PART VI 

Building Assets

Today, many low-income working families are living on the edge of financial disaster. Despite their best efforts, these families continue to struggle to make ends meet and have no reserves to cover the inevitable costly crisis - such as a hospital stay or major repairs for the family vehicle - or save for investments in the future.

According to the New America Foundation, fully half of all Americans have few or no assets. As a result, 40 percent of all Caucasian children and 73 percent of all African-American children grow up in households with zero or negative net financial assets.

Researchers find that assets do have a range of important positive effects on children, families, and neighborhoods. There is increasing evidence that assets:

• Are associated with household economic stability;

• Decrease economic strain on households;

• Are associated with educational attainment;

• Decrease marital dissolution;

• Decrease the risk of intergenerational poverty transmission;

• Increase health and satisfaction among adults;

• Increase property values;

• Decrease residential mobility;

• Increase property maintenance; and

• Increase local civic involvement.26

Municipal leaders have an opportunity to aid residents in building assets that enable them to exert control over their lives and participate in their community in meaningful ways. Many of the strategies covered in this kit refer to financial assets; these can either be held as financial assets (e.g., savings accounts, financial investments, retirement savings) or converted into real, intellectual, or business assets, such as home ownership, post-secondary education and training, or a new business.

Because the EITC is a significant resource above and beyond a monthly paycheck, it can be a vital tool to help working families build these needed assets. As a result, EITC campaigns across the country are developing creative asset building programs to assist families in not only getting by, but also getting ahead.

This section discusses a variety of asset building opportunities that local EITC campaigns can instigate or support, including: promoting financial literacy, consumer education to avoid high-cost financial services, fostering savings, and providing home ownership counseling and incentives. These efforts are strengthened when EITC coalitions have the right partners at the table, including financial institutions; community organizations that offer debt, credit, and homeownership counseling services; and organizations that operate asset building programs such as individual development accounts, homeownership grants, and educational funds.

Building Assets: Key Roles for City Officials

Build city-wide partnerships that support wealth- building among low-income families Utilize the media to disseminate messages about asset building opportunities Support existing programs and offer assistance to boost organizations’ efforts Sponsor legislation to combat predatory lending practices Launch a city-wide savings program Convene financial institutions and request that they offer free or low-cost accounts for eligible families

City Best Advice

Consider appointing an asset-building coordinator to each tax preparation site Offer on-site products and services as well as referrals Consider locating tax sites in financial institutions Contact or visit asset building programs that work Consider cost and capacity Partner with, and leverage support from, community groups that are familiar with asset building

For related resources, see Appendix A.

Source: Page-Adams, D. & Scanlon, E.(2001). Assets, Health, and Well-Being: Neighborhoods, Families, Children, and Youth. St. Louis, MO: Center for Social Development at Washington University.

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