AFN Grantmaker Briefs
The 2016 Financial Coaching Census & Executive Summary
Financial coaching has gained recognition as a strategy that can improve financial capability and security. Yet within this advancing field of practice, many questions remain. What is the current size of the field? How is financial coaching being implemented? How do organizations, coaches, and funders measure success? And what is needed to support more effective implementation?
To begin addressing these questions and support the growth of the financial coaching field, the Center for Financial Security (CFS) and Asset Funders Network (AFN), developed the Financial Coaching Census to better understand the financial coaching field, from its size to its scope, identifying both challenges and opportunities. To address these questions and support the growth of the financial coaching field, the Center for Financial Security (CFS) and Asset Funders Network (AFN), developed the second annual Financial Coaching Census to better understand the financial coaching field, from its size to its scope, identifying both challenges and opportunities.
Financial Coaching Census 2016 explains the methodology, summarizes the key findings and baseline insights, discusses areas for reflection, and Identifies actionable steps to move the field forward. These insights allow funders and organizations to better and more swiftly address the shifting needs of coaching programs, financial coaching practitioners, and financial coaching clients.
"If you want to lower my blood pressure, help me pay my electric bill.” People's relationship with money impacts their health. Far beyond health care access and affordability, wealth and numerous social factors related to where people live, work, and play impacts a person’s health. Data indicates assets, income, and health are inexorably linked.
On the one hand, good health is associated with higher wealth and income, better employment and education. On the other hand, we know that adults with more financial resources have better health and live longer lives.Throughout one’s course of life, the challenges of health and wealth are connected — but why aren’t the solutions?
The formerly incarcerated face multiple obstacles and a lack of economic opportunity as they navigate re-entry.
Business ownership and self-employment can play a crucial role in supporting formerly incarcerated individuals, particularly people and communities of color who are disproportionately affected by incarceration rates.
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To begin addressing these questions and support the growth of the financial coaching field, the Center for Financial Security (CFS) and Asset Funders Network (AFN) developed the first-ever Financial Coaching Census to better understand the financial coaching field, from its size to its scope, identifying both challenges and opportunities.
The Financial Coaching Census explains the methodology, summarizes the key findings and baseline insights, discusses areas for reflection, and identifies actionable steps to move the field forward. The objective moving forward is to deliver the Coaching Census on a yearly basis, allowing the field to track the trends, both positive and negative, that occur as the field continues to grow. These insights will allow funders and organizations delivering coaching to better and more swiftly address the shifting needs of coaching programs, financial coaching practitioners, and financial coaching clients.
Narrowing the wealth gap changing federal and state tax policies so household savings and investment incentives are accessible to those who are the least economically mobile. The U.S. income tax system is arguably one of the biggest contributors to wealth inequality as it is subsidizing higher-income households to build assets while providing limited benefits to low- and moderate-income families. Closing, or even narrowing, the wealth gap in the years ahead will require changing tax policies so that household savings and investment incentives are accessible to those who are the least economically mobile.
"Engaging in tax work is especially important for funders who have the privilege of investing broadly. By not addressing taxes, you’re not addressing the elephant in the room.” - Elena Chavez Quezada, The Walter and Elise Haas Fund; Member, AFN Steering Committee
AFN's new Strategy Spotlight, Building Wealth Through Tax Reform: Opportunities for Grantmakers, written by Asset Building Strategies founder Heather McCulloch, shines a particularly bright light on state tax reform efforts and the catalytic role philanthropy can play to take these efforts to scale.
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Nearly half of Americans lack savings sufficient to cover a $400 emergency in 2014, underscoring the fact that further progress in financial empowerment requires more than ensuring consumers have access to financial tools. The challenge is getting consumers to use and benefit from the products and services currently available to them.
Developed with grantmakers and providers in mind, Asset Funders Network’s (AFN) new report, Consumer Engagement: Helping People Want What They Need, concentrates on the concept of “consumer engagement” to assist consumers in redirecting or modifying their existing savings behavior. Written by Doorways to Dreams Fund (D2D) with support from MetLife Foundation, this brief introduces and describes consumer engagement as an effective strategy to move consumers to desire the very tools and services that will help them build financial assets, skills and confidence.
Click here to review the Brief, Executive Summary, and other resources.
The growing racial and ethnic wealth gap presents a challenge for funders striving to build assets and tackle inequality in the United States. One of the key reasons for the racial wealth gap is that African-American and Latino households hold lower levels of business and financial assets. This is one of the key reasons for the racial wealth gap, so it stands to reason that business ownership may be an important means to narrow the gap.
However, people of color have historically been challenged to secure the resources—such as capital, education, and experience, as well as access to markets—needed to start and grow businesses. Micro- and small-business development strategies and programs have traditionally sought to engage underserved racial and ethnic groups as a means to opening opportunities for entrepreneurship. This paper examines the available research on business ownership, its connection to wealth creation for diverse populations, and identifies proven tools and strategies funders can employ to strengthen the access to and effectiveness of business ownership as a means to build wealth and reduce the racial and ethnic wealth gap.
