A Framework for Measuring Financial Resilience Outcomes
J. MICHAEL COLLINS PH.D.
Principal, Policy Lab Consulting Group
KATIE LORENZE
Research Consultant, Policy Lab Consulting Group
Most people face short-term financial emergencies at some point, ranging from an unexpected decline in income to a major expense that is too much to cover in any given month. Programs that aim to build wealth have a long-term time horizon. However, financial security in the long term is not possible without the ability to withstand financial shocks in the short run.
What helps people avoid financial emergencies and bounce back from them? What interventions are effective, and how do we know? Measurement matters to invest in strategies that work to increase the financial resilience of economically vulnerable households, especially those who have been left out of opportunities
and experienced inequities due to structural racism. Evidence-based strategies are important to funders, policymakers, nonprofits, employers, financial service providers, communities, and other stakeholders in designing and delivering programs and policies that further financial security and economic equity.
This brief on assessment strategies offers a framework to help funders and practitioners design and measure the effectiveness of short-term financial resilience programs with specific interventions in mind. Not meant to be prescriptive, the brief includes a range of metrics associated with different interventions to bridge financial setbacks that can shape understanding of program success along the course of delivery. Those four interventions include:
This paper and the accompanying brief, Achieving Financial Resilience in the Face of Financial Setbacks, are designed to inform community-based strategies to help economically vulnerable families better manage financial setbacks, shortfalls, and shocks.
QUESTIONS FOR FUNDERS TO ASK THEMSELVES AND THEIR GRANTEES
- • What is the problem we are trying to solve?
- • What is the best solution for the problem?
- • What are the goals of the intervention?
- • How long will the relationship with the
customer be?
This framework offers funders and practitioners a starting place to explore these questions in the context of financial resilience programs.
The Asset Funders Network (AFN) is a membership organization of national, regional, and community-based foundations and grantmakers strategic about using philanthropy to promote economic opportunity and financial security for low- and moderate-income Americans.
AFN works to increase the capacity of its members to effectively promote economic security by supporting efforts that help low- to moderate-income individuals and families build and protect assets.
Through knowledge sharing, AFN empowers foundations and grantmakers to leverage their resources to make more effective and strategic funding decisions, allowing each dollar invested to have greater impact.
