NEW YORK, April 14, 2015 /PRNewswire-USNewswire/ -- New research finds that low-income individuals make significant gains towards economic stability when they access a bundled set of employment services, income supports and financial management services, including ongoing support from a financial coach who addresses their individual needs.
The Local Initiatives Support Corporation (LISC), the country's largest community development organization, studied the outcomes of 40,000 low-income clients seeking assistance at its Financial Opportunity Centers (FOCs) across the country. FOCs—embedded in more than 76 neighborhood nonprofits in some of the nation's most disadvantaged areas—help people find and maintain good jobs, stick to realistic budgets, improve their credit, and save for the future.
The data show that those who participated in a coordinated set of FOC services—not solely workforce training, financial literacy, or help with income supports such as public benefits, but all three, combined—were much more likely to succeed. Of those who were most engaged with their coaches, 74 percent were placed in jobs, 78 percent retained those jobs, and 76 percent raised their net incomes.
Those numbers translate into real purchasing power for some of the lowest-income people in the country—dollars that are quickly put back into local economies and help catalyze growth. FOCs are located in the same neighborhoods where LISC is investing in housing and health, reducing crime, strengthening schools, and re-energizing commercial corridors—reinforcing broader hopes for more stable neighborhoods.
"This report gives proof to our long-held belief that it takes more than just a job for people to raise their standards of living," said Michael Rubinger, president and CEO of LISC. "The challenges some people face are staggering. When we address them together, people can make real, long-term gains."
LISC's research, published today in a new report, "Integrated Services and Improved Financial Outcomes for Low-Income Households" shows progress on multiple fronts. The study also finds that 60 percent of clients either increased their credit score or acquired a credit score, and nearly 60 percent of those who started with zero or negative net income moved to positive net income.
"As LISC tested and then expanded the FOC approach, our program managers developed a sophisticated data tracking tool," said Chris Walker, head of research at LISC. "That focus on accountability gives us a rich resource for determining the factors that lead to success—and also offers insights for how we can continue to help these individuals move toward the middle-class."
LISC researchers evaluated 34 months of outcomes for clients at 62 different FOCs—nearly all of whom are in the bottom 20 percent of the nation's household incomes. When they entered the program, typical FOC clients were earning less than $800 per month and nearly two-thirds did not earn enough to cover their monthly expenses.
"What sets FOCs apart from traditional workforce development programs is the bundling of employment services and financial coaching—those are at its core," added Rubinger. "Families that have struggled for years—and in some cases, for generations—find that they have someone in their corner, a financial coach who understands how to address their challenges and can help them change course. That can make all the difference."
The report is available at http://www.lisc.org/content/publication/detail/22370. Other information on LISC's comprehensive strategy can be found at www.lisc.org/section/ourwork/sc
About the Local Initiatives Support Corporation
LISC equips struggling communities with the capital, program strategy and know-how to become places where people can thrive. It combines corporate, government and philanthropic resources. Since 1980, LISC has invested $14.7 billion to build or rehab 330,000 affordable homes and apartments and develop 53 million square feet of retail, community and educational space.
Contact: Andrea Retzky for LISC at 917-587-5473 and [email protected]
SOURCE Local Initiatives Support Corporation