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In 2011, the University of Wisconsin-Madison’s Center for Financial Security launched the Financial Coaching Outcome Measures Project to test a set of standardized measures with support of The Annie E. Casey Foundation. Four nonprofit community-based organizations collected data on client outcomes and shared the results to form a consistent database of similar measures. The goal of this project was to develop measures that satisfy standards of social science while also being attuned to the practical issues of data collection and analysis. Development of the Financial Capability Scale (FCS) was a result of this project.
Community-based programs develop data points that reflect their unique interests and missions, demands from funders, and participant goals and objectives. The resultant lack of uniformity in measures is a barrier to scale and more rigorous program assessment. By coalescing around a set of measures that organizations can readily integrate into their existing client tracking systems, funders, policymakers, and other stakeholders will be able to better understand the outcomes and impact of the delivery of their financial coaching investments.
The College Kids children’s savings account program provides every child entering kindergarten in a public school in the city a college savings account. The accounts are seeded with $50 by the Treasurer’s office to help families jump start saving for college. Families have opportunity to save more through matches and incentives such as perfect attendance, matched savings, and participation in financial education courses either in person, online, or via a smartphone app.
The goal of Jay County Promise is to increase the number of Jay County students pursuing post-secondary education through the creation of 529 college saving accounts. Statistics show that if a student has up to $499 in a college savings account, they are three times more likely to attend post-secondary education and are four times more likely to graduate.
Improving women's ability to build wealth is not only good for women, but is essential for the economic well-being of children, families, and our community. The women's wealth gap has been largely overlooked in discussions of women's economic security, yet wealth (the value of assets minus debts) is the most comprehensive indicator of financial health. Our new brief finds the wealth gap to be significant - during their working years, single women have only 32 cents for every dollar of wealth owned by single men.
Women & Wealth: Insights for Grantmakers, the new grantmaker brief from the Asset Funders Network, authored by Mariko Chang, PhD, examines the causes and dimensions of the women's wealth gap and provides recommendations and best practices for grantmakers to reduce the women's wealth gap and improve women's access to the wealth escalator.
The AFN Funder Brief, Strategic Philanthropy: Integrating Investments - A Framework for Impact describes opportunities, such as health and well-being, that start close to home. They begin in our families, neighborhoods, schools, and jobs. Despite philanthropy’s commitments to improve family economic security, stability, and growth, a lack of cross-sector collaboration limits the impacts including constrained public resources and siloed programmatic services.
A new approach to address these challenges is the development of a framework that can more effectively tie together and shape the disparate policies, investment structures, practices, and stakeholders to leverage resources and impacts. The strategic framework of asset development helps to create an effective, integrated, and sustainable system, enabling families to move through safety nets into financial security and opportunity.
also see: Financial Coaching: Executive Summary
Coaching is no longer reserved for sports teams. Today, people are looking for excellence and turning to coaches to improve their health, their career and their finances. A coach can see what a client cannot. Just like fitness coaches hold their clients accountable for their diets and exercise, finance coaches hold their clients accountable to sound financial management, providing them the guidance, support and motivation needed to reach their financial goals. Financial coaching is a promising strategy to help people improve their financial well-being.
Practitioners are turning to coaching strategies to better facilitate behavior change as opposed to the disappointing results often found when only financial education or financial access programs are introduced.
A good credit history is crucial in today’s economy. Without a strong credit history it is difficult, if not impossible, for households to get and stay ahead.
Growing numbers of grantmakers recognize the importance of credit building and its ability to improve the outcomes they seek for individuals and families. Their support has been critical to the emergence of credit building as a distinct, yet essential, component of programs designed to achieve economic mobility and security. However the need far outpaces the current funding base. Recruiting additional funders committed to credit building as a stepping stone to financial health and wellbeing is imperative.
Financial security and economic mobility are foundational to our both our culture and economy, yet for many families they remain an unrealized promise. Fifty-four percent of all U.S. households lack sufficient financial assets to make investments in opportunities that increase financial mobility, such as buying a home, creating a business, or investing in their children’s education.
Foundations have invested in a range of approaches to make financial security and economic mobility a reality for more Americans. As the gap between the haves and have-nots in our country continues to widen, these investments become even more crucial, and more complex.
For decades, foundations have invested in a range of approaches that enable families to move forward—to live in safe homes and communities, start their own businesses, pursue education, secure jobs and advance careers, access health care, and save for the future.
Despite these investments, the gap continues to widen between the haves and have-nots, driven by barriers that are increasingly complex, intertwined, and exacerbated by dwindling public and private resources.
The current debate on Tax Policy Reform provides the ultimate window of opportunity to promote and create policy change that levels the playing field and increases wealth building opportunities and economic stability for those who need it most: the low-to-middle class. Tax expenditures originally designed to help all Americans build financial security favor the wealthy and mistakenly shut out those with less.
Over 45% of subsidies to the top 1% of households averaging $1.25M while the bottom 60% receive only 3% of benefits.
Political and economic pressure is building for both tax reform and fiscal reform more broadly.
Short-run tax and spending pressures from the “fiscal cliff” coupled with concerns over long-term fiscal imbalance will force policymakers to make difficult yet unavoidable choices about national budget priorities, including asset development and the fairness of the nation’s tax structure.