MDCs EITC Carolinas Campaign

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MDCs EITC Carolinas Campaign

• Statewide support initiative for 40 community
  tax campaigns across NC, many in rural counties
• Funded by AECF
• Three strategies
• EITC awareness/outreach
• Free tax preparation
• Linking tax site customers to AB opportunities

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Accomplishments of community tax campaigns with
which we worked in 2005

• 650 volunteers
• 80 tax sites
• 5,356 clients
• 55 counties
• Countless hours
• Dozens of organizational partnerships
• LEADS TO

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Accomplishments in 2005

• 7,774,335 in federal refunds
• 2,715,201 in EITC
• 354,328 in Child Tax Credit
• 273,181 in state refunds
• 1,031,200 saved in tax prep fees
• 9,078,716 for NC SC communities
• (federal state saved tax prep fees)

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So, is this all about the numbers?

• EITC and saved tax prep fees are important, but
  the theory behind the investment of Casey and
  others is that tax time is when people get a
  significant portion of their potential savings
  -- can we help families turn those refunds into
  assets?

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Refunds into Assets Why?

• Need to address asset inequality, not just income
  inequality
• Assets can be a route out of poverty
• Assets such as homeownership stabilize
  neighborhoods and families
• Outcomes for children like educational attainment
  increase
• In 2007, IRS will allow splitting refunds between
  multiple accounts more potential to turn some
  into savings and assets

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From theory to practice what the field is
finding

• More difficult than anticipated, but growing
  number of successes
• Tax Prep is key because that is when the money
  comes in, but
• Should link to a larger system of year-round AB
  services with multiple access points
• If the AB activity is related to directing the
  tax refund, should happen on-site. Otherwise,
  often better to direct tax site customers to
  follow-on activities off-site or at another time

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Findings contd

• Need to pay attention to the larger context of
  why it is difficult for people to build assets
• For example, the field needs to pay more
  attention to helping families address medical
  debt before it spirals out of control

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General Findings contd

• Relationships are key
• Community organizations are often trusted
  intermediaries between financial services
  providers and customers
• Relationship between tax site staff and customer
  is key to encouraging customers to take advantage
  of AB opportunities
• Customers want one-on-one services to ensure
  confidentiality

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What Were Doing in NC to Link Tax Sites to Asset
Building

• In 2005, demonstration project to do Asset
  Building counseling at three tax sites in
  Winston-Salem through the Experiment in Self
  Reliance (ESR).
• Results
• 740 tax site customers chose counseling
• 97 (13) signed up at tax site for an AB
  opportunity
• 58 (7.8) signed up for IDA and 48 (6.5)
  enrolled
• Another 120 contributed to an existing IDA
• 85 already banked, but 28 opened savings
  accounts (NC Saves)

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Linking to AB in 2006

• 10 more seed demonstrations to
• Expand AB counseling project at ESR and at other
  tax campaigns
• Link tax customers to credit reports and
  follow-up credit repair/counseling
• Had credit counseling group (Fiscal Progress)
  write handbook for tax sites
• Expand financial ed to Latino/Hispanic pop, esp.
  around asset protection issues (payday/predatory
  lending, check cashing)

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Challenges for the Field

• Encouraging innovation in financial services
  products without a bewildering level of
  complexity for consumers Medicare part D
  problem
• Encouraging universal access and going to scale
  while involving/supporting local financial
  institutions that are key to community investment
  
• Developing new models for sustainability no
  consistent funding stream for tax prep