculum
• Pilot a financial education program
• Pilot an Individual Development Account program
• Evaluate the pilot programs

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FLIP Basics

• Shriver Center selects nonprofit partner sites
  through RFPs and connects them with local banks
  and credit unions
• University of Illinois Cooperative Extension
  trains instructors
• Local nonprofits deliver classroom instruction to
  participants
• 13 partners participated in the evaluation

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FLIP Basics

• Free, 12 hour financial literacy course
• Participants must complete 10 hours to graduate
• Interactive curriculum
• 5th grade reading level

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All My Money

• Making Spending Choices
• Envelope Budgeting
• Planning your Spending
• Understanding Credit
• Handling Credit Problems
• Building Consumer Skills
• Taking Consumer Action
• Checks and Checking Accounts

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Your Money Your Life

• Managing your Debt
• Avoiding Money Traps
• Using Financial Institutions
• Choosing Insurance
• Realizing Job Benefits

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Your Money Your Life

• Making Money with Money
• Taking Advantage of Public Benefits
• Understanding Taxes
• Identity Theft
• Immigrant Banking Issues

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IDA program

• IDAs are asset building tools that use matched
  savings to help participants develop regular
  saving habits and achieve specific asset goals
• Participant savings up to 1,000 were matched 21
  by state and private funds
• Three sites in FLLIP program (2001-2003)

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IDA Results

• 126 low-wage workers completed the IDA program,
  saved 116,395, leveraged 232,790 in matching
  funds, and made 153 asset purchases
• 34 home purchases
• 42 home repairs
• 13 post secondary education or training
• 3 small business capitalizations
• 59 car purchases and 2 car repairs

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Participant Selection

• Persons with minor children at or below 200 of
  the FPL, including individuals receiving TANF
  and/or low-income workers
• IDA participants had to have earned income for
  deposits into Individual Development Accounts

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FLLIP Evaluation

• Conducted by School of Social Work at University
  of Illinois at Urbana-Champaign
• Measured demographics, graduation rates,
  knowledge gains, satisfaction, and behavior
  changes (6-12 months after completion)
• Full report and best practices available at
  http/www.povertylaw.org/advocacy/communityinvestm
  ent/ fllipevaluationexecsummary.cfm

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FLLIP Evaluation

• 1,198 participants
• 822 completed the financial education course
  (68.6)
• 652 graduates were in financial education-only
  sites (no IDA matching funds)
• 170 graduates were in IDA sites

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Knowledge Gains

• Significant financial deficiencies upon
  enrollment, especially regarding public and
  work-related benefits
• Graduates demonstrate impressive gains
• The average number of correct responses for all
  graduates increased almost 21
• Significant gains were found in each of the five
  knowledge areas

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Satisfaction

• High ratings for materials instructors
• The training content, style of delivery, trainer
  preparation, and trainer presentation received
  high marks
• Almost all participants rated both the quality of
  the training and the performance of the trainer
  as excellent or good

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Behavior Changes

• 85 changed household budgeting practices
• 82.4 managed credit cards better
• 74.7 saved more (31.6 saved for a down payment)
• 64.6 changed the way they pay bills
• 55.7 used currency exchanges less
• 40 used payday loans less
• 37.8 33.6 opened first checking or savings
  account

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Behavior Changes

• 35.4 made a long-term investment other than a
  home purchase
• 34.8 accessed public benefits 21.5 made a major
  home improvement
• 19.6 purchased insurance
• 17.7 accessed job benefits
• 6.3 purchased a home

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Policy Supports

• IDHA exempted all assets in IDHS approved IDAs
• IDHS exempted retirement accounts for TANF, GA,
  and Food Stamps
• IDHS proposed eliminating cars as assets for Food
  Stamps
• IDHS proposed eliminating all asset barriers for
  TANF and GA

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Incentives

• Approved work activity
• Supportive Services
• IDA exempted asset
• No cost

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Leveraged Funding

• IDHS
• 500,000 initial funding
• 174,200 approved for FY 2006
• Private Foundations (over 1.5 million)
• Richard H. Driehaus Foundation
• Joyce Foundation
• Grand Victoria Foundation
• Banks and individual donors (over 300,000)

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Current IDHS/FLLIP Program

• 11 FEP sites
• 526 participants enrolled in 34 sessions
• 79.3 graduation rate
• Staff training curriculum development

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Tax Assistance Programs

• DHS provides funding to the Center of Economic
  Progress and the Tax Assistance Center who
  provide free tax assistance preparation and tax
  counseling services throughout Illinois
• The Earned Income tax credit has been one of the
  key factors in the success of welfare reform for
  more than 200,000 families who have left welfare
  for jobs since July 1997

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Tax Assistance Programs

• Since 1997, DHS has coordinated an extensive
  outreach campaign
• In 2005, nearly 35,000 families received more
  than 47 million in state and federal refunds
• Since services are free, low income working
  households saved over 4 to 5 million in fees
  and charges especially from high interest
  Refund Anticipation Loans

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Tax Assistance Programs

• The success of this partnership is demonstrated
  through the increase in numbers of individuals
  using the tax sites and the number of refunds
  prepared
• Program reaches 60 to 70 of those eligible for
  the tax credit
• Approximately 2700 volunteers helped at tax sites
  this year

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Tax Assistance Programs

• These federal and state income supports along
  with food stamps, medical assistance and child
  care are critical if lower wage families are to
  move out of poverty and achieve self sufficiency

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Administrative Support

• DHS has supported the need to expand services
• Added additional site
• One day sites in rural communities

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Challenges

• Customers with special needs
• Serving the entire state
• Funding

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Financial Education
Community Partnerships
Customer buy-in
Financial Management
Outreach
Policy
Administration
Staff Education
Tax Counseling
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For More Information

• Contact IDHS Program Development Evaluation
  [phone